Can a motorbike with two wheels, touching the ground, stand on it without any external support given to it by side-stand or mid-stand or someone actually holding it? No…right? But still we see it zooming on the roads on the same two wheels…that too without any external support. Initially, the rider has to face a few problems in gaining momentum through a proper mix of acceleration, handle control, gear settings and break application along with one important thing – Confidence. However once he knows, how to set the motion of the bike, excitement begins and reaches to its next level. Now why am I telling you all this? He he he…Because the kind of investment scheme which you will go through, if you keep your reading momentum intact, will give you, the same thrill as you would speed up a motorbike.
Let me tell you the first things first. The methodology which you would be reading, is actually a fraudulent investment scheme. Got your interest on this article? He he he…now read further…
It will pay you abnormally short term high returns on your investment and hence would entice & allure new investors. Don’t worry; the promoter of the scheme doesn’t have to do any kind of business with your investments to generate profits so as to pay alluring returns. Now you would be thinking – how the hell, will he be giving us high returns then? Well, the promoter will pay high returns to all his investors out of the money paid into the scheme by subsequent investors and not from profit. Again, you will ask me – are you going nuts? How will the scheme survive? He he he…Well, the scheme is not set to survive but to die, after living it’s life only and only on cash inflows & outflows. Till the time, investors maintain their cash-flow injection, the scheme will boom on it’s own…
During inception, the promoter will have to infuse one thing in this scheme – CONFIDENCE. It will deceive those people who have much more money but are layman in the field of investments and financial world. Such people generally have a tendency to get amused by the jargons, which promoter uses in creating investment deception. Of-course, initially the scheme will have a lesser number of investors, but when the existing ones get higher returns at the maturity of the short investment term, the number will start growing. Obviously, the scheme will grow more through the words, spread by the initial investors who got higher returns. Other investors will definitely grab such opportunities to participate in the scheme, leading to a cascade effect deriving from the promise of extraordinary returns which actually will be paid out of the investments of new entrants and not out of the profits which will not even be generated.
Well, if you be the initial investor who got higher returns on your investments, won’t you re-invest in this scheme? Yes, isn’t it? And that’s where the promoter strikes his chords. The promoter will set the re-investment deal with all his existing investors prior to the date of maturity, thereby sending them just statements of their gains and not the actual money because it has been re-invested in the scheme again. He he he…The promoter will definitely try his best in minimizing the withdrawals too. However, if few investors do wish to withdraw their money in accordance to the terms and conditions allowed, the requests will be processed promptly. This is to generate an illusionary effect, where in other investors remain wrongly aware about the solvency status of the scheme/fund. Other investors will still think that the scheme/fund can chunk out higher returns compared to other alternate investments available in the market.
Now that’s how the scheme will boom. Let me tell you, how its death is slated.
Well, everything has a saturation limit. There will be a time, when the number of investors pooling in their hard earned money will decrease. Such a time can come, when cash inflows will be lesser than the cash outflows as the existing investors will not like to continue further with the scheme. It will automatically generate liquidity crunch and hence the scheme will collapse. Also, if legal authorities intervene during the time of its boom and ask for details, the scheme can be exposed to its death due to the lack of submission of valid investment methodology by the promoter. And believe me, it will still be a planned death as the promoter knows about it, well in advance, prior to setting it on a run.
If these two does not happen and the promoter controls his greed factor, then he can vanish in vacuum with the available funds in his scheme thereby allowing it to die purposefully. There would be two effects in such a situation – one the investors would panic, but will the promoter care? And two, the promoter will give the world another rags to riches story of himself, thereby arising from anonymity to entering another anonymity. He he he…
And believe me, this investment methodology is not a newer one. In 1920, it made Charles Ponzi a millionaire who landed
You might be asking that in the world of investments, every methodology becomes a jargon. So what is the jargon for this scheme? Well Charles Ponzi was the first one in
If you are not inclined towards history, you would definitely curse me for telling you such an old scheme that emerged in 1920. The world has drastically changed since then and so you will not believe in its existence anymore. Correct? Let me tell you a universal axiom – History repeats itself…so did Ponzi Scheme. Dona Branca, popularly known as “People’s Banker” in
Where-as, Reed Slatkin, used the same scheme, since 1986 till 2000 to raise $593 million.
Again if you might be cursing me for introducing you to the years passed by - several years ago, let me bring you Bernard Madoff who used the same scheme to create the biggest fraud that this world has ever experienced – valued over $50 BILLION.
He was finally arrested on
It would definitely be worth mentioning that if your CONFIDENCE IN CREATING GREED has grown enough, then I can extend my blog with your story too...he he he
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