- (mirror version) - WHERE IS THE authority? !! (Part 1 of Rampant Lawless Series)

(this is a mirror version, original post at here)
http://jp3rdparty.blogspot.com/2011/08/where-is-authority-part-1-of-rampant_27.html

Scam Series: The Ponzi Scheme
by JP

There are a lot of scams and money-cheating activities around.

From the paper-based, the [Scratch-n-Win], lucky draw scam, lottery scam etc. to solid items - property transaction, house and car buying or selling, office renting, land swooping etc.

From well-plotted gambling table to well organised pyramid scheme.

With highly advancing and global integrated technology development nowadays, besides the common unsolicited emails sent to our mailbox, we might still be cheated off a penny of twos by those annoying mobile phone SMS !!

Most of the time, we might have just 'chosen' the way of [keep quiet] if we got cheated (unless the figure is considered 'big' to us, or if we felt hurt or sad with that).

Well, let me bring a series of rampant scams happening everywhere; then you re-choose your choice of decision IF it happens to you again.

[The Ponzi Scheme (A Pyramid System)]

The Ponzi scheme is a pyramid system with cheating off money from investors.

The scheme is named after Charles Ponzi who became notorious for using the technique in early 1920. Ponzi did not invent the scheme (for example Charles Dickens' 1857 novel Little Dorrit described such a scheme decades before Ponzi was born), but his operation took in so much money that it was the first to become known throughout the United States. Ponzi's original scheme was based on the arbitrage of international reply coupons for postage stamps; however, he soon diverted investors' money to support payments to earlier investors and well-riching himself.

A Ponzi scheme is a fraudulent investment operation that pays returns to separate investors, not from any actual profit earned by the syndicate, but from their own money or money paid by subsequent investors.

The Ponzi scheme usually entices new investors by offering returns (dividends) other investments cannot guarantee, in the form of short-term returns (dividends) that are either abnormally high or unusually consistent. The perpetuation of the returns that a Ponzi scheme practises and pays requires an ever-increasing flow of money from investors to keep the scheme going.

Generally the investor would be so happy with the high dividends that they would not complain. The authorities would therefore remain ignorant (or corrupted) of the operations of the scheme. Besides if exposed and forced to stop the investors would lose all the money they had invested.

The system is destined to collapse if there happens lesser 'fresh' investments than the dividends paying-off. Usually, the scheme is interrupted by legal authorities before it collapses because a Ponzi scheme is suspected or eyed. At most of the times, some corrupted authorities work with the scheme organiser to seize the operation pretendedly once the system hit its 'bottle-neck' where insufficient 'fresh' investment pumping in to cope up with the dividends paying-off.

Nevertheless the so-called dividends would contribute to the per capita and GDP of the country. And the magnitude bunch of the 'black-money' scammed by the organiser would contribute to those corrupted authority's earnings as well!!