Your Money: the Ponzi Scheme Explained

In the investigation of the alleged $50 billion investment scam by Barnard Madoff, it's been referred to as a Ponzi scheme. So what exactly is a Ponzi scheme? AP Personal Finance Editor Trevor Delaney explains. (Dec. 17)

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[mapleleafs182]

the whole fucking economy is a ponzi scheme. We don't need money.

[JH1776Publius]

Asshole, there is no such thing as a free lunch; education and health care are not free someone somewhere has to pay for it and that someone is the taxpayer..

Your burden includes your income tax, your tax on food, your tax on booze, your tax on everything. Which puts it up at nearly 50%. Ridiculous.

[RandomJ0e]

Rozz2656 So we should start trading goods for other goods. Like Water for wheat ect. Then problem is then what is something worth,goods can go bad,how will you settle debts,what is consider collateral ect. So lets use gold as currenty but gold is to expensive then we use paper than back to square one. Ta da

[rozz2656]

we should just get rid of money, it creates to many problems and its really just pieces of paper we should use lik resources etc

[Regginyaga]

Isn't this exactly how banks work?

[jorn1233]

@redwoodmountianwitch money creates greed

[DSkeptic86]

@csbob2010 Ok, thanks.  Now I understand. wow

[csbob2010]

@robinhood201218 Sounds a lot like Social Security.

[csbob2010]

@DSkeptic86 What they do is get people to invest a little bit of money, then when they actually see the big returns...they can get the same people to invest way more money. Then they get jacked. They build up their trust and then use their greed to take their money.

[csbob2010]

@b0010100b As long as your not on the bottom of the pyramid when the fuckers decide to cash in.

[redwoodmountianwitch]

@mapleleafs182 If people had the maturity to only take what they need, then money would'nt be needed to organize deals and debts. If only greed did'nt exist. We are stuck in a world full of fucksticks, my friend.

[b0010100b]

so a Ponzi scheme is a "blind" Pyramid scheme? Older investors inadvertently drive new investments through simply bragging about their cash.

Clever.

Greed is the best bait ever for taking a persons money. The biggest bank heist is 100's of times smaller than these greed/bad math Ponzis. people simply hand away their life saving thinking they'll get something for nothing. If it wasn't so devastating to the victims it could almost be considered an elegant proof of theory for human behavior.