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."
Legal if enough people believe it (Score:3, Interesting)
Some of the videos claim that because it's 'gifting,' it's somehow legal
Reminds me of that law [mamedev.org] software pirates invented so that they could copy games.
You can't con an honest man.... (Score:2, Interesting)
The people that send off money (gifts, paying for "Get Rich Easily" books, whatever) are idiots, they were idiots 10, 20, 30 years ago for similar scams, and they'll be idiots in 10, 20, 30 years time in whatever variation comes to light then. I won't cry for them. Maybe they'll learn the really hard way, because for some people there is sadly no way of getting them to learn any other way.
However it isn't right that YouTube is giving these people a free advertising platform. There are some people out there that are actually vulnerable (for whatever reason, this shouldn't matter) and society does need to protect them.
Why should it be illegal? (Score:5, Interesting)
With more and more videos being pulled because the various MAFIAA organisations can't get enough, crap like that will soon be the only things left on YouTube. Let's be honest, what's left? Music videos were the first thing to go (or "be unavailable in your country" should they not want to cough up the dough to be available for you). User made videos are now targeted, as well as videos to the likeness of "look how I play $instrument to $song".
Soon all there will be left are videos that, bluntly, nobody wants to watch.
But, to avoid being modded offtopic, let's ask another question: 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. How can they promise you insane interest rates when your bank can only give you 3% or less? How the heck should they have any influence on your weight (aside from you not being able to even buy bread anymore and thus starving)? And if that's illegal, why is religion still legal while promising essentially the same?
Re:A fool and his money... (Score:2, Interesting)
As a kid of the English aristocracy, I can with full confidence say that the richest people in this country have never done any hard work and have no more creative ideas than the average Slashdot poster.
As far as I can tell from the nouveau riche the family tends to mingle with, they might work harder than us but I've not met one who does "hard work" in the sense of toiling mentally or physically through almost every waking hour, as was pretty much obligatory for some classes over a century ago. And they certainly don't have creative ideas! they're mostly just middlemen who know how to appeal to a large volume of the lazy.
One of the great giggles of capitalism is that it produces a middle class the largest component of which only exists to support capitalist machinery - the re-sellers, the jesters in marketing, the accountants, the civil lawyers, etc.
Re:"educate yourself! educate yourself!" (Score:3, Interesting)
Solid critical thinking skills start with a decent education. Decent education starts by making it free, neutral and accessible.
So true.
Speaking as a philosopher of education I can say that there's no end to the practical application of logic and reasoning that you're taught in the course of the study.
It should be an obligatory course in elementary school, but for some reason it's much more important to have bible-stories read to you.
Makes sense right? I guess someone thinks it's a shortcut to good behavior being told what's right and wrong in broad general terms open to interpretation, instead of equipping people with the basic tools to figure those things out for themselves on a case by case basis in an exact, non-interpretable manner.
Re:waves of infection with stupidity (Score:5, Interesting)
Friend of mine seriously considered "investing" in a Ponzi scheme. Even after I explained to him how it works he was still thinking about it. Why? Cause he considers himself smarter than the guy doing the scheme. The conversation went a little like this:
Bob: Have you heard of these short term money market investments?
Me: Heh, these.. what.. investments?
Bob: short term.. money.. you give them money and a few weeks later they give you 100% return.
Me: Oh really.. what are they investing in?
Bob: Doesn't say.. I mean, that makes sense, if you knew what to invest in you wouldn't need them right?
Me: It's a scam.
Bob: Really? Their web site looks legit.
Me: Web developers are pretty cheap ya know.
Bob: Well I've search around for them and I've not found anyone bad mouthing them.
Me: Maybe they change their name every week.. or maybe they're doing the long con.
Bob: I think they're legit man.. umm.. long con? What do you mean?
Me: How much are they asking for?
Bob: Not that much, only a few hundred.
Me: So if you invest a few hundred and in two weeks time they give you double your money back and then ask you to reinvest that and give a few hundred more, you would right?
Bob: Well, yeah, I guess.. maybe a few times.
Me: So if, say, on the third time they said they really needed to you pump in twice as much as you have already given them or they won't be able to give you back your investment.. you would right?
Bob: Well, I guess, I mean, they'd have a good history by then.
Me: After just 3 cycles?
Bob: Yeah..
Me: You're a sucker.
Bob: No.. I'd take the money before then I think.
Me: So if they ask you for your phone number and call you up, will you talk to them?
Bob: Sure.
Me: And you'd give them your bank info.
Bob: Uhh.. umm.. I guess so.
Me: Yeah, you're a sucker.
Bob: I think I'll give em the first hundred and then take their money on the first cycle.
Me: I think they'll see you coming and make sure you never get that first "investment" back.
(Bob isn't his real name, but if you're reading this M... you know who you are).
Re:They learned it by watching the government. (Score:5, Interesting)
The national debt is now over 11 trillion dollars and there hasn't been a real budget surplus since 1969.
The federal government has borrowed money and can not pay the prior lenders back, so they borrow more money in order to do so. This has been going on for so long that only a few people still recognize it as an active ponzi scheme, as is evident by the ignorant people modding my post as a troll.
The interest payments on the debt will crest half a trillion dollars this year, and will be over a trillion/year by the time Obama's 1st term is up. The government will likely borrow more from social security (why not? its doomed anyways) in order to pay off prior lenders as it becomes more and more difficult to find new lenders.
There are other areas where the government is actively ponzi as well, such as medicare (medicare is a bigger problem than social security.)
Check out (U.S. Government Accounting Office) http://www.gao.gov/cghome/d08446cg.pdf [gao.gov] to see how grim the pyramid really is.
It wont be possible to take down the pyramids through force (taxation at gunpoint) for much longer. If ponzi could have gone out and robbed some banks, he could have paid off all of his lenders. But imagine the point where even if he robbed every bank in the country he couldn't pay them off. America is pretty much there, right now, at the point of no return.
Re:waves of infection with stupidity (Score:5, Interesting)
Or work for the guy that started it. I wrote the software to monitor one and he offered to graft me on somewhere near the top. As I'd done the maths I realized how sleezy it was (it was fairly obvious that those towards the bottom stood to lose every penny, whilst the guy at the top was looking at £50,000 per month) and in declined. Probably I wouldn't these days.. I'm older, wiser and have less of a conscience.
Re:waves of infection with stupidity (Score:2, Interesting)
And who is going to collect? (Score:3, Interesting)
Bad debt happens on country level all the time. What are you going to do, send the bailiffs on someone who can answer the question "and whose army?"
Much is made of the Chinese calling in the US debts, but what would China be without exports to the US? The world has become far to complex for childish tricks. Unless someone has a compelling reason to create turmoil, then the system can go on forever. That is the one part of the middle class idea that really works. The more middle class chinese there are who earn their living with trade, the less the will to upset this style of living with something as silly as calling in debt.
Granted, the current system is extreem but if the US economy collapses to many other economies will as well. The last thing the Chinese goverment right now wants is to tell its own people the economic welfare their communist leaders have created is about to end. Rich with no freedom is a lot easier to swallow then becoming poor with still no freedoms.
Re:They learned it by watching the government. (Score:4, Interesting)
See the difference? Its hard for the government to write off bad debt when its the one thats upside down.
That's ok. The US debt is backed by nuclear weapons, the IRS, and 2 million prisoners providing near free labor.
I'm trying to be funny, but I'm sort of serious. The fact that the USA can invade another nation with impunity to enforce its economic policies, use the IRS with impunity, and throw you into jail if you don't follow laws specifically created to create criminals makes the USD more valuable.
I'm mostly being pragmatic about the issue even though I don't agree with it. I mean, have you ever tried to pay the IRS in something over than US dollars. I don't think they will be happy with you. By the mere fact they force people to pay in USD means that it is made de facto valuable because you have to pay or face jail time.
Not being in jail is important to you, right? Therefore the USD is valuable to you.
Re:They learned it by watching the government. (Score:2, Interesting)
And you also have to realise that VERY few people receiving welfare do it for extended periods of time if they don't have to. Welfare provides enough for basic needs like food and shelter (and we have a public health system), it isn't the conditions that many people will endure for long. The vast majority of people on welfare are on it because they need it and I do not begrudge them some quality of life just because I have to pay a couple of dollars in tax to do it. If that means a few people get to live in relative poverty willingly then so be it, I don't think they should die either. There will always be unemployed and there will always be some people that don't want to work and are willing to live on a bare subsistence wage. As one of our PM's once said - "we should marry these two groups together".
My example of musicians, artists and charity volunteers seems to have been completely lost on you. I was trying to demonstrate that there are many advantages of living in a compassionate society that aren't immediately obvious.
We look after each other over here. We just booted out an arsehole prime minister in a landslide election that was trying to dilute welfare and turn us into the US. You may remember him, Bush's last act was to give the little prick a medal. Good riddance to him.
Re:"educate yourself! educate yourself!" (Score:1, Interesting)
No, I don't believe in democracy at all. As has been said before Democracy is 3 wolves and a sheep voting on what to serve for dinner.
I believe in a Constituional Republic wherein the power of the central government is strictly limited, and powers are reseved to the member States and the people. That was the great promise of America, but it wasn't long before the corruption at the basis of human nature took hold and began distorting the carefully balanced government.
As has been attributed to historian Alexander Tytler:
We are at the final stages of this progression, I fear.
Re:Onzi is a deceptive investment (Score:2, Interesting)
Re:They learned it by watching the government. (Score:3, Interesting)
"The government will likely borrow more from social security (why not? its doomed anyways) in order to pay off prior lenders as it becomes more and more difficult to find new lenders."
Except that its actually exceptionally easy to find lenders. Currently treasuries are barely above a negative yield and buyers are lining up to get them and paying some of the highest prices ever to do so. If the market is willing to lend the U.S. Government gobs of money at what is essentially interest free right now, why shouldn't the government do so in order to pay off the older high interest debt? Seems both rational and responsible.
Your hysterical rhetoric obscures some other more relevant facts. Regardless of the total $ amount of the debt, as a percentage of GDP U.S. debt was actually MUCH higher in the 40s and 50s and current debts is roughly equivalent to where it was in 1990.