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Old 12-25-2004, 09:03 PM
mbhunter mbhunter is offline
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Default Re: What exactly is a "ponzi scheme?"

There's a link here:

http://members.impulse.net/~thebob/Pyramid.html

In both cases the people who get in first win and those who get in later tend to lose. The pyramid scheme has one guy at the top who eventually gets "bumped off" of people's lists. The Ponzi scheme has a central entity throughout the whole process that redistributes the wealth to the earlier entrants (which may include the person starting the scheme) from that invested by the later entrants.

Some people have referred to the US Social Security System as a Ponzi scheme, but I don't technically think it is because it's legal.
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