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Ponzi Scheme: a form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from
by deweller 4y ago
Ponzi Scheme: a form of fraud in which belief in the success of a nonexistent enterprise is fostered by the payment of quick returns to the first investors from money invested by later investors.
- kiba 4y agoWe need a word that is not intentionally a fraud but is pretty much an example of an unsustainable pyramid.
- orangepurple 4y agoFractional reserve banking
- adgjlsfhk1 4y agoNot a ponzi scheme. It doesn't rely on growth to survive.
- orangepurple 4y agoYou are right. However, over time systemic risks grow with it. Your point still stands.
- Ekaros 4y agoIt kinda does. Fractional reserve system means there is more debt that there is money. And if interest rates are not below zero. There will be always more debt until someone defaults. Actually even full reserve with debts would mean there is more debt than there is money...
- outsidetheparty 4y ago"Capitalism" (in its modern, dependent-on-continuous-growth interpretation)
- peteradio 4y agoHouse of cards.
- viscountchocula 4y agoHere, the Ponzi idea is that early investors in suburban and exurban housing receive generous subsidies to expensive infrastructure beyond what their value can realistically support tax-wise over the long term. Their early, illusory success (appreciation in price, perception of living The American Dream) convinces others to buy in before realizing that replacing sewers, roads, etc is really, really expensive at low density and so the infrastructure crumbles or requires a bail out.