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?”

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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.

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In-ground Assets, Monetization, Private Banking, Part II

From our prior post we talked about why in-ground assets aren't pertinent to private banking programs. The reason why we are speaking about this is there are a lot who "claim" to be well placed to have a private banking program which should place the monetized asset into a banking program.

One of the features of in-ground assets has the power to "predict" how much is under the ground. Again, this would be a prophecy and not a factual statement, which leads us to private banking programs which are based mostly on factual money information which is obvious in an once a month bank account statement. How would somebody trade on a prophecy? They would not. 

The other feature we wish to recap is getting an insurance firm to "wrap" the asset. How is the insurer, to supply the wrap, going to give the owner a policy based mostly on a prophecy? They are not. Here is where in principle is sounds great, but in fact it does not work. There's not an insurance firm which will give the owner a policy, or "wrap", on an envisioned asset. 

Nevertheless on occasions if there's available true assets, e.g. the volume of gold, etc, exiting the mine, then and if, the owner is pleased to pay for the "insurance wrap", then yes, naturally, the insurer would be content to wrap the asset into a policy. This naturally, would cost millions of dollars for the owner and now the very next step "if" the owner of the gold mine has gotten this far, is to have the "wrap" or policy monetized into money. How troublesome do you believe that is? Stay informed, and we'll explain the unvarnished reality of monetizing an insurance wrap.

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.

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Alternative Investmest Regulations and Forex

In the choice investment world, there are many markets, whether its private placement, managed futures, foreign-exchange or any other niche, one thing's certain, alternative investments are showing up everywhere with disinformation. With this trend now clear, the large issue is, why would you not broker alternative investments? Well, if you can follow the guidelines, brokering could be a rewarding profession. As you'll see, there's lots of money in investment brokerage, but there's also harsh regulation. Since you can't broker deals with insufficient education, we are providing the best info on alternative investment education to aid you in succeeding. To get you going, we'll review some of the basic legal facts for brokers, covering all of the major markets during the process. This will enable you to shield yourself and others while brokering, making your transactions more successful. Most vital, if you choose to broker non-public placement investments, you have to act within the law. First, you need to typically reach financiers indirectly without solicitation. This is terribly critical due to the hard laws connected with private placement programs. If you solicit for speculators before they ask about particular investments the reality is, you are breaking the law. To remain effective and legal, you need to often contact backers mentioning project finance as your most vital goal.

Once trust opens up the conversation and they request information, you can debate any investment you want. Also, when providing paperwork to an investor, a brokering agent you never send it. It should come straight from the program and the documentation will never state yields or commitments. By referencing yields either verbally or through forms, you are breaking the law again, and this time it much more serious.

 

If you'd like to become an introducing broker for a managed currency exchange investment, there are two routes you can take. First, you could become an introducing broker for a foreign exchange trader in the United States, earning commission for each banker you find. Though this sounds great to most, you have to have a license before it's possible to start soliciting stockholders. There is some studying, however it can pay off great in the ultimate analysis. Against that you can become an introducing broker for FX traders using offshore Forex brokers. Once again, you would be collecting commissions for banker referrals. By working with traders who exploit offshore currency exchange brokers, you are not subject to the laws in the States. This does allow you to earn residual payments, but the truth of the case is, accomplishing Forex shareholders can be extremely difficult if you're unapproved. Overall, whether you'd like to broker domestic or offshore Forex investments, you need to always keep the law under consideration. Though managed Forex is highly rewarding, one mistake can be drastic. If you make a decision to broker managed futures investments, you can take one of two routes. First, you can broker managed futures in the States, raising capital to earn commission. This requires a NFA license, which adds firm oversight into the picture. Though there are failings to having an NFA license, the reality is, authorized futures brokers have the capability to earn millions every year. For this awfully reason, it's frequently a good idea to get a NFA license if you are working in managed futures. Since the license is recognized by backers around the world you can raise never-ending equity if you're smart.

 

Against that if you choose to broker a managed futures investment without a license, the trader must be offshore. In this example, since you are working with an offshore futures trader , USA laws don't apply to you, unless you are working with residents of the USA. Remember, always keep the SEC on your side and comply with regulations and laws of the pertinent country.

 

Though it'd appear appealing to broker deals without regulation, actually it's stronger than it sounds. For more info about a NFA license. If you would like to broker investment related products, you have to go outside of your niche.

 

If it is REO's, private equity, hedge funds, loans or maybe more, there's always a deal to broker. Though you can become loaded brokering investments, you have to know one thing above all, the law. In each investment market, there are laws you want to consent to if you would like to attain success in business.

 

Do yourself a favor, and completely research your alternative investment niche before following it. The reality is, you may need a license, or else you will decide to work with private investments. Remember, alternative investments are good, but just like the rest in life, there are ground rules.

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Precious Gems and Private Banking Programs

The buying and selling of gemstones is harder than one would think. This is another market which is very hard to penetrate. We are not going to go into detail about the buying and selling of gemstones, but would like to relay how difficult it is to use gemstone product for a private banking program.

 

The most important part of using gemstones for a private banking program is the stones have to be of bank specifications. What does that mean? The stones have to be cut and polished, each stone has to be certified by a gemologist, and the stones have to have documentation from a Top World Bank. Gemstones in a non-bank vault do not qualify because the majority of the stones are uncut, or in laymen terms, they are not cut and polished.

 

What is the likelihood you will have gemstones from Top World Bank? Very slim. Anyone can take the stones and have them stored in a bank vault for security, but to have the Top World Bank issue a SKR, (Safe Keeping Receipt) is a different task. Why, the bank will not issue any documentation, including a SKR, if the stones are not “high” quality. Lastly, the stones being cut and polished, having bank specification quality, and issued documentation including a Safe Keeping Receipt has to total fifty million US dollars.

 

Any vault, like the Sarasota Vault, non-bank vault, or the like are stones which will have to be transferred to a top world bank, cut and polished, and receive bank specified quality which will cost a sum of money.

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Primary vs Secondary Market Banking Activity

As many of you have been learning about financial instruments and private security transactions nobody ever goes into much detail between the difference of the secondary and primary market.  The majority of deal making with brokers is within the secondary market, but many do not realize the difference between the two.

The primary market is the market which happens at the financial institutions or the Top World Bank's level.  Most of the people you deal with on a day to day basis do not have access to a Top European Banker to ask questions about financial instruments or private transactions.  There are advantages to primary market over the secondary market.  One of the key advantages of the primary market is predictability.  In the primary market and throughout the Top World Banks, they are able to predict the gain and/or loss ten or mores in advance whether it be medium term notes, currencies, or the like.  The primary market has safety for the client.  This is the similar to predictability.  If the Top World Traders are able to predict the outcome ten or more years in advance then safety of the transaction is an obvious.  The other aspect within the primary market is experience.  We would say any Top World Trader has been doing this type of activity for most of their life and have the correspondents (other Top World Banks) to work together.  The downside to the primary market is it is virtual impossible to penetrate.  You have to know or know of someone that knows of a Top World Banker that is experienced within this arena of activity.  Another illustrative example is the oil business.  The top players like Chevron, Exxon, and Shell are the primary market and anything else would be the secondary market.

The secondary market is exactly what it says it is.  It is second to the primary market.  The activity which takes place at the primary market level reaches down to the secondary market level or sometimes in finance mentioned as, the street level.  The main disadvantage of the secondary market is the amount of fraudulent activity.  Another disadvantage is the unpredictability of trading activity.  Traders in the secondary market cannot predict ten years out and beyond.  Secondary market traders can be from a top world bank, but most of them are not.  Think of it this way; why would a trader working in the primary market decided to go out on his or her own and work in the more unpredictable secondary market?  They wouldn't.  This is how some inexperienced traders that have done a few transactions end up in the secondary market attempting to make a lot of money off the client and putting the client at more risk than the primary market.  Also, this is the market where fraudulent traders can take off with the clients money, or have the client block funds in their bank account and nothing happens resulting in a waste of time and loss of little money, and worse case putting a bad taste in the clients thinking about this type of activity.  The advantage to the secondary market is it can be fairly easy to penetrate if you have a client with the money.  This same advantage comes with a disadvantage, a lot of fraudulent activity.  You can run in circles for years with brokers masquerading as buyers, sellers, and high net worth individuals.  To put in perspective, the secondary market is the internet market and the primary market is the relationship market.  We do not want to stick our foot in our mouth either.  The secondary market is a relationship market too, however, at the end of the day, you will found out that elusive secondary, grey, market is full of many individuals that do not understand the basics of this type of business.

While we have stated some negative information about the internet, we would like to state the internet is a great tool to prospect for new clients or more business.  Just keep your eyes open for anything suspicious and do not believe what everyone says. 

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