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From: rjn@hpfcla.UUCP
Newsgroups: net.consumers
Subject: Re: Pyramid schemes (Amway)
Message-ID: <34800002@hpfcmp.UUCP>
Date: Mon, 30-Sep-85 20:57:00 EDT
Article-I.D.: hpfcmp.34800002
Posted: Mon Sep 30 20:57:00 1985
Date-Received: Sun, 6-Oct-85 06:12:09 EDT
References: <203@kitc.UUCP>
Organization: 30 Sep 85 18:57:00 MDT
Lines: 21

re: SSS as "pyramid" scheme...

> Amway isn't the only "legal" pyramid scheme running in America.  Don't
> forget the biggest pyramid of all:
>                  Social Security
> It's only legal because the government does it.

SSS is a "Ponzi" rather than a pyramid.  In a Ponzi scheme, prior  investors
are paid out of the income from new  investors;  up until the  operator  has
enough  "float"  to  retire  to  Brazil.  The  government  won't act in this
manner, of course,  because  unlike a Ponzi  operator,  the  government  can
enroll  new  investors  by FORCE and pay old ones by  printing  money  (i.e.
inflating the money supply).

The recent lactic culture scam is also  representative  of a Ponzi.  Pyramid
schemes rely on a growing  hierarchy of  re-distributors.  Quiz for the day:
Is a chain letter a pyramid scheme?  Film at eleven.

Regards,                                               Hewlett-Packard
Bob Niland                                             3404 East Harmony Road
hplabs!hpfcla!rjn                                      Fort Collins CO  80525