It’s clearly a scam…

Posted by Costas Stopas

1) It’s clearly a scam…

Good morning Mr. Stupa, I have opened a trading account with the company…. com (ss columnist removed name) and we trade forex.

Obviously this is common and I have no question about it. The point is, they strongly suggest we do a contract (I can also send it to you, since they already sent me an unsigned draft) on Amazon that will give me 11% per month according to them (which is obviously very tempting but also probably scary). They are talking about an initial investment capital of €25,000.

They keep saying that the money is 100% guaranteed because they present themselves as a company etc. Keep in mind that they do not have an office in Greece and all communication is via Viber.

So I wanted an opinion from someone I take very seriously. I understand you won’t be obligated to anything, I just want an opinion.

PL

thanks a lot

Answer: This is clearly a scam. I myself would be worried if they had my phone number, not €25,000.

Let’s start with some simple ideas. They offer a return of 11% per month, which means that with a capital of €25,000, each month you will receive €2,750 in interest.

2750 times 12 equals 33,000 euros. That is, you will invest 25,000 euros and in one year you will have 58,000 … guaranteed.

At the moment, the highest interest rate in the eurozone is Italian with Greek. A 10 year bond for example is about 4% per annum.

That is, you buy a bond for €25,000 and in 12 months you get €1,000 in interest, so you have €26,000.

From 26,000 to 58,000 euros we lose another 32,000 euros.

How can one cover this difference without risk as they provide both capital and return guarantee?

Keep in mind that the 10-year bonds of Greece and Italy, for example, offer such a high yield because they are the countries with the highest debt in the Eurozone, so, at least in theory, there is a chance of bankruptcy.

So without a 100% guarantee, the market offers 4% per annum…

The key interest rate set by central banks is in some ways the “compass” for fixed income returns. Any deviation above this is a risk. The greater the deviation, the greater the risk that must be taken into account.

In this case, the yield of 11% is unrealistic.

I’m afraid that even if they invest your money in drug dealing or arms trafficking, they won’t get such returns.

In general, when accepting offers from investment companies, banks or brokerages, the first thing you should do is ask about the commission of the capital market or central bank that is regulated by the company.

Then check that it is actually moderated from there…

The second thing you should know is that investment returns are always based on risk.

So when they offer you a return of more than 130% per annum, it is either a very risky investment or a fraud… Since they assure you that there is a guarantee, the only case left is fraud…

If I were you, I would turn over the contract they ask you to sign to the Securities and Exchange Commission and the Cybercrime Prosecution for further…

If you find a clue, you might find that the English investment firm is based somewhere in Attica or Africa…

What amazes me is how you manage to deal with the highly volatile and unpredictable forex market when you can’t spot a scam from miles away…

I’m posting the answer because I think it relates to many potential victims…

2) VAT on food …

Dear Mr. Stupa,

On the impact of VAT on food in simple economics:

1. (aggregate) prices result from supply and demand curves (many quantities at this price)

2. For sellers who lower prices (expecting more income from more sales), the elasticity of demand (i.e., the ratio of increase in the quantities sold to the percentage decrease in their price) must be >1.

3. But in food, demand is inelastic (ε < 1) so the seller has no incentive to lower price od

So shouldn’t we cut taxes?

In general, you should. Not because prices fall but because disposable income rises (in the case of sellers)

this:

+ direct taxes

+ Employment and wages

+ Propensity to invest

=> + Productivity

=> In the long run also reduce prices

George Bab.

[email protected]