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The
American Trade Cooperative (ATC) enables:
The
American Trade Cooperative uses a Mutual Credit System
to provide a unique source of credit and financing
for real estate and several other sectors of the economy.
Although new to the U.S. the System has a very important
working model that has provided the same services in
Switzerland for many years.
Switzerland’s WIR Cooperative
Economic
conditions in Switzerland during the 1930s were not
significantly different than what is being experienced
currently in the U.S. For businesses, the Great Depression
triggered:
Banks contributed to the problem by reducing, or
eliminating, credit lines even to customers they had long
relationships with. This was not caused by a change in the
clients’ credit rating or ability to repay loans, but by the
banks’ new policies and their reluctance to part with the
limited cash available. This resulted in a drastic reduction
of working and investment capital for many businesses.
Many of
those businesses had valuable assets such as their
signatures, equipment, inventory, real property, etc.,
however, those assets were simply not acceptable by banks as
security for loans.
From the
adversity came the idea of forming an operation called the
WIR Cooperative, where qualified participants could
take advantage of a
Mutual Credit System,
and pool some of the assets in a financial vehicle similar
to a Trust*
as backing for a Trade Credit, equal in value to a Swiss
Franc, which could be used, in combination with cash, to
make buying and selling transactions between cooperative
members. Originally, WIR had 16 business owners as founders
and has grown to a current membership of 62,000.
The monetization of the assets created an immediate
increase in the working and investment capital for the
co-op members, which resulted in a general increase in
business activity.
The
American Trade Cooperative
For
several years our company, under the direction of Ezio
Valentini, has worked to bring to the American marketplace a
similar operation. Extensive work has been done to develop a
system that complies with legal and regulatory requirement
as well as being in line with U.S. market conditions.
The
Company works with a knowledgeable group of advisors
which includes one of the foremost experts on economic,
monetary and banking matters, Mr. Bernard Lietaer, (www.lietaer.com)
best known for being, while with the Central Bank of
Belgium, the co-architect of the convergence mechanism to
the Euro.
ATC’s
mechanism for the
Mutual Credit System
is quite similar to WIR’s and designed to provide services
to the same sectors of the economy.
When an
asset is pledged to the Trust as security for the issue of
ATC’s Trade Credits, equal in value to the U.S. Dollar, a
credit line is established and when a portion, or all, of
the credit line is used, by the member making a purchase, a
debt relationship is established. The loan is not placed on
an amortization schedule and is not repaid in cash but in
Trade Credits and the interest is 2.5% per annum.
The Trade
Credits are used, in combination with cash, to make
purchases which results in the cash available to go
further.
The
Real Estate Sector
WIR’s
real estate operations contribute substantially to the
overall volume and that sector has been selected as the
initial vertical market for ATC’s launch. That decision was
prompted by current conditions in the real estate markets.
The
primary purpose of the Cooperative is to activate dormant
equity,
i.e. equity with limited marketability although with an
established value. There are currently billions of Dollars
of property, primarily in unencumbered land, that can be
monetized and converted to a transferable form of payment,
placed in circulation and injected into the national
economy.
Example:
A real
estate investor joins the cooperative and pledges a parcel
of land, commercial, industrial, vacant, etc., as security
for a line of credit with the Cooperative. Title to the
property does not change, however, a Notice of Interest is
filed which establishes the Cooperative’s interest and must
be removed if the owner wants to sell the property.
At
anytime prior to the line of credit being used the Member
can terminate the arrangement and have the security returned
and the Notice of Interest removed.
When a
part, or all, of the credit line is used a loan has been
established. It needs not be repaid in cash and can be
extended indefinitely as long the investor remains a member
of the Cooperative and the interest due on the unpaid
balance is paid on time. In case of a default, the
Cooperative perfects the security claim to make itself
whole.
The
investor has now improved his/her liquidity. In addition to
the cash on hand and credit from traditional sources he/she
can count on the trade account to help with purchases of
goods and services from any of the members in the sectors
serviced by the Cooperative.
In
addition, the investor, can offer to accept part-cash,
part-trade credit terms when marketing property, which
increases the potential for sale. The trade credit portion
of those sales is credited to the trade account.
The
Cooperative provides an innovative method of extending
credit as well as an advantageous way to finance property.
As a
testimony to the effectiveness of this method is the Swiss
Cooperative which currently has 750 real estate companies as
members of the System who are authorized to bring the
services of the System to real estate investors in that
country.
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*The ATC
Trust vehicle is conceptually similar to
a REIT, the main difference being that REITs accept assets
and issue a security (stock) which becomes publicly traded.
The ATC Trust also accepts assets, however, instead of stock
it issues a Trade Credit which is used to transact deals
involving property and other asset.
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