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Ex-CEO of GM...Ask me a Question
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<blockquote data-quote="HerefordSire" data-source="post: 666993" data-attributes="member: 4437"><p><em>It a little more complex than that. The funds have assets and investment managers and deal with digital transfers. The mob usually deals in hard cash unless the quantities of cash are large enough where they just weigh the cash on scales after seperating the denominations with machines. Some groups deal with so much cash they launder it through financial institutions to move it around and make it legitimate. Back to the pension fund. The managers could have invested in Bernie Madoff's old fund of funds if they wanted to, as long as it fits the guidelines of the Fed in regards to pension diversification, risk ratings of Moody's, etc. Just like Madoff's fund, noone knows if the money is actually there of not until recessions hit the economy. How are you going to store $10B is cash? What if the warehouse catches on fire? </em></p><p><em></em></p><p><em>For example, call your bank and ask them what your balance is. Then go down there and ask for your balance. You think that cash comes from your account? Nope, it is just another digital transfer. The cash never was in your account when you gave it to them in the first place. They borrowed your money (yes, you loaned them them your money) and invested it. What did they invest your cash in? Whatever they can get away with legally. So lets say, the Yen moves against the dollar and they have your money invested in Treasuries. Whoever controls those digits can make the move in the dollar yen spread. So your $100K you think is in your account, I can be playing the Yen Dollar spread and I can use your cash as collateral for a loan. So your $100K may turn into $1M. So I can make $10K per day on your $100K. Thank-you.</em></p></blockquote><p></p>
[QUOTE="HerefordSire, post: 666993, member: 4437"] [i]It a little more complex than that. The funds have assets and investment managers and deal with digital transfers. The mob usually deals in hard cash unless the quantities of cash are large enough where they just weigh the cash on scales after seperating the denominations with machines. Some groups deal with so much cash they launder it through financial institutions to move it around and make it legitimate. Back to the pension fund. The managers could have invested in Bernie Madoff's old fund of funds if they wanted to, as long as it fits the guidelines of the Fed in regards to pension diversification, risk ratings of Moody's, etc. Just like Madoff's fund, noone knows if the money is actually there of not until recessions hit the economy. How are you going to store $10B is cash? What if the warehouse catches on fire? For example, call your bank and ask them what your balance is. Then go down there and ask for your balance. You think that cash comes from your account? Nope, it is just another digital transfer. The cash never was in your account when you gave it to them in the first place. They borrowed your money (yes, you loaned them them your money) and invested it. What did they invest your cash in? Whatever they can get away with legally. So lets say, the Yen moves against the dollar and they have your money invested in Treasuries. Whoever controls those digits can make the move in the dollar yen spread. So your $100K you think is in your account, I can be playing the Yen Dollar spread and I can use your cash as collateral for a loan. So your $100K may turn into $1M. So I can make $10K per day on your $100K. Thank-you.[/i] [/QUOTE]
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