| By
Gary Scott
Here are some fraud
protection ideas.
Over the last two weeks, we shared
several messages that covered frauds and some articles that the U.S. dollar may
fall some more. I never stated that some of the greatest frauds ever perpetrated
are by governments diluting the value of the currencies. Despite the fact this
is true, I did not point out this fact. My goal was to review fraud protection
ideas.
Yet an interesting event took
place that revealed some important facts about human nature. Understanding the
way we are can help us understand ourselves and markets and learn fraud protection
ideas so we can invest better.
A number of readers wrote and
indicated that they were quite angry because I was writing about the falling U.S.
dollar and suggested that it is somehow unethical to make a profit from the greenback's
collapse. They got this from fraud protection ideas?
This reminded me of two fascinating
fraud protection ideas phenomenon that take place when dealing with fraud that
if we can understand can make us better investors.
First of Two Fraud Protection
Ideas
The first fascinating fraud phenomenon
is that investors refuse to believe frauds when unveiled.
I first discovered this with
my first scam encounter over 30 years ago while working and living in Hong Kong.
A commodity trader in town allegedly had a way to scam the Japanese commodity
trading firm he worked for. Purportedly the quotes arrived in Hong Kong minutes
before Tokyo and the time gap could be taken advantage of. The guy approached
one of my clients and promised to make 15% to 20% per month if he would be an
accomplice.
The client sought my advice.
I investigated and discovered that the deal was a fraud. The commodity dealer
had tricked investors all over town. If the client opened the account, the trader
would lose the entire deposit via churning and fees. What could the client do,
go to the police and tell them he was ripped off while trying to defraud a commodities
firm?
I called the client and told
him the whole story and explained exactly how the con artist worked. Thought that
was enough. Later I learned that the client invested $10,000 anyway and lost it
in exactly the way I had warned him. To add insult to injury the client then put
up another $10,000 (the con artist told him they could recover the first $10,000).
He lost that too!
This has happened again and again.
Clients contact me, ask me about a fraud. I unveil it, tell them what to watch
out for and then learn later that they made the investment (and lost their money)
anyhow.
Second of Two Fraud Protection
Ideas
Here is the second fascinating
fraud phenomenon.
Often when someone uncovers a
fraud, the investor gets mad at the person who unveils the fraud and not the guy
who is stealing from them!
In the Hong Kong example above,
finally the Hong Kong Fraud Squad investigated and the con artist fled town. My
client was angry at me and the police. "If everyone had left the guy alone, he
would have worked it all out", was his refrain.
So those of you who are upset
about the declining U.S. dollar, I am sorry, but do not shoot the messenger when
you hear fraud protection ideas.
Since the late 60s I have been
helping my clients learn about international investing and business as part of
my main goal to share global ideas with my readers that make their lives better.
Sharing fraud protection ideas is part of this help.
I am not a politician and try
to avoid getting into political arenas (which today would alienate about half
my readers whatever I said). A great deal of the U.S. dollar problems are essentially
political and can only be resolved at the ballot box.
Yet I know that the problem cannot
be resolved politically until a great majority of our nation is more aware that
our personal day-to-day lifestyles are the threads that weave the political problems.
We make our politicians.
Thus my website also includes
hundreds of philosophical messages about what we can do to make our lives more
sensible, productive, balanced, debt free, healthy and such and in the process
make society better despite fraud at the highest levels of our society.
Just three of the hundreds of
these messages are at
The
Root of Inspired Investing or
International
Investing Made EZ or
Sunday's
Lesson from a Wild Duck
Merri and I hope that by living
in a transparent, ethical, healthy, balanced, debt free, productive way we set
some sort of positive example and hope that our messages have some common sense
that makes some small positive difference.
Fraud Protection
Ideas Resolution
How to resolve the falling U.S.
dollar problem? I do not know. Unfortunately it is a heck of a lot easier to see
a problem and to see its consequences (such as debt and deficit leading to a falling
dollar) than it is to see a solution for a huge dollar problem.
I feel it is my responsibility
to share my experiences on how, not just to profit, but to survive loss from the
terrible consequences we face from the enormous U.S. debt.
By the way Barry Minkow in his
book about fraud "Cleaning Up" explains why people get mad when scams are unveiled,
why they ignore warnings about fraud and why the U.S. debt will most likely continue
to grow.
He wrote about himself when he
was creating his huge fraud: "I had fallen into the supreme falsehood of fraud
perpetration: fraud is a means to an end and never an end in itself. I told myself
that lies to the banks, investors, and auditors were not really wrong as long
as I had a plan that would ultimately pay everyone back. As long as no one got
hurt there was no crime."
Minkow believes that most fraud
perpetrators believe that they have a cure which will eventually recover the losses.
He writes: "The first irony of
course is the irony of the cure and the lies that we (fraud perpetrators) tell
ourselves. The second irony of fraud is that the very greed that we perpetrators
count on our marks (potential investors) possessing to drive them to invest and
blind their objectivity is the same greed that blinds we perpetrators and makes
us feel invulnerable to detection. Greed is the one-size-fits all blindfold that
both perpetrators and investors wear in tandem. Though neither will admit it."
There is some wisdom in those
quotes, and I do not see any final resolutions to the problems of greed coming
along soon.
The danger of the U.S. dollar
is nothing new. I wrote about the dangers of denying this in my first book over
20 years ago. The big danger is not the dollar but the denial. See GaryScott.com
to read what I wrote about this those two decades ago.
Until next message, look ahead.
If you do so without denial, you'll be surprised. You really can see sometimes
what is happening ahead.
You can learn
more about Barry Minkow at
Frauddiscovery.net
Gary
Join
Merri and me at our next seminar in Quito where we will talk
about developing wildlife preserve in Ecuador. Details are
at Garyascott.com
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