Scientific Community Wealth (un printed Chapter)

By GP Vaca

Implementation of "Citizen Shares"

Hard to believe that the solution to the economic problems of the world has been before our eyes, however, we have not applied formulas by which a dynamic change in the global economy can begin.

Virtually all Latin American countries have in their hands enormous wealth that can be put to work for the good of their people. Countries such as Venezuela, Ecuador, Brazil etc. They have literally thousands of companies that have been founded and fully funded by its citizens, and obviously created by their governments. Companies are being managed, operated and administered by their governments. But what about earnings and profit?

Everyone assumes that the proceeds of such corporations are being used for the common good of the people, and that nations and governments administer them for that purpose. The sad reality is that there can’t be any doubt that the root of the prevailing corruption throughout the continent, has much to do with the management of these companies in question. Billions disappear and wasted, are wasted in mismanaged funds.

The best example of this situation is that Latin American governments often borrow to subsidize, pay and finance projects of these companies, when the companies should be doing the investment and financing of such works. Unlike a company like Exxon, which depends on its investors; responds to investors and pays dividends to its investors. They do not rush to their government to get a loan to build a refinery? Of course not! It does this using their profits, and if more money is needed, they resort to offer more shares in the stock exchanges. The question then must be asked, why nations cannot function as "corporations" and do the same when in fact the governments are managing them for their citizens. A clear evidence that corporations need the entrepreneurs to make them more successful.

To demonstrate this reality, take the example of a company in North America. They start as an exploration company in Ecuador, they pay the country of Ecuador the mining rights for exploration and start out selling shares to finance such exploration, once they find gold, they announced to their "investors" and start the exploratory phase. Its shares jump from 0.92 cents to $ 8 in a few days. By October 2007, this company has announced that it estimated that "resources," in minerals are at least a deposit of gold from 58.9 million tonnes grading 7.23 g / t gold, resulting in 13,700. 000 oz. of contained gold and 22.4 million ounces of contained silver (grade: 11.8 g / t). (1) The deposit is the most significant in the world in the last hundred years’ discovery. And there are tons of gold in various ranges of Ecuador. Tons of gold for which companies will pay royalty percentages as miserable as possible. The question is very simple, why then Ecuador does not do the same as the company. It sells shares and works just like a corporation. An organization that defends the rights of their "investors", the Ecuadorian people.

That's what makes the whole corporation. But in our countries rather than addressing the issue of debt by financing as a corporate matter, like any other corporate entity will do, when you need money, following the procedure that is universally known: Offering shares to finance new projects. Our countries simply borrow. These debts that are acquired are transferred to their citizens, then they finance projects and the government pay for road building, bridges and power plants to facilitate the "exploitation" of resources. In short, those measly cents of royalty monies they have been paid by the "multinational companies" the countries “invest” in building everything for the advantage of foreign investors who win big.

But here are two vital things that we must think, reflect and react. If our governments maintain hundreds and often thousands of corporations; "Public undertakings" under their control. The owners of these corporations and public enterprises are "the citizens" Because these companies were founded with their taxes, their contributions, their right to land. Often times citizens and whole tribes had their land confiscated. Therefore, the just thing to do is to give them the shares they own.

Indebted countries choose to subsidize companies that are being mismanaged by directors that have being appointed because they are politicians not because they have any experience managing businesses. They produce very low profits and provide few benefits; more often than they admit, funds end up in the hands of the incumbent president and his cabinet, as most of these companies are under the direct management of the executive. Needless to mention that our successive governments have become the mere distribution of those enterprises.

In other cases, several companies are run by the military, or by educational institutions or a particular ministry. Therefore, the country often ends up hiring a "multinational company" to explore and exploit resources in exchange for 7% or 8% of the royalties. It is an absurd way to manage countries. Because in reality companies like Exxon and Mobil, after signing an agreement with a particular country; go and sell "shares to raise funds" to do the job that the country should have done in the first place. Then they exploit the country, they paid the paltry royalties and they win big, that is capitalism.

Unfortunately, socialism is worse, because socialism was created and is managed by the world oligarchy. They manage Trojan horses to manipulate countries, they get used to the idea that the leader represents the people to build all the infrastructure needed by the elite to exploit the resources of the nation. Socialism facilitates these Trojan horses the loans needed to eventually plunge the country into more poverty, and when the right time, which is never a day later than when they finish building the necessary infrastructure. Then they tighten their lending and create the necessary conditions for the people to accept any demands and they sell everything than they built at the cost of millions, paying the same multinational, who now would buy for cents for what they paid with tears.

Of course, the founders of Multinationals will maximize earnings as they own the majority of shares, and will issue and sell additional shares in exchange for a percentage of the profits, paying countries the pittance they can negotiate. However, we have been convinced for decades that only multinationals can handle such tasks. The reality is that Ecuador, Colombia and most countries have been mining gold for centuries if not thousands of years, as has been proven by the metal Library of Tayos Cave and Cave of Mana. Gold mining is not such an impossible task and neither is the drilling for oil or gas exploitation. They are for the most part, technologies with decades of extensive knowledge where many experts, technicians and engineers have been working.

It just does not make sense that a country that has the resources, scientists, money and businesses to do the job, would have to hire multinational companies to exploit the resource for paltry royalties. In the process we have allowed the world's wealth to fall into the hands of the Zionists Khazarians cartels. Those who have claimed to be Jewish and have positioned themselves as advisers to kings and queens since they destroyed the Roman Empire, to control everything from the shadows of global finance and banks.

So the solution to all economic problems for countries is to simply use the same mechanisms that have been used by the global elite in their private companies: this is the key:

 Sell shares in their corporations now listed as "public undertakings"; oil companies, mining companies, telecommunications, mobile, internet, water, gas, electricity, pharmaceuticals, import / export, shipping, construction etc. Wealth in the hands of every nation is impressive. If nations sell shares of all companies, they do not need to borrow. No need to pay loans to banks of the elite, World Bank or International Monetary Fund. They not need to borrow to China or another country, because wealth is in your hands. Gold, oil, minerals, is in their land, their territory and their citizens.

In this new structure it is key the distribution of shares: 24% of shares will be placed on reserve to be used to support its currency and as savings for the country; another 21% must be shares held by the government as founders and owners of businesses; 25% will be sold to domestic investors, and 25% to foreign investors. Now, this opens a door to erase poverty and make all citizens share the wealth. Because there is precisely a 5% that can be distributed to each and every citizen. This is indeed the way to eradicate poverty in all nations and to prevent World War III. But above all, you must understand that is the right thing to do, because being public corporations these were” created” by mandates from governments, were precisely created using “money from taxes or wealth of the country”, therefore, the real owners of these corporations and companies are none other than their citizens, who should be given their respective rights of their shares, they deserve nothing less as citizens.

How it would work.

If every citizen is given 100 shares of each company. As anyone involved in corporate finance knows, when a company issues shares that pay about a penny per share to be registered. A company can create billions of shares. But let us understand that by creating 15 million (in the case of Ecuador, as they have 15 million citizens) those shares would cost only $ 150,000. So the distribution of 100 shares to each of its 15 million citizens, will cost only fifteen million dollars. That's an incredible savings, if measured how far the country pays in welfare checks, medical costs and social programs.

Now, imagine the possibilities. The growing wealth of the nation, can go up in direct proportion to the investments. In fact, by distributing shares of all their public companies to all their citizens, so that every citizen will receive financial benefits of every expense they make, every investment made, and all the country's resources. Because you create the equitable distribution of wealth. Those most astute and ambitious citizens can buy as many shares as they want. Companies could increase funding for the wealth the nation begins to benefit everyone, to a greater or lesser degree on their investment, but as the state has granted to each and every one of its citizens an amount, everyone will benefit in a fair and equitable manner.

It is absurd to continue the form that the world has been operating. Most of the benefits go to those families who have been controlling the world. Incredible but true. So, when using this strategy, ownership of companies will no longer be in the hands of globalists or financial characters, but in the hands of the citizens of that country. We are not changing the structure at all, just the way it distributes and controls the wealth.

It is obvious that many of the financial woes of the nation then will be cured. Countries no longer need to create all kinds of assistance programs. In a sense, every citizen will get their money. The more they have invested and contributed more they will receive.

The government will not get a measly 7% or 8% of royalties for oil, but will get 21% of the benefits of management to reinvest, finance programs related to the oil industry or the mining industry, etc. . While at the same time 24% of the profits remain in the country to make stronger its currency and its finances. Intelligent citizens who have invested in their country will get the dividend distribution of those earnings. International investors who want to invest in oil and gold also benefit. Everybody wins. International and foreign investors are needed, as it is in foreign markets that the shares are sold at a much better price.

So let me analyze more carefully what I am proposing.

You see, when a company needs a cash infusion to expand its existing operations, further exploration, to protect their market share, develop new business, build a new refinery; expand exports or buy another company, it may require more money than they have available. In that case, the directors of the company have two options: borrow money or raise more capital.

Most Ecuadorian companies can simply get a grant and make the government get debt to get the money. What I propose here is none other than the second option, get the money as any corporation does, as every corporation, offering shares. But the citizens remain as an investor.

So for all intents and purposes countries become true corporations. Partly as owners of the resource, of the corporation and the shares then they have the right to issue 100 shares to each of its citizens before the sale of the shares. It is their right as citizens who have paid taxes and contributed to the country, the owners make their corporations. That small action, ensures the financial well-being of each Ecuadorian family. Poverty can be erased, wealth will be shared and true capitalism will finally shine just as John Adams was actually suggesting. However, the advantages for each "partner" is spectacular compared to the risk that other companies have to run, let me mention some advantages:

1.       The political risk is deleted: While investors from Exxon or Mobil have to fear political change in a nation that could affect the investment, due to changes in government, usually they change the political environment and monetary and economic policies, or civil war may happen as has been the case in Iraq, Afghanistan, Libya etc. Thus under my proposal, the governance structure becomes its true partner and the risk has been removed.

2.       The geopolitical and economic risk: While other multinational companies have always feared a debt default by some countries, in this way the countries adopting these policies will be financially stable, because it is creating the structure to have a strong financial backing, strong savings and an alliance between foreign, domestic investors and their government.

3.       Market risk: This is perhaps the most beautiful advantage. You know that other companies have to fight hard and spend serious money to get market share, massive amounts of money must be paid for mass advertising to put a product in certain countries, in this case you become partners with companies that have monopolized some sectors in each of their respective countries. So you have an excellent partner, not only you are becoming partners with the country, but with the consumer. When you become partners with CNT, for example, who sell telephone services, internet, communication services in Ecuador, you cannot lose. When you become partners with Flopec that controls most of the shipments to and from Ecuador you cannot miss. But most importantly, you do not have to fight for market share, its "partner" can do that with a decree, but that is not necessary, because each Ecuadorian is his "partner" who will happily spend, buy, because it is their business.

In assuming debt most companies consider risky because they must have a reasonable expectation of steady cash flow -profits- to make regular interest payments, plus it has the risk that investors may feel that the company is also highly indebted (it has too much debt relative to its shareholder funds), which can weigh heavily on the stock price. But, in this case the shareholders and consumers are partners. In a sense, they will be happy to consume.

Although most companies have to deal with the risk of a possible bankruptcy, which is precisely what happens when increases in interest rates paralyze businesses. Banks stop lending during the financial crisis, which has forced many companies to raise capital funds at very high prices and reduced investment in order to stay afloat. But in these cases the partners are governments and financial institutions, and the citizens themselves, which together will help manage what is best for consumers and shareholders. Guess what? we are all in the same boat, so we have a real Scientific Community of Wealth.

In today's world it seems that we are working in the interest of the Federal Reserve and the banks that own the Federal Reserve. The usual suspect and what I will call the criminal cartels that have subjugated the world to poverty. Those who make money with interest. Currency controls through the powerful forger who creates money out of nothing. That must end, and we must deal with currencies that are backed by gold, silver and a basket of natural resources. To avoid corruption, we have to do the same with banks. Domestic banks should be equally owned by citizens; they must have shares in their banks.

By creating this structure, the government and citizens become partners as one mind. Each country will become financially stable and with dynamic finances. They have 10% savings and 14% on reserve. Of course, since banks make money from the debt and interest, then they have always been pushing debts as "an attractive spending." Careful analysis is required with respect to "interest tax deductible expense." But if banks are required to have a minimum of 30% of property investors citizen, then we all win equally. 21% must be owned by the government.

Corporate finance strategists usually charge a lot of money to decide the best way for companies to raise funds, for each case that they conduct research say it will always be "inconclusive data on the structure of the ideal capital to maximize the value of a company to shareholders. " Of course, this is a game changer, because expenses taxes, interest, public relations, and overall financial management have some different dynamics. But I think it would be much wiser to create a company that represents our systems and our partners of the Scientific Community Wealth, so they can do everything in the interest of everyone involved. In other words, if we create a consortium to make this possible in all countries, because in fact we need to do this to bring it to fruition in all Latin American countries simultaneously.

Under the system of Scientific Community Wealth countries become true corporations, and citizens become real shareholders. Under the system that is now used, most countries simply acquire debt with huge interest (usually 8% or more) to provide a grant to their companies in which they will invest. Unfortunately, much of that money ends up in the hands of corrupt bureaucrats who cheat, overprice projects or mismanage the money, and well before anything occurs that is invested properly, ends up being wasted. That is so prevalent in South America that on average they are paying up to seven times what projects cost in other nations. It is carried out by simple means of applying higher costs, project studies, unnecessary personnel to the point of overpricing everything. 

What better example than in Ecuador they ended up paying $ 19 million dollars per kilometer to build about ten kilometers to access the new airport.  Therefore, the need to incorporate a super computer that will track virtually all expenses and all contracts worldwide and provides a comparison of what is a fair price to pay for certain businesses and services. We hope that, with the creation of this system, companies are beginning to be managed responsibly as they have to respond to its shareholders, its people, its government to corporate directors. All this creates an atmosphere of checks and balances to eliminate corruption seriously.

In the future.

Therefore, when a country has the need for more money, it does not have to resort to such agencies of the world elite, they do not have to beg or grovel to the World Bank or the International Monetary Fund. You can simply issue new shares for one of their companies, they have several options available, much better than simply acquire or create debt and subsidies, these options are:

1.       Give all existing shareholders the right to buy more shares, because if shares have been provided to every citizen, then wealth had to increase for most citizens, who will have the opportunity to buy more shares;

2.       When faced with a number of special requirements, such as a natural disasters and the destruction of a pipeline, then immediate action is required, the country could offer shares in a "placement" to a group of people, or institution such as the IESS.

3.       Also as a third option will create a specialized "subsidiary", which give investors the opportunity to direct funds to a specific aspect of the company, usually with high growth prospects or the emergency crisis resolution.

"Citizen initiatives"

One of the most common ways companies are raising new shares is through a “rights issue”: under this system we will call them "citizen shares".

This means that companies like common practice offer existing shareholders the right to buy more shares - in proportion to their existing holdings - at a certain price. In this case it is very important to use this method to issue "citizen shares". In reality, a nation with a corporate entity, a public company where the government holds all the "shares" now they must provide those shares to the true shareholders, the citizens. So they have the right to give those shares to the citizens, to give those shares in a sense is to transfer them to the right owners of the nation, which are its citizens. Therefore, 5% of the created shares will be delivered; in amounts of 100 shares to each and every one of its citizens. Again the super computer is necessary to prevent fraud. In a sense it is the right of every citizen.

Of course, for most existing companies the issue price of the "rights" must be less than the current market price to make the deal worthwhile. In the case of newly issued shares of these new business entities where the state owns the corporation much like a sole proprietorship. No price on the stock exchange has been established. So the country has the right to establish the number of shares and 5% of the shares must be delivered and distributed to its citizens, before assessment and distribution of shares and before entering the financial markets for sale. For the protection of all investors these "citizen shares" should have a ban on the sale for five years "just to keep the market safe and not flooded with shares, especially from people who do not know the markets and could be influenced by scare tactics, so it will be a guarantee for the company to avoid any damage to the value of the shares when those citizens have yet to contribute to the "society". It is a measure of protection. In making the stable company and that some shares will not be sold for a certain amount of time.

At first, it may sound like a crazy idea to give shares, delivering or granting shares to "people" without their having done anything. But that will be a lie. It is not shares for nothing - after all, citizens are who, with their taxes, with their contributions, financed by their sacrifice "funded" those corporations. Therefore, they are only receiving what is their "rights as citizens", certainly those shares will be valued like all others and could eventually be sold. However, it is crucial to the success of the company, because it will create wealth for every citizen, and help correct many social and economic problems of each nation and will make every nation much stronger and financially sound. It really is the way to eradicate poverty. Every citizen will get a check and not as charity, as a bond of assistance, not as aid but as "investors" and that is empowering people by this law issued by his country and his fellow citizens.

So none of the "investors" should worry about those shares. There should be no consideration that a country and the company are carrying out a "social" welfare of their money, on the contrary, the purpose has to be the recognition of the true partners. It is a "rights issue". The plan, of course, is not raising money, but you must understand that because the country founded the corporation, financed its existence, factories, land, machinery, etc., which was done with state monies, monies of those citizens who now worthily receive their shares for justice as worthy owners of the company, and are therefore entitled as country's citizens, as taxpayers of their nation, as those who paid taxes and were in fact investors; indirectly, even if it was the state who founded and created the corporation. This is under the "sovereign mandate" thus who are actually the owners of the corporations? Certainly citizens. It's your money, without their mandate the government could not have created and funded "public companies" and are entitled to a small number of those shares. For in truth and in reality it is always the citizen who has awarded the money to his government to create such corporations. In fact, it is only the just and worthy thing to do that as owners of corporations, now that their companies need money, respectively the country needs money, whether through government to get more capital. But this will not work and it will not be able to give good results unless we start doing the right thing and delivering at least one hundred shares to each citizen. This will give incredible fruits and eliminate poverty in the future. Because there will not be any more homeless citizen, no one fellow who does not have anything to survive. It is vital to do it; it is what it means homeland. It is the revolution of our economies. If it comes to obtaining additional capital to expand a business that will greatly enhance its competitive position and purchasing power, then the "rights issue" or "citizen shares" are just giving legality to the real "shareholders public corporation "and of course it was not the government but his own people.

It's a question of rights in this case, then it is the transfer of shares to the true owners of the corporation. It becomes the safeguarding of the corporation, why? for the first time ever, citizens are reaping the benefits, they will share the wealth of the company that was created with their taxes. The fact is that the government is only the "manager", indeed the government is merely the administrator and only temporary. It is a mistake that must be corrected: The citizens are the real owners of public corporations and it is they who should receive benefits in the form of dividends, the wonderful thing is that once you perceive and receive your money, you become an " active investors "in the wealth of the nation. So we all win and nevermore the wrong people; and that is usually the bureaucrats and politicians, rulers and profiteers of turn. Profits are being mismanaged. FINALLY, profits are being distributed to those who have the right.

Placements

Probate issues can cause problems for everyone involved and it takes a long time to organize. Thus, Ecuador should have its own team of specialists who perform this work without paying large amounts of money to companies that do such work at a huge cost, but actually do nothing but fill out forms and requirements by investment institutions. It is essential to create this "institution" to handle that aspect and can be profitably if the situation for the rest of the nations at the best prices is handled.

Share divisions - half the price

Many people wonder how it becomes possible that many companies still sell its shares for less than $ 10. The most amazing thing is seeing companies that are truly worthy with very low prices and you think their stock prices should be at $ 50, $ 60, even $ 100.

The answer lies in the device known as the "split" stock markets. The theory behind such is that investors prefer to buy 1,000 shares at $ 2 each, than to 2 shares at $ 1,000 each. On this basis some companies saw their shares rise for several months or years, they can reset the price to half or even a third of its previous level (two for one, three divisions one and so on).

Issues experience - a division with a difference

While some investors think on issues of bonus as gifts from a company and the word "bonus" means something for nothing, the reality is they do not have the same effect as share splits.

Under a bonus of 1-for-4, shareholders will receive one free share for every four shares held. If you own 1,000 shares traded at $ 2, you will receive 250 shares "free".

Unfortunately, as it is a question of rights, gifts increase the supply of shares and tend to drag the market price down.

1,000 shares at current market price x $ 2.00 = $ 2,000

250 "free" shares = $ 0

The cost of all shares = $ 2,000

The average value of their shares after the bond issue will be the total cost of their shares ($ 2,000), divided by the number of shares they already own (1250), which comes to $ 1.60. Your investment of $ 2,000 is still a value of $ 2,000 - just in theory now has 1,250 shares trading at $ 1.60 instead of 1.000 shares traded at $ 2.

Some freebies!

In reality, of course, increases of capital release can work in your favor if it’s made by quality companies and stock prices do not retreat in what the theory suggests.

But do not assume it is guaranteed something for nothing. As the Reserve Bank cannot print money without devaluing the currency, something that unfortunately people do not seem to understand that the more the Fed prints money the less the dollar is worth. For there are many more dollars circulating diluted in value, as companies cannot create value out of thin air. Therefore, it is prudent to limit the use of these techniques in a system of the Scientific Community Wealth.

Repurchases;

This is the best way a company can create value for shareholders, if you have funds ready and no immediate growth opportunities to invest. In the same way that a share issue increases the number of shares outstanding and depresses its price, a buyback reduces the number of shares outstanding. This raises the earnings per share (the same profits, fewer shares, more to go around), which usually affects upward on the share price. Therefore, we must be prudent for the country to buy the shares of citizens after five years if they can, which will increase dividends to shareholders.

If a company can halve its earnings per share to double its shares in question, the same company can double its earnings per share by simply halving the number of shares. This is a key aspect of wealth creation for the people. The effect on earnings per share through a share buyback is also a good sign that the administration has enough confidence in the future of the company to invest in itself. It also means that the management do not necessarily feel compelled to expand for the sake of expansion, unless the right opportunities arise.

When a public company issues new shares, the total number of shares traded on a secondary market rises. Assuming no change in the fundamentals of business and profitability.

Capital not issued "Stock"

The Stock a publicly traded company is authorized to issue, but it has not. In general, the statutes of a company specify the maximum number of shares that can be issued, but shareholders may increase or decrease according to the procedures contained in its records. Normally there is a greater amount of capital securities issued not required in order to give a company the greatest amount of flexibility. Therefore, it is extremely vital to keep 24% as backup shares. That only serves to enrich and make the company much stronger. Not issued capital is held in restraint. When a company incorporates a maximum number of shares in the legal documentation specified. Most companies make this a VERY large number to never face that limitation.

You do not necessarily expect the stock price change. The reason that a company issues new shares is to raise more capital. Although the new shares are issued, the money raised from its sale becomes an asset in the balance sheet of the company.

Buy my Book. You will see that it is the solution to the World Economy. I will soon publish more ideas.