Ponzi Schemes Multiply On YouTube 346
Hugh Pickens writes "While it's probably not true that P. T. Barnum was the originator of the saying 'there's a sucker born every minute,' the proliferation of nearly 23,000 Ponzi schemes on YouTube, with an astounding 59,192,963 views, proves that the sentiment is still alive and well. The videos usually don't ask for money directly, but send viewers to web sites where they are urged to sign up for the 'gifting program,' usually for fees ranging from $150 to $5,000. One of the videos recently added on YouTube featured Bible quotes, pictures of stacks of money and a testimonial from a man who said he not only got rich from cash gifting, but also found true happiness and lost 35 pounds. 'They make it seem like it's legal and an easy way to make money, but it's nothing more than a pyramid scheme,' says Better Business Bureau spokeswoman Alison Southwick. Some of the videos claim that because it's 'gifting,' it's somehow legal. 'They talk about "cash leveraging," whatever that means, and other vague marketing talk,' says Southwick, but the basic scheme is that participants are told to recruit more people who will put in more money. 'It's just money changing hands,' says Southwick, 'and it always goes to people at the top of the pyramid.' A spokesman for YouTube, which is owned by Google Inc., said the company doesn't comment on individual videos."
They learned it by watching the government. (Score:5, Insightful)
"educate yourself! educate yourself!" (Score:5, Insightful)
...this is precisely why we really need to reconsider our public schooling system.
If we abolish forced schooling, and insist that people "educate themselves" They'll find one of these scams, get taken for an expensive ride, and then left dumbfounded as to what happened.
Solid critical thinking skills start with a decent education. Decent education starts by making it free, neutral and accessible.
Sign of the times (Score:4, Insightful)
Just like during the Great Depression, this will be a time of resurgent con-men as the majority will (in desperation) try anything to get cash.
Re:They learned it by watching the government. (Score:3, Insightful)
Right, because taxation never produces libraries, public roads, schools, an FDA, FCC, or any number of other services.
All taxation does is make a handful of oligarchs rich, right?
A fool and his money... (Score:5, Insightful)
The notion that you can "gift" (or "buy") your way to being rich without doing any hard work, or having a creative idea, is so completely stupid that anyone who believes it, assuming they're in full control of their mental faculties, deserves what they get.
Re:"educate yourself! educate yourself!" (Score:5, Insightful)
You'd be surprised how quickly a sucker learns after his money is gone forever. Sounds like a cheap education to me.
Re:"educate yourself! educate yourself!" (Score:4, Insightful)
You'd be surprised how many people fall for one of these schemes, then move on to the next, lose out, and move on to the next to lose out again...
Re:Why should it be illegal? (Score:5, Insightful)
Why should it be illegal to play pyramid schemes? Just because people are stupid enough to fall for them? I have no sympathy for people who are lured in by promises that are quite bluntly too good to be true, where thinking about it for only a minute would give you enough reasons to stay away from it.
Libertarian intellectualism at its finest. Why don't we just scrap all the laws and let people fuck each other over every way imaginable? People do stupid things, laws try to prevent and minimize the harm done by those actions.
Re:"educate yourself! educate yourself!" (Score:4, Insightful)
Want to see an economy tank all we need is a couple million illiterate people come of working age.
Re:"educate yourself! educate yourself!" (Score:3, Insightful)
No, it sounds like the most expensive, yet useless education ever devised. You lose a lot of money, and you learn one way NOT to lose your money, when it's far too late.
It's *money* which is the Ponzi scheme (Score:2, Insightful)
ok. Follow me here. This is real simple, but 300 million Americans keep missing it.
I need some money in order to facilitate a transaction... How do I create that money?
I go to a bank (the FED) and borrow $100 from them. The FED creates new money (credit) and loans it to me at 5%. (Did you see the pea in the shell game? It was right there. Cos millions keep missing it)
Right, so there is only $100 of credit in existence but now I owe them $105.
1 year later I'm a bit stuck because I've paid off most of the loan to the FED but that last $5 is a real bitch because it just doesn't exist. So what do I do?
I need some money, so I go to a bank (the FED) and borrow some more money from them. The FED creates that new money and loans it to me. Great! I can pay that $5 which didn't exist. But wait, I now need to pay off interest on the new load. lather, rinse, repeat.
That's money. The debt has to keep growing, or the system collapses. Growth. Growth. Must have growth. A Ponzi scheme of epic proportions. Hey, maybe you can talk some bums on the streets to take out some loans for a couple of McMansions. Then everything will be all right.
That's money. The government created it that way, and can change it as required. Don't you think they share some of the blame?
Re:"educate yourself! educate yourself!" (Score:2, Insightful)
There is a general tendency not to admit one has been wrong after having invested in something. A result is that people who have been scammed are generally unwilling to believe they've been scammed, even when confronted with evidence. They'll rather make up flimsy explanations for why the evidence can't be right.
So, no, the sucker won't learn fast, if at all. And it won't be cheap, because those that do learn will end up paranoid, unable to trust other people ever again.
Re:"educate yourself! educate yourself!" (Score:4, Insightful)
Solid critical thinking skills start with a decent education. Decent education starts by making it free, neutral and accessible.
That's a good start, but critical thinking must also be focused on as a skill. It's far too easy to regurgitate a textbook and even regurgitate what other people have thought on the matter. In things like math it's easy to learn the method without understanding, and in things like science you spend a lot of time catching up with that others have done or experiments with an expected outcome that is more reproduction than experimentation. Linguistics teach you to express things but again doesn't really help critical thinking alone.
Sure, you can do more critical thinking on subjects already discussed to death by millions of scholars around the world, but given the tendency to google instead of thinking yourself it really only works on those who already want to think for themselves. To teach critical thinking you need to make them "think where no man has thought before". Make up a situation they won't find on google, ask them to argue some opinions, form arguments and give reasons for their logic. Unfortunately that is orthogonal to teaching them about the big and important events in history, which is so much more concrete and measurable. So we get people that know a lot about the world and understand little of it.
Re:It's *money* which is the Ponzi scheme (Score:3, Insightful)
Re:They learned it by watching the government. (Score:4, Insightful)
Well, considering that most people on Social Security are well past their reproductive years, it won't keep them from adding to the population.
I'm heavily against govt. (especially the feds) spending on things which it is not constitutionally mandated to do, but, even I see some need for a very, very basic social safety net for the elderly and infirmed. However, the ponzi scheme that is the SS program, isn't what I'd like to see. It is going to go bankrupt in a few years. Likely when I retire, it will not exist I fear. It really sucks that I have paid all this fuckin' money into a black hole, which will not come back to me. Frankly, even at this last point, if the govt. would let me, I'd sign away any 'rights' I have to collect SS, if they'd let me OUT of the program at this point, and let me keep and invest my money on my own.
Re:Why should it be illegal? (Score:5, Insightful)
Here's why:
If it illegal to take someone's money by use of force, so it should *not* be legal to do the same with a pen or a computer.
If the strong of body cannot rob the weak, the strong of mind should be prohibited from doing the same.
Re:Why should it be illegal? (Score:4, Insightful)
Because outside of the damage they inflict upon naive individuals and their families, if left unchecked (as we basically saw with the housing bubble) they have the potential to inflict damage upon the real economy.
Because a large percentage of people are not smart with money but are otherwise extremely capable of being productive contributors to society. As a society it benefits us for people to be justly rewarded for their fruitful labor, which requires mitigating the potential harm of their money-foolish character flaw.
And finally, to the extent that money becomes a hack as opposed to an accurate representation of labor and capital, it is devalued as a concept, which decreases its global worth and utility.
Re:It's *money* which is the Ponzi scheme (Score:5, Insightful)
1 year later I'm a bit stuck because I've paid off most of the loan to the FED but that last $5 is a real bitch because it just doesn't exist. So what do I do?
If it's (hyper)inflation you spend it as soon as possible before it loses value until it collapses like the reichmark in 1920s germany or just recently the zimbabwean dollar. If it's stagflation you hoard it as money is increasing in value. What you're missing here is that somewhere, real value is produced. Imagine that there's 100$ total and there's 10 foobars, the only goods to trade so each is worth $10. Now there's a foobar maker, which produces another foobar - there's now 100$ and 11 foobars and the new market price is 9$. Who's earned value? The people sitting on a 10$ bill. Now imagine how well it works if everyone wants to sit on their 10$ bill.
So what's the solution? To print money, they print one more 10$ bill and suddenly there's 110$ total and 11 foobars and the money market works. Of course they can fall to the temptation and print more money than actual growth, say 110$ and 10 foobars, meaning you can sell a foobar for 11$. The government basicly took part of the value out of everyone's 10$ bills. But people have a very simple way of fighting this - don't sit on money, sit on goods as printing money only increases prices. In those situations money is just an intermediary as you swap one good for another, you buy gold or a saner currency.
Of course the government like everyone else like skimming something of the top, but for the most part they work hard to keep the financial system going. Once you stop believing in the currency you also stop believing in deposits and credits because they make you "stuck" in that currency and so the whole economy withers. Like with the human body, you have vital organs but if you have no circulation system then none of those will survive either.
Pyramid != Ponzi (Score:2, Insightful)
Ponzi scheme is not the same as pyramid scheme.
One important difference is that with Ponzi scheme you do not receive any real, i.e. not on paper, profit immediately.
Re:Why should it be illegal? (Score:3, Insightful)
In other words, I do think the law should protect you from being robbed and mugged, it should give you a title to enforce a contract you and another party willingly entered in, but why should the law protect or even reward someone for acting like a complete moron?
We need laws against robbery and being mugged not to protect strong people, but to protect people who are weaker and/or less well armed and less violent than the muggers. The laws are there to protect people who are physically weaker. I think it is quite sensible to also protect people who are mentally weaker. If the law protects me from a person who uses a gun or a knife or strong fists to convince me to hand other my money, why shouldn't the law protect me from a person who uses his brain and his smooth talking mouth to convince me from handing other my money?
Re:They learned it by watching the government. (Score:5, Insightful)
Master Charge owns the debts of others
United States owes debts to others
See the difference? Its hard for the government to write off bad debt when its the one thats upside down.
Re:They learned it by watching the government. (Score:4, Insightful)
With the usage of the word "arse", I'd have to guess you are not an American.
I'm guessing Europe, UK?
It is just a different mentality, you are used to thinking of the large government 'nanny' state, where the state takes care of you from birth to death. Over here, we (at least we did) believe in personal resposibility, the individual, and taking care of your own.
During your working life, you are supposed to save for 'rainy' days, and retirement. In the constitution, the federal government, over here, is pretty much only supposed to be there for defense, and to be more or less, a mediation between the states, where the real power is supposed to reside.
However, that balance of power has slowly eroded over the years, and national programs and the like have come from the feds, which they really should not have the power to do or force upon citizens of each state. That's what myself and others are generally complaining about.
Many of us want to get back to the 'roots' of the US, and get rid of government mandated ponzi schemes (like SS). We don't want to go the way of Europe, and have a large, overbearing nanny state. As it has been said before, a government that is big and strong enough to give you everthing, is also big and strong enough to take everything from you too.
I'd rather be left to struggle more on my own, and be more free of govt. entanglements.
Hmmm, there is a difference... (Score:3, Insightful)
Cry me a river Sophie! There is quite a chance that the national debt will mean nothing at all to any of us or our grand children. This is the old right wing scare tactic and nothing more.
In case you haven't realized, there's not enough people to buy t-bills to finance the debt at a rate the government can live with, so the federal reserve is printing money to buy up to about a 300B worth in addition to the trillion dollars worth it already holds. So we're printing money to pay for things, and, that's the kind of crap third world countries do. The only reason we can get away with it is because the dollar is the reserve currency of the world and now everyone has to pretend that the dollar is still worth the same as it was before, even though the Fed is printing away, otherwise, they lose all of their stuff.
I wouldn't cry a tear for these dollar holders overseas those. By and large these people are holding dollars in an attempt to keep their currencies relative to the dollar so they can export more junk to the USA. Like the Chinese, Japanese, you name it.
So what the Gov't is doing, in the big picture, is to take advantage of the fact that our trading partners are trying to use our own currency to screw us, and are instead using that to go buy massive amounts of stuff with it.
Meanwhile, the those of us that save have to run the risks of having all of our assets getting wiped out because of defacto dollar devaluation. What really sucks is that dickering over exchange rates is absolutely the worst way to mediate trade. It would be so much simpler just to set up quotas and tarriffs and have some protectionism, then it would be to screw up the entire money system of the world.
Re:They learned it by watching the government. (Score:3, Insightful)
Uh, is he assuming that the investments would be made the way they're supposed to be made? Because in practice the system would just turn into a means for funneling more taxpayer money directly into the coffers of the already incredibly wealthy. Invest, loot, company crashes, money is gone, adios Social Security. The only good that could come of this is that if the system crashed we might get enough riots to get some of these mansions full of pricks burned down.
Re:They learned it by watching the government. (Score:5, Insightful)
I don't know when, but at some point in the last few years wanting to have a balanced budget became the sure sign of a right-wing extremist.
The tax deduction only works for Master Charge, because it can take defaulted loans as losses, which then count against its income.
GP makes no sense. The US could simply refuse to pay off its debts, but to claim that this would have no consequence, or even be beneficial, is surreal. All of a sudden US treasuries, up till now the benchmark of safe investment, would be worthless. Investors would switch to safer euro-denominated bonds, probably from Germany. The markets would be awash with worthless dollars everyone wants to convert to euro. The dollar would collapse. China might start cutting its losses, accelerating the process. The euro would become the global reserve currency, assuming that European economies weren't too hammered for it to switch elsewhere.
The status quo, allowing America to effectively raise cash on its own terms, would be destroyed, and the American public would have to learn to deal with difficult terms of debt like the rest of us.
So yeah, good luck with that.
Did his analysis (Score:1, Insightful)
Did his analysis include the stock market dropping in value by 50%?
Just curious. Might not be applicable if he didn't.
Re:They learned it by watching the government. (Score:3, Insightful)
I don't know when, but at some point in the last few years wanting to have a balanced budget became the sure sign of a right-wing extremist
Too bad the last 8 years of what could be called "right-wing extremists" weren't even close to a balanced budget. I'd say it's more like wanting a balanced budget has become the sure sign of a politician that's doomed to lose their next reelection campaign because they haven't done enough pandering to their overlords.
Re:Did his analysis (Score:3, Insightful)
"You have to look at the investing in the market long term. Sure, there are fluctuations, and corrections. But over the long haul...so far, it makes money. Sure, if it drops 50% right now...there are some losses, but, it will go back up."
And that would be fine if you had a long term choice of when to retire.
I'd say yes, you're hopelessly optimistic.
Re:They learned it by watching the government. (Score:4, Insightful)
Re:They learned it by watching the government. (Score:4, Insightful)
But I'm not arguing that everyone has to get rich or perish. Just work hard, and live within your means. That means you don't spend on luxuries (HDTV, cable, fine cars, good booze) till you've bought groceries, and put back money for retirement and general savings. The problem is, that largely people have come to expect the govt. to fund their retirment and take care of all the basics, while they go spend their money on 'fun' stuff as mentioned above. If they stayed at home and cooked...they'd not have the weight problems, and they'd save money, etc.
"In fact I know lots of musicians and artists that did their best work while on the dole (unemployment benefits) and enriched us all. I also know several people on welfare that do great charity work."
I love artists and what they do...I applaud people for doing charity work. However, I don't feel it is my place to work hard, bust my ass to earn money, and then turn around and hand it over to people that are sitting around, doing 'fun' stuff like art and music. Hell, if I could be supported, I'd learn to play the guitar or paint or take more time to enjoy my writing. Unless you are good enough to sell your stuff, that is a HOBBY, it is not a livelyhood. Many charities hire people to work for them...no need to be on the 'dole' when you can work for a charity doing good deeds.
Again, no...not saying you have to get rich. But I don't believe in supporting people to have an easy life. I don't mind giving to the elderly, and the infirmed that cannot work. But, anyone that can work....should.
Re:They learned it by watching the government. (Score:4, Insightful)
Re:They learned it by watching the government. (Score:3, Insightful)
Sure things are down, but, there ARE always jobs out there, just may not be ones you 'want'. Like you mentioned, PhD cab drivers...yes, it sucks, but, you gotta do what you can to put meat on the table. When things pick up, you can move back up to a better job.
Also, I think people need a mentality change. Job for life at a company has NOT been around for a long time, yet many people cling to that idea/ideal. Also, we are now in a very mobile society. Putting down roots for life, is possibly a thing of the past. You have to move to where the jobs are, or at least be willing to relocate, or if you can't sell your house....travel,and get on the road. Long commutes,, contracting gigs...etc.
When times are tough...you have to be willing to do what it takes. But much of your proposition was that if jobs go from your area, you are sunk. To me that tells me one thing...MOVE to a different area where there are jobs for your skillset. Is it pleasant? No...but, you gotta do what you gotta do. There are jobs to be had out there, but, my may have to move from NYC to GA or somewhere...and learn a different lifestyle.
Re:They learned it by watching the government. (Score:3, Insightful)