Ponzi scheme here in Singapore?

ion continues to take shape

On Madoff's billions dollars Ponzi Scheme, the Judge asked Madoff before he sentenced him to maximum 150 years in prison, "Where did you learn the scheme from?"

Madoff clamly responded, "The Social Security Scheme."

Couple of months ago, I said US government could actually be doing a Ponzi-scheme too with its government bonds and Treasury bills. Upon maturity of $1 billion worth 5-year bills, the government would borrow $1.05 billion to repay the principal and interest of the maturing bills.

In Singapore, CPF collects contributions from current generation of working adults and paying out to the retiring group. Take for example - Every month, CPF collects $10 from thousands of employers and pays out $2 to people reaching 55 years or to estates of people who have passed away.

Madoff had been comfortable with a $8 positive margin to finance his lifestyle and massive marketing machinery for so many years. He only started to feel the heat when more and more people withdraw their monies.

The only difference is that our money with CPF are being invested in productive assets and thus generating income to pay interest. What if we reach the stage that we are unable to generate decent returns, the possibility of huge investment losses and a definite scenario of increasing no. of baby boomers withdrawing their lifelong savings?

Could we degenerate into another Ponzi scheme? Never says never. But we certainly must not let that happen.