Leverage Debt Reduction -Chapter 1 - The Inverse of Leverage Financing

Paying 1 debt pays off multiple others.

Leverage Debt Reduction means paying on one debt that also pays-off multiple others debts as well. 

It’s the inverse of leverage financing. Leverage Financing of $100, for example, would allow you to buy say $300 worth of investments. Leverage Debt Reduction does much the same thing with debt. One payment pays-off multiple other debts. Leverage Debt Reduction holds the key to resolving the trillions in debt piling up throughout the financial system and around the world. 

‘Mirror Debt’

Let’s use the example of a student loan. Say your mom and dad co-signed a student loan for you. The loan is for $50,000. 

You, your mom and your dad will have this same $50,000 worth of debt showing-up on your individual credit reports. That $50k debt appears under 3 different names. It looks like each of you now carry $50k worth of debt. We refer to this as ‘Mirror Debts.’ That is when one debt shows up on multiple accounts under different names. 

Let’s say there’s an investment ‘Expert’ looking over these 3 reports. Let’s also say he didn’t recognize that these 3 accounts were all related to the same family - yours. It appears to them there are 3 separate loans for $50k. They count that $50k loan three times – one for you and again for your mom and dad. They calculate there is now $150,000 worth of outstanding debt. 

This is what we have today. Experts are telling us all about the billions (trillions) America has in debt. A large portion of that is actually the same debt. It’s simply being counted multiple times – under different headings. I discovered this while studying the Credit Default Swap market back in 2007 - 09. 

Here’s were ‘Leverage Debt Reduction’ comes into play. Let’s say you pay-off $20,000 worth of your student loan. That also pays down the debts listed under your parents accounts as well. Each of you will have this debt reduction show up on your credit report by this same $20k. 

Remember that ‘Expert?’ He thought there was $150,000 in combined debt. Well now, those same credit reports show only $90k worth of remaining debt. You paid-off $60k simply by paying $20k on your student debt. That is an example of how Leverage Debt Reduction works.

We would see the same kind of paydown if your mom made a payment on the loan listed under her name. The same again if your dad made payment. Your parents may be making payments to the loans listed under their own name, but it pays off the loan listed under each of your credit reports. 

Mirror Debts hold true for any number of financial markets. That is multiplied in derivatives markets. These markets are counting the same debt multiple times – under different headings and players. These different players do make payments to their debts. This is paying down a host of other Mirror Debts too. 

Leverage Debt Reduction would track all these corresponding Mirror Debts. Once a payment is made on any given Mirror Debt, we would simply track and apply that same credit towards all its counter-part Mirror Debts. It works just like your student loan cosigned by mom and dad. When you pay your student loan, your parent’s debts are also reduced - automatically. A large part of financial markets are made of these Mirror Debts. Therefore, most of today’s markets offer this kind of Leverage Debt Reduction. 

Phantom Debt

It can be easy to track the payments on a co-signed student loan. It becomes more complicated if you want to track all the Mirror Debts for industries like Credit Default Swaps. This tracking system is the critical step missing from today’s financial system. It has created a façade of ‘phantom-debt.’ Much of this so-called debt does not actually exist. It’s just like that student loan. There was never $150,000 worth of student loan debt – just the $50k. This Phantom Debt hides away incredible and immediate value. That value is easy to tap. We just need to properly track the paydowns to all Mirror Debts. Welcome to Leverage Debt Reduction. 

‘Double Write-down’

This brings us back to that investment Expert. Let’s say he’s talking about a $150,000 in Credit Default Swaps. We can now know that it represents just $50,000 worth of debt obligations. They are simply counting the $50k three times – like we saw of the student loan. In 2008, Credit Default Swaps were counted more than 3 times. There was 5 Credit Default Swaps for every home mortgage in America. (Today, Credit Defaults equal about 2 ½ times our total real estate mortgages.) 

Our point is a simple one. Paying off just one (of 5) of those Credit Default Defaults would have also paid-off the 4 other ‘mirror’ Credit Default Swaps. The details behind this are more involved than a student loan, but the example offers a fair idea how Leverage Debt Reduction works.  Writing off multiple Mirror Debts at a time is referred to as a ‘Double Write-down.’ 

Tracking these Double Write-downs would have saved us from most of the 2008 real estate crisis. I say this without exaggeration – as will be explained in later chapters. I’m re-launching Leverage Debt Reduction now because there is a new tsunami coming our way. The last market implosion had far less debt and far more value than this market bubble. It will therefore require an addition set of debt reduction (and value creating measures) then Leverage Debt Reduction alone. 

For example, we have the RADHA Mortgage that pays down over inflated properties with no capital paydowns while re-building equality. The RADHA Mortgage was also developed in the crash or 2008. We have other programs like the ‘Inflation Tax’ that re-balances over inflated real estate markets. The ‘New Deal of Markets’ does much the same for over inflated stock markets. Those programs will be covered in other books. For now, we start here with Leverage Debt Reduction. 

Leverage Debt Reduction needs to be in place before this next market implosion has gotten too far along. Leverage Debt Reduction can reset this market bubble with far more ease and far less pain the 2008. Otherwise, this coming market collapse will be many times worse than anything seen before. 

The following YouTube Video was made back in 2012 based upon the books written in 2008. We have made a great deal more up-grades to the program and concept since then. 



https://www.youtube.com/watch?v=UOwIkiJRPa8&t=2s