New Financial Institution!

for clarification, i wasn't talking about Doc's friend but about folks who jump on unrealistic investment schemes

and phoenix had the best interpretation of the saying

OK, I've rubbed my few remaining brain cells together on the SL banking conundrum and I think I may have a workable idea. Please bear with me as I'm not an economist or accountant, so I may have missed some important and/or salient points. Here goes.....

The intial problem is that neither Ginko Financial nor SL National Bank can get the type of banking insurance that guarantees transparency and stability in their field of business: namely storing and investing other peoples' money. In both cases the problem seems to be that the real world institutions, quite rightly, do not consider L$ to be a real currency.

OK, so L$ cannot be recognised as a currency. However it is a commodity that can be bought and sold in the same way that you can buy and sell apples. If you're in the wholesale agricultural business it makes sense to insure your stock against theft, natural disaster, market value fluctuations, etc., etc.... So maybe the angle potential SL banking institutions need to take is to find an insurer that will insure their stock of L$ from the commodity POV rather than the currency POV.

I for one can see that there is a real need for rock-solid banking in SL and the first person or group that truly cracks it will usher in an era of economic stability in SL.

Well said; I have a slightly different 'spin' on it... that you might find interesting.


True banking *is* rock solid, now... for the customer. How?

1) You can keep your own $L safe (unless the Company itself takes them) - it's not like keeping paper bills in a mattress.

2) Any bank making a loan to you is taking a risk on *its* part.

3) Earning interest on your money - well, that's the only hole, but honestly who is going to waste time investing $L 1000 only to get, say, $L 1050 over the course of a year?

Thus there is no insurance industry, other than the obvious one of converting $L to USD credit with the Company. The 3.5% lost that way is probably less than the cost of any insurance mechanism.



Beyond that - any 'bank' that constantly borrows at loan shark rates is LOSING your money, not making it, and will never repay the bulk of it. Though history has proven that many, many people can't make that leap of understanding.



With regard to currency: it is unlawful for anyone to create currency within the United States.

$L is *similar* to currency, but with one key difference: one cannot go to a United States supermarket and pay $L 250 for a bottle of soda.

The store can lawfully refuse $L as a form of payment. That is why $L is truly not currency. However, it may be deemed to hold *value*, an entirely different matter altogether. Anyone can print gift certificates, E-tickets to Disneyland rides and so forth that hold *value*.

You need more than just a prospectus -- a real bank can be audited by a relatively trusted third party like PWC or KPMG. Not that small town bank scams don't happen in RL, but at least in a small town an owner has a reputation and a physical presence.

People are asking these SL "institutions" to give a record of where they are getting a return, but unless that record is in publicly traded securities, you'd never know. Unless they were audited by a trusted RL organization, it's meaningless.


I could set up my own little fund right now and give you a pretty little prospectus:


Overview
XY Fund is able to pay our high rate of interest through acquisition activity in the coffee bean farm market. We are behind a team that owns and buys coffee bean farms, and has recently discovered the significant economies of scale of farm consolidation. Between our newfound synergies and the growing international coffee market, we are seeing extremely strong growth and and profit margins which in turn enables us to return a high rate of interest to our shareholders commensurate with the risk. Sadly, we do our primary business in a South American country where it is hard to raise money, especially in the farm sector.


** Image: A newly acquired farm currently being modernized **

Risks
We should warn potential investors that there are several risks:
- It is possible that local governments could issue new regulation limiting our ability to acquire other farms and consolide the market
- Our nation currently has a stable government but revolutionary instability and marxist activity has been known in this region. An uprising could limit our ability to perform.
- There is risk that the international coffee market could undergo a rapid fall-off, which would in turn limit demand for our end product, the coffee bean.
- Like all farm industries, there is also risk of extreme weather conditions which could damage crop production.
- We have competition in the form of larger coffee bean farmers in other countries and within our own country, but believe that our new strategy and new efficiencies will enable us to continue to gain market share.

We believe all these risks are manageable, but of course nothing is certain . We do not guarantee returns to our investors nor are we insured by any governmental or private entity.




would something like that make you feel better? at the end of the day, you do what you want with your money... but don't come crying if you lose it.

Get real. Why would they?

With deepest regrets, I fear I must retract my offer to invest.

I have heard reports of Zugswangistas operating in the area.

*gives a beautifully made walnut box*

I don't really recommend using this, but if it comes down to it... there are enough for two reloadings.

After that, if you cannot make it to the helicopter it won't matter anyway. There is a cigar and one gold bullet, at the bottom.

Do drop by our usual bisto in Paris, ol' chum, and tell me how things went by this spring?

nice one Des!

apparently they ceased operations quite recently stating it's "not fun" to do banking in SL anymore ahaha, they returned the monies.. but without the interest... fools!

Heh. Here is the announcement:



Heh. I wasn't a depositor, but when I saw this thread earlier I had to go take a look see. I particularly liked the smiley at the end of their notecard.

However, the notecard does say WITH interest.

P2

Ummm. They did pay interest every day.

by taking the money out of the game, putting it in a real bank at 4%, then importing it back in when the linden supply buffer amount gets low.

That's not possible. Returns from a real bank at 4% annual interest won't even approach the 0.31% daily interest that "SL National Bank" claimed they would pay. Of course, they got out of business pretty quick, too...