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Comment by sam_goody | Hacker News Reader

Can I suggest that it should be legal to create a Pnozi scheme, as long as you are up front and absolutely clear that that is what you are doing.

It seems to me that situations like the current one with Hertz are really just Ponzi schemes played out with stocks.

If we could do this legally, I bet you there would be a lot of these, and the ones playing would know what they are in for. (And there would be less incentive to do it illegally).

If Dave Portnoy and Warren Buffet both started a pyramid, who could grow the larger one before bust? Would you buy?

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Ultimately the end of any pyramid scheme is a large number of people losing money , often money they can't afford to lose.

It doesn't seem likely to be in the interests of most governments to actively encourage straight Ponzi schemes as when the people at the bottom of the pyramid lose their money, they may end up requiring state assistance, transferring the risk to taxpayers.

sounds a lot like regular old gambling. most will lose, but a few will win through luck or skill. if it's clear up front that the expected value is negative, I don't really see a reason to ban it. most forms of entertainment involve losing money.

The people who "win" at Pyramid schemes aren't (IMO OFC) winning through luck, they're winning by being the people that set them up.

And in the US and many other countries gambling is regulated, so that the games have certain parameters and the risks are known, can't see that being applied to pyramid schemes.

a disclosed ponzi scheme is called "musical chairs", and if you remember playing it as a kid it's not that much fun and almost always ends with someone crying.

Good point. Reminders me of negative yielding bonds. Institutions buy them knowing they will lose money unless there is a greater fool willing to buy them at a premium.

That's not exactly accurate. Storing cash is expensive, so some non-speculative demand for negative yielding bonds.

Cough crypto!

Ponzi only works when there are greater fools.

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