“I told you so”

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This is something you do not get to hear but it is the truth. Ponzi scheme is the biggest business in the world because everyone has a vested interest in the game including the “victims” especially in a contracting economic condition. People are making so much money that nobody has a vested interest to ask any questions, clinging to false hope that the good days will last forever although a “grand funeral” has already been planned for the ponzi scheme sometime in the future.

According to Wikipedia, a ponzi scheme is a fraudulent investment operation that pays returns to its investors from their own money or the money paid by subsequent investors, rather than from profit earned by the individual or organization running the operation. The scheme is named after Charles Ponzi, who became notorious for using the technique in 1920. Ponzi and pyramid schemes are closely related.

How does this ponzi scheme trick really work? How do they keep it going? As long as new investments are expanding at a healthy rate, the schemer is able to keep the fraud going on and on. Once investments begin to contract, the house of cards quickly collapses. In other words, the ponzi scheme falls apart meaning it pops and burns the pockets of investors especially those who are late to the party.  

How soon? The higher the returns, the greater the risk of the ponzi scheme collapsing more quickly. Over the years, even intelligent and educated people who do not understand how things work and are always too easily to be brainwashed have been ruined by investment schemes that turned out to be fraudulent. Indeed, we wonder all the time how the obvious red flags could have been ignored by so many of them who kept the schemes afloat for a while before the collapse.

We are all entitled to our opinions so there is no need for some people to scream at me. It is always the victims who are naïve, not the schemers who are smart. As long as real economic growth is declining and there are job worries and skimpy wage growth, the demand for “anything” that promises quick and high returns will always be there. Please get a second or even third opinion if you have been approached by people claiming to be able to make a fortune for you overnight.

Someone has got to stand up and expose that everything we believed in is a big lie. That job belongs to the financial regulators working around the clock to protect the suckers on the street. Indeed, all sorts of tricks are being exposed daily and unsurprisingly, the schemers are getting bolder than we think. Beware also that the schemers are continually reinventing themselves and changing names to escape the radar screen of the regulators.

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