CHAPTER 28………………………………………………
A Ponzi scheme was one of the methods of investment fraud.
It was named after Charles Ponzi, a con man who became briefly but intensely infamous in Boston, America, during the 1920s.
To explain his method simply, it was a pyramid-style multi-level structure in which profits for earlier investors were guaranteed using the money of newer investors.
At first, people were lured in with promises of an unrealistically high-return business opportunity.
Though skeptical, the first investors eventually gave in to the temptation of high profits—and Ponzi truly did pay them their returns.
“Using the money of those who invested later, of course.”
Charles Ponzi came up with the idea that he could earn money through the price difference in postage stamps.
He believed he could buy coupons in countries where postage was cheap, then sell them in countries where postage was expensive.
In theory, such a business could make sense.
But soon, even Ponzi realized that due to various practical obstacles, the stamp business was impossible.
“And the moment he realized that, he abandoned the stamp business and began committing full-scale pyramid fraud.”
It was a business with no real substance.
But people, seeing the early investors genuinely becoming wealthy, flocked in like moths to a flame, each rushing to invest.
Ponzi continued paying the earlier investors with the money of the later ones, and he quickly became a celebrity.
To guarantee profits for the first two investors, he needed to recruit four more.
For those four, he needed eight.
For eight, sixteen.
For sixteen, thirty-two…
In other words, a kind of geometric progression.
Count Ponzi’s stamp business was nothing more than a sandcastle destined to collapse the moment investors stopped coming.
It was a business designed from birth to fail.
In the original story, it was written that Count Ponzi was executed for fraud, along with the tulip bubble incident.
“Berkshire is said to be more serious about economic education than anyone else. Lady Ariana, what do you think of Count Ponzi’s portfolio?”
Facing Chloe’s question, Ariana paused briefly in thought.
Is she testing me?
Still, it’s wiser to show my true ability only in front of those on my side.
Revealing it to those who aren’t… the outcome is obvious.
First, they might feel threatened and interfere at critical moments.
Second, they might steal her ideas and take the advantage first.
Third, they might become annoying out of jealousy and envy.
Even if one reveals their true competence, it is rarely accepted as it is.
Ariana did not trust people easily.
She didn’t hesitate to show ambition before her grandfather, but that was because the Grand Duke saw his own childhood in her.
Recently, at lunch, Ariana had even said this to him:
“Grandfather, please don’t praise me too much in front of others from now on. I might end up being hated without even realizing it.”
“Even in front of that senile old man?”
“His Grace the Grand Duke of Varnbelt is the exception… But it would be troublesome if I gained others’ resentment. A path I could have walked smoothly might become one where I stumble because of someone’s interference. Of course, even if I fall, I can brush the dirt off my knees and stand again. Even if I bleed a little, wounds heal eventually. But isn’t even that healing time unnecessary for me? I don’t want to fall, and above all, I hate wasting time, Grandfather.”
Schwaben burst into laughter at her words, then nodded.
“To already see through human nature… I truly gained an excellent granddaughter. Now then, is this how one holds a watering can?”
“Yes, that’s the correct way.”
Following Ariana as she tended the tulip garden, Schwaben held the watering can with satisfaction.
Ariana demonstrated and said:
“Grandfather. At the next lunch, please advise me on how to obtain what I want without provoking the other person’s defense mechanisms.”
“Our little cutie already knows the word ‘defense mechanism’?”
Ariana froze slightly—she hadn’t expected even her grandfather to call her “cutie.”
But strangely… she didn’t dislike it.
Perhaps her cheeks even reddened.
“…I’ve been studying introductory psychology. I heard it from Madam Walker. She said everyone has defense mechanisms.”
“It was worth personally asking Madam Walker to educate you. She’s already taught you this much.”
Madam Walker had once been a priest who educated the current Emperor.
Schwaben spoke to Ariana:
“There’s no need to wait until lunch. I can answer now. Ariana, you must know how welcomed you are as the Berkshire Lady. Yet you already consider others’ defense mechanisms… remarkable. May I ask why you suddenly feel such a need?”
“Everyone manages their expressions so well in front of me… But maybe because I grew up in the slums, I’m very quick to notice things, Grandfather.”
Schwaben, born an illegitimate child himself, fell silent at her words.
It seemed he believed her maturity came from the hunger of her past.
He often appeared to feel guilty, as though he should have rescued her from the slums sooner.
Though it wouldn’t hurt to stir the sympathy of a powerful grandfather, Ariana hated seeing him saddened.
So she hurried to continue:
“They say if someone is ten times better than you, you envy them. If they’re a hundred times better, you fear them and bow down. Since I look young and easy to underestimate, and since for now I intend to remain that way, people will inevitably show their defense mechanisms and bother me. And I’m not very good at dealing with people. I should be careful not to provoke them… But when I must reveal myself, I want to do it cautiously. I don’t want to walk around collecting resentment.”
“Ariana… I understand what you mean.”
Schwaben patted her head and said:
“Cutie. I will teach you the way to remain in the middle.”
Before the aged wisdom in the old man’s crimson eyes, Ariana could only hold her breath and listen.
“It is silence. Do not show off even in places where you do not need to reveal yourself. Even if you know, pretend you do not. Lower your posture. Keep your mouth closed. And if you must reveal yourself… do so only in front of those who are on your side. That is enough. In the end, the day will come when everyone supports you of their own accord.”
The noble young ladies looked at Ariana with expectation, yet their faces already held dismissal.
They’re all waiting for me to embarrass myself. None of them will become my ally.
Then silence is golden.
After thinking, Ariana answered:
“Lady Chloe, I am still lacking in learning. If Count Ponzi is considered such a promising investment, there must be a reason people judge it so.”
“You say you are lacking? Lady Ariana, it’s well known that you are very diligent in your studies.”
Ariana smiled as she held her teacup.
“Still… I don’t think I would invest in Count Ponzi.”
Ariana’s innocent, childlike smile was so lovely that everyone at tea time froze for a moment.
Chloe broke the silence.
“Lady Ariana, may I ask why you would not invest? These days, Count Ponzi is so famous that it’s difficult even to meet him.”
“I just don’t like the name Ponzi. I prefer pretty names.”
For an instant, Ariana saw the young ladies exchange mocking looks.
But, as elegant nobles, they quickly corrected their expressions.
