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CONTENT
Definition History Types Of Ponzi Scheme Unraveling of a Ponzi Scheme Case Study 1 Case Study 2 Popular Ponzi Schemes of 21st century
DEFINITION
A Ponzi scheme is a fraudulent investment operation that pays returns to its investors from the money paid by subsequent investors higher returns than other investments short-term returns requires an ever-increasing flow of money
Charles Dickens' 1844 novel Martin Chuzzlewit described such a scheme The scheme is named after Charles Ponzi an Italian business man (1920) 50% profit within 45 days, or 100% profit within 90 days Postal reply coupons in other countries and redeeming them at face value in the United States Robbing Peter to pay Paul Made payments to earlier investors and himself Loss : $20 million in 1920 dollars ($300 million in 2013 dollars)
HISTORY
2- Economic Bubble
Based on the "greater fool" theory Where prices rise because buyers bid more assuming prices are rising One participant gets paid by contributions from a subsequent participant A bubble involves everrising prices in an open market (for example stock, housing, or tulip bulbs) Bubble burst when greater fool become greatest.
No matter how large the model becomes before collapse, approximately 88% of all people will lose.
In 2001, the Haitian $240 million was equivalent to 60% of the country's GDP. In 2003, a $1 billion scheme in Florida, affecting 28,000 investors In May 2006, a $311 million Ponzi scheme over a 20 year period in California, USA In October 2006, in Malaysia, known as SwissCash offering returns of up to 300% within a 15-month On April 13, 2007, in Pakistan, Sibtul Shah doubled investment in 15, later extended to 70 days. In April 2013, Republic of Mauritius over 700 million Mauritian rupees. In June 2013, in Tunisia, a fraud 80 million dinars
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