Zero Discounted Currency Exchanges

Currency exchanges happen all the time and every banking business day. If you are going to travel to Europe and have US dollars then you may need your dollars exchanged into German Marks. What about the internet broker deals where the exchange is at a discount? Is it for real or not? Currency exchanges at a discount, like 15/10 or a fifteen percent discount happen in very rare instances where the client “losing” money on the exchange needs fast action to the other currency and is willing to lose some in return. On the other hand, the chance of this happening in the broker community is miniscule or nil.

Why do you see so many currency deals on the internet today? Two reasons, ignorance and greed. The currency deals you see within the realm of the internet or your “in-box” are for the “hope” to make a lot of money on the “currency swap” from brokers. Brokers are ignorant to the fact that their chance of ever doing a discounted currency transaction is nil by the reason someone told someone they are doing currency transactions all of the time. They will mention names such as, the Treasury Department, the Feds, or some “group” which needs to have Euros instead of Dollars. The reality is more myth than fact and defies common sense.

Here are the numbers for your review:

Client A has 100 million dollars and would like to have the currency exchanged into Euros.

Client A has a somebody that will exchange the currency for the “broker” 15/10 or fifteen percent discount.

Client A, according to the brokers, would like to have the Euros, even though the Client loses money.

As of the 1^st of August, 2011 the exchange rate is one US dollar to .70 Euros, therefore Client A will have the equivalent of 85 million Dollars except it will be in Euros which is 59.9 million Euros after the currency exchange, or to state, Client A will lose fifteen million dollars.

If you were Client A, would you do it? Does it make sense to lose money on behalf brokers and other that believe you can do currency exchanges with 15 percent discounts all the time?

Welcome to Zero Discounted Currency Exchanges.

Real currency exchanges take place within the private banking realm and the client never loses any money. Using the example above, Client A with 100 million dollars will have 70 million Euros instead of 59.9 Euros. As stated before, would you, as Client A rather have 70 million Euros or 59.9 million Euros at the end of the day?

Now a surprise to the brokers which claim to have done numerous currency exchanges. How do you think you will be paid if there is a zero discount currency swap?

In summary, Client A really doesn't need a broker, but if there is a broker on the horizon, it is in the best interest of the broker to take care of their client and make sure Client A does not lose money. So you have to ask yourself, are you in business to help your clients? Or are you in business to line your pockets with the mystical, discounted currency swap which will hurt your client?

And we ask the brokers again, “How do you think you will be paid for a zero discounted currency exchange?”

For more information please revert to Commodity Trading

In Ground Assets and Monetization Part III

As we mentioned in our last article about the possibility of monetizing an insurance wrap, which is slim, we are going to into detail why this is a fault of brokers across the world which have believed a myth.

Insurance wraps are a nice way of saying an insurance policy for an asset which is worth a lot of money.  The belief is an owner of gold mine or other type of in ground asset can be insured or "wrapped" for a certain percentage of the mine and then the wrap is then monetized or transferred into cash to place into a private banking program.

How do you monetize and insurance wrap?  The correct question would be, "what lender is going to lend cash against the wrap"?  From our point of view there is not a lender today which is willing to lend against an insurance wrap because of the risks involved.  On of the reasons is the insurance wrap is not an asset, but a policy.  For example, would a lender lend against a life insurance policy?  They wouldn't.  Would the lender lend against whole life policy?  That is a maybe, because a whole life policy builds up cash and as many know is probably the worst of life insurance policies.

In summary, the probability of a lender lending against an insurance wrap is nil.  So why do so many brokers try over and over to get an insurance wrap monetized?  We will leave that up to the reader to figure that one out.

Commodity Trading

Commodity Trading

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In-ground Assets, Monetization, Private Banking Programs

One of the things we are called upon is being able to monetize in-ground assets, such as gold mines, or any other asset that may be under the ground.  The majority of owners with in-ground assets are "asset rich" and "cash poor".  Since some of the assets can have substantial value to them, many brokers throughout the world believe you can take an in-ground asset, monetize it, or put an insurance wrap on the asset, then monetize it, and place the cash funds into a private banking program.

The truth of the matter and fact, is this proposed activity has never been done and the probability to get it done is nil.  One the primary reasons why is to really know how much, in assets, is under the ground is hard to predict.  The other aspect, is finding the appropriate insurance company to place an insurance wrap on the "predicted" assets which are under the ground.  The other important part to realize is even if the asset owner was able to get an insurance wrap on the in-ground assets, it does not mean the wrap can be monetized.  It would be a risky proposition for the owner for the reason an insurance wrap costs a substantial sum of money.  To further clarify, the lender, or the one to monetize, the asset is taking a risk too.

As you can see, there are many facets involved, step by step, as to why this type of private banking transaction will not work.  We will go through it step by step throughout our blog/article post.

Professional Commodity Trading 

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