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You may have lost money in your investment portfolio,
due to mismanagement and not even know it.

Two theories re Ponzi schemes: the second is not too encouraging

As noted in a recent news article on Ponzi schemes, the perpetrators of such ruses entail a certain dichotomy and often display a pronounced inconsistency -- and accompanying illogical fault -- in their character.

On the one hand, they are often exceptionally bright and creative people who command more than their fair share of charisma and ability in manipulating others to do as they want (which is to fork over money, obviously).

On the other hand, though, the schemes that they orchestrate are simply incapable of enduring, given that the money they bring in owes to neither legitimate business productivity or to investment aimed at promoting it.

And, thus, they stand atop their creations like activated time bombs, with the ultimate implosion of their fraudulent enterprises being inevitable.

Here's a theory regarding Ponzi schemes, as advanced by well-placed commentators on the subject: Empirical evidence showing a decline in such ruses over the past several years truly indicates that they are on the wane. That obviously spells good news for the general public.

But here's a counter theory that they suggest is more likely, namely this: "The relatively buoyant financial recovery [of recent years] has allowed these schemes to remain hidden for longer."

And that, obviously, is not good news. The writers say that "just a simple economic change" could reveal the heightened magnitude of such frauds and bring about a massive effect of spiraling difficulties for legions of investors.

One such change, they say, would be a significant upward tick in interest rates for investors, which would likely induce many more of them to pump money back into safer vehicles (such as bank CDs) than is currently the case.

Time will tell, of course. Although the first theory is clearly preferable for the outcome it would entail, past history and the enduring nature of fraud-based investment schemes would reasonably seem to indicate that, unfortunately, the second theory might prevail.

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