The Fed & SDR Denominated Derivatives January 15, 2015

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Both have to meet their strict guidelines. After the first three letters had been received, John Hancock staff began questioning the legitimacy of the instruments offered and asked for verification from him. He encouraged John Hancock representatives to learn about the instruments by requesting from their bank a letter confirming the company's availability of funds to engage in such investments. The currencies of all the major countries are under severe pressure because of massive government deficits. The tumble in the US effected to the whole world.

Impressive names used in prime bank trading programs

k. The Securities and Exchange Commission (SEC) requires that all publicly traded companies file a Form k every year. The filing date, ranging from 60 to 90 days after the end of a company's fiscal year, depends on the value of the publicly held shares.

Gold coins are a common way of owning gold. Bullion coins are priced according to their fine weight , plus a small premium based on supply and demand as opposed to numismatic gold coins, which are priced mainly by supply and demand based on rarity and condition. The sizes of bullion coins range from one-tenth of an ounce to two ounces, with the one-ounce size being most popular and readily available.

Coins may be purchased from a variety of dealers both large and small. Fake gold coins are common and are usually made of gold-layered alloys. Gold rounds look like gold coins, but they have no currency value.

Unlike gold coins, gold rounds commonly have no additional metals added to them for durability purposes and do not have to be made by a government mint , which allows the gold rounds to have a lower overhead price as compared to gold coins.

On the other hand, gold rounds are normally not as collectible as gold coins. Gold exchange-traded products may include exchange-traded funds ETFs , exchange-traded notes ETNs , and closed-end funds CEFs , which are traded like shares on the major stock exchanges.

Gold exchange-traded products ETPs represent an easy way to gain exposure to the gold price, without the inconvenience of storing physical bars. However exchange-traded gold instruments, even those that hold physical gold for the benefit of the investor, carry risks beyond those inherent in the precious metal itself.

For example, the most popular gold ETP GLD has been widely criticized, and even compared with mortgage-backed securities , due to features of its complex structure. Typically a small commission is charged for trading in gold ETPs and a small annual storage fee is charged. The annual expenses of the fund such as storage, insurance, and management fees are charged by selling a small amount of gold represented by each certificate, so the amount of gold in each certificate will gradually decline over time.

Exchange-traded funds , or ETFs, are investment companies that are legally classified as open-end companies or unit investment trusts UITs , but that differ from traditional open-end companies and UITs. Also, the Creation Units may not be purchased with cash but a basket of securities that mirrors the ETF's portfolio.

Usually, the Creation Units are split up and re-sold on a secondary market. ETF shares can be sold in basically two ways. The investors can sell the individual shares to other investors, or they can sell the Creation Units back to the ETF. In addition, ETFs generally redeem Creation Units by giving investors the securities that comprise the portfolio instead of cash. Because of the limited redeemability of ETF shares, ETFs are not considered to be and may not call themselves mutual funds. Gold certificates allow gold investors to avoid the risks and costs associated with the transfer and storage of physical bullion such as theft, large bid-offer spread , and metallurgical assay costs by taking on a different set of risks and costs associated with the certificate itself such as commissions, storage fees, and various types of credit risk.

Banks may issue gold certificates for gold that is allocated fully reserved or unallocated pooled. Unallocated gold certificates are a form of fractional reserve banking and do not guarantee an equal exchange for metal in the event of a run on the issuing bank's gold on deposit. Allocated gold certificates should be correlated with specific numbered bars, although it is difficult to determine whether a bank is improperly allocating a single bar to more than one party.

The first paper bank notes were gold certificates. They were first issued in the 17th century when they were used by goldsmiths in England and the Netherlands for customers who kept deposits of gold bullion in their vault for safe-keeping. Two centuries later, the gold certificates began being issued in the United States when the US Treasury issued such certificates that could be exchanged for gold.

The United States Government first authorized the use of the gold certificates in On April 5, the US Government restricted the private gold ownership in the United States and therefore, the gold certificates stopped circulating as money this restriction was reversed on January 1, Nowadays, gold certificates are still issued by gold pool programs in Australia and the United States, as well as by banks in Germany , Switzerland and Vietnam.

Many types of gold "accounts" are available. Different accounts impose varying types of intermediation between the client and their gold. One of the most important differences between accounts is whether the gold is held on an allocated fully reserved or unallocated pooled basis.

Unallocated gold accounts are a form of fractional reserve banking and do not guarantee an equal exchange for metal in the event of a run on the issuer's gold on deposit. Another major difference is the strength of the account holder's claim on the gold, in the event that the account administrator faces gold-denominated liabilities due to a short or naked short position in gold for example , asset forfeiture , or bankruptcy.

Many banks offer gold accounts where gold can be instantly bought or sold just like any foreign currency on a fractional reserve basis.

Pool accounts, such as those offered by some providers, facilitate highly liquid but unallocated claims on gold owned by the company. Digital gold currency systems operate like pool accounts and additionally allow the direct transfer of fungible gold between members of the service. Other operators, by contrast, allows clients to create a bailment on allocated non-fungible gold, which becomes the legal property of the buyer. Other platforms provide a marketplace where physical gold is allocated to the buyer at the point of sale, and becomes their legal property.

Typically, bullion banks only deal in quantities of ounces or more in either allocated or unallocated accounts. For private investors, vaulted gold offers private individuals to obtain ownership in professionally vaulted gold starting from minimum investment requirements of several thousand U.

Derivatives , such as gold forwards , futures and options , currently trade on various exchanges around the world and over-the-counter OTC directly in the private market. Along with chronic delivery delays, some investors have received delivery of bars not matching their contract in serial number and weight. The delays cannot be easily explained by slow warehouse movements, as the daily reports of these movements show little activity. Because of these problems, there are concerns that COMEX may not have the gold inventory to back its existing warehouse receipts.

Outside the US, a number of firms provide trading on the price of gold via contract for differences CFDs or allow spread bets on the price of gold.

Instead of buying gold itself, investors can buy the companies that produce the gold as shares in gold mining companies. If the gold price rises, the profits of the gold mining company could be expected to rise and the worth of the company will rise and presumably the share price will also rise.

However, there are many factors to take into account and it is not always the case that a share price will rise when the gold price increases. Mines are commercial enterprises and subject to problems such as flooding , subsidence and structural failure , as well as mismanagement, negative publicity, nationalization, theft and corruption. Such factors can lower the share prices of mining companies. The price of gold bullion is volatile, but unhedged gold shares and funds are regarded as even higher risk and even more volatile.

This additional volatility is due to the inherent leverage in the mining sector. Furthermore, at higher prices, more ounces of gold become economically viable to mine, enabling companies to add to their production.

Conversely, share movements also amplify falls in the gold price. This article is NOT investment, tax, or legal advice, nor is it a solicitation for investment. I have an affiliate relationship with some of the companies listed below.

Real estate investing comes in many forms, including wholesaling , traditional rentals , house hacking , and everything in between. I like the cash flow and the diversification that comes with owning several properties instead of the liability that could come with just one direct investment. Fundrise was my first foray into alternative real estate investments and I have since joined their affiliate program. What appealed to me with Fundrise was the quarterly cash flow, low minimums, and being automatically diversified in not having to pick-and-choose individual deals.

Groundfloor is a revolutionary player in the private lending crowdfunding space because for a couple reasons. Most Roofstock investors are drawn to the platform seeking more attractive investments than they can find in their home market.

On PeerStreet, accredited investors participate in private lending crowdfunding deals, usually for fix-and-flip projects on residential properties. What I like about PeerStreet disclosure: The company highlights their vetting process, noting that only 1 deal in 20 that they evaluate ever makes it onto their site. They even hooked everyone up with a sweet pair of socks adorned with their logo. CityVest is a real estate investment marketplace providing accredited investors with insider access to pre-screened and institutional real estate investments.

Then he sends those landowners an offer letter, and begins the negotiation process. Side Hustle Nation member Josh Brooks described a similar process in his land investing adventures. Tax liens can be an attractive alternative real estate investment for a couple reasons. The Kislak Organization appears to be one of very few companies organizing the sale and consolidation of tax liens online, but the information they share publicly is very limited.

Property Partner is an online platform that allows users to invest in buy-to-let properties in the United Kingdom. Property Moose is a real estate firm that allows users to invest in a wide range of properties in the United Kingdom. Peer-to-peer lending offers the chance to lend money to your fellow citizens and earn interest on your loans. The downside is that most peer-to-peer loans are unsecured debt, meaning you have no recourse when borrowers default.

And they default all. They chalked it up to a math mistake, which could be the truth, but it still feels a little shady. Lending Club operates on a similar model to Prosper and is actually a little larger.

What is the expected return or range of returns? Is the platform open to non-accredited investors or only to accredited investors? This European peer-to-peer lending platform provides loans to residents of Spain, Estonia, and Finland. Business lending is a sub-category of peer-to-peer lending where you can lend your money to growing businesses that need extra cash to expand.

And for investors, business lending represents the chance to support small business growth while earning attractive returns. On Kickfuther, you can help support growing companies by lending them money on purchase-order backed inventory. On the plus side, I was able to fund my loans with a credit card, which helped me meet the sign-up bonus minimum spend requirements. Be prepared to potentially wait a long time to see a return, since it usually takes a public stock offering or acquisition to cash out your shares.

However, there are investment limits based on your income and net worth. The focus is on mission-driven startups, and you can invest in equity crowdfunding campaigns for the companies you believe in. Invest in startups on the Wefunder. Accredited investors can back well-known venture capitalists and angel investors in their early stage startup investments on the high-risk, high-reward Angel.

Accredited investors can invest in promising agriculture businesses or let AgFunder. As in all trades or exchanges, there are two ends, a gain end and a lose end. The derivatives are meant to take the risk out of trade for trans-border businesses and other financial institutions, along with large private investors. The current policies and institutions handling the clearing process are incapable of dealing with this systemic risk. As such, a single and unified international policy is required.

The development and implementation of the multilateral monetary framework is capable of addressing this risk more effectively than the USD system. By denominating derivatives in SDR, both virtual aspects of the unit of account and derivatives will align, allowing for a more unified policy response to the risk. SDR denominated derivatives will fundamentally reduce the exposure by functioning above the constraints of national fiat currencies, which are heavily influenced by the multi-trillion dollar non-sovereign dominated Forex markets.

The SDR, held by sovereign central banks, will help stabilize the international supra-sovereign response required to reduce the derivatives risks and enact the unified policies. The clearing of derivatives will also have to be handled in a broader multilateral framework as well.

The establishment of clearing entities, or banks, perhaps with only one or two acting as the mandated clearing houses, can facilitate the reduction of systemic risk to the international monetary framework. This process would reduce the chances of default with the least amount of systemic risk to the broader international monetary structure.

The risk associated with derivative clearing is one of the more important factors which will require a unified policy framework which operates above the limited policies which exist at the national and domestic level. No one currency or country has the ability or policy framework to deal with the challenges presented in correcting the imbalances which have developed from the USD system.

China, Russia, or any other grouping of countries, are not interesting in replacing the USD as the international unit of account. The response to the systemic imbalances which exist will require the unified approach to policies and procedures which only the multilateral framework can provide. If the USD collapses all will collapse. Look what happened in ?

So many bought into USD bonds. The tumble in the US effected to the whole world. And the other countries know that or they would have pulled from the USD years ago. They still have the mightiest military force on the face of the earth and hard to reckon with.

Now the US is flexing their muscles and teeth, coming out of the recession, looking strong and other countries will flee to them again in the bond market and NYSE. I personally think all is a false facade.