Is this a form of hypothecation?

Hi Thomas,

I don’t want to get into a battle of semantics. I believe “self liquidation arbitrage loans” best describes what you first proposed to do. Buy low and sell high, and profit from the difference. If you wish to call it something else, you are at liberty do so. Here’s a link that clarifies what exactly what a self liquidation arbitrage loan is:

“…It’s a loan where you profit from the spread between interest rates. You can get a loan and make money through some arbitrage and hedging. This is absolutely legal under international banking rules”

http://www.eagletraders.com/loans/arbitrage.htm

The difference between working the money with paper or property is risk, real or perceived. Almost all property can be insured for loss while most investments vehicles cannot.

Self liquidating loan arbitrage can very profitable when done correctly.

For those who have never heard of self liquidation arbitrage loans, click on the link below to get Jim Straw’s book. It’s ready for immediate download in .PDF format.

Tim Thach