Sunday, October 9, 2011

The Great Albanian Pyramid Scheme II

OK - before we move forward to talk about the pyramid scheme that toppled the Albanian government in the 1990's and ignited a civil war in that country, it is worth looking into the history of that country in the 1990's.

    From 1944 until 1985, Albania was ruled by a despotic and cruel Communist system headed by Enver Hoxha.  Even by Soviet and East European standards, the Communist dictatorship of Hoxha was harsh and barbaric.  The country was kept in a state of virtual isolation from the outside world and the ever present secret police enforced a brutal repression over the small country.

     This isolation and backwardness meant that for about 40 years, the people of Albania had no real way to compare their country with other countries, including the standard of living and, more germane to our discussions, how economic systems and actual investments work.  This meant that when Communism eventually collapsed across Eastern Europe in the late 1980's and ended in Albania in the early 1990's the population was completely ignorant about investments and free market systems.

    In situations such as this, it is not surprising that people are easy prey for criminals and fraudsters to take advantage of the situation.  And, of course, this is what eventually occurred.

As always, have a great and fraud-free day.

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