Wednesday, August 6, 2014

Scientology and Amway, Malevolent Cults


I have spent considerable time writing my observations of the Amway cult.  In discovering the bad truths of Amway, the topic of Scientology seems to come up over and over again.  Indeed, David Brear first brought the similarities of Scientology to Amway to my attention, and he is correct in writing that no totalitarian cult can be thoroughly understood in isolation.  To this premise I am in total agreement. The more I have studied Scientology, the more convinced I am that Amway and Scientology  are founded on the same bad premises as other malevolent totalitarian cults and regimes.  David Brear, in his insightful blog , and his numerous contributions and comments elsewhere, has examined this same topic very thoroughly, therefore I will attempt to narrow the scope of this blog post to to the significant similarities Amway has to Scientology (or Scientology has to Amway).  Of course there are significant differences that can be raised as well.  One might say that Amway promotes itself as a ‘business’ while Scientology promotes itself as ‘religion’ and a ‘church’.  As David Brear continuously reminds his readers, the only banner that totalitarian organizations never place over themselves is “totalitarian.”  I agree with this premise.  Banners such as ‘business’ or ‘religion’ is at the heart of all deceptions which  are to follow. These banners are the foundation—the big lie—for which all subsequent deceptions hang.

The lines between religion and business blur and become meaningless terms as these cults apply these to themselves.  Indeed  they provide the ‘cover story’ and promote the utter confusion that permit  these pernicious cults to proceed and exist.  They are much similar to the banner of ‘government’ which gave cover to ‘fascist,‘ ‘nazi,’and ‘communist’—all  totalitarian regimes.  Even the term ‘capitalist’ might be included amongst these adjectives.
I find it significant that both Amway and Scientology are ‘challenged’ repeatedly about their banners.  Amway, while claiming to be a ‘business’ organization, has been shown to be organized like the mafia in operation and organization.  Adherents aspire to religiously follow orders from their ‘kingpins’ which head up their particular ‘family’,  or ‘corporate structure.’   Scientology’s status as a religion has been significantly challenged as well.  Oddly enough, Scientology has been accused as operating more as a business rather than a religion.  During founder L.Ron Hubbard’s life many millions of dollars were funneled to him while he hid away from view.  Aspirants in his cult are steered onto a path known as the ‘bridge to total freedom’ which is a pay as you progress up this bridge to total freedom--which eventually culminates with the exorcism of  alien ‘body thetans’.  
The Scientology journey into the cosmos begins with ‘auditing’ (a bastardized form of psychoanalysis) where the new adherent is asked to reveal the ‘ruin’ in their lives while holding in each hand ‘cans’ which are attached to an ‘e-meter’ which measure slight changes in skin resistance.  Scientology ‘market’  these e-meters for several hundreds of dollars each and are considered ‘artifacts’ of the church.  (I have discovered what I estimate as several hundreds of these artifacts for sale on ebay.  Readers might remember that I pointed out how many of Amway’s ‘tools’ are for sale on ebay as well.)
The ‘business’ of Scientology incorporates the sale of countless books and media presentations.  (All of founder L. Ron Hubbards extensive publications are considered sacred text.)  In a sense, Scientology promotes itself as being in possession of myriad  cosmological ‘secrets’ that it is willing to share with anyone for a significant price.  (Those familiar with Amway probably know where I am going here.)  Amway also markets all the secrets about their own  ‘bridge’ to ‘financial freedom’ all in the form of countless ‘tools’—books, tapes, DVDs, and other  ‘sacred’ media such as “Communicate” (wherein downline adherents have a ‘bat phone’ or ‘hotline’ from and to  their upline cult leaders.)  Just as in Scientology, all these ‘sacred artifacts’ are pushed ‘religiously’ on the Amway cult and significantly are deemed ‘self-help’ which will lead followers to higher levels on the Amway pathway to  ‘financial freedom.’
Adherents of Amway and Scientology may spend many years of life following after and paying for the secrets to their respective ‘bridges’ before the unpalatable truth of their ‘negative’ experience becomes known.  Many awaken from their ‘dream’ and discover that they have been victimized by a pernicious cult: that there is no ‘heaven on earth’, nor a future ‘heaven’ in outer space with L. Ron Hubbard.’  Adherents leave, sometimes bitter, sometimes ambivalent.  Both cults significantly instill in their adherents that failure is solely the responsibility of the individual.  Failure may be linked to not trying hard enough, not attending enough functions, not believing, not buying enough ‘tools’, for being ‘negative’, for  being a ‘suppressive person’, for not ponying up outrageous sum of money for auditing or courses or function attendance.
Another significant similarity that both cults practice is best described using the Scientology term ‘disconnection’ whereby an adherent must ‘disconnect’—stop associating with all those persons in ones life who take a ‘critical’ viewpoint and fail to support the adherent’s in devotion to the cult.  Amway teaches one to separate oneself from all ‘negative’ persons, to include close family members.  Married couples are encouraged to join together and children are drawn along with their parents newly found endeavor, many times banished to their rooms while cult meeting are held in the parlor.  Scientology deems all negative outsiders as SPs (Suppressive Persons) and enforces ‘disconnection’.  Adherents of both cults are taught to avoid all negative ‘entheta’ media, especially all negative web pages and critical press.  In the past, children of Sea org members were sent to concentration like camps where they were put to labor and indoctrinated into Scientology's strict dogma.
The Amway upline ‘masters’ invade downline ‘believers’ homes and may act in a highly dictatorial manner.  They are known to go through an adherent’s pantry  and deem non-Amway products as ‘negative’.  
For core adherents of Scientology, especially those who have signed billion year contracts to join the ‘Sea Org’ have been isolated, and had cell phones , televisions, and computers confiscated.  Scientology has been known to enforce ‘disconnection’ between married couples, children, family and friends.  Even worse, persons deemed traitorous or suppressive may be sent to what I can only describe as a Scientology prison called ‘Rehabilitation Project Force’ (RPF) where they are required to perform gruelling work, wear rags, and eat ‘slop’ all as a form of ‘penitence’.  (Indeed these abusive practices far exceed anything Amway adherents encounter, although many demands of time and finances are demanded of the ’core’ Amway aspirants which I consider financially abusive in, but not to the extremes that ‘core’ Scientologists are exposed).  
Scientology incorporates the ‘totalist paradigm’ whereupon believers are shut off access to the outside world so that their perceptions of reality can be manipulated without inferences.  The goal at this stage is to provoke expectable patterns of behavior that will appear to arise spontaneously, adding to the impression of Omniscience on the part of the controlling group.  Those who are involved in the manipulation are guided by a sense of higher purpose that allows them—actually compels them—to set aside ordinary feelings of human decency in order to accomplish their great mission.  Those who are being manipulated may come to endorse the goals and means of the cult—or simply abandon the will to resist.  In either case, the adherent is robbed of the chance for independent action or self expression.  “Their freedom,” as David Brear affirms, “ has become slavery.”  In Amway, adherents laughably become ‘independent business owners’ but in reality are anything but ‘independent.”  Another ‘great lie’!  Folks in Scientology, Amwayology, and nearly all significant cults,  are exposed to ‘thought reform’.  Generally adherents are taught to believe that these manipulations do not exist.   They are exposed to ‘Ideological Totalism’—the ever present human quest for the omnipotent guide, the great leader, or precise science: all of which Amway and Scientology provide universally.  Their secrets are all for sale while  adherents’ believe’ to their own detriment.  These mysteries are offered in a manner which lead the follower to believe that their overall well being is being enhanced, even if they do not reach the promised  ‘nirvana.’  I’ve heard Amway adherents claim that their experience as being the equivalent of a college education.  I might note that in both cults, traditional education is downplayed while the cult dogma is preached.
The parallels between Scientology are too immense to cover in just one blog post.  I hope to return to this topic again soon.  There are way too many similarities to enumerate in this one sitting.  My ‘entheta’ is to reach those who are being manipulated by these business and religious frauds!  




Sunday, July 20, 2014

Amway's Fraudulant Business Model

                                             Amway India Criminal Defendants


Amway operates a fraudulent business model.  Downline recruits basically are the only customers; the products are intentionally priced so as to be effectively unsellable outside of the pyramid distribution channel.  Recruits are lead to believe that any potential profit in the scheme will come from recruitment of a never ending chain of downline distributors.  All recruits are brainwashed on the idea that buying and consuming the overpriced products and recruiting others to do the same will result in progress along their dream inspired road to ‘financial freedom.’  

Money in this scheme flows to the top of the pyramid while new recruits believe they can extend their downline legs and position themselves at the top of their own pyramid, and are sold on the idea that success comes from creating an extensive downline network who will continue to buy and self consume Amway’s mixed bag of products and ‘how to’ tools that teach recruits how the Amway ‘dream’ operates.  

Money flows to Amway and Amway top level kingpins by the millions and billions, while the majority of die hard believers never experience the promised financial freedom.  Nearly all ‘believers’ in the Amway dream devote incredible time, money and treasure, none of which will ever be recovered, no matter how hard they strive to succeed in the scheme.  All are taught to believe failure is not Amway’s fault, but their own.  Although nearly all distributors fail in Amway’s fraudulent MLM business model, the pyramid scheme never totally collapses because it continues to grind up new recruits, who ‘pony up’, are ‘used up’, and eventually ‘drop out’, all while viewing themselves as failures (never realizing that their failure was pre planned by Amway and the sellers of deceit, the Amway kingpins).

Thinking about joining Amway?  Fah get about it!

Wednesday, August 29, 2012

Gay Boycott Intentional Ploy by Amway To Divert Attention From Their Longtime Swindle


I suppose the gay press is up in arms over the disclosed contributions made by the Douglas and Maria DeVos Foundation. Could it be that Douglas and Maria Devos actually intended to inflame the reading gay public?  Does the controversy divert attention away from the current scandalous nature of the Amway Cult Scheme that has sucked the life blood out of its adherent 'true believers' for over half a century?



Thursday, September 1, 2011

What would the founding-fathers of the American Republic have made of this?

By David Brear, Guide to the Amway Labyrinth:
Introduction by Blog Administrator:

Multilevel Marketing is intentionally designed to be a failure for the great many who seek its fortune. It is designed to 'extract' literally billions of dollars from new 'investors' who believe that they can succeed where all before have lost. They believe the propaganda of the swindler and begin paying into a craftily devised closed market scheme. Investments of time and money in 'multi-level marketing' are proven to be wrought with dismal failure; where investments of time, money and reputation are never to be recouped.

David Brear has enlightened readers of Quixtar Cult Intervention for some time by describing the Amway Labyrinth. He coined the term 'financial holocaust' to describe financial ruin 'believers' experience by following Utopian cult charlatans.  He draws upon his own keen insight and historical analogies to inspire readers to think and draw their own conclusions . We all live in an age when modern day 'bubble fiascoes'  and the equivalent of modern day Ponzi schemes threaten everyone's financial well being. There are many inventive ways to lose ones money (or be removed of it). The South Sea Bubble Fiasco bears witness that it has all happened before. quixtarisacult

Click Here To See The US Debt Clock Add to the Debt in Motion.

What would the founding-fathers of the American Republic have made of this? by David Brear
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‘He that first cries out stop thief, is often he that has stolen the treasure.’
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What follows is not fiction. On the contrary, it is the history and analysis of an age-old fairytale which, when tailored to fit the spirit of the times, came close to sinking the world’s fastest-growing economy, because a short-sighted, and corrupt, political elite not only failed to challenge its authenticity, but also foolishly embraced its charlatan-authors as saviours.
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Nelson Wilmarth Aldrich (1841-1915) was an American politician and financier whom most people have now never heard of. However, what this forgettable-fellow did in the closing years of his life (and which still affects almost the entire world today) must have had the founding-fathers of the American Republic spinning in their graves; for until Aldrich came along, the non-indigenous people of the USA had managed to chart their own course towards prosperity without the need for a central banking system. A mere 65 years before Aldrich was born, American colonists had rebelled against the increasingly corrupt ways of Europe (where central banks and paper money had appeared at the end of the 17th century). The free-thinking men who drew up the US Constitution, were not economists, but they were blessed with a large amount of common sense. They realized that, when facing a financial storm, if bankers and financiers are allowed to take the helm of a sovereign nation’s monetary policy, then the instinctual desire of a dishonest minority to make a profit at the expense of the honest majority, will begin to steer the ship of state into dangerous waters.

Nelson W. Aldrich was an unremarkable, former wholesale grocer from Rhode Island who, after marrying into a wealthy family in 1866, and then entering politics and ‘Freemasonry,’ eventually became leader of the Republican party in the US Senate, and Chairman of the influential Senate Finance Committee. By the time of his death, the American press referred to Aldrich as the ‘General Manager of the Nation.’ Indeed, he has been widely-recognised as the helmsman of a series of radical financial changes of course which led to the creation of the US Federal Reserve System and the 16th Amendment to the US Constitution that apparently authorized the imposition of an unapportioned, federal income tax on the sale of American citizens’ own labour. However, a growing number of insightful commentators now openly-accuse Aldrich of being the corrupt dupe of a bunch of narcissistic charlatans (not unlike Bernie Madoff) who hatched a plot to enslave the American people in a fundamentally unconstitutional system of perpetually-expanding debt, resembling a protection racket; for although its sounds impossible, the 16th Amendment to the US Constitution was, in fact, never ratified, whilst federal income tax on labour was unlawfully imposed on the American people (and has been kept in place for almost a century, contrary to various rulings of the US Supreme Court), in order that successive federal governments (Democrat and Republican) can continue pay the interest on money which, since 1913, they have been obliged to keep borrowing from bankers, and which they previously could print independently. Whilst a majority of Americans don’t care, or continue to believe the ‘Federal Reserve’ and ‘Internal Revenue Service’ to be essential structures conceived by their elected leaders to act in the interests of the nation, in 1913, the Federal Reserve Act transferred the United States monetary policy, including the monopoly to issue paper money, into the hands of a private bank with a misleading name. In other words, the Federal Reserve Act was quite literally a license to print money. Furthermore, since US dollars no longer guarantee bearers payment on demand in gold, the Federal Reserve Act has, therefore, surreptitiously become a license to print effectively-valueless (counterfeit) money.

Ironically, at the end of the 19th century, Senator Aldrich had considered the above financial reforms (which he began to implement in 1909), to be the central planks of communism (i.e. extreme, or revolutionary, socialism). However (in the intervening years), Aldrich had acquired millions of reasons to change his mind. In 1906 (aged 65), he suddenly sold his interests in the Rhode Island Street Railway System to a New York company, the boss of which was the agent of the financier, J.P. Morgan. Aldrich then followed the advice of a number of his financier-friends, and rapidly multiplied his substantial windfall by investing heavily in controversial mining and rubber companies operating in the Belgian Congo. These companies began to generate indecently huge profits, and pay similar dividends, because they’d been sold the right to use slave labour by King Leopold II of Belgium (a megalomaniac who held the frighteningly familiar beliefs that he had been anointed by God and that negroes were sub-human).

In 1907, a financial crisis hit the USA and 50% was wiped off the value of shares being traded on the New York stock exchange. Across the nation, numerous banks and trusts were besieged by their depositor/investors, forcing many of them into bankruptcy. At this moment of universal panic, J.P. Morgan coolly stepped forward, and together with a group of similarly cash-rich New York associates, offered sufficient funds to save the nation’s failing-banks, but effectively taking control of them. Later that year, when the USA was facing another financial crisis, J.P. Morgan was allowed to takeover the US Steel Corporation. However, it is now known that the panic of 1907 was almost certainly engineered by J.P. Morgan and his associates, using the age-old technique of spreading rumours.

In 1908, the ‘Aldrich-Vreeland Act’ was passed. This created a ‘National Monetary Commission,’ chaired by Senator Aldrich, to investigate, and report on, the previous year’s panic. After publishing 30 (less-than-intellectually-rigorous) documents, in which the Commission members failed to identify the underlying cause of the problem and, instead, concluded that the national economy had been saved from total collapse by the injection of a convenient reserve of private capital. The Commission produced the ‘Aldrich Plan’ upon which the Federal Reserve System is still largely-based. Interestingly, it was only after he had returned from a trip to study European National Banks, that Aldrich became completely-convinced that the USA also needed a central banking system, just like Britain, France and Germany. Isolated from all voices of dissent, and advised by a group of bankers and economists, including, Paul Warburg, Abram Andrew and Henry Davison, over a period of just 10 days in 1911, Aldrich (now aged 70, and whom Paul Warburg later described as ‘bewildered’) produced his detailed plan for an American central bank. Although it bore his name, in reality Senator Aldrich could not have been the author of this plan. His judgement has been further called into question, due to the fact that his daughter, Abigail, was married to financier, John D. Rockefeller Jnr. Indeed, the Senator’s Grandson, Nelson Aldrich Rockefeller (1908-1979), would later become Republican Vice-President (alongside President Nixon’s forgettable-replacement, Gerald Ford).

So, what exactly is it that narcissistic charlatans will invariably try to do, if corrupt, and/or stupid, political leaders fail to identify them and allow them to steer a nation’s monetary policy in whatever profitable direction they want? The rather obvious answer to this important question has been known for three centuries; for, before the industrial revolution, central banking systems and many of the other so-called ‘essential structures, and instruments,’ of free-market capitalism (which have produced today’s failing global-economy) were already being installed in England without any real regulation.

In 1694, a ‘joint-stock’ company, the ‘Bank of England,’ was created. A Royal Charter granted its Governor the monopoly to act as the English Government’s banker. Until this time, the ancient concept of money had been based on the intrinsic value of the precious metal content of a sovereign State’s coinage, but the ‘Bank of England’ was also given the monopoly to issue paper money (guaranteeing bearers payment on demand, in gold). However, thriving merchant banks, insurance and securities markets, and a stock exchange (turning over millions of pounds of business annually on promissory notes) were expanding rapidly in London at the dawn of the ‘Age of Enlightenment.’ By 1707, the United Kingdom of Great Britain had been created by the union of Scotland with England.

In 1710, the incorporation of a ‘South Sea Company’ was proposed by a London stockbroker, George Caswall (of Turner Caswell & Co.) and John Blunt (of the ‘Sword Blade Bank’). What they initially offered, seemed to be a perfectly viable investment scheme linked to profits generated by Britain’s growing overseas trade. As such, the ‘South Sea Company’ prospectus closely resembled the ‘East India Company.’ In 1708, the directors of the ‘East India Company’, supported by their political allies, had, in exchange for lending the government approximately £3 millions, acquired the hugely-profitable (temporary) monopoly of British trade with the ‘East Indies’. The government debt was then resold to private investors in the form of ‘East India Company’ stock. In other words, the idea of the proposed ‘South Sea Company’ was to circumvent the ‘Bank of England’s’ juicy monopolies, by creating a corporate trading-front behind which lurked another national bank. This mystifying, but lawful, structure would sell an exclusive financial product derived from carving up government debt - a variation of the theory of insurance (i.e. the off-loading of financial liability held by the few, onto the many). In the face of political opposition, the ‘South Sea Company’ prospectus was supported by the ‘Lord Treasurer,’ Robert Harley, Earl of Oxford (1661-1724). He was responsible for the management of government debt which was spiralling out of control due to the country’s involvement in the vastly expensive ‘War of Spanish Succession.’ At this time, over 30% of British tax receipts were needed to maintain just the interest payments. Harley (a self-righteous, Nonconformist Christian and leading member of the Whig party) was so enthusiastic, that he personally organised a campaign of pamphlets and editorials in newspapers. Notable poet and collector of antiquarian manuscripts himself, Harley employed his literary friends as propagandists. They were some of the most talented English prose writers of the day, including Daniel Foe (a.k.a. ‘Daniel Defoe’) and Jonathan Swift.

Behind all the pretty words and exciting images, the reality of the ‘South Sea Company’ was somewhat different. Its core-commercial activity was intended to be the purchase of kidnapped humans in W. Africa to be transported and sold into slavery (for a large profit) in the Americas. This horrific racket was perfectly lawful at the time; it was falsely justified by the convenient, contemporary belief that negroes were no different to farm animals. After discharging their surviving human cargo, the slave ships were to be used to transport goods to Europe.

In 1711, a joint-stock company (i.e. a corporate structure with a specified commercial purpose, initially financed by capital raised from the public sale of shares in its declared assets and projected trading profits) was incorporated by Blunt and Caswall. In return for a future monopoly of British trade with South America, the ‘South Sea Company’ was permitted, by Act of Parliament, to assume liability for a portion of the British National debt. Private holders of a recent issue of government securities (with a guaranteed face-value), were obliged, by the same Act of Parliament, to exchange these for ‘South Sea Company’ stock (with a nominated value). The initial rate of exchange was determined by the government, but, thereafter, the value of the stock became subject to market forces. The company was permitted to raise extra working-capital by borrowing against the security of the future debt-repayment due from the government. The government agreed to pay the ‘South Sea Company’ 6 % annual interest (in perpetuity) on approximately £10 millions value of the national debt (fixed at the moment of exchange). However, stock-holders had no rights to a share of the approximately £600 000 annual interest payments to the company. Officially, dividend payments had to depend solely on the company’s actual trading profits. Unfortunately, S. American ports had been closed to British ships since 1703, but the government intended to fund its interest payments to the ‘South Sea Company’ from tariffs on the goods which the company was going to import from S. America once the war was successfully concluded.

As predicted (by Harley and his friends), the ‘War of Spanish Succession’ soon ended. However, as enormous international tensions remained, the Treaty of Utrecht (1713) granted Britain only limited trading rights with Spanish colonies. Just one solitary ship, carrying not more than 500 tons of cargo, was allowed per year. A further clause in the Treaty, specified a maximum annual quota of 4800 slaves. Consequently, an immediate boom could not occur. In fact, the ‘South Sea Company’ only conducted its first, allotted slave trading during 1717, and this represented a net-loss. To increase income and play for time, the company’s officers took on a further £2 millions of national debt to be converted into stock, but they now artificially increased the market-value of their existing stock-issue by paying dividends using capital which they’d borrowed against the security of the government’s future interest payments. During 1713, the value of (what should have been) the technically insolvent ‘South Sea Company’ rose by 40%. Despite the fact that, to remain solvent, the company officers had wilfully breached the terms of an Act of Parliament, no private investor had cause for complaint, and independent financial regulators didn’t exist. Although relations between Britain and Spain were on the slide, supporters of the ‘South Sea Company’ steadfastly denied this bleak reality, insisting that long-term prospects for future earnings were excellent.

In 1718, another war with Spain broke out. South American ports were again closed to all British ships. Therefore, the ‘South Sea Company’s’ specified commercial purpose disappeared overnight. Since the company’s officers were only authorized to pay dividends using actual trading profits, the shareholders had become the contributing participants in an unviable system of economic exchange without a sustainable source of external revenue. Whilst the war continued, the company couldn’t conduct any trade. Self-evidently, there could be no actual profits to divide. In reality, the pieces of paper printed as ‘South Sea Company shares’ had become fake securities, because they had long-since lost their guaranteed face-value. Therefore, any unqualified ‘commercial’ vocabulary used to describe the subsequent criminal activities of the officers of the ‘South Sea Company’ should be considered a misleading use of language. Obviously, it was now impossible for certain politicians to face reality. To maintain confidence, Harley and his friends had encouraged King George I to become ‘Governor of the South Sea Company.’ For a period, Britain’s Head of State was the unwitting front-man for what was soon to become one of the most convincing, and extensive, closed-market swindles in history.

By 1719, Harley had fallen from royal favour and the new ‘Chancellor of the Exchequer,’ John Aislabie, was facing a rising national debt already over £50 millions. John Blunt and his ‘company cashier,’ Robert Knight, again offered salvation. In the face of competition from the ‘Bank of England,’ they proposed what they arbitrarily defined as a ‘larger joint-stock, investment scheme’ where private holders of a new issue of approximately £31 millions of government securities (with a guaranteed face-value) could voluntarily convert these into ‘new South Sea Company shares’ (with a nominated face-value). Without a full explanation of the source of their finance, Blunt and Knight offered to pay the government an immediate £7.5 millions fee for the privilege. To sweeten the deal, the pair even promised that the government would only have to pay 5% annual interest on the new debt, and that this would be lowered to 4% after 8 years. Knight then corrupted approximately 50 members of parliament and numerous friends of the King. The (freshly-Knighted) Sir George Caswell had been elected to parliament, 2 years earlier. The bribes comprised valueless pieces of paper, elaborately printed as ‘new company shares,’ but which would acquire a market-value only if the proposed ‘South Sea stock-conversion’ was voted through parliament. Recipients of the bribes included: Charles Spencer (First Lord of the Treasury), Charles Stanhope (Secretary to the Treasury), James Craggs the Elder (Postmaster General), James Craggs the Younger (Southern Secretary) and the Duchess of Kendal (the King’s favourite mistress).

In the Spring of 1720, parliament duly passed another Act which agreed to Blunt and Knight’s so-called ‘investment scheme.’ In order to finance the new debt-acquisition, the ‘company’ was given official permission to increase its number of existing ‘shares.’ However, to pay the £7.5 millions fee, the government’s own securities needed to be exchanged for ‘new South Sea Company shares’ at a nominated rate already different to the securities’ guaranteed face-value. There were some common-sense objections at the time, but, incredibly, the ‘South Sea Company directors’ were allowed to set their own rate of conversion. Obviously, the greater the nominated value of the ‘new shares’ at the moment of exchange, the greater the profits were for the ‘directors’ and for everyone whom they’d bribed. In the end, the exchange-value of the bribes alone totalled over £1.2 millions. In effect, the Parliamentary Act was a license to print, and launder, a form of counterfeit currency. Once the conversion was completed and the government was paid, the counterfeiters began to use various ruses to drive-up the market-value of their ‘new shares.’ Again, using pamphlets and newspaper editorials, exciting rumours were started about ‘secret, future trade agreements and the unlimited value of future trade with the Americas.’ When this ‘positive’ propaganda tactic worked, and share prices rose steeply, the counterfeiters then sold further issues of ‘new stock’ and started to lend cash (via their own Bank, the ‘Sword Blade Company’) against the artificially inflated market-value of their previous issues, but only to enable individuals to purchase the subsequent issues. There was a veritable mania to buy - a contagious mass-psychosis, akin to gambling fever, began to spread throughout the land. In the end, there were more than 30 000 reality-denying believers - all convinced that they couldn’t lose. In January 1720, ‘South Sea Company shares’ were trading at approximately £130, by the end of May 1720 they were over £500. Not surprisingly, dozens of copy-cat swindles began to appear. Frustrated members of the public who felt they’d missed the boat, and who now couldn’t afford ‘South Sea Company shares,’ fell over themselves to get in on the ground floor of any ‘new prospectus’ that sounded speculative. The most infamous of these was presented as:

‘A Company for carrying on an Undertaking of Great Advantage, but nobody to know what it is.’

One morning an enterprising young man circulated a ‘prospectus’ in London’s financial quarter for a ‘joint-stock company’ that required £500 000 capital to be raised from 5000 shares to be sold at £100 each. Subscribers were to pay a £2 deposit per share which would entitle them to an annual dividend of £100 per share. The source of all the profits was to be kept an absolute secret at first. After one month, subscribers would have to pay the remaining £98 per share - only then would they be given the full explanation. An office was opened in Cornhill (opposite the Royal Exchange) at 9 o’clock the following morning. By 3 o’clock 1000 shares had been subscribed for, and the £2 deposits paid. The young man promptly closed the door of the office. He caught the first available mail-coach to Dover, and was never seen again.

The even less-sustainable ‘joint-stock’ swindles were popularly known as ‘Bubbles’. They led to a temporary weakening in public confidence in the entire London stock-market, and demands for independent regulation. In June of 1720, the ‘Royal Exchange and London Assurance Corporation Act’ (or ‘Bubble Act’) obliged all ‘joint-stock companies’ to have a Royal Charter compelling their officers only to engage in ‘authorised trading activities.’ This was not enforced for two months, but confidence returned temporarily. Predictably, the loudest supporters of the legislation had been the ‘directors’ of the ‘South Sea Company’ and their corrupt political allies. However, in order to pay-out some profits, and to maintain their own more-sustainable, but essentially identical swindle, the ‘South Sea Company directors’ needed to keep raising more capital and to keep the market-value of their ‘shares’ increasing. Since there were no external trading profits being generated, the public were merely buying infinite shares in a finite quantity of their own cash.

Apart from all the pseudo-economic mystification and ‘commercial’ shielding-terminology, the factors which fooled almost everyone, were that:

- the ‘South Sea Company’ was associated with the King and the government
- it had a Royal Charter
- its directors were now some of the most wealthy and famous Christian gentlemen in Britain
- all holders of the original share-issue had received annual dividends for 9 years

Some profits were taken when some private ‘share-holders’ re-entered reality and began to realise that it was all too good to true. When the ‘South Sea share’ price hit the psychological barrier of £1000 at the end of June 1720, public confidence finally began to crack. An increasing number of people, including the instigators themselves, then began to sell-out in a panic. The bubble started to deflate. By the second week of September, ‘South Sea stock’ had lost 33% and it was still in free-fall. Fearing that the British economy might collapse, the directors of the ‘Bank of England’ (who managed about 8% of the national debt) offered their silver reserves to underwrite and stabilize ‘South Sea’ shares at £400. Many grabbed this offer, but the ‘stock’ continued to plunge. On the September 24th the ‘South Sea Company’s’ own bank stopped redeeming ‘South Sea stock.’ The directors of the ‘Bank of England’ now withdrew their previous offer, creating even more panic. Many depositors became convinced that the government’s bankers didn’t possess sufficient reserves to meet their obligations. Tens of thousands queued to withdraw their savings, and/or convert their paper money into gold. By the end of September 1720, the market-price of ‘South Sea stock’ had collapsed to approximately £135. Several thousands people (including many aristocrats) were ruined, five banks had failed. There was some rioting in London streets, whilst an unknown number of bankrupt victims committed suicide. Parliament was recalled in December and the government was forced to form a committee to investigate and report.

In the Spring of 1721, the labyrinth of lies and corruption was only partially unveiled. Many of the guilty parties remained isolated from liability. Some, including Charles Spencer and Charles Stanhope, were impeached. James Craggs (the Younger) dropped dead before he could be held to account, whilst his father (probably) committed suicide. The Craggs’ vast profits and estates were confiscated from their heirs by the Crown. John Aislaby was imprisoned. Robert Knight, had already run away to the Continent with bundles of cash. John Blunt, was arrested and put on trial. His profits and estates, along with those of his fellow ‘company officers,’ were also confiscated by the Crown. The new, First Lord of the Treasury, Robert Walpole, saw too it that these seized funds were used to relieve the victims. ‘South Sea Company’ stock was divided between the ‘Bank of England’ and the ‘East India Company’ and new directors were appointed. The restructured ‘South Sea Company’ continued to trade in times of peace until the 1760s, but its principal role remained the management of government debt. It was finally wound up in the 1850s.

To give some idea of how convincing the ‘South Sea Bubble’ was at the time, the ‘Master of the Royal Mint’ and Britain’s leading mathematician, physician and astronomer, Sir Isaac Newton(1642-1727), was asked for his mathematical opinion on the rapid rise of ‘South Sea Company’ stock. Newton apparently replied that he ‘could not calculate the madness of people.’ However (according to his niece), Newton lost £20 000 himself. Ironically, he also owned one of the world’s largest private collections of antiquarian books on the subject of ‘Alchemy.’

According to the ‘South Sea Company’s’ accounts, over a period of 25 years (1717-1742), 96 triangular trading voyages were undertaken and a total of 34 000 humans were purchased in W. Africa. At least 4000 (11%) did not survive the journey to America.


Copyright David Brear 2008

South Sea Bubble video, satirical, amusing:





Wednesday, August 24, 2011

Amway Global, Isn't This Quixtar?


Quixtar? Isn't this Amway? I'm sure a lot of prospective recruits into the former Quixtar pyramid recruitment scheme have asked that question. It all seems so amusing to me now. Shouldn't people being exposed to the supposed new Amway Global pyramid recruitment scheme now ask the question: But isn't this Quixtar?

The former Amway cult became the former Quixtar cult which is now the present day Amway Global cult. A cult by any other name is just as bad I suppose? The historic bad legacy of Amway continues; and yes, it is still a cult, a pernicious (harm doing) cult. They still operate by proselytism of the unwary into a 'closed market swindle' preying on their own with little regard for the thousands of thousands who have historically lost in the Devos/Van Andel merry-go-round of greed.

I find it ironic that Amway is now willing to cough up well over 100 million dollars to re-compensate present and former 'associates' who GOT SCAMMED by Quixtar! Of course they admit no wrongdoing? Of course they settled pyramid scheme allegations made by former 'associates' out of court.

I'd really like to say to all those former Quixtar Independent Business Operators I TOLD YOU SO! Of course that might seem like gloating which it is. The truth has always been out there. The writing has been on the wall about Quixtar/Amway. British born author and Amway critic David Brear coined the best descriptive term for Amway: The Financial Holocaust. Indeed Amway's history reads like a crime story. I sometimes grow weary of repeating the same bad themes about Amway, but there is always the hope that just one prospective recruit can be saved the anguish of realizing the bad truths of Amway after the money's all gone.

Quixtar just seems like an appropriate name for the Amway cult. What could they have been thinking? Shouldn't this Quixtar affair be continuously served up cold and rubbed in Amway's face? Isn't it significant that Amway is coughing up a very small percentage of their swindled loot to settle with the 'taken' in their former Quixtar Cult?

Amway, again, manages to settle their pyramid scheme problems out of court and stay in operation. With very minor changes in their carefully devised swindle, they continue to rope in the unwary (or the greedy) and continue their swindle worldwide unabated. Of course that is the bad news. For those squandering thousands of dollars in a Quixtar nightmare, there may be a check and some rather mundane Amway products on your horizon. Your intentions to defraud others into your scheme may pay off in an unexpected way. Lucky you!
"The Amway slot machine rings up a couple cherries I suppose, not exactly the three gold bars as originally promised."

The proposed settlement may still be in the hands of the presiding judge. You would think that the Department of Justice might take a long look at the alleged Amway corruption. I suppose the DOJ will just take Amway's word for it that they are admitting no guilt by settling the suit. Again, this all plays out like past Amway affairs. Amway watchers and critics have good reason to be jaded!