PRIVATE PLACEMENT PROGRAM or high-profit investment programs are safe, private and “only invite-to-join” trading programs for financial instruments (especially MTN) They are offered by the banks. These instruments are first bought early for their nominal value with a significant discount, which are sold afterwards for a higher price in the secondary market. The difference between the selling price and the purchase price is the profit of the supplier/investor. These programs are offered only to customers with high purchasing power and such transactions may only be carried out by licensed dealers. Most of the revenues are used to finance humanitarian purposes and business projects.
As explained in the previous chapter, PPP exist to ‘create’ money and money is created by creating debt.
For example, you as an individual can agree to loan $100 to a friend with the understanding that the interest for the loan will be 10%, resulting in a total of $110 to be repaid. What you effectively have done is creating $10, even though that money can not be seen initially.
Banks do this sort of lending every day, however when the amount gets higher, it gives banks the power to create money. PPP involve trading with discounted bank-issued debt instruments which defer payment obligations, or debts.
Theoretically, any person, company, or organization can issue debt notes. Debt notes are, in a sense, deferred payment liabilities. The PPP market is changing and it is no longer limited to governments and MTN, also, industrial companies and banks can issue their own debt instruments.