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The Medina Bond

June 14, 2012

The Perpetual Bond® (B)™ is a financial innovation (please see these Letters, June 2012) with at least as much power to effect a movement for societal change (or innovation) as most technological discoveries and innovations such as, for example, agriculture over hunter-gatherer, iron over wood and stone, steam over horses or water, electricity over gas over oil over coal over wood, quantum over “matter”, and so forth.

But therein lies the danger and the challenge. Are we ready to change? And can we change?

It’s not an idle speculation because we have often found that “better” is not necessarily “good” in the short term and whether it is good or not depends viscerally (with or without blood) on the willingness of those who are in power to at least tolerate or think about change – as they are charged to do – or not.

The Medina Bond™ is such an instrument although, in principle, it is not that much different from the same benefits and challenges to government and the financial establishment as The Canada Pension Bond™ – “3% plus inflation, every year, no matter what” guaranteed – which also has the ability to “rock the boat”. Both are just applications of The Perpetual Bond (B) but what are we to do with the legions of rock-carriers and “rock-et scientists”, governments and bankers, secular or not, who are so thoroughly vested in the technology and consequences of what they know?

We have described The Medina Bond™ as

The Medina Bond™

“Inflation, Every year, No matter what”

Guaranteed

plus an optional, or to be determined, share of  the capital gains and dividends that are earned by the underlying Perpetual Bond which is invested in the capital markets of the world, and, for practical reasons, the Western World.

We also anticipate that The Medina Bond (like The Canada Pension Bond) will have no fees and no loads after three months (to discourage churning by ambitious salespeople or large corporate deposits that can’t get “inflation plus anything” elsewhere).

The intention, of course, is to help savers and investors in the so-called “third world” prepare for the hajj, a lifetime sacred duty of many millions of people, but one also sees that sovereign funds will be exported before they are repatriated, and that the Bond effectively provides an off-shore banking facility.

Disclaimer

Investing in the bond and stock markets has become a highly regulated and litigious industry but despite that, there remains only one effective rule and that is caveat emptor or “buyer beware”.

Nothing that we say should be construed by any person as advice or a recommendation to buy, sell, hold or avoid the common stock or bonds of any public company at any time for any purpose. That is the law and we fully support and respect that law and regulation in every jurisdiction without exception and without qualification to the best of our knowledge and ability.

We can only tell you what we do and why we do it or have done it and we know nothing at all about the future or the future of stock prices of any company nor why they are what they are, now.

The author retains all copyrights to his works in this blog and on this website. The Perpetual Bond®™ is a registered trademark and patented technology of The RiskWerk Company and RiskWerk Limited (“Company”) . The Canada Pension Bond®™ and The Medina Bond®™ are registered trademarks or trademarks of the Company as are the words and phrases “Alpha-smart”, “100% Capital Safety”, “100% Liquidity”,  “price of risk”, “risk price”, and the symbols “(B)” , “(N)” and N*.

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