Chumak I.O., Burlakova O.M., Finogeeva O.V.

Oles Honchar Dnipropetrovsk National University, Ukraine

THE FINANCIAL PYRAMID

Financial pyramid – a widespread phenomenon in the economy. They have existed throughout human history, take place in the modern economy. The desire to create a pyramid built into human psychology, and their shapes change with the development of civilization.

Financial pyramid – a specific way to ensure income due to the constant raise money from new participants. Investors may be people of different levels of security, often unaware of any fraud. Pyramid schemes are registered as commercial institutions, and attract funding for certain projects. If the real yield is lower than the project promised investors profits or non-existent, so the funds of new investors are gone to pay income. A natural result of such a situation is bankruptcy of the project and the recent losses of investors. Experience shows that after the collapse of the pyramid can return around 10–15% of the collected amount at that time. In addition people will not trust the national financial markets will sharply increase leakage of deposits from banks, which in turn adversely affect the economy of the state.

The principal difference of the bubble on the real business of the project is a source of income payment. If the amount paid exceeds the amount of stable income surplus value that provides the business, then this project is a pyramid.

 The most famous modern pyramid scheme, is a company of JSC "MMM", which existed during the 90s in Russia. The company attracted a significant number of investors promised to pay the biggest dividends. The stock price rose by 5 times from 25 to 125 thousand rubles per share. Founder of JSC "MMM" – Sergei Mavrodi – is a leading entrepreneur of Russia. In the second half of 1994, the number of depositors was 10-15 million. It should be noted that the shareholders of 'MMM' basically became ordinary savers, pensioners and the disabled. According to experts, the amount of damage to that enterprise has exceeded 110 million rubles, about 50 people after the collapse of the "MMM" committed suicide.

No less famous than the "MMM" is the company a regional non-state pension fund, "North", a pyramid scheme as a pension fund, which operated in the same years.

At present, examples financial pyramids in Russia are «Binar» (MyBinar), its successor «program NewPRO» and its clone «program SuperProgik». Launched a new project founder Sergei Mavrodi MMM AO – MMM-2011, launched it in January of 2011.

In the history of mankind , there were a lot of bubbles. The very first emerged in France in 1720, it was called the "Mississippi Company," the consequences were terrible, more than 83% of investors lost their property, the economy collapsed, France has been ruined.

The emergence of the bubble can be predicted with a fairly high degree of probability, through the analysis of conditions conducive to their emergence. Of course, lived through the experience of bubbles creates a barrier to their appearance, and because of the adoption of appropriate legislation, and because of "immunity" from investors and the public. Financial markets in today's world of rapidly evolving, and new financial instruments, technical capabilities, which allow the use of technology to the construction of financial pyramids again. Thus, there remains the possibility of financial pyramid schemes in the future.

Thus, the pyramid can be considered an integral part of the economy that always exist, because the main problem, the main reference, which guided these companies is human greed.