What is a Ponzi scheme?

What is a Ponzi scheme? What are the hazards of Ponzi scheme? Now let me tell you.

Ponzi scheme is one of the oldest and most common investment schemes and a variant of pyramid scheme. This scam is called Charles? Speculator in Ponzi scheme? Invention? Yes This kind of scam deceives people to invest in fictitious enterprises and pays investors money as a quick profit to induce more people to fall for it. Ponzi scheme is also called in China? Rob Peter to pay Paul? 、? White wolf with empty gloves? . In short, it is to use the money of new investors to pay interest and short-term returns to old investors, so as to create the illusion of making money and then defraud more investment.

Characteristics of Ponzi scheme 1. Anti-investment law with low risk and high return. As we all know, the iron law of investment is that risk is proportional to return. Ponzi scheme? Often do the opposite. Liars often attract investors who don't know the truth with higher returns, but never emphasize the risk factors of investment. The returns in various situations may be different, and some are ridiculously high. For example, Ponzi promised to get a 50% return on investment within 45 days, and the rest were stable and extraordinary returns. For example, Madoff assured his clients that the annual return was only about 10%, but he emphasized it very much? Investment must be earned, is there a loss? . But in any case, swindlers always try to design an investment path far higher than the average market return, and never reveal or emphasize the risk factors of investment.

Characteristics of Ponzi scheme II. Characteristics of funds for robbing Peter to pay Paul. Because the promised return on investment cannot be realized at all, the return on investment for old customers can only be realized by joining new customers or other financing arrangements. Right? Ponzi scheme? Put forward quite high requirements for capital flow. Therefore, scammers always try their best to expand the scope of customers and broaden the scale of absorbing funds in order to get enough funds to make up for the space. Most scammers never refuse to add new funds, because the cake is bigger, not only the income is more considerable, but also the risk of capital chain breakage is greatly reduced, and the duration of the scam can be greatly extended.

Characteristics of Ponzi scheme III. The unknowability and unrepeatability of investment know-how. Liars try their best to play up the mystery of investment, keep the investment know-how secret, and strive to shape themselves? Genius? Or? Expert? Image. In fact, due to the lack of real investment and production support, there is nothing for scammers to scrutinize? The way to make money? Therefore, keeping the mystery of investment as much as possible and publicizing the non-replicability of investment is one of its effective tricks to avoid external doubts. At that time, a reporter from Boston Global Times wrote an article to expose Ponzi scheme, but Ponzi didn't take it seriously. Don't understand financial investment? Arguably refuted. Madoff is also mystifying, never telling others the investment know-how of stable profit 10% every year.

Characteristics of Ponzi scheme. The countercyclical characteristics of investment. ? Ponzi scheme? Our investment projects never seem to be affected by the investment cycle. Whether it is industrial investment related to production or financial investment related to market conditions, investment projects always seem to make a steady profit. It seems that the afforestation plan of 10,000 mu has never been affected by climate, environment and geography. In the past 20 years, Madoff's hedge funds on Wall Street have survived several financial crises. These investment projects always show the anti-law characteristics of violating the investment cycle.

Characteristics of Ponzi scheme V. Pyramid characteristics of investor structure. In order to pay high returns to the investors who join first, Ponzi scheme? We must constantly develop offline, and attract more and more investors to participate by means of inducement, persuasion, affection and connections, thus forming? Pyramid? Types of investor structure. A few insiders at the top of the tower make profits by squeezing a large number of participants at the bottom and inside the tower. Even an inscrutable man like Madoff, the former chairman of Nasdaq, can't avoid leaving the production line and making extensive use of friends, family and business partners for development? Offline? Some people are successful? Attracting investment? And get a commission? Offline? New development? Offline? Grow like a snowball. Pyramid? Structure.

The manifestations of Ponzi scheme

Since Ponzi, in less than 100 years, all kinds of? Ponzi scheme? Are emerging all over the world. With the process of reform and opening up, China has been transformed? Ponzi scheme? Also entered China in large numbers. There was a kind in the 1980 s? Rats will? , that is? Ponzi scheme? A copy of. And more familiar? Ponzi scheme? The improved version is all kinds of pyramid schemes. So are most illegal fund-raising cases in China? Ponzi scheme? Copy of. Some business miracles in China, such as Wu Ying, a 26-year-old woman rich in Zhejiang, which was recently exposed, are also the means to get rich? Ponzi scheme? Copy of. The Ant Force God incident in 2007 was also a similar scam, using the new money to buy equipment and ant species to pay the previous investors. Others, such as afforestation in Wan Li, are actually this? Ancient times? An updated version of the scam, just? Ponzi scheme? The payback period of afforestation in Wan Li changed from 45 days to 8 years. Others, such as selling to farmers to grow a strange agricultural product or aquaculture product, and then promising to recycle it at a high price, belong to this kind of scam. Some people even refer to some behaviors of China stock market as? Ponzi scheme? It's not completely unreasonable to make a copy.

The underworld in China is not very developed, but there is a relatively developed Jianghu society. There are various ways to cheat money in Jianghu. For hundreds of years, these tricks have been appearing all the time, adapting themselves to the realistic conditions of modern society in a new guise and repeatedly fooling people. Bernard Madoff, the former chairman of Nasdaq, also adopted the same method, repackaging the old scam with modern financial means and reviving it. Every time this kind of deception appears, even if it is finally uncovered, it will cause a small amount? Investors? For example, loss? Afforestation in Wan Li? ,? Investors? It is almost impossible to recover all the losses. On this issue, modern banks and? Ponzi scheme? The difference is that the national government will guarantee the interests of depositors.

Because? Ponzi scheme? It's not wonderful at all. Most people who are cheated are people at the bottom of society, and the scope involved will be relatively large. Although Madoff has been arrested by the FBI, this kind of thing will not go away. This is the case in China, the United States and other parts of the world. The so-called prevention depends only on people's own vigilance. The key is not to be greedy and not to think that pies will fall from the sky. Don't believe those stories that make big money easily. However, under the guidance of money desire, the more common sense is violated, the easier it is to be believed. This often makes people very helpless. For some people, if they are cheated, they will not learn from their mistakes, and the lessons of the past will have no effect. What else can we do? Are you online? Ponzi scheme? There are only a few in the original edition. Investors? Recovered some losses.

The harm of Ponzi scheme

Compared with ordinary financial fraud, Ponzi scheme? There are more victims, wider influence, deeper harm, stronger concealment and greater social harm.

First, there are many victims. ? Ponzi scheme? The inherent investor structure of pyramid scheme and the pyramid scheme of cheating and getting off the assembly line determine that the victims must reach a certain scale in order to effectively maintain the cash flow required by the scam. So, typical? Ponzi scheme? Victims are often huge, such as Ponzi, who cheated 40,000 investors, and Colombia, which is characterized by illegal fund-raising? MLM scam? The number of victims reached 2 million, and it is difficult to count the number of people cheated in the recent Madoff case. In addition to the United States, Madoff fraud has spread to Britain, France, Switzerland, Spain, Japan and other countries.

Second, the amount of fraud is huge. ? Ponzi scheme? Some founders never want to repay the investment principal, so they never worry that the amount involved is too large, while scammers think that increasing the amount of funds raised will help enhance their popularity and attract more investors to participate. So, under the accumulation of snowball effect? Ponzi scheme? The amount involved is often higher than that of general financial fraud. For example, Ponzi fraud150,000 dollars, illegal fund-raising case in Colombia involving 800 million dollars, Madoff case reaching an unprecedented 60 billion dollars.

Third, the social influence is wide and has many levels. ? Ponzi scheme? The number and scale of deceived people determine that its social influence far exceeds that of ordinary fraud cases. Its influence level is diversified, including government officials and celebrities, financial investment practitioners, ordinary people and retirees with low risk tolerance, which has caused serious social harm. If it is not handled properly, it is likely to endanger financial stability and social order because of public opinion. For example, pyramid schemes in Colombia have caused large-scale riots in some areas.

The fourth is to endanger investment confidence and financial stability. Given? Ponzi scheme? Its influence and harmfulness are fatal to investors' confidence every time? Ponzi scheme? After that, it always takes a long time to repair the damaged financial order, and it is not possible to restore investors' investment confidence overnight. Taking Madoff's fraud case as an example, a large number of financial institutions were involved, which led to the customers of financial institutions losing trust in financial institutions, triggering a large-scale chain lawsuit and adding new injuries to Wall Street, which has been hit hard by the financial tsunami.

Fifth, deception is deceptive and hidden, and it is difficult to supervise and trace. Smart? Ponzi scheme? Using more subtle investment methods to make the way of making money seem specious and feasible, supplemented by stable excess returns, can effectively deceive ordinary investors and even professional investors. ? Ponzi scheme? Some insiders often master the core information of the group, cronyism and strictly keep the financial secrets of the group, thus reducing the risk of being exposed or investigated by the outside world. For example, Madoff's asset management department and trading department work on different floors. Madoff kept the company's financial situation secret, even for his children and relatives who were company executives. All the accounts and documents of investment consulting business were locked in the safe by Madoff. Lack of transparency and all kinds of deception? Ponzi scheme? It can often be maintained for a long time outside the vision of regulators.