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Post N° 8

Definition of a Sausage Bank;

You deposit your savings and I will give you a small interest to make you believe that I keep this money for people who want to borrow.

In reality  if you want to borrow money I will charge you a higher interest,I use your money to buy other companies and speculate in the stock market.

if you want to buy a house I borrow the money from the Central Bank a a lower interest then I agree with the other Banks that compose the EURIBOR to set a rate higher to lend each others money. We all make money by doing this as this rate is at least 1% superior to what I have received.

In addition to this I prepare a Envelope, I put in it all the Mortgage policies that I have and as  in the past I in agreement  agreement with the valuation of the property increased this more than 100% of the property real value. I then sell this envelope to financial institutions according to the rating given to my Bank by the credit rating agencies which I previousely agreed with  nice presents and succulent benefits.

In accordance with the Rating given to me by Morgan Stanley, Standards and Poors I can sell this mortgage backed securities at very high price obtaining immediately liquidity  to continue investing in the stock market and buy other companies.

In addition and in order for the people who buy my securities to be safe I also contract an insurance and again depending on the rating given to my bank by the rating agencies I pay a small rate each each against the possible default of these certificates.

If you think this is what I do you are mistaken please find below what I continue to do:

1. I sold all my properties to an investment company and I have made an agreement with the investment company whereby I continue to stay in the same premises paying them a rent per  year. It may sound stupid but is is not as I can get liquidity in my bank immediately conning everybody to believe that I`m a sound company.
2. As a I have no property I use the savers money  as my capitalization and this  in addition to the value of the shares in the stock market fools everybody in believing I`m a very good bank.
3. As nobody is controlling me I also issue future Bonds of my company with very long terms , I offer a very good interest after 10/15 years or an option to exchange these for shares in the company, once again a receive money and I do not have to mantain any capital. If I want to buy another company I do not have to pay any money I siply exchange my high value shares for the others and everybody is happy.

WHAT HAPPENS IF EVERYTHING GOES WRONG

No problem, the governments must help me please remember I do not have any of my own money invested it belongs to savers and investment companies.

This is a Sausage Bank, we make money without putting any money out.