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Introduction

The “Auric-Liquescent Trust” is a private trust, open to any qualified mortgage holders in the UK, who wish to participate and become the beneficiaries of the trust. The trust offers a way to settle its beneficiaries' mortgage obligations with a one time gift from its TRUST FUND, in the form of negotiable asset backed security, with an assured cash value of the full settlement amount.
This is a private arrangement between the Trust and its beneficiaries, and is based on donations and gifts from a private trust fund, so, there are no tax or capital gains implications to consider. Once the negotiable instrument have been signed, sealed and delivered to the mortgage lender, there will be several very powerful reasons why the mortgage lender will not be able to pretend that the negotiable instrument it has received is not valuable or acceptible, or that it has somehow been lost or destroyed. Amongst other things, it would render the mortgage lender liable for fraud, and its Chief Financial Officer liable for charges of embezzlement.

The Proposal

The trust shall raise funds via the beneficiaries, pledging an amount of at least £500 each, with the stipulation that when the pledges are called in, they will have a set period of time in which to deposit their donations into the Trust. The trust shall acquire between £500,000 and £1,000,000 in physical gold, not gold certificates, which are also subject to fraudulent fractional reserve practices. The gold will be stored securely in the vaults of a gold storage company, who will provide a letter certifying that the Trust has a substantial gold reserve held in their vaults.
Promissory notes shall then be issued by the Trust, as a gift to its beneficiaries, to serve as full and final settlement of a mortgage for any amount up to the value of the gold held in reserve (the more the Trust has in reserves, the bigger the promissory notes that can be issued). Attached to each NOTE will be a copy of a certificate from the gold storage company, certifying that the Trust has sufficient gold in reserve to cover the value of the note. So, the beneficiary will have been issued a promissory note which is in effect, a private Gold Backed Security. The Trust will set its Reserve Ratio at 0.00001%, which means the Trust can write up to 99,999% more in promissory notes than the Trust has in reserves, according to established fractional reserve practices.
As the HOLDER of the security, the fractional reserve aspect will not affect the beneficiary, as the beneficiary will not be redeeming the promissory note, however, the mortgage lender will be able to verify, via the certification, that there are sufficient gold reserves to cover the value of the note, even though they will be unable to access it, however, that will not matter to the mortgage lender because they will immediately move to securitise the NOTE (i.e. sell it on the Securities Market), which according to its terms and conditions, will render it an unsecured obligation. This is because the promissory note itself will contain a unique combination of features, including a very specific set of instructions under its terms and conditions, that:
“The payment on this promissory note will be made in monthly instalments of £500 (five hundred pounds) per month, on the 28th (twenty eighth) day of every consecutive month until the obligation is fulfilled. The payment can be obtained by the HOLDER at [ADDRESS]. I hereby give permission to the HOLDER and/or the HOLDER IN DUE COURSE of this Promissory Note, to use this NOTE in any way necessary as a negotiable instrument to be financially traded on; whereas such trade shall terminate the obligation herein.”
This means that while the beneficiary could technically be paid on this note, by attending the specified address in person, on the specified day of each month until the obligation is fulfilled, this facility is only available to the beneficiary (the HOLDER), once the note is sent as full and final settlement, then the mortgage lender becomes the HOLDER IN DUE COURSE and the payment obligation is extinguished, but, as previously mentioned, this will not matter to the mortgage lender because they will immediately move to securitise the note upon receipt.
A Promissory Note of a similar type was tested and a legal precedent set by Michael Tellinger of Johannesburg, South Africa, when he settled a shortfall amount with Standard Bank of South Africa, with promissory notes totalling 800,000 RAND in 2013.
The Promissory Note will be notarised and have a Bank of England five pound note affixed to the face of the note and the gold reserve certification attached as an allonge, so the NOTE offered to the Mortgage Lender will be a combination of the trust’s promissory note and a Bank of England promissory note so it makes it exceedingly difficult for the mortgage lender to claim that the NOTE is neither acceptable or valuable.

A Notice of Full and Final Settlement template letter will also be provided. This notice will be marked as private and confidential and addressed to the mortgage lender’s Chief Financial Officer, appointing him as the beneficiary’s fiduciary trustee, responsible for settling the beneficiary’s financial obligations with the enclosed promissory notes.

"Remember the golden rule, he who has the gold, makes the rules."
Anon

Implementation

To get this to work, it will require about 1000 people becoming beneficiaries of the trust, pledging a donation of £500 each.

Once a launch date is established, the pledges will be called in and between £500,000 and £1,000,000 in physical gold will be purchased and stored in a vault, partitioned off from other deposits. The storage company will produce a letter certifying that the trust has between £500,000 and £1,000,000 in physical gold reserves.

If, for example, a beneficiary requires £200,000 to settle their mortgage, then the trust will issue a private gold backed security (promissory note) for £199,995 with a Bank of England five pound note affixed to its face, signed by the trustee and notarised, along with a copy of the certification letter from the gold storage company. This will be classed as a gift from the Trust to its beneficiaries for their kind donation.

It is advised that the promissory note is hand delivered to the mortgage lender's legal documents receiving office at the lender's headquarters where the note and copies can be stamped as received. Failing that, it should be sent Royal Mail Special Delivery Guaranteed®

The Notice of Full and Final Settlement will advise the CFO that the promissory note should be treated as cash according to the Bills of Exchange Act 1882 and protected by the court case Fielding & Platt Limited v Selim Najjar 1969 where it was ruled by Lord Denning:

"We have repeatedly said in this court that a bill of exchange or promissory note is to be treated as cash. It is to be honoured unless there is some good reason to the contrary."
The Chief Financial Officer, acting on behalf of the mortgage lender, will have 72 hours to return the promissory notes along with a detailed explanation why the notes are unacceptable and exactly how their company is exempt from the Bills of Exchange Act 1882. It will be also be pointed out that if the notes are dishonoured by non-acceptance then the debt is extinguished, according to the Bills of Exchange Act 1882, otherwise the note will be deemed as accepted.

Even if in the unlikely event that somehow the NOTE is deemed unacceptable and not deemed to be dishonoured by non-acceptance, then the mortgage lender will have accepted a five pound note as full and final settlement.

If the mortgage lender refuses to accept the NOTE yet refuses to return it then the beneficiary can take the mortgage lender to court for theft, as they have the intention of permanently depriving the beneficiary of the NOTE according to the Theft Act 1968, and also report the mortgage lender to the Inland Revenue for not declaring cash received. If the mortgage lender refuses to accept the NOTE and claims that the NOTE has been lost or destroyed then it has been accepted, according to the definitions of offer and acceptance as described in the book, Contract Law by Brian Blum:

"If the offerer proffers property or services and the offeree having a reasonable opportunity to return or refuse, exercises any ownership or rights over the property or keeps the benefits of any service then the offer is accepted."
What happens to the mortgage lender’s property once they have accepted it, is not the beneficiary’s concern, however if the mortgage lender refuses to acknowledge the actual cash value of the NOTE, then the beneficiary can invoice the mortgage lender for the full value of the NOTE.

In essence, there are multiple ways to prove that the NOTE delivered to the mortgage lender is valuable, and once delivered as full and final settlement, it is virtually impossible for the mortgage lender to deny payment.

Should the mortgage lender fail to acknowledge the value of the NOTE and fail to return it and we exhaust all legal remedies in the lower courts then the TRUST will have sufficient funds to take the case before a jury in high court. The beneficiaries will be consulted for a decision as to whether to pursue a court case aiming to push through a single case upon which all others can “piggy-back” upon, or to dissolve the trust and return beneficiaries donations, less an amount to cover administration and running costs.

proposal.doc
proposal.pdf