I'm used to applying "pyramid scheme" to "i buy this thing not cause I want it but just hoping I can sell it to someone else for more money later, and they're going to be doing the same thing as me." Cause that is likely to leave someone holding the bag. But I guess that is an overlapping phenomenon that may not be the same as a pyramid scheme.
What do we call that phenomenon? Just "capitalism"?
A pyramid scheme pays out fake returns that were actually new investments, which requires unsustainable geometric growth. An asset bubble doesn’t depend on fraud or growth, it just keeps going until speculators’ confidence is shaken.
A pyramid is a more psychologically powerful scam as many people actually get big returns and become true believers. Made up assets are more akin to the tulip mania and such.
I'm used to applying "pyramid scheme" to "i buy this thing not cause I want it but just hoping I can sell it to someone else for more money later, and they're going to be doing the same thing as me." Cause that is likely to leave someone holding the bag. But I guess that is an overlapping phenomenon that may not be the same as a pyramid scheme.
What do we call that phenomenon? Just "capitalism"?