top of page
Search
  • Jim Costa

Jim’s Rant For The Day. Historical Ways Of Commerce.

In olden days this is how a new cotton plantation owner would do business.

He would borrow from a bank for the needed seeds, fertilizer and operating cash. The bank would take a mortgage on the farm. When the cotton is picked he would sell it to the local cotton Gin. The Gin company would bring an invoice to the Bank and pledge it as inventory, draw cash to pay the plantation owner.

When the cotton was loaded on a ship the Gin company received a Bill of Lading from the Captain, transferring temporary ownership to the ship. The Bill of lading was delivered to the bank as collateral and cash was given to the Gin so their sale is finalized and they are paid on the spot. That transaction is done for the Gin.

The bank types up an invoice for the agreed upon sales price quoted by the Captain, staples it with the Bill of Lading, and a Draft for the full sales price, payable to the bank. A draft is a backwards check, signed by the one expecting to receive the funds. It is mailed to London where the factory is located that purchased the cotton.

When the London bank receives the letter and draft he calls the factory owner. The bank examines all the documents to see they are all in order and pays the U.S. banker. In all of the steps taken by the U.S. Banker, he takes a discount from his counter parties as his fees. All of this I considered “Monetizing the Paper”. This is how money used to be, and should be, created.

As we go into our new future there will be very few banks in existence. The ones that are left will do this kind of work but for really huge transactions such as $6 Million worth of sugar that needs to be tested for quality. But in the meantime, a local grain mill can do the same by digitizing the invoice for grain just purchased and create a NFT (Non Fungible Token) that has all required documents digitally attached to it (Purchase Invoice, Insurance policy and perhaps a Bank Draft waiting for presentment). That $10,000 Token is sold for $9,500 to be redeemed in 90 days upon presentment.

Notice that no banker is used here. The grain miller just created the money directly ($9,500) he needed to buy the grain and pay his staff to process it.

Is this what Trump just got people to talk about in the coming days as the world wonders why he packed his family jewels in that tight costume?


P.S. I left out other documents here to simplify so don't yell at me.




120 views0 comments

Recent Posts

See All

From Jeff - IRAN plus a Miscellaneous Rant.

IRAN:  Remain CALM - I'm putting my 2 cents on the posts below: But first, we had a curious premonition post on May 14: STARTING …. https://t.me/The17QLetter/333 And a helicopter crash meme: MOSSAD -

Comentarios


bottom of page