Why It's Called a Ponzi Scheme
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- Опубликовано: 28 авг 2024
- Ever wonder where the term Ponzi scheme comes from? Today associated with figures like Bernie Madhoff, it originated with one Charles Ponzi and his plan to make millions with postage stamps. Back in 1920, there was a deal where you could effectively pay for postage in one country, and redeem the value in the country you received it, where the price of postage might be different. Do this between the United States and Italy, where inflation had wracked the country, and according to Ponzi you could make a profit of 400%. Well he told his friends about his great plan, and he doubled their money in 90 days. So he started a company in January 1920, and by July he was taking in a million dollars a day. But here’s the catch: That whole postage scheme? The value was redeemed in stamps, not cash. Logistically the overhead purchasing such large quantities and shipping them from Europe to America would cost more than he could make in profit, so he didn’t - as long as more people kept investing, he kept paying out. Until the Boston Post reported that to cover his investments he would’ve needed 160 million postal reply coupons… and there were only 27,000 in circulation. Charles Ponzi lived 6 months as a millionaire, and the rest of his life in poverty.
Imagine going like "This guy Mr. Ponzi seems like a trustworthy guy, I should invest in his scheme!"
Don’t forget the guy whose name is made off
Ponzi wasn't a bad guy, he literally donated the skin off his back to help a burns victim.
The worst people wash their crimes with public acts of charity. He stole millions in a time where millionaires were the top
You either die a hero or live to see yourself become the villain
A good act doesnt wash out the bad, nor the bad a good one.
@@theberserker6000youre not meant to take stannis' morality serious bro. Hes literally a fundamentalist
@@Yatagurusu a fundamentalist of what? A justice fundamentalist?
If i recall correctly he himself said he learned it from someone else so we'll never know who actually came up with the ponzi scheme.
From his former Boss in Canada who had the Zarossi bank, his name was Luigi Zarossi and left the country before he could arrest him.
It's a pretty old scam. They used to call it "Robbing Peter to pay Paul." The Ponzi case was so huge, though, that it ended up taking his name.
Remember its only illegal if a person does it
LOL if it's a bank, government, or corporation that does it, that's just business as usual
Only illegal if you get caugth
Great for me I guess, being a bird with broken wings is hard, you know?
@@JD-qq8fz more than welcome to go to china
@@JD-qq8fz like ya mam out on the town everynight
These days we call it: Literally the entire financial strategy of most cities and towns in North America WHOOPS
How
@@Dog.mentalityhe’s referring to car dependent suburbia which is unsustainable and only survives due to federal and state funding and cities expanding their suburbs generating a little bit but some immediate revenue but then digging an even bigger hole in the long run leading to bankruptcy.
@@dkoda840 more than welcome to go to china
@@Riza20462 Ah yes don’t agree with something go to china, you’re not American.
He represented himself in court. Was aquitted from some charges from the first jury but ended up being found guilty by a second set of jury
Nowadays we call it cryptocurrency.
Crypto is closer to a pump and dump scheme
And rugpulls where they just flat out lie about what the product is
Cryptocurrency is more pump and dump. Hustler’s University is more of a pyramid scheme.
Gaining money by giving out money he doesn't have for investors to give him money that he will pay back with money he still doesn't have ? Idk that sounds more like banking to me.
@@joundii3100yea I still don't understand at all. seems like the same concept of banks and liquidity??? why aren't banks illegal?
Serves him right for swindling all those people's money.
Love the name of your channel.
I was once a bit of a ponzi then I met a clever woman who caught me in her envelope and stamped me down. Now, instead of a fancy suite and straw boater, I wear postal shorts and deliver through a DL slot. Hey, it’s better than a life in the Penn. And the pay’s regular.
Idk if this is toward a lover or an employer.... or both
@@fleurcode then my work here is done.
Isn't that just how banks work?
Banks invest/loan out your money and give you a small portion of the profit as interest. Ponzi wasn’t investing in anything, just paying the old investors with the new investors’ money. Plus with banks, you have FDIC protection guaranteeing up to $250,000 in your accounts.
@@Pantsinabucket 🤡
Yes, my thoughts exactly. Instead of telling people he was investing in the stamps and promising that much in ROI, he should have just said that he just invested it in other people ( which he did by giving loans). I don’t think fdic existed at that time (otherwise there would have been no bank runs in 1929). From the documentary, it seemed like the banks refused to return his money when he needed it back. I think a Ponzi scheme is defined more by lying about what you are doing with the money than it is about the method because that is what banks, insurance companies, Wall Street and the government does “borrowing from Peter to pay Paul.” You need to have “reserves” and insurance to make it safe. He had “reserves” of $4,000,000. He owed investors $7m. The amount he was short was in the banks. Not defending the guy but after witnessing so many recessions and government bailouts, You have to really compare apples to apples.
Now a days its presence is still around and that would be the game we call 'life'.
This is just a nutshell explanation. The documentary on him is interesting
I mean, tbf, yeah
It's a short
Explaining things in a nutshell is literally the point of a 1 minute formar
@ValatY No shit, I typed what I did because obviously, there are more details, right?? Because people these days just watch some clip and think all the details are in there
@@Itsadarkworld34 appreciate the notice 🫡
Very interesting
but when did he started wearing a leather jacket and became the 'cool guy' of that small town?
😂
In Pakistan we call this scheme "double shah"
You can’t blame an Italian for trying.
Why does he sound auto toned
Video was something a minute and three seconds or something like that. RUclips has a hard 60 second limit for shorts and there wasn't a great place to make cuts so I nudged it a bit to make it faster
@@JackRackam thanks was just wondering blind people got them good ears.
Wait, that's how social security works?
*Racks gun* always has been
Social Security is an insurance against old-age poverty. Paying money to get money back is how literally every insurance works
@@cheydinal5401 The point of insurance is to cover people that have an unlikely problem. If everyone needed more money than they paid, the system would work.
Since everyone grows old (unless they die), everyone is going to receive large social security payments. If they receive less than they paid, there's no point to social security. If they receive more than they paid, they fit it from the next generation (making it a Ponzi scheme)
And of course It had to be named after an Italian...