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4. The House-buyers Pyramid Scheme page 58

In the UK The Fair Trading Act 1973, the Pyramid Selling Schemes Regulations 1989 plus Amendments 1990, outlawed ‘Pyramid Selling’ with unlimited fines and a 2 year prison sentences.

There is one aspect of such illegal Trading Schemes that interests us here.

With a Pyramid Scheme, unlike traditional retailing, there was often no set retail price.
Thus a product would be sold on with each buyer/seller gaining their profit as the product moved down the chain. When demand peaked or the persuasive power of a vendor dried up or the price of the product rose above reality, the collapse of such Schemes was inevitable.

The wise or devious had left earlier with their fortune intact and possibly enhanced.
The gullible were left without any fortune at all – and many with huge looses to pay off.

We all need somewhere to live and many of us join the ‘house-buyers pyramid scheme’.
We hope that the boom will carry on long enough for our own purchase to move out of negative equity. When the economy turns down the market will grind to a halt with few first time buyers coming in at the bottom. Prices can crash and some latecomers may find that they are jobless, homeless and heavily in debt.



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