TradePlacer.com Blog - tradeplacer tag

TradePlacer.com Launches CapitalSlice.com for Alternative Investment Projects

Tue, 30 Nov 2010 17:36:00 GMT

In a move to expand its services, TradePlacer.com is pleased to announce the launch of CapitalSlice.com, a platform that matches investors seeking alternative investment vehicles with projects. Leveraging revolutionary TradePlacer technology, CapitalSlice.com enables investors to coordinate investment projects with larger capital structures with the goal of obtaining returns higher than 10 percent. CapitalSlice.com lists unique projects focusing on real estate and emerging markets such as a solar power project in India with a government contract and a timber plantation in Panama where trees grow a little in value every day. Other projects may include farms, mines, and rental income properties.

CapitalSlice matches investors with alternative investment projects allowing them to pool their resources to take advantage of business opportunities. Business owners and project managers of such projects often have opportunities to expand investments but lack the capital or credit to do so even if returns are likely to be in the higher than normal. Traditional bank loans for small business projects are scarce due to tight credit standards. Meanwhile investors are seeking higher returns than fixed deposits, and the opportunity to diversify into projects that have been traditionally unavailable to them. CapitalSlice brings investors and project managers together for mutually beneficial projects.

The aim of CapitalSlice is to increase transparency, pricing, and liquidity in alternative investment projects where capital slices are shared amongst investors. CapitalSlice also assists in educating investors and obtaining due diligence information.

To facilitate further education and communication between investors and project managers, TradePlacer.com has also introduced several new features such as a forum, charts, and analysis.

Trade placer.com is a real-time marketplace where you can buy or sell items such as gold, silver, platinum, wine and other collectibles. It is the next step beyond an auction, because both buyers and sellers can set their desired price and quantity in real-time.

For more information on how to list your projects at CapitalSlice or to learn more about the investments please visit http://www.CapitalSlice.com and http://www.TradePlacer.com or email info@tradeplacer.com

Past the Point of No Return

Thu, 26 Aug 2010 21:33:07 GMT

People often say that the US dollar is no longer backed because it is no longer backed by gold or silver. The truth is that the US dollar is a promissory note backed by the ability and willingness of American taxpayers to pay the value of the dollar.

The currency value of the US dollar is the perceived value of the US government’s ability to collect taxes and repay its debts. This being the case, let’s review the fundamentals of the US economy and dollar.

GOVERNMENT DEBT:
DEBT TYPE	DEBT AMOUNT
Federal Government Sector debt - a record high in 2010.	$13.4 Trillion
State & Local Government Sector debt - a record high.	$3.1 Trillion
Un-funded Social Security contingent liabilities estimated looking forward	$17.5 Trillion
Un-funded Medicare/Medicaid contingent liabilities	$89.3 Trillion
Total Government Liabilities	$123.3 Trillion

Source: http://www.ncpa.org/pub/ba662

The above summary calculates the current unfunded federal, state and local government liabilities to be 123.3 Trillion. I have seen several other estimates running as high as 200 Trillion; however this article will continue to use that figure. If we take that $123 trillion in government liabilities and divide it by the 111 million households in the US we find that the average household liability to the government for its promises is $1,108,108. In other words the average household would need to pay $1 million each in additional taxes in order to pay for the unfunded liabilities. Government budgets are not currently balanced and are unlikely to become balanced as tax revenue declines during the recession. However, assuming government budgets were balanced let’s consider the following chart:

Average Household Government Liabilities:	$1,108,108
Average Household Income Before Taxes:	$67,163
Average Household Federal Tax:	$22,929
Average Household State and Local Tax:	$6,783
Average Household Income After Taxes:	$37,451
Income As a Percentage of Government Liabilities:	3.4%

Sources: US Census Bureau, The Heritage Foundation, CNN Money

Total household income in the US is roughly 3.4% of total government liabilities already in place without future unbalanced budgets. In other words, if everyone living in the US spent their entire income after taxes - without food, clothing, or shelter - they could pay the interest only on that obligation as long as the interest rate was less than 3.4%. This is a good argument for keeping interest rates low indefinitely. Since people generally need food, shelter and clothing, let’s look at household budgets to see how much more they can afford to pay the government:

Given that the US savings rate of disposable income is hovering around 0%, it is clear that the average household already spends everything it earns buy its food, clothing, and shelter. One problem is that while the government has indebted itself beyond the brink of physics, another problem is the average American household has done the same. According to the Grandfather Economic Reports, the household sector has an additional $12.8 trillion in its own debt - and the interest rate on that debt is much higher than the government’s treasury interest rates.

It is often argued that the government can raise tax rates and increase its revenue. Sounds like a great idea, but it once again defies physics. Even assuming that households pay 100% of their income in taxes without any loss in GDP, the unfunded liabilities couldn’t be paid. In addition, the higher tax rates go, the lower tax revenues go and vice versa. If the government reality wanted to increase its revenue it would have to lower tax rates. As tax rates increase, taxpayers increasing turn to Fight, Flight or Fraud to avoid paying more taxes. This trend can be seen clearly below:

In the past, debts were manageable and households saved so the US dollar had perceived value. Some of this perceived value still exists. However, today it is clear that the US government will be unable to fulfill its obligations. While people may perceive or believe in the US dollar and government, the truth is that both are insolvent. It is only a matter of time before perception catches up to reality. If the government diluted $123 trillion in obligations against the current M3 monetary supply of roughly $14 trillion in an orderly fashion, the dollar would fall in value to about 11 cents in today’s dollars.

While the US is insolvent, it is not bankrupt. Bankruptcy is the realization of insolvency. As long as investors are willing and able to purchase and hold government bonds the liabilities can be refinanced. It is only when these promises can’t be delivered upon that participants will be forced to realize default and it may be possible to push this off for years.

The US is not the only country with unsustainable unfunded liabilities. Both the US and Greece have unfunded liabilities exceeding 800% of GDP, The European Union’s unfunded liabilities are 432% of GDP.

Source: Jagadeesh Gokhale, "Measuring the Unfunded Obligations of European Countries," National Center for Policy Analysis, Study No. 319, January 22, 2009 and Eurostat

The US along with most other industrialized nations are undeniably past the point of no return on the path towards a historical renaissance. There is no way out, but to go forward. While many free market proponents are pushing for smaller government, balanced budgets, increased savings, and criticize the Federal Reserve for its inflationary policies, it makes much more sense to support the nation’s current trajectory because it is much easier to go forward than back and it is too late to change inevitable outcomes. The more intervention and liabilities taken on by the government, the faster the realization will become. Despite fairy tale stories by the media and politicians, the laws of mathematics dictate that the dollar and the US economy will default either through the default of obligations or default of the currency itself through inflation.

For more investing information, up to date news, articles, analysis and charts visit Tradeplacer.com

Where is The Silver?

Tue, 20 Jul 2010 18:18:00 GMT

With the price of gold hovering near 67 times the price of silver, a logical deduction must be that silver is much more abundant, and easy to acquire than gold. To the contrary, evidence proves otherwise. In fact there is very little silver to be found anywhere.

Known Above Ground Silver Holdings
Form	Ounces
Silver ETF SLV	295,313,780
US Eagles Minted	240,418,077
COMEX Warehouses	114,102,049
Estimated Private Bullion (non eagles or maples)	120,000,000
Central Fund of Canada	75,209,103
LBMA Estimated stocks	75,000,000
Canadian Maples Minted	21,303,000
Silver ETF ZKB - SWISS	7,397,885
BMG Bullion Fund	5,033,609
Total	953,777,503

There is nearly twice as much gold as there is silver in the form of investment grade above ground bullion and coins, and that ignores that fact that 52 percent of the worlds gold is kept in jewelry. While there is an 953 million ounces of above ground silver, there is an estimated 1,803 million ounces of above ground gold in bullion form.

It is important to note a few structural differences in the holdings of gold and silver as well. Approximately half of the above ground gold bullion is held by governments. There are no known silver reserves held by governments. While governments have historically sold their gold to finance their budgets and keep the gold price contained there is no similar readily available entity that could sell silver bullion. Precious metals investors often hold onto their precious metals for time periods measured in years, decades, and lifetimes. Most private investors will not sell their bullion for a 10 percent or possibly even a 100 percent gain. Therefore, even if there are nearly 1 billion ounces of silver in existence, the question remains on how much of that is actually for sale at anywhere near today’s prices.

The implied dollar value of all the silver bullion is tiny compared to gold, or other assets. In fact, measured in dollar value, silver is 1/127th of gold. Many investment funds have more than $16.88 billion however gold is more readily available to purchase in larger dollar amounts. Silver may be one of the most neglected and unloved assets of this century. Perhaps, the reason why silver is so cheap, is ironically because it is too rare to be invested in by asset managers. Or is it?

TradePlacer.com Launches Real-Time Exchange for Collectibles

Wed, 23 Jun 2010 16:46:00 GMT

In an effort to increase liquidity for collectible assets, TradePlacer.com is pleased to announce the launching of its real-time auction marketplace for gold, silver, platinum, wine and other items. After over a year of development, the marketplace was built to leverage state of the art technology capable of handling large trading volumes, and is offering incentives for beta users.

Unlike traditional auctions, TradePlacer.com buyers and sellers are able to set their own prices and quantities. Users are able to resell items that they won previously back into the same auction before it expires. A trading order book lists all bid and ask prices and quantities for full transparency, and trades are matched in real-time by TradePlacer.com's proprietary trade matching engine. This enables users to trade real assets such as gold and silver bullion, and wine in real-time, much like they are trading a stock. While some users may choose to only buy items for delivery, other users may sell, or trade items for profits before an auction closes.

Initial items listed include gold and silver coins, junk silver, and other bullion. Users are also encouraged to suggest new items to be listed. It's completely free to sign up and place orders. If a user's price is matched, they become an auction winner. Users are allowed to cancel and change their orders at any time until they are matched. A small commission is only charged for successfully fulfilled trades.

For more information on how to trade gold, silver, platinum, wine and other collectibles please visit TradePlacer.com

If you are a business interested in listing your gold, silver, wine or other items on TradePlacer.com for free, please contact us at info@tradeplacer.com

TradePlacer.com Blog - tradeplacer tag

TradePlacer.com Launches CapitalSlice.com for Alternative Investment Projects

Past the Point of No Return

Where is The Silver?

Known Above Ground Silver Holdings

TradePlacer.com Launches Real-Time Exchange for Collectibles