Executive Summary:
The technology is now available to substantially protect consumers, investors, businesses and even governments from the destructive effects of inflation and deflation. This technology involves the use of asset-backed securitization, real (or indexed) financial instruments and a number of processes collectively referred to as the Real Monetization™ process. The term "real" means that these instruments are defined in real terms, including real rates of interest (over-and-above the rate of inflation) and real (or constant) dollars. As such, real financial instruments are self-adjusting for inflation and deflation, thereby allowing our monetary system to become a complex adapting system.
The modern introduction of real (or indexed) financial instruments began in 1981; when the Thatcher Administration in Great Britain introduced government bonds that were sold at a fixed margin floating above the rate of inflation, as measured by the percentage change in the Consumer Price Index. Today, 17 countries around the world are currently issuing real (or indexed) government bonds. Nonetheless, the use of such instruments in the private sector has been stymied by the fact that the government indexed-bond markets tend to be highly illiquid. This illiquidity results in these bonds having a high real yield. As an example, the U.S. Treasury began to offer indexed bonds (Treasury Inflation Protection Securities or TIPS) in 1997. As of this writing (4/1/01), the yields are about 3.50%; while the historical real yield for U.S. Treasuries is about 2.1%, according to data from Ibbotsons. This extra 140 basis points (or 1.40%) effectively prices the real financial instruments in the private sector out of the market, since they would typically be priced off the TIPS. The illiquidity is primarily due to the accruing interest, which is inherent to real financial instruments in nominal terms. (The term "nominal" simply means that the terms, or instruments, are not adjusted for inflation.)
In October, 1999, Real Monetary Systems, Inc. (RMSI) sponsored the filing of a 1,891-page patent application for a number of software processes, which we collectively refer to as the Real Monetization™ process. The primary function of the Real Monetization™ process is to provide liquidity for the accruing interest inherent in real financial instruments. On January 18, 2000, RMSI granted an exclusive license to Virtualmoney.com for the exclusive right to use the Real Monetization™ process for the issuance of an asset-backed real monetary equivalent (the Millennium Dollar™), which is indexed to the U.S. Dollar. The logic of real financial instruments suggests that everyone, including borrowers and investors, is better off, if we define our financial instruments in real terms. As such, this monetary movement points to the issuance of asset-backed currencies by the private sector, which are self-adjusting for inflation and deflation. The offering of such private currencies has been a favorite topic among economists for decades, but the problem has always been how to create them.
It is now possible to create an asset-backed private currency, using asset-backed securitization, real financial instruments and the Real Monetization™ process. The Company will eventually back the Millennium Dollar™ with Real Mortgage-Backed SecuritiesTM, which will initially pay about 4.50% real rate of interest (over-and-above the rate of inflation). This 4.50% represents the gross revenues the Company will earn on the assets backing the private currency. A second revenue stream will be developed from the conversion of Millennium Dollars™ back into nominal dollars at an estimated spread of 1.5%, which is similar to a credit card receivables operation at a bank. Collectively, the revenues are high enough to permit the Company to offer a Revenue Sharing Program as an incentive, for consumers, businesses and financial institutions, to participate in the use of the Millennium Dollars™. Inasmuch as real financial instruments can factor out the inflationary premium, they will be highly competitive with traditional, nominal financial instruments. For instance, the Real Mortgages™ should reduce the home owners' first year mortgage payments by approximately 25%.
The Company will provide a facility (the TimeSafe™) on the Internet to provide monetary transfer services in Millennium Dollar™ units. Initially, these transfers will be "promises-to-pay" that are backed by short term U.S. Treasuries and other cash equivalents. Subsequently, as the volume allows, the monetary unit will be backed by TIPS; and then, by Real Mortgage-Backed Securities™. Promises-to-pay are covered in the Uniform Commercial Code, which allows companies to offer demand notes without their being subject to security laws. Ultimately, we expect to be wholesaling Millennium Dollars™ to banks and thrifts, thereby allowing them to offer real financial products and services.
On July 13, 2000, the Company filed a trading registration statement (via Form 10SB of the 1934 Securities Act) with the Securities & Exchange Commission for the purpose of registering the common stock issued prior to that date. Sixty days later, the Company was a reporting (public) company. A central part of the Company's business model is to allow the Company's customers to become its business partners, by creating a market for the Company's publicly tradable stock. Nonetheless, it is also expected that the Company's successful activities will lead to a secondary public offering.
The Company will offer Millennium Dollars™, as promises-to-pay, for sale on its Web site in exchange for U.S. Dollars. This offering, along with the Viral Network Marketing Program, is expected to bring the Company a substantial number of users in a short period of time. As such, Members will have multiple ways in which they can benefit financially from participating in the use of the Millennium Dollars™. They can benefit from:
(a) the use of a
currency that is asset-backed and self-adjusting for inflation and deflation;
(b) the eventual
use of Real Mortgages™, which will lower their initial mortgage
payments by about 25%;
(c) participating in the Viral Network Marketing Program;
(d) purchasing publicly registered stock in the Company.
If you have any questions, please feel free to contact Thomas W. Tripp, President/CEO, at: tom.tripp@Virtualmoney.com.
Milestones:
The Company's history extends back to the establishment of the original Real Mortgage Corporation, which evolved into Real Monetary Systems, Inc. Originally, the goal was simply to offer Real Mortgages™. However, the quest to do these mortgages led to number of discoveries, along with the development of an intricate development plan; not so much for a single company, as for a real financial industry. A brief description of these matters can be found in our Milestones.
See: Milestones
News Releases:
The Company is a reporting (public) company, as the result of filing a trading registration pursuant to the Securities Act of 1934. As such, the Company will regularly issue news releases, which will be posted on the Company's Web site and distributed to the media. We will also e-mail the news releases to anyone requesting this service. If you wish to be added to our News Release E-mail List, then please forward your request to: Service@Virtualmoney.com.
See: News Releases
References:
The Company will maintain a list of references for the benefit of our customers and investors. Nonetheless, out of consideration for those providing our references, we will not post them on our Web site. If you would like to receive a list of our references, then please contact us via e-mail at: Service@Virtualmoney.com.
S.E.C. Filings:
The Company is a reporting company pursuant to the Securities Act of 1934. The Company's filings with the Securities & Exchange can be viewed at Freeedgar.com.
See Virtualmoney at: www.Freeedgar.com
Market Makers:
In the third quarter of 2001, the Company will begin to seek market makers for its publicly tradeable stock. The Company will endeavor to have the stock listed on the NASDAQ OTC Board. For current information on our market makers; please contact your registered representative, or send us an e-mail to: Service@Virtualmoney.com.
Questions?
If you have questions, as an investor; then we suggest that you join us in a lively discussion about the Company, its products and services at our Forum. If you have a question that has not been asked yet, then please post your question for the benefit of everyone. If you see questions, that deserve a better answer; then please post your thoughts.
We believe that you will find the subject matter of real monetary theory to be quite interesting. In fact, we refer to this subject matter as the I.Q. Trap, short for intellectual quicksand. Typically, the best and the brightest get caught in the I.Q. Trap. One sure symptom, when you begin to wake up in the middle of the night; thinking about this subject matter; then you are well ensconced. Enjoy it. We can only convert, from a nominal monetary system to a real monetary system, once; unless of course, we allow the new monetary system to revert to the old.
