MMM: The stuff of nightmares
IAM taking a break from the Kingdom’s exhausting politics this week. I definitely need a break. I have had enough of the DC, ABC, DC, LCD, BNP egg dances which are taking us nowhere. I am a political animal and a week is never complete for me without addressing a political topic.
But too much of everything is not good for anyone’s well-being. I am now over-dozed on our local party politics. I need a break. Let me thus focus this week on a different set of politics; that is politics of the stomach.
No human being ever wants to go hungry. We all want the good life. Who would not want a bit of caviar, oysters, crayfish and the finest wine for dinner every day? Who would not want to wear the latest iconic fashion brands; Jimmy Choo, Versace, Dolce & Gabbana, Karan, Armani, Givenchy, etc.
Who would not want to zoom around the city in a Maserati or Lamborghini? We all want the finer things in life.
Even those among us with modest ambitions wish to at least have the essential basics necessary for human survival. The biggest problem is we don’t seem to know how to achieve these.
My younger brother was so obsessed with wanting to make money to afford a finer lifestyle that he used to cross the border every Wednesday and Saturday to purchase lottery tickets in South Africa. Of course he never won.
The very concept of lottery is the biggest scam ever perpetrated on humanity. After spending substantial amounts without winning, he gave up. Not before my mother had condemned him with her perennial wisdom and wit.
“There is no substitute for hard work. If you want to live like a King, work like a bloody slave. If you want the finer things in life, accumulate the wealth to afford them. If you want to accumulate the wealth, work hard, be innovative, be wise, use your brain,” opined my mother.
My mother is indeed a woman of perennial wisdom. Even though she is not well educated, she has a good grasp of rudimentary economics.
“For you to earn value, you must create the value first. For you to create the value, you must use your brain,” she has often said.
Let’s take the example of one young American man who has changed the world; Mark Zuckerberg. From a tiny bed of his University dormitory, he came up with a very simple idea of connecting the world. Playing with his laptop, he created several dots together and devised a simple scheme of enabling long lost friends to reestablish relations. The world is now overwhelmed with this simple concept. From his dormitory bed, Zuckerberg created value. His Facebook empire is now worth nearly $450 billion, the third largest company in the world after Apple and Exxon Mobile. This is just an example. I am not saying lets aspire to this level. It won’t happen. After all, our occupation is politics.
I am just using Zuckerberg as an example to illustrate my mother’s simple wisdom; for you to earn value, you have to create value or be part of a process of creating value.
If you wake up every day to go and toil in a Chinese-owned factory in the industrial area, you are at least creating value. The garments that you produce bear some value to those who buy them and compensate you and your factory for your sweat. In a nutshell, we create wealth for ourselves by producing goods and services of value to others who buy them. This is simple Sothonomics that a herd boy in the mountains should understand. By rearing his sheep and goats, he is creating value. The goats and sheep will be sold to generate money from which the herd boy’s part wages will come from. Of course the money generated by the factory worker or herd boy is never enough to afford them caviar, but it might be enough to guarantee them a living, no matter how modest.
What I can never understand are the hordes of people who believe they can generate wealth without a sweat but by simply joining a scheme in which they are encouraged to deposit cash to one another with a promise of 30 percent RO1 (Return on Investment).
In a nutshell, I can never understand anyone who signs up to a scheme as crooked, silly, stupid and plain foolish as this MMM Global nonsense.
Based on the current popularity of MMM Global, we clearly still haven’t learnt any lessons about such scams. Scrutator erroneously thought that after the MKM saga, which left so many of our friends, family, colleagues and neighbours high and dry, with some of them even being ruined financially, we would have been better able to resist the lies of the scammers who run these schemes.
But alas, we had Basotho spewing vitriol at the Central Bank of Lesotho (CBL) and Consumer Protection Association (CPA) for condemning MMM Global. The CBL and CPA had rightly warned that like all Ponzi scheme bubbles, MMM Global would burst sooner rather than later.
The warning was certainly not idle consid- ering that the scheme’s founder, Sergey Mavrodi, used it to defraud Russian investors in the 1990s of tens of millions of maloti before being caught, convicted and jailed for fourand-a-half years. Even though Mavrodi was imprisoned for defrauding 10 000 investors specifically, international press reports say more than 15 million Russians suffered and went bankrupt from dealing with him.
However, some supporters of MMM Global were so incensed by the warning that they hurled expletives at the CBL and CPA on social media, and even accused the two agencies of conspiring to deny them of the “riches” that would emanate from the scheme.
One either must be an ignoramus to believe that they are going to score riches through a Ponzi scheme like MMM Global.
Typically with such dubious schemes, there is no convincing explanation of how the money magically increases in value by 30 percent every month? Clearly this is a Ponzi scheme, no different to others like MKM. The money that some people receive is just coming from the money paid by later joiners. There are certainly no profits being made, no value being created, but just money flowing from one victim to another and a crook running the whole operation from a secret location.
It came as no surprise, therefore, for Scrutator to hear that Mavrodi was reportedly on the run after doing what he does best; con people and split after making his profits. Given the gullibility of some of us, you might find an MKM victim also joining the MMM Global scam. In that case, Scrutator would have no choice but say they would have gotten their just deserts if they were swindled again.
Here is a time old rule: If it seems too good to be true, then it certainly is too good to be true. MMM Global shows all the signs.
There is a reason people like Mavrodi target poor countries. They know that a lot of people don’t want to get off their backside and actually work for a living. The so-called “miracle prophets” who have become so popular in Africa also use the same trick. They say if you “seed” for the “man of God” to buy a new Bentley or private jet, then showers of blessings will fall on you.
The MKM debacle should have taught us that investments typically grow slowly and steadily, if you are disciplined, and that enormous growth is a myth. Hard work and innovation is the way to go and not these get-rich-quick schemes. The sooner we learn that, the earlier we will start making progress as a nation.
At least from the standpoint of pyramid schemes, MKM can be said to have been better. Its promoters were at least trying to create value. Pooling resources for investment, buying and developing properties. Their genesis of their Ponzi failure was to promise unsustainable returns for investors.
Based on the information provided on the website, MMM follows a classic pyramid structure. The participants derive their income or returns primarily for the recruitment of new members. In other words, the returns are not based on investments or the selling of any product or creation of any value, but on money paid by new people joining. The philosophy is that you offer assistance by paying others before others pay you for your investment in return. Through brokerage by MKM you are directed to deposit money to another person. The longer you keep it the more the interest. When your payback time is due, other people in the pyramid structure are mobilised to pay you including your interest. What Twaddle is this? In the meantime no value is created. So what’s the basis of the 30 percent ROE?
Iam disappointed that many of my Basotho countrymen have fallen for this crap. A friend of mine was so happy this week that he had earned 300 interest from the R1000 he had invested. The trail will continue until my friend invests R50 000 or even more. He may even sell his house to gain more before everything collapses around him.
Even news that Mavrodi is now in hiding after the collapse of some of his schemes under the MMM Global fraud seems to have done little to deter my fellow wise Basotho.
The good thing at least is that Mavrodi would never take his schemes to Sillicon Valley, where the Zuckerbergs and other youngsters have made billions simply out of using their brains to create value.
He will never take his schemes to Italy, German and France the respective creators of Fiat, Mercedes and Peugeot. He will take his schemes to places where people sit on their brains and hope that wealth will simply drop from the skies.
These are the most gullible of the gullible. Luckily Scrutator is not among them. Mavrodi and his MMM Global represent the right stuff for idiots. For us to create wealth, let’s get off our big butts, let’s think and create real value my fellow Basotho. And if ever Mavrodi visits us here, let’s tie him to a tree, pour petrol on him and burn him alive
MMM Global founder Sergei Mavrodi.