You're Being Scammed

By Mike Johnson

Some people steal. Some people cheat. Human nature doesn’t change.

I learned this first-hand running stores for 7-Eleven and McDonald’s.

An incident at McDonald’s was especially enlightening.

Food cost was our largest expense. A large component of that was fry yield. Each serving of fries was supposed to be a specific portion. So managers were judged on the number of servings per pound of fries.

There were many honest ways to gain an acceptable yield. Yet one manager decided to cheat.

Each month, we inventoried the amount of fries on hand to calculate usage and the yield. This manager started adding a few extra phantom cases to his inventory, making it look like he’d used fewer pounds of fries, which made his yield look higher.

Each month, to maintain the scam, he had to keep adding more and more phantom inventory to his counts. Eventually, our boss noticed the impossible number of cases listed and caught the manager.

When numbers look ridiculous, there is a reason.

It’s either an error or a scam.

Which brings us to today’s financial markets. Nothing makes sense. The numbers are all out of whack. In every asset class.

This isn’t an error. This isn’t somebody else’s french fries. This is your life savings.

You’re being scammed.


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