The effect of POnzi scheme on the economy

[Mosiah]

Not about Ponzi, explanation for the purported hugh increase in poverty in Jamaica since 2007.

The election was when?

[Assasin]

I know. it is rumoured at least that he is at least an investor.

[Karl]

Agree 100%.
There is no good in a Ponzi scheme.

...all it does is encourage short term splurging by those who through their money in followed by even greater hardships than they initially had.

...a few, very few may come out ahead. Usually those who recognised the "too good to be true" - and made a deliberate decision to get in early and leave early and followed through on that.

Could some of those persons use the funds received to start businesses or prop up businesses with cash flow support?

Definitely.

...and could some of those businesses succeed.

Definitely.

...but the havoc reeked by the Ponzi scheme is much greater than any successes by or two. The havoc is tsunami-like.

[Willi]

Local or general?

[Don1]

lol

[Gamma]

ponzi river...ponzi bank ... gi dem a run jiggs, gi dem a run!

[Don1]

Well no wonder you can't explain how poverty decrease with production and wealth. While debt ballon.

.

I don't understand the above statement.

Whatever it means...I maintain that Ponzi schemes don't create value.... particularly for poor people who cannot participate in them...and consequently Ponzis cannot explain the dramatic reduction in poverty between the late 1990s and 2007.

As to what may explain the poverty reduction...I already gave my speculations above in answer to Willi

[Gamma]

by definition HOW can a ponzi scheme create value? you mean the consumer purchases which end up being repossessed or sold?

[Mosiah]

heh heh! silly!

[Don1]

I would love to see his study on Ponzis and wealth creation apart from the lucky few who "invest" and get a positive return...and also his tracking of where the monies collected ended up... seems to me the investigators are not finding much in Jamaica...but in the US, Central America & Asia...

Mi nuh put much truss inna politicians... sarry... not credible for me

[Muadib]

About a year or so before the harshest Global recession in 70 years...

Unnuh ah some real eediat.. muss be di orange hats.

Nuh worry doh cause unnuh luff poor people..

[Don1]

In a way I guess Ponzis can create value for an economy... since it accumulates capital and there is a psychological effect that people "feel" they are wealthier because they expect big returns to continue... so they may act wealthier by spending more...but

1. The capital accumulated by the Ponzi would have to be invested primarily in the subject economy...and not massively expatriated offshore in tax havens & foreign investments as seems to have been the case with Jamaica

2. The investments would have to be in assets producing value

But even so...since no legit investment can match the rate of return Cash Plus etc were paying...it would collapse even under those circumstances

Madoff on the other hand could have continued much longer...he was only paying a few points above the market yield ....no more than 15% or so annually...the rates in Jamaica were like 10% per MONTH

[Don1]

tut tut...bad timing

u guys shudda tek di crown inna 2002

[Assasin]

"In a way I guess Ponzis can create value for an economy... since it accumulates capital and there is a psychological effect that people "feel" they are wealthier because they expect big returns to continue... so they may act wealthier by spending more..."

THAT IS THE SHORT TERM EFFECT AND THAT IS WHAT WILLI AND I HAVE BEEN SAYING.

Economics is not only based on asset that you own, as they measure sentiments in consumer and producer's survey, so how people feel is important and it can result in short term boom as it did. You can see this when Cash Plus sponsoring NPL team, Olint sponsoring Jazz and Blues, Cash Plus paying big bucks for Drax Hall land etc. These were not commuity PONZIs but illegal company with value of 15% of GDP so it must have economic spin off on society as a whole.

[Mosiah]

di same recession dat Man A Yard say wouldn't hurt us? is dat one yuh a talk bout?