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This is the way it works. Hang on

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eddy2   Friday, 08/10/18 11:36:45 AM
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This is the way it works. Hang on for the ride of your live. There are three entities involved. Government, Bank and the company it self.

The government represents the public interest and appoints a board of directors to oversee spending.

The bank underwrites the offering by offering a credit contract to the company equity holders.

Let’s stop there and examine what that contract may or maynot have in it.

The company borrows stock from the bank under a written contract with collateral attached. The collateral is in the form of a derivative supported by personal collateral put up by participants.

This could be house, home or other business interest that the bank will use to piggy back from.

The company in the meantime will counter piggy back. The sale of the paper “shares” has to be reported as cost plus profits “ capital surplus and retained earnings” .

Retained earnings is the cost and capital surplus being the earnings above par.

This is all due too the effect of the banks equity being piggy backed and the government acting as the trustees of the investors.

The government will in good faith match dollar too dollar of lending capital for every dollar raised.

It doesn’t always have to be in dollars it could be in facilities and consumable goods.

The government assets are lent to the bank. The bank inturns leases the assets to the company at a profit plus expenses ie ( depreciation) the bank lends back its equity to the company and cause the government is the trustee for the public shares the debt for the lent shares show up on the equity side of the equation in reverse to what they should be. Once the debt is slowly paid then of course the retained earnings will rise and capital surplus will diminish.

Buyer beware, do your own DD and teach your self to follow the money through the appropriate Chanel’s.

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