eskiador

Este artículo ha sido marcado como molesto Deshacer
eskiador
12:40 el 03 julio 2009

THE MIRACLE OF PPP (part 8)

Because of the Off-Balance Shett nature of these Credits, the Banks can make significant profits by using only the good faith and credit of their Bank and the FED Credit, without the security of Traditional Capital Markets. If a banker knows by heart only these traditional Capital Markets, he can criticize this " miraculous profit" and advises negatively the investors who want to enter into Private Placement PPP!

Given the limited liability and signficant profit making potential for the bank created by this ledger credit mechanism, the FED gives a Credit and Contracts to repay an amount which is a steep discount (15% TO 40%, depending on the term of the paper) from the stated maturity value of the Banks Instrument, issued by the Bank thorugh the FED´s Private Capital Market Profits from Bank core lending Activities easily cover this Discount and provide a substantial Profit to the Bank through the Banks use of Fractional Lending (these points have been explained in the previous Paragraphs).

The Benefit to the Federal Reserve is that it has the interest free use of the proceeds from the sale of the European Bank Instruments, through maturity of those papers. Due to the Off-Market nature of the proceeds, these funds can be used for any purpose the FED chooses. This point explains the necessity of introducing to FED the useful economic, humanitarian Projects. As with the Banks, the FED issues Credits to the Banks using only the good faith and credit of the United States Government. This good faith ledger entry credit is acceptable to the Banks as the only means by which the proceed from the sale of their Bank Instruments are secured. In the future, we may see this faith and credit from European Union Reserve.

This mechanism also allows the FED (maybe EUR in future) to avoid the security associated with the common practice (practice of "traditional" bankers) of the On-Market borrowing through the issuance of Treasury Bonds or the printing of Cash. Repayment of these Credits upon maturity is most often done through issuance of new Bank Instruments, otherwise knows as "Rolling Over". New Issuance of Bank Papers will succeed Old Issuance of Bank Instruments at their maturity without showing Cash.

Publicar Ocultar ¿Quieres hacer públicos tus favoritos? Publicar No por el momento
0 comentario
0 vez compartido
 Comentar

Artículos relacionados en Finect

¿Qué es la Paridad del Poder Adquisitivo o PPA?

InversisAdmin


PPA son las siglas de Paridad de Poder Adquisitivo (Purchasing Power Parity (PPP) en inglés) y compara el nivel de vida entre distintos países, atendiendo al Producto Interno Bruto per cápita en términos del cost...

Private Placement Programs

bolmas


Los Programas de Trading son los mejores y más seguros vehículos de inversión con un 0% de capital riesgo garantizado, que suele suscitar el interés de individuos con fondos, tesoreros corporativos, inversores privados y...

THE MIRACLE OF PPP (part 9)

eskiador


This Off-Market, PRIVATE PLACEMENT, capital Market maintained by the FED thrives due to the fact that the FED regulated institutional Investors (Insurance Companies, Pension Funds, etc.) which are the major source ...

THE MIRACLE OF PPP (part 7)

eskiador


B) MECHANISM OF ISSUANCE & DISTRIBUTION CHANNELS OF FEDThe above highly profitable Trading Program exists as a result of the United States FEDERAL RESERVE (FED) practice of securing short term to medium-term liquidit...

Últimos artículos del blog de eskiador

THE MIRACLE OF PPP (part 9)
0 Comentarios
THE MIRACLE OF PPP (part 8)
0 Comentarios
THE MIRACLE OF PPP (part 7)
0 Comentarios
THE MIRACLE OF PPP (part 6)
0 Comentarios
THE MIRACLE OF PPP (part 5)
0 Comentarios
THE MIRACLE OF PPP (part 4)
0 Comentarios
THE MIRACLE OF PPP (part 3)
0 Comentarios
THE MIRACLE OF PPP (part 2)
0 Comentarios
THE MIRACLE OF PPP (part 1)
0 Comentarios
INTRODUCTION TO THE KNOWLEDGE OF THE PPP (part 10)
0 Comentarios

app version

Fri Feb 24 10:10:26 CET 2017

2271

22d7561e711c8d1a939b249a13bfac9cb818fe4f