[BitFunder] TU.SILVER -- Interim Report April 12th, 2013

[DannyM]

I didn't edit anything. At all. What the heck are you talking about.

I did agree not to share the data in public. I shared it privately with Deprived.

Not that hiding this is very ethical.

Usagi said, "The only thing I ask is that, since this is a paid service, you not share the data in public (i.e. in a forum post) or something like that."

[Deprived]

I've now looked at the Book Value calculation page of the spread-sheet.  All I can say is what a mess.  Guess DT was having a bad day when he decided it was fine.

Here's SOME of the pretty basic errors in it:

1.  Unsold silver is double-counted.  The valuation of each share starts off as being the Ask price for silver (shown in the excerpt I posted above).  To that is then added a portion of the value of the unsold silver.  So right away, before anything else is done, shares have been valued at more silver than is actually possessed.  In theory it's possible some other value then negates that - but having looked at the other pages there's no apparent deduction that would correspond (and absolutely no reason to be doing it this way even if there were).

2.  The calculated Book Value is for ALL issued shares - whether sold or not.  That's just horrible - as it means the simple act of selling a share so as to receive exactly book value would change the book value.

3.  Unsold silver is valued at the Ask price in the excerpt I posted earlier.  That includes BitFunder fees and a markup.  Neither of those should be in the valuation of unsold silver because:

a)  Bitfunder fees will NEVER go to the fund even if the shares are sold (should be obvious why).  So at no point ever will they be realisable.
b)  Intended markup when sold should NOT be in a valuation of unsold silver.  You don't mark BTC you hold up by the profit you expect to make investing them - and you shouldn't mark silver up by the profit you hope to make selling them.

It's trivially easy to prove that the calculation is wrong in two ways:

1.  Add up the book value of all current holdings (silver, cash, invetsment position, kitty).  Now divide it by number of shares.  Do you get Book Value?  No you don't - whether you divide it by all issued shares OR sold shares you don't get the same number.  How can the total book value be different to number of shares * book value/share?  It can't.  That it IS different is because one or the other (actually both) are totally fucking wrong.

2.  Modify the data to represent selling a single share and receiving EXACTLY book value for it.  Does book value change?  Yes it does (and I tried both ways - selling a newly issued/backed share AND selling an already issued one).  So it's wrong.  Note that if selling an issued share at BV reduces BV/share then there's a pretty serious problem anyway.

The BV usagi calculates does NOT represent the value of one issued share OR one sold share.  I've no idea what DT thought it represented when he approved the books - but it would seem whatever checking he did failed to include the two simple tests I just listed (in fact #2 isn't ALL that simple as you have to adjust a fair few data items).

Even if it DID represent the BV of a share then the system is still screwed - as anyone wanting to buy silver through the fund (its supposed main purpose) has to buy the silver at a price that includes all the investment junk then sacrfice all those other elements when redeeming for silver.  That makes it impossible for the fund to sell silver at a good price without losing BV.  That at present those wanting to get silver through the fund have to pay an additional premium for pretty simple errors in the calculation of BV just adds insult to injury.

On a side note I received a PM request from usagi to delete my previous excerpt from his spreadsheet.  I am declining that - as there's nothing particularly confidential about silver spot prices, MTgox rates or a very simple calculation using those.  There ARE some parts of the spreadsheet I won't publish - such as the identities of people who bought silver (why this was left in a spreadsheet given out to ANYONE other than usagi beats me).

[Atruk]

There are THREE further calculation sheets that number goes through before I get a book value.

I have those sheets too.  And would you believe it - the final book value is STILL below the price you charge.

Not that it SHOULD have any relevance - but you still can't make up your mind what you're selling.

Is it silver?  Well in your (now locked) thread about FinCen compliance you state in the final post that you're a silver store - which would tend to suggest you just sell silver.  And when someone redeems shares all they get is silver.

Or is it ownership to some extent of other assets as well?  Well your pricing seems to suggest so - as does your repeated refence to some book value that contains elements that far exceed just 1/10th oz of silver plus associated costs.

When you make your mind up WHAT you're actually selling then it's likely we can make some sense of your pricing policy.

It doesn't make too much sense to me either, but I find the number 0.09818688 (a number that apparently includes the "cash kitty") interesting as it is less that half the initial book value of one of the fund's shares.

[repentance]

From now on, if you or anyone has a question regarding the company's finances you MUST speak to me or DeaDTerra about it privately.

Same shit, different day.

[Zeeks]

Not sure why anyone played along with another Usagi scheme. Look at all the info people figured out about him last time when the craziness in his GLBSE based things came out, he does this with every internet community he comes across. He'll read up a bit about whatever the main topics are then storm in acting like he knows everything and tries to run/do something big and important. Eventually it comes out that he is incompetent and he retreats with his tail between his legs, making lots of impassioned posts about how everyone is out to get him. It's a clear pattern.

Usagi, you need to recognize your own destructive pattern and try to fix it. Stop biting off more than you can chew by trying to jump ahead when you are not ready for it.

[greyhawk]

Hullow!  


I've heard this thread has turned to popcorn central?

Someone bring me up to speed or....wait... I'll just guess: People shoved billions into the usagi's greedy little hands again and the usagi fucked it all up again. Is that close enough?

[ldrgn]

Problem is, of course, that the tiny spread he intended to run just doesn't work if actually left up as orders.  As the BTC/USD rate can easily move far more than that spread during a few hours - making it very easily for a trader to exploit by buying from out-dated Asks then selling into Bids when they get updated.  That's why it just can't run how it started out - when it actually DID have a tight spread and good prices.  For about a week.  That week is, of course, the only time I've traded the shares

Boy, if only these exchanges listed prices in a stable monetary unit of accounting instead of bitcoins...

Anyway, my advice to Serena is to open the books.  Maybe it's my inner accountant crying but I think real financial statements (instead of this A+B crap) and a publicly available general ledger will clear up the scammer accusations that have plagued all of her businesses.  I know "a public general ledger" is insanity, but I feel it's appropriate in this situation for a few reasons:

1. This is Bitcoin, it's all about keeping account balances in public and having them publicly verifiable.
2. Usagi's had lots of problems in the past and present with interactions between entities under her control, a ledger will clear this up.
3. Accounting is fun
4. pro forma spreadsheets will be easier for Usagi to write and everyone else to verify if account balances can be known

[Deprived]

Problem is, of course, that the tiny spread he intended to run just doesn't work if actually left up as orders.  As the BTC/USD rate can easily move far more than that spread during a few hours - making it very easily for a trader to exploit by buying from out-dated Asks then selling into Bids when they get updated.  That's why it just can't run how it started out - when it actually DID have a tight spread and good prices.  For about a week.  That week is, of course, the only time I've traded the shares

Boy, if only these exchanges listed prices in a stable monetary unit of accounting instead of bitcoins...

Anyway, my advice to Serena is to open the books.  Maybe it's my inner accountant crying but I think real financial statements (instead of this A+B crap) and a publicly available general ledger will clear up the scammer accusations that have plagued all of her businesses.  I know "a public general ledger" is insanity, but I feel it's appropriate in this situation for a few reasons:

1. This is Bitcoin, it's all about keeping account balances in public and having them publicly verifiable.
2. Usagi's had lots of problems in the past and present with interactions between entities under her control, a ledger will clear this up.
3. Accounting is fun
4. pro forma spreadsheets will be easier for Usagi to write and everyone else to verify if account balances can be known

The spreadsheet DOES contain all trading information - I think every transaction related to the fund is in there.  And nothing I've seen leads me to believe any of those transactions are fake.

Where the problem arises is in the interpretation of the data to arrive at a value.

Usagi sees no contradiction between:

1.  Claiming TU.SILVER is just a silver shop and that buying its shares as a means to get silver is somehow cost-effective.
2.  Valuing (and charging for) that silver as though the shares represented ownership of a bunch of other assets as well.

Add in some elementary errors in the valuation and it becomes even more comical - as even if you accept the (contradictory) assertions about what the shares represent ownership of, it still isn't internally consistent (Total value of assets does NOT equal number of shares * supposed value/share).

[Deprived]

There are THREE further calculation sheets that number goes through before I get a book value.

I have those sheets too.  And would you believe it - the final book value is STILL below the price you charge.

Not that it SHOULD have any relevance - but you still can't make up your mind what you're selling.

Is it silver?  Well in your (now locked) thread about FinCen compliance you state in the final post that you're a silver store - which would tend to suggest you just sell silver.  And when someone redeems shares all they get is silver.

Or is it ownership to some extent of other assets as well?  Well your pricing seems to suggest so - as does your repeated refence to some book value that contains elements that far exceed just 1/10th oz of silver plus associated costs.

When you make your mind up WHAT you're actually selling then it's likely we can make some sense of your pricing policy.

It doesn't make too much sense to me either, but I find the number 0.09818688 (a number that apparently includes the "cash kitty") interesting as it is less that half the initial book value of one of the fund's shares.

Well their value has dropped because silver has fallen in price and BTC has risen vs USD.

Which may be where this idea of selling at a price inflated by imaginary/unrelated/double-counted elements came from.

After all - if you're going to sell something which falls in value AND hold it in stock then only way to make a profit is to massively mark up your price compared to competitors who either drop-ship OR value things in USD rather than BTC.  Then you just have to make up a story why somehow your massively over-priced stuff is worth more than the same stuff for much cheaper elsewhere.  Hence the pretend shares of non-contractual investments (contract does NOT specify any obligation to maintain non-silver assets at any level relative to shares or book value) and the fairy-tale valuation method in the spreadsheet.

I'm assuming you actually have the spreadsheet as you know the .098 number.  If so, you just have to look at what price (in BTC) was paid for silver and then the price it was sold at to see why the original system was going to cost usagi a ton.  Under the new system usagi does OK - provided, of course, he can find enough victims investors willing to pay over double spot for silver coins.

[repentance]

Anyway, my advice to Serena is to open the books.  Maybe it's my inner accountant crying but I think real financial statements (instead of this A+B crap) and a publicly available general ledger will clear up the scammer accusations that have plagued all of her businesses.  I know "a public general ledger" is insanity, but I feel it's appropriate in this situation for a few reasons:

1. This is Bitcoin, it's all about keeping account balances in public and having them publicly verifiable.
2. Usagi's had lots of problems in the past and present with interactions between entities under her control, a ledger will clear this up.
3. Accounting is fun
4. pro forma spreadsheets will be easier for Usagi to write and everyone else to verify if account balances can be known

It's not necessarily insanity, but I think it could create confusion.

While usagi has recently said that TU.SILVER is a "coin shop", realistically it's more like an investment fund which operates a coin shop.  Transparency is great and all, but most businesses couldn't function if shareholders were giving their input on a daily or weekly basis - there's a good reason why shareholder meetings only happen occasionally absent a crisis.

Obviously, usagi needs to be accountable both as the fund manager and as the operator of the coin shop, but a balance needs to be found between between shareholder involvement and micromanagement by shareholders (which will absolutely not work).

Separate from any past actions of usagi's which were controversial is the issue of whether his style of communicating with his shareholders is beneficial or whether it inevitably ends up with every decision being questioned and debated endlessly.  usagi's communiques sometimes come cross more as a means of saying "look how clever I am" than as being primarily a means of keeping shareholders informed and that is usually where the trouble starts.  Quoting Buffet as an appeal to authority will not overcome this problem (it may even exacerbate it).

[Deprived]

While usagi has recently said that TU.SILVER is a "coin shop", realistically it's more like an investment fund which operates a coin shop.  Transparency is great and all, but most businesses couldn't function if shareholders were giving their input on a daily or weekly basis - there's a good reason why shareholder meetings only happen occasionally absent a crisis.

The real problem is that usagi is trying to use the share BOTH to represent silver being sold AND to represent shares in the investment fund.  That inevitably leads to either over-priced silver or devaluation of investments - as there's no way to sell the shares representing silver cheap (relative to other silver sellers) whilst keep those representing invesment high (there only being one set of shares).  Everything else stems from attempts to reconcile two completely opposing objectives into one (plus maybe some from the impossibility of trying to sell something that is devaluing fast at a profit whilst competing with those who don't actually hold it in stock).

That's why my very first criticism was basically that the silver selling MUST be seperated from ownership of the investment.  Of course usagi's reply was then along the lines of 'you don't understand' - his typical refrain whenever the inconsistencies in his statements are pointed out.

[repentance]

The real problem is that usagi is trying to use the share BOTH to represent silver being sold AND to represent shares in the investment fund.  That inevitably leads to either over-priced silver or devaluation of investments - as there's no way to sell the shares representing silver cheap (relative to other silver sellers) whilst keep those representing invesment high (there only being one set of shares).  Everything else stems from attempts to reconcile two completely opposing objectives into one (plus maybe some from the impossibility of trying to sell something that is devaluing fast at a profit whilst competing with those who don't actually hold it in stock).

That's why my very first criticism was basically that the silver selling MUST be seperated from ownership of the investment.  Of course usagi's reply was then along the lines of 'you don't understand' - his typical refrain whenever the inconsistencies in his statements are pointed out.

Could this have been overcome by issuing two classes of shares to each shareholder - one representing the silver and one representing shares in the investment fund?

It's generally not a good idea to make anything more complex than it needs to be.  Perhaps there are some simple options which could be applied now (even if TU.SILVER needs to buy back shares to implement them) to prevent later dramas.

[Deprived]

The real problem is that usagi is trying to use the share BOTH to represent silver being sold AND to represent shares in the investment fund.  That inevitably leads to either over-priced silver or devaluation of investments - as there's no way to sell the shares representing silver cheap (relative to other silver sellers) whilst keep those representing invesment high (there only being one set of shares).  Everything else stems from attempts to reconcile two completely opposing objectives into one (plus maybe some from the impossibility of trying to sell something that is devaluing fast at a profit whilst competing with those who don't actually hold it in stock).

That's why my very first criticism was basically that the silver selling MUST be seperated from ownership of the investment.  Of course usagi's reply was then along the lines of 'you don't understand' - his typical refrain whenever the inconsistencies in his statements are pointed out.

Could this have been overcome by issuing two classes of shares to each shareholder - one representing the silver and one representing shares in the investment fund?

It's generally not a good idea to make anything more complex than it needs to be.  Perhaps there are some simple options which could be applied now (even if TU.SILVER needs to buy back shares to implement them) to prevent later dramas.

Well the sensible approach from the start would have been to have had 2 securities.  One representing the investment part which then issued a second security representing silver.  Then the silver asset could be priced at silver spot + storage/shipping/markup etc and the investment one grow or contract based on how profitable the silver trading was plus the results of whatever other investment activites usagi got involved in.

It could still be done now of course.  Way would be to create a 2nd security and issue all current investors a share in each.  Then the silver one would be priced on silver and the other on the remaining assets - with no need thereafter to keep same number of each obviously.  That would leave people who bought shares just to get silver with a share of other assets they didn't want - but at least they could then sell them rather than now where they kind of, sort of own other assets but have to surrender all claim on them if they ever want to redeem shares for (very expensive, as a result) silver.

Of course there IS a problem if accounting/seperation of the two elements were done seperately.  The losses made from buying silver and having to repeatedly mark it down in value and price until it sells wouldn't be able to hidden.  But anyone who repeatedly invests with usagi should be used by now to the value of their investments vanishing - so it wouldn't be that much of surprise to them.  And they can always just value in USD and claim a profit that way if they want (or value the silver in silver - meaning they can't possibly make a loss).  And at some point BTC will fall anyway - I assume usagi is going to keep predicting it every week until it happens : even a stopped clock is right twice a day after all.

[usagi]

Boy, if only these exchanges listed prices in a stable monetary unit of accounting instead of bitcoins...

Anyway, my advice to Serena is to open the books.  Maybe it's my inner accountant crying but I think real financial statements (instead of this A+B crap) and a publicly available general ledger will clear up the scammer accusations that have plagued all of her businesses.  I know "a public general ledger" is insanity, but I feel it's appropriate in this situation for a few reasons:

1. This is Bitcoin, it's all about keeping account balances in public and having them publicly verifiable.
2. Usagi's had lots of problems in the past and present with interactions between entities under her control, a ledger will clear this up.
3. Accounting is fun
4. pro forma spreadsheets will be easier for Usagi to write and everyone else to verify if account balances can be known

Thanks for your excellent advice, but we cannot open the books due to people like Deprived who shoot first and ask questions later. This is why we hired a 3rd party financial advisor to look over the books. When we do release financial statements, it is done once, and the numbers have been checked by multiple people who have experience dealing with 'large' funds (5,000 BTC+).

You can see how we calculate value for yourself by simply reading our most recent report.

I like how you demonstrate keeping things light and lively. You are being nice and put me in a good mood, so I will quickly explain to you what everyone else is intentionally missing. Starting from a balance of zero, we bought silver, which sent our cash balance negative (E. Cash Balance: -46.0237 BTC[7]). This figure also contains the value of the sold silver. To balance this, we add the value of the unsold silver, which we estimate using "ask" from "Price Guide" as a minimum value (C). This gives us a very simple net profit per share from coin sales minus what we paid for the silver.

To this is added the cash kitty and profits from selling options and other investments -- any values which are held on separate balance sheets to keep things readable.

Finally, to turn the value from a net value to a value we can sell units at in order not to lose money, we simply add our cost price for silver ("A", the "ask" from the price guide) on a per-share basis.

Simple stuff.

[usagi]

Hello!

Taking a cue from GMP, we have initiated a shareholder protection plan. Enjoy!

[Deprived]

Hello!

Taking a cue from GMP, we have initiated a shareholder protection plan. Enjoy!

For those not aware, GMP (listed on Crypto) have Avalon orders in.  With Avalon set to massively increase prices for batch 3, GMP decided to raise massively the price at which they sell new shares.  That's not a bad move at all - as pre-ordered/early-batch Avalons ARE now trading at well above what they cost, even allowing for the change in BTC/USD rate.  It acts to ensure that existing investors get to reap the increased market value of the assets bought with their invested funds.

Not sure what relevance this has to TU.SILVER though.  Your bonds have a face value defined as 1/10th oz of silver - that hasn't changed and can't change.  There's nothing else that investors have any contractual right to which CAN be protected.  Putting your fingers in your ears won't change the price of silver anywhere else - it'll just make your claims of being a coin shop and/or a cheap way to buy silver look progressively more ludicrous.

You may also want to update your summary etc on Bitfunder.  At present it says:

"How it works
We calculate the price of silver in bitcoins and add a small markup for shipping and vault storage."

No mention that you then treble it for other reasons unrelated to silver.  This IS mentioned in the details - though no indication is made that the majority of the price you charge is for the other stuff with silver only a minority of what is paid for.

It also says:

"The lowest price in BTC
Compare our prices to most online coin shops and we believe you will choose TU.SILVER."

Not sure it's fair to say MOST online coin shops are more expensive than you.  There may be some that went out of business a few years back but left their website up that ARE more expensive.

And it also says:

"TU.SILVER is a low risk bond that is callable as 1/10th of an oz. of .999 fine silver."

Not only is that inconsistent with your claims of not being a security (if YOU explicitly refer to it as a bond, how is NOT a security) but how is it low risk?

The face value of it is 1/10th of an oz of silver.  The price that you sell at is OVER DOUBLE that (around treble now).  How is the rest of the value (other than the silver) "low risk"?  What's the mechanism for redeeming the rest?  The only way in which it's a low risk is that there's NO risk of them ever getting any of that value back if they redeem the share for silver.

There's nothing inherently wrong with running an investment fund that holds a lot of silver.  But there's definitely something VERY wrong with actively misrepresenting it as a way to obtain silver at a reasonable price.  If you've decided no longer to sell silver (other than to the occasional idiot willing to pay 3 times spot) then openly state that and stop pretending to be a silver shop.  Silver now represents (using YOUR formula for calculating the silver element) a MINORITY of what people buying your shares pay.  It's NOT your primary business any more.

[usagi]

The face value of it is 1/10th of an oz of silver.  The price that you sell at is OVER DOUBLE that (around treble now) ... Silver now represents (using YOUR formula for calculating the silver element) a MINORITY of what people buying your shares pay.  It's NOT your primary business any more.

As with everything the price of TU.SILVER is driven by market demand. I am not the one selling at the ASK price right now. So you're not arguing with me -- I don't even need to say anything -- you're arguing with Mr. Market, and you're losing.

Most of your mistakes are addressed in our recent reports. You're free to disagree; and I am free not to care. I've put up bids at .1 and above, and I've written PUTs for an additional 150 shares at .1. Go ahead and put your money where your mouth is.

[Deprived]

The face value of it is 1/10th of an oz of silver.  The price that you sell at is OVER DOUBLE that (around treble now) ... Silver now represents (using YOUR formula for calculating the silver element) a MINORITY of what people buying your shares pay.  It's NOT your primary business any more.

As with everything the price of TU.SILVER is driven by market demand. I am not the one selling at the ASK price right now. So you're not arguing with me -- I don't even need to say anything -- you're arguing with Mr. Market, and you're losing.

Most of your mistakes are addressed in our recent reports. You're free to disagree; and I am free not to care. I've put up bids at .1 and above, and I've written PUTs for an additional 150 shares at .1. Go ahead and put your money where your mouth is.

If you're no longer selling silver then why were you, a few days back, saying that you were unable to sell silver (that was your stated reason why you wouldn't use your cash to buy more)?  As I said back then - if you don't put up Asks you WON'T sell silver.  We BOTH know the reason you won't buy more is because, right now, Silver is a bad investment.  And it HAS been for a while - but you can't really admit that when you've been pumping it as a great investment - to the extent of making an extra thread called (from memory) something like "Why you should buy TU.SILVER now".

At least you DO now have one thing to seperate yourself from other online Silver shops.  You'll only sell silver when it's expensive - whereas the rest sully themselves by selling even when it's cheap - how shabby of them!

[Deprived]

I've put up bids at .1 and above, and I've written PUTs for an additional 150 shares at .1. Go ahead and put your money where your mouth is.

I assume you're writing PUTs rather than CALLs your contract says you'd write because you've finally worked out the 2 glaring flaws with your original plan.

As for putting my money where my mouth is, well let's look at what your PUTs actually are.

The price you sell your shares at bears no real relationship to the price of silver - other than always being somewhere above it.  So even if I could exactly predict the price of silver I'd have to guess what price springs out of your imagination.

Plus when the price of silver falls such that executing those PUTs would make sense - what happens?  Oh yes - you stop selling shares totally as you've pretty much abandoned all pretence of being a silver shop.

So I couldn't execute the PUTs by buying from your Asks as a) They'd stay high,  and b) They wouldn't even exist.

That leaves buying from your investors.  But your investors (the ones who actually wanted silver) have already shown they massively over-value you and/or silver and fail at basic math so are unlikely to suddenly start selling at realistic prices.  The investors who believe msot of teh share value is in the non-silver element have no reason to change their mind on the share valuation - as they either know silver is only a small part of it or are entirely oblivious to what they've bought.  And if, by some misfortune, someone with any sense has one of your shares then they aren't gonna sell below your PUT price when they could buy a PUT and execute it themselves.

I'll happily buy and trade options on Silver.  But that's not what you offer (despite your contract saying you write options on Silver you don't)- you offer options on your shares which have very little to do with silver any more (it's a minor part of their price).  So nope - I'll decline betting on what random prices you assign to your shares as you'll just set them to whatever means noone profits from your options - regardless of whether or not those prices have any relevance to reality.  But thanks for the offer.

Options offer a range of ways for the less than honest to make a profit - especially if they're an issuer.  One is to price-fix so noone can execute.  Another is to artificially raise the price whilst selling CALLs - so they look better value than they are.  But the jackpot one is to sell more PUTs than there are available shares which can/will be sold on the market - you can then sell PUTs knowing it'll be impossible for anyone to execute them.  I do hope you aren't doing any underhand things like that - and that the unfortunate coincidence of stopping selling and issuing PUTs at the same time is JUST an unfortunate coincidence.

EDIT:  Just to be clear what buying a PUT option from you is.  It's playing a game of "guess the number I'm thinking of" - with you not having to think of a number until I've told you what my guess is.  And if you still can't win then, you have the choice of not thinking of a number at all in which case I automatically lose.

[usagi]

I assume... So even if... I'd have to guess... ...so are unlikely to... And if, by some misfortune... ...especially if... I do hope... And if...

I've been busy reorganizing TU.SILVER to weather the silver/BTC crash. Which, I now believe, will be sustained. The #1 reason why I believe this is that an associate of mtgox has posted that there is a backlog of over 4,000 unverified accounts. There are other reasons, chief among them the sell-off of industrial metals in Cyprus as their economy continues to collapse. I still believe the long term picture is bullish for silver/BTC, but for the next week at least I have decided to move in the other direction.

We have redone the BV calc to be more accurate and redone how we account for certain things such as the investment position. Ironically I was undervaluing the unsold silver position at the price-guide "ask". It's been redone to calculate a bv over the outstanding units and then use this intermediate figure to price the unsold silver. I have also been laying the groundwork for two important actions. One, I'm going to change how we account for bought silver so that we don't need to show a negative number in cash balance, because the physical representation of our accounts (i.e. bitcoins in an address) does not go negative. This should help the people who've access to our books understand what we are doing a little better. Secondly, as you can see below we have begun making inroads on LTC-GLOBAL. This is to set the stage for the acquisition of LTC-SILVER. We have been in positive talks with SaltySpitoon and will likely move to buy out LTC-SILVER in August.

No report this week. I'm feeling under the weather. In lieu, here's a short summary of what I am doing to protect the shareholders of TU.SILVER.

1. I am closing the IPO of TU.SILVER by personally buying out the 207 remaining units of the fund at .1201, which is more than 20% above it's bv calc and is above the current market ASK price and depth of only 15 shares. The company will use the money to invest into 1,000 shares of BTC-BOND and 1,000 shares of LTC-ATF.B1 until further notice.
2. Our cash position is now 13.5226 BTC, and the investment position is 1,000 shares of BTC-BOND and 1,000 shares of LTC-ATF.B1 valued at 0.01/unit each. (33.5226 BTC total).
3. I've sacrificed my management fee for march and moved 4 BTC into the Kitty (total is now 10 BTC in the kitty).
4. The current bv calc states 0.10477199.
5. Going forward I will increase the distribution by 10%. February's dividend was 0.00128. The dividend for March will be 0.001408/unit and will be paid on the full moon of Easter (March 27th, 2013).

After these actions the cash position will be 12.3962 BTC (plus investments) and the bv calc will read ~0.1034/unit. With 40+ BTC in bitcoin or bitcoin-face-value securities, plus slow accumulation of LTC, we should be reasonably insulated against further BTC price shocks, and that much closer to our goal of sustainable expansion of the fund.

Thanks to my investors, happy Easter everyone.