INTRODUCTION

A constant theme running through the global non-bank finance market as it has evolved since the 2008 crash, has been private placement and buy/sell programs. Sadly, the whole sector has become tainted as unscrupulous individuals, with no real knowledge of how it operates, have persuaded the unaware to part with significant sums of money on the expectation that they were going to reap outstanding returns. So prevalent did these scams become that the FBI and other agencies put out warnings that these programs are, in themselves, a scam. Blame the internet, it's the cause of much grief in the market generally! It's probably true to say that less than 1% of what's on offer on the internet is real. But nevertheless, it is a genuine, private 'Tier-1' market place where financial instruments of many types (mostly MTN's) are transacted by independent traders and trading groups, operating across the worlds to top-tier banks.

This guide is written to help and inform those considering entering this market to make the right decisions. You will find explanations on some of the obscure or unclear aspects of its secure investment opportunities. This guide was prepared from our years of experience, and in consultation with one of the largest global platforms that, because of the confidential and sensitive nature of these programs, prefers to remain anonymous.

Before discussing what is commonly referred to as PPPs, it is important to understand the basic reasons for their existence. This document explains the basic concept of what money is and how it is created; control the demand for money and credit, and the process of issuing a debt note; the discounting of the rating and the sale and resale of the note in arbitrage transactions - and how all this leads to exceptional profits, often used for major projects or corporate (private) financing. Sometimes (not always) with free and clear funds, that is: funds that do not have to be repaid.

Private placement and buy/sell programs have been a recurring part of global non-bank finance since 2008. However, many scams have emerged, leading agencies like the FBI to warn that most online offerings are fraudulent—less than 1% are legitimate. Despite this, a genuine Tier-1 market exists where independent traders and trading groups transact financial instruments with top-tier banks.

This guide aims to help newcomers navigate secure investment opportunities in this market, drawing on extensive experience and consultation with leading platforms. Before discussing PPPs, it's crucial to understand why they exist, how money is created and controlled, and how debt notes are issued, discounted, and resold for profit—often funding major projects, sometimes with non-repayable funds.

HISTORY

In the 1990s, the trading in bank instruments was and is presently a multitrillion dollars industry worldwide. The World's largest Holding Companies of North American and European Banks are authorized to issue blocks of debt instruments such as medium term notes, debenture instruments, and standby letters of credit at the behest of the United States Treasury for the United States Treasury Trust and Foundations and the United States Federal Reserve. The Instruments issued are backed by a Treasury undertaking.

The genesis of this marketplace was the 1944 Bretton Woods Conference of world's leaders. The principles originally championed as answers to post World War II economic stability are still the impetus for the operation of these transactions today. These transactions started some fifty years ago, have grown and been continuously modified, and as described in this article are Private Placement U.S. Treasury and Federal Reserve investment transactions administered by select Western Banks.

A brief history will help to understand the origin of these transactions and how it has remained strong and viable despite the great economic changes the world has experienced over the last half-century.

Consequences of World War II

With World War II having come to a close, the leading political and economic authorities of the world met in Bretton Woods, New Hampshire (USA). Their purpose was to formulate a common plan to rebuild the war's massive devastation and to impose global restraints upon forces which had twice led to world chaos during the first half of the Twentieth Century and left economic collapse in its wake. To accomplish this goal, these leaders sought to empower universally recognized international institutions capable of effectuating and preserving political order and capable of encouraging and facilitating world economic trade and cooperation.

Leading economists around the world advocated the creation of an international banking system that would administer a universally accepted "currency". It was believed that a centralized global authority, and a standard world currency, with fixed exchange rates between the different currencies of the world, was the formula for stimulating growth and maintaining world economic stability.

The Bretten Woods Conference

The Bretton Woods Conference was held on July 1, 1944, with more than 700 participants representing 44 countries coming together and advocating for the establishment of an international banking system.

The English economist John Maynard Keynes called for the adoption of a standard currency. However, the political realities of state autonomy have inevitably prevented the adoption of a uniform currency. As an alternative, international leaders have decided to adopt the US dollar as the standard global currency for international trade. It was backed by gold and the most stable currency. This adoption of the US dollar as the standard currency of international trade was the cornerstone that triggered the development of the banking instrument market. The Bretton Woods Conference also gave birth to the United Nations, the World Bank, the International Monetary Fund (IMF) and the Bank for International Settlements (BIS). The World Bank was structured to operate in a manner consistent with traditional commercial banks. It was created to serve as a lender to the poorest and least developed countries. World Bank funding came from the evaluation of the most industrialized countries. Today, it receives deposits from more than 140 member governments and lends to the least developed countries in need of international capital.

1950 – 1960 : The Golden Age of The U.S. Dollar

In its attempt to further solidify the universal acceptance of the U.S. Dollar as the standard world currency, the Bretton Woods Conference had fixed the price of Gold backing the U.S. Dollar at $35.00 an ounce. During the 1950s and the 1960s the price of gold in the open market had increased to a price nearly ten times that amount. The need to back the U.S. Dollar with gold valued at $35.00 an ounce while simultaneously providing sufficient U.S. Dollars to accommodate the increased needs of the international marketplace created significant stress on the United States Monetary system. The United States did not have enough gold to continue issuing the dollars necessary to continue to support international economic expansion.

1971 New Regulations

On August 15, 1971, facing a threatened speculative run on the U.S. gold reserves, President Richard Nixon renounced America's promise to convert paper dollars into gold upon demand. With this executive proclamation the United States abandoned the gold standard. In the absence of the gold backed standard currency the idea of fixed exchange rates among all currencies of the world became passed, and by 1973 the IMF, the World Bank and the Bank of International Settlements had abandoned the idea of fixed exchange rates.

Within the territorial limits of the United States the U.S. Federal Reserve exerts influence upon the domestic economic trends by the regulation of domestic bank reserve requirements and the adjustment of the Federal Discount Rate.

While these may be internally effective tools, they are inadequate to provide the international control demand in the global marketplace. The United States Treasury expanded the roll of the Federal Reserve System to monitor the International markets separate and apart from domestic duties.

US Treasury and Financial Instruments (MTNs)

The US Treasury needed to find a solution to continue creating US Dollars, so it created financial instruments, mainly Medium Tern Notes (MTN's)*, which it sold to major global banks.

The US Treasury through the validation of the Federal Reserve issues the largest financial instruments of the issuing banks of the World Bank in US dollars.

These transactions are economically important because the banking instruments have such large dollar amounts that the effect of these sales will have a direct impact on the volume of the US dollar in circulation.

Once the Federal Reserve cash out the sale of financial instruments in dollars, they can be reintegrated into targeted segments of the global economy in accordance with the US Treasury and policies determined by the G-8 countries.

The big world banks exchange their financial instruments. Private Placement Programs (PPP's) are born ... But reserved only for banks and governments ...

* Medium Term Notes are negotiable debt securities with an interest rate. They are issued by governments or companies in international debt markets to finance their medium and long-term capital needs.

Banks, Individuals and PPPs

This solution is very advantageous economically and financially for everyone, and it's something magical... we always win upwards or downwards... if the economy of a country is growing, we win in positive speculation, if the economy of a country collapse, the debt is erased... but the US Dollars were created meanwhile...everyone wins ...

There is so much to gain from this system, that the banks have started to want to use this system to launder their own liquidity, and those of some of their clients obtained more or less in the legality (not respecting oil embargoes, money laundering. ... ).

Remember the file of HSBC a few years ago.

Banks will therefore organize, and create "subsidiaries" so-called "trading platforms". They will offer their large clients to invest in programs through its platforms. The money returns gray and spring white with huge profits validated by the Federal Reserve (FED).

But in this case, if there is any doubt about the origin of the funds, the Federal Reserve (FED) validate the transaction only if a part of the profits generated is donated to a humanitarian foundation, or a government project always humanitarian.

TECHNICAL EXPLANATION AND EVOLUTION OF PPP

As explained in the previous chapter, PPPs exist to 'create' money. Money is created by creating debt.

" For example, you as an individual can agree to loan $100 to a friend with the understanding that the interest for the loan will be 10%, resulting in a total to be repaid of $110. What you have done is to actually create $10, even though you don't see that money initially."

Don't consider the legal aspects of such an agreement, just the numbers. Banks are doing this sort of lending every day, but with much more money giving banks the power, essentially, to create money from nothing. Since PPP's involve trading with discounted bank-issued debt instruments, money is created due to the fact that such instruments are deferred payment obligations, or debts. Money is created from that debt.

Theoretically, any person, company, or organization can issue debt notes (again, ignore the legalities of the process). Debt notes are deferred payment liabilities.

" Example: A person (individual, company, or organization) is in need of $100. He generates a debt note for $120 that matures after 1 year, and sells this debt for $100. This process is known as 'discounting'. Theoretically, the issuer is able to issue as many such debt notes at whatever face value he desires - as long as the buyers believe that he's financially strong enough to honour them upon maturity."

The PPP market is changing and no longer limited to governments and MTNs, and industrial companies and banks can issue their own debt instruments.

Debt notes such as Medium Terms Notes (MTN), Bank Guarantees (BG), and Stand-By Letters of Credit (SBLC) are issued at discounted prices by major world banks in the amount of $-billions every day.

To issue such a debt note is very simple, but the issuer would have problems finding buyers unless those buyers 'believe' that the issuer is financially strong enough to honour that debt note upon maturity. Any bank can issue such a debt note, sell it at a discount, and promise to pay back the full face value at the time the debt note matures. But would that issuing bank be able to find any buyer for such a debt note without being financially strong?

" EXAMPLE : If one of the largest banks in Western Europe sold debt notes with a face value of €1 million at a discounted price of €800,000 most individuals would consider purchasing one, given the financial means and opportunity to verify it beforehand. Conversely, if a stranger approached an individual on the street with an identical bank note, issued by an unknown bank, and offered it for the same sale price; most people would walk away. It is a matter of trust and credibility."

This also illustrates why there's so much fraud and so many bogus instruments (and the joker-brokers and dreamers who promote them) in this market.

As a consequence of 'money creation' above, there is an enormous daily market of discounted bank instruments (e.g., MTN, BG, SBLC, Bonds etc) involving issuing banks and groups of exit-buyers (pension funds, large financial institutions, etc.) all operating in an exclusive Private Placement arena.

All such activities by the bank are done as 'Off-Balance Sheet Activities'. As such, the bank benefits in many ways. Off-Balance Sheet Activities are contingent assets and liabilities, where the value depends upon the outcome of which the claim is based, similar to that of an option. Off-Balance Sheet Activities appear on the balance sheet ONLY as memoranda items. When they generate a cash flow they appear as a credit or debit in the balance sheet. The bank does not have to consider binding capital constraints, as there is no deposit liability.

Until the crash of 2008, PPPs were the exclusive territory of the world's largest corporations and 'arm's length' government bodies (governments cannot place funds directly into a PPP, the same applying to companies listed on stock exchanges and banks themselves).

Since 2008, Programs much more accessible …

Until 2008, the normal minimum deposit $100,000,000. However, since then, the sector has "bottomed out" in the "massively rich" market and, thanks to the buy/sell programs that have now evolved out of the PPP market, it is possible to enter into a program with $ 25,000,000 that will produce monthly double-digit returns. It is even possible to find programs with much smaller amounts through the common investment portfolios, which will provide a very attractive return. Thus, the market has now evolved into two main sectors:

- PRIVATE PLACEMENT PROGRAMS (PPP)

- BUY/SELL PROGRAMS

Market Evolution : Private Placement Programs (PPP)

PRIVATE PLACEMENT PROGRAMS (PPPs): For minimum deposits of $25 million or less. Large institutions, funds and foundations sometimes deposit funds in their tens of billions to create money for major projects, particularly in the developing world. The World Bank, IMF and other global monetary authorities do not have any concerns about the inflationary effects of this new money, as it is always absorbed through labour and materials.

In these programs, you will enter into a JV with the trade group or humatarian foundation and have your 50% of profits paid to wherever you instruct them to pay it. Alternatively, you will enter into a generic contract where your profits are simply paid to you from the trading group.

Market Evolution : Buy/Sell Programs

BUY/SELL PROGRAMS: These have evolved out of the PPP formula where traders can use commodities, forex and a variety of bank instruments to trade. They are most often operated by lone traders or independent trade desks and can deliver double-digit weekly returns on deposits from as low as $50,000.

However, it is important to note that these programs are operated at the discretion of the trader and his overall schedule. They are not always available. Many U/HNWI's and their family offices and wealth managers use this 'low entry' option just to 'test' the process. They invariably come back to market with larger deposits. It is possible with some of these programs that you will be able to automatically roll-over your profits - a compound trade. An extraordinarily effective capital enhancement tool. Whereas, many other buy/sell programs required you to withdraw your profits on a regular basis. It all depends on the jurisdiction and other considerations. Examples of PPPs and Buy/Sell Program performance is shown below.

Conventional Trading vs Private Placement

All trading programs in the Private Placement arena involve trade with discounted debt notes in some fashion. Further, in order to bypass the legal restrictions, this trading can only be done on a private level. This is the main difference between PPP trading and 'conventional' trading, which is highly regulated.

This is a Private Placement level business transaction that is free from the usual restrictions present in the securities market. It is based on trusted, long-established private relationships and protocols.

Conventional trading activity is performed under the 'open market' (also known as the 'spot market') where discounted instruments are bought and sold with auction-type bids. To participate in such trading, the trader must be in full control of the funds, otherwise he has no means of buying the instruments before reselling them.

However, in addition to the widely recognised open market there is a closed, private market c comprising a restricted number of 'master commitment holders'. These are trusts, foundations and other entities with huge amounts of money that enter contractual agreements with banks to buy a limited number of fresh-cut instruments at a specific price during an allotted period of time. Their job is to resell these instruments, so they contract sub-commitment holders, who in turn contract exit-buyers. This form of pre-planned and contracted buy/sell is known as arbitrage, and can ONLY take place in a private market (the PPP market) with pre-defined prices. Consequently, the traders never need to be in control of the client's funds.

However, no program can start unless there is a sufficient quantity of money backing each transaction. It is at this point that, the client, is needed because the involved banks and commitment holders are not allowed to trade with their own money unless they have reserved enough funds, comprising money that belongs to clients, which is never at risk.

The 'host' trading bank is then able to loan money to the trader against your deposit. Typically, this money is loaned at a ratio of 10:1, but during certain conditions it can be as high as 20:1. In other words, if the trader can 'reserve' $100 million of client funds, then the bank can loan $1 Billion against it, with which the trader can trade. In all actuality, the bank is giving the trader a line of credit based on how much client funds he controls, since the banks can't loan leverage money without collateral.

Because bankers and financial experts are well aware of the 'normal' open market and of so -called 'MTN-programs', but are closed out of this private market, they find it hard to believe that it exists. Bankers in top-tier, global banks (where this trading takes place) are ignorant that this trading exists within their own institutions because it happens at a level far removed from their own mainstream banking operations.

Arbitrage and Leverage

Private Placement trading safety is based on the fact that the transactions are performed as arbitrage. This means that the instruments will be bought and resold immediately with pre-defined prices. A number of buyers and sellers are contracted, including exit-buyers comprising mostly of large financial institutions, insurance companies, or extremely wealthy individuals. The arbitrage contracts, provision of leverage funds from the banks and all settlements follow long-established and rapid processes.

The issued instruments are never sold directly to the exit-buyer, but to a chain of market participants. The involved banks are not allowed to directly participate in these transactions, but are still profiting from them indirectly by loaning money with interest to the trader as a line of credit. This is their leverage. Furthermore, the banks profit from the commissions involved in each transaction.

The client's principal does not have to be used for the transactions, as it is only reserved as a compensating balance ('mirrored') against the credit line provided by the bank to the trader.

This credit line is then used to back up the arbitrage transactions. Arbitrage trading does not require the credit line to be used, but it must still be available to back up each and every transaction. Such programs never fail because they don't begin before arbitrage participants have been contracted, and each actor knows exactly what role to play and how they will profit from the transactions. The trader is usually able to secure a line of credit typically 10 to 20 times that of the principal (the client's deposit). Even though the trader is in control of that money, the money still cannot be spent. The trader need only show that the money is unencumbered (blocked), and is not being used elsewhere at the time of the transaction.

This concept can be illustrated in the following example :

"Assume you are offered the chance to buy a car for $30,000 and that you also find another buyer that is willing to buy it from you for $35,000. If the transactions are completed at the same time, then you will not be required to 'spend' the $30,000 and then wait to receive the $35,000. Performing the transactions at the same time nets you an immediate profit of $5,000. However, you must still have that $30,000 and prove it is under your control."

This is why the client’s funds in Private Placement Programs are always safe and without any risk.

Arbitrage transactions with discounted bank instruments are done in a similar way. The involved traders never actually spend the money, but they must be in control of it. The client's principal is reserved directly for this, or indirectly in order for the trader to leverage a line of credit.

Confusion is common because the perception is that the money must be spent in order to complete the transaction. Even though this is the traditional way of 'normal' trading - buy low and sell high - and also the common way to trade on the open market for securities and bank instruments, it is possible to set up arbitrage transactions if there is a chain of contracted buyers, but only in a private market.

How PPPs Yield Exceptional Profits

Compared to the yield from traditional investments, these programs can deliver a very high yield. 100% (or more) per week is possible. And this is how: Assume a leverage effect of 10:1, meaning the trader is able to back each buy-sell transaction with ten times the amount of money investor has deposited with the program. In other words, you have $10 million but the trader, because of his leveraged loan with the bank, is able to work with $100 million. Assume also the trader is able to complete three buy-sell transactions per week, with a 5% profit from each buy-sell transaction:

" (5% profit/transaction) x (3 transactions/week) = 15%
profit/week Assume 10x leverage effect = 150% profit ... PER WEEK"

Even with a 50/50 split of profit between you and your trading group or humanitarian foundation, this still results in a double-digit weekly yield. This example can still be seen as conservative, since Tier-1 trading groups, like the ones we can connect you with, can achieve a much higher single spread for each transaction, as well as weekly trades.

PROTECTION OF FUNDS

Naturally, your first consideration will be the protection of your deposit. There have been many scams associated with PPPs, and the trade groups understand this. However, from their standpoint, they still have to show the funds as being under their 'control' to their host banks, in order to secure the leveraged funds from that bank, which will deliver the exceptional returns you entered the market to achieve.

Different trade groups and the different programs operated between them use a variety of ways to secure your deposit and these range across.

With Seraphic International, we work with some of the most well-known trade desks that has a variety of methods to ensure the safety of the funds.

Your funds are not committed – The platform uses its own line of credit. Your funds only serve as collateral to use a dedicated line of credit for the program.

Sole signatory – The trade group may ask you to move your funds to this a new Account with their host bank (always a global tier-1 institution) where the account will be under your sole signature. No funds can be moved from your Account without your say-so.

Non-depletion – The account the traders open for you can also be non-depletion meaning that, no matter what, no funds can be taken from your account by anyone - other than you.

This account can also be used with the following instruments provided that you own the financial instrument:

BG / SBLC / SKR

These financial instruments must be transmitted and confirmed by your initial bank account on your trading account by SWIFT MT760 / MT542. An inter-bank mechanism that prevents you using the funds for any other purpose for the period your program is operating.

Tax and compliance fees that were paid by the platform will now be paid directly by the customer. Its fees are payable once and amount to 1% of the initial deposit by:

Wire the 1% to the program bank designated account. Or Attorney Fiduciary Escrow Account, always with a top-tier bank and under the control of an attorney or recognised and/or authorised escrow agent. Released when the account is open.

"If you are EVER asked for any kind of up-front fee, under whatever description, you are definitely not dealing with a genuine trade group or their approved introducer. Run ..."