Introduction to Ponzi Schemes: Part 2

Introduction to Ponzi Schemes: Part 2

Category:

Education

Tags:

• Ponzi
• scheme
• inflation
• deflation
• gold
• silver
• vorojtsov

[theporksicle]

Interesting that you mention the example of the intelligent investor joining the Ponzi scheme out of a sense of resentment that the dumber investor had made money.

And, thanks for fleshing out some of the issues with ponzi schemes, so much of the stuff out there is just repetition of what a ponzi scheme is, very few people take the time to explore why they work, how sustainable they are, why people still fall for them in spite of their dangers being well publicised etc

[Zpock1]

Interesting point that most investments/companies will have some component of ponzi scheme to it, as part of it's sucess will partly be due to further investments by others.

[skinnyjohnsen]

@Live2Break It depends on what country you're in; Not all countries have laws against pyramid companies/ Ponzi schemes, but most modern capitalist countries do;

Bernie Madoff, or what's his name, did this and he is in prison for life, after destroying the life of so many people.

Some would call for capital punishment, but not me;

It's your own greed and stupidity that makes you fall for it!

If anything is too good to be true, well it just isn't true! It's a bloody fraud!!! Be careful ;-)

[Live2Break]

@noxure so it is a trick to make money??is it illegal or legal???

[robmct22]

banking system is like a ponzi scheme, but runs on trust rather than fear or greed.. if we all tried to take our cash out at the same time the banks would collapse, the money is invisible and not real...

[onjoFilms]

How do I go about starting one? Do I need to be registered?

[noxure]

@Live2Break It's a con "investment" where the money just goes back and forth between the investors without actually investing in something.

Say you invest $1000 and a month later I give you $1500. What you don't know is that this $500 is just money from someone else who also invested $1000. So, because your satisfied you invest the $1500 back into the scheme and meanwhile more people are starting to do it too. When I have $10mil worth of "investments" and I take all the money and flee.

[NeddLudd1811]

If you could identify that old investors are being paid directly from new investors money, and not via some return on real investment, then you could identify the ponzi and arrest the parties involved.

But you could argue that the wests welfare system is a ponzi. Pensions are being paid directly from taxation and have not been invested anywhere. So as billybob pointed out in his comments it really is most vs least influential.

Thanks for posting these videos.

[Live2Break]

what is a ponzi scheme??

[billybobhobnob101]

@billybobhobnob101 Instead of just rewarding first in and screwing last in - you would have a more complicated program that rewarded most influential and screwed least influential- also even for the influential constant high rewards are probably less reinforcing than a schedule that includes some lower returns and even losses.