- Jim Costa
Jim’s Daily Rant. For Silver Stackers Only – How To Raise Cash And Still Keep Your Silver.
That is the problem I am working on today. In a nutshell, the answer is to hypothecate it out, or syndicate part of it. Hopefully I will have the legal documents for this completed today.
A winning racehorse owner spends all his capital training a plain horse into a winner. He does this alone. Once the horse is a known winner the owner syndicates it out. He sells shares of it while he himself controls the horse and most of the future profits. Hypothecation will do the same for Silver Stackers.
Future investors will have lost the ability to buy into silver as there will be none for sale. They missed the boat, or in this case, a ticket on the rocket in value.
Option I is to raise cash during the chaos you will have to sell some coins back to a gold dealer at a discount. You will also lose the rocket price increase on those coins.
Option II is to give some to a bank as collateral and borrow against them. This gives you the rocket ride. But many commercial banks will be closed and if not you risk losing the collateral if they too close their doors.
Option III is to Hypothecate coins out but still hold them in your possession and keep a percentage of the rocket ride. That is what I am working on today.
What Will Have To Be Negotiated:
1) The Buy In Price for each coin. You paid $20 per coin. On the day of negotiation the price may be $600. So if the Newby can find market silver it will cost him $600, otherwise he is shut out. Therefore, the negotiated price is somewhere between $20 and $600++ . _______________ Price per Coin
2) Percentage of Future Rocket Ride to Newby.
The lower the Buy In Price the more of the future profits the Newby must give up. _________________ Profit % to Newby
3) Optional Ride End: Newby can hold for x months or years before the pie is cut.
When cut he is paid out (silver or currency) and you still may gain from the ride.
_______________ Buy Out Date
4) Early Buy Out Price Formula: Example: (# Coins pledged X Profit % X Published FMV per coin on Sale Date)
Early Buy Out Formula
What Will Not Be Negotiated:
A) Right of Newby to Hypotheticate. If the Newby later needs cash and does not wish to lose the rocket ride, he may Participate some of his coins to a third party. You will recognize the third party’s claim.
B) If Newby fails to get payment for early end on some coins or Buy Out Date, both payments due within 30 days), then Newby gets full physical possession of coins in question, without a Profit Percentage to you.
Reasons for “A” and “B” Above:
If we assume you have lots of silver buried in the yard and you are only hypothecating some coins, you do not need to show Newby the hiding place. If you show him some coins how does he know you didn’t rent them for a day? Everything here is based on trust. You demonstrate trust by building in damages to him if you default. The same argument goes to the party he hypothacates with. He has built in damages he can also pass on to his Newby.
Note: This is still a work in process. I hope to have the Hypothication contract prepared in a day or so. If you want a free copy of it email me. Costa4670@gmail.com
P.S. A few coins (Dollars, quarters etc.) might be put in the Newby's possession to offset some of his risk and instill trust. Future settlement will be a small amount.