The Money Room

Bearer Depository Receipts are the big league of finance. Always have been... Don't get confused by the fashionable buzz-words like 'Hedge Fund,' or 'Chinese Market,' or 'Sovereign Wealth Fund.' The amount of 'billionaires' who fall out of media skies and are made, or even self-made, apparently, out of thin air, are simply part of this fantasy world which the popular media tries to make us all live in. ...A lot of it, is sheer promotional marketing to sell a brand.

I have a Money Room. That is, I have companies I own that do.

We issue bearer certificates on vault deposits. And these bearer certificates have active secondary markets here and there around the world.

Bearer Depository Receipts and their secondary trade is generally a private treaty affair between large cash-rich experienced numeraires whose business networks have a global reach and have the requirement to move liquidity or goods from time to time to different locations – and usually for a business purpose, not just for financial speculation. They are not, strictly speaking, public market financial instruments at all; they are private contracts between companies and their fiscal agencies.

I will show you my Money Room (maybe...) and describe a few deals and trades and keep a regular segment here logging the value of our bearer certificates.

TODAY'S VAULT POSITION (per unit bloc):

as at 6 p.m. (UCT) on 12.5.2011...,

Per each One (1) bearer certificate, nominally USD2,000.00 ;

being,

• silver bullion bar 20 ounces @US34.78; $695.60
• listed shares with placement agreement 1 year at 25%
  call discount to lowest average market price last three months. $1,000.00
• attached 25% call  $ -

Total: $1,695.60

Now the benefit of all this if you can't immediately see it, is that effectively it is an entry price positional trade for PHYSICAL SILVER, with a 25% safety valve; if the silver price drops up to 25 per cent on your entry price, you make the call on the share discount, and your second line is topped up with the 25 per cent you lost on the silver entry price. You liquidate both lines and you have lost zero dollars. And then you can re-enter at the new price point. In our companies, we spend most of our time talking to listed companies who want some cash invested now and are prepared to risk the 25% in shares – and then we write unique private contracts and agreements with them and this becomes our second line risk stock. We check that the listed companies have adequate cash resources and we try to satisfy ourselves they will stay around and have adequate market liquidity.

We charge 2.5% combined In and Out and can talk about vault arrangements. We do many variations in the basic design and have done one treaty recently in which the other side requested they vault their own metals and we agreed with that so long as they forwarded us 20% of the metal side. (Therefore they maintained 80% in their own vaults and we stored 20%).

Let's keep a track in this blog of what happens... It will come up regularly as 'The Money Room.'

...And don't forget, this post - as always - is brought to you by the commercial website http://mind-decadence.webs.com/  So please take a look there too if you can.

Yours Truly,

OMSF.