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Printing Money For beginners And Experts

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Printing Money For beginners And Experts



This is a good interview, chaps.


He says, in part:

"There is a 25% chance that Sterling will be worthless in 10 years time."




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Paul Tusatin of BullionVault discusses his recent analysis, Printing Money For Beginners And Experts.

BullionVault founder and CEO Paul Tustain has a background in financial I.T. and settlement systems software. His previous business processed $120bn worth of stocks and bonds for major banks through London's markets each day. He bought his first bar of gold in 2001 following the sale of his software business. But that gold was expensive and contractually complicated, and the poor experience led to his founding BullionVault. A sought-after commentator, Paul is regularly interviewed by the international media and widely published as an authority on the history and economics of gold investment.


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MP3 : http://commoditywatch.podbean.com/mf/web/4n7eqt/paul-tustain.mp3


In Edit: An interesting interview -


One of his comments:

"There is a 25% chance that Sterling will be worthless in 10 years time."


That should raise some eyebrows !



I agree with most of what he said..

But he started to lose me a little, when he started talking about Loans and Collateral.


I wonder if Paul has ever actually worked at a bank, as I did for many years. He seems to speak as if all loans were made against collateral. That simply is not true. In real estate, it is generally the case. But not for all types of companies. Many companies will borrow on an unsecured (no collateral) basis, paying back the loan from future cash flow, rather than from selling an asset. In effect, the banks are lending "against the company's balance sheet" (and future earnings) and have no specific collateral for the loans that they make. That is sound banking, but not for all types of companies.


Perhaps he did not want to make his argument too complex, so he just ignored this (rather important) fact. For me, it made the argument weaker, because I kept thinking about what he had left out.


As he said:

"I am not particularly worried, so long as the idea to create the loan is just between the bank and borrower."

"The key consideration should be the quality of the collateral."

(What if there is no collateral? I would say: the bank makes loans when the they the borrow can pay them back.

When they lend without collateral, it is because they have confidence in the company's business.)

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