Could Ponzi's Scheme Have Worked?

Delta Force

Banned
As described to potential investors, Charles Ponzi's scheme involved purchasing undervalued international postal reply coupons in foreign countries and cashing them in for stamps in the United States. It's argued that the overhead of purchasing and redeeming the coupons would have precluded profits, and at one point Ponzi's scheme would have required 160 million coupons to be in circulation to be profitable, compared to an actual total of around 27,000. Clearly the scheme wouldn't have been able to work at full scale, but could it have worked on a smaller scale? Could an individual have found out about the arbitrage possibilities and carried out a smaller scheme that would just enrich themselves and a few other individuals required to carry it out?
 
As far as I know, IRC's were never redeemable for cash--they were only redeemable for postage stamps. So at most, someone carrying out this scheme would be able to get a small discount on postage stamps.
 
Top