Round Tripping (also said in German)

This term is used to describe various phenomena. – A state offers special incentives to attract foreign direct investment. Investors then contribute their capital to a foreign company. The latter then makes the investment in order to enjoy the benefits. In addition to lower taxes, these often include other preferential conditions, such as more generous land use rights. The profits from the investment are transferred to the investor’s home country. – One country – for example: Indonesia – grants investors special advantages, usually an attractive interest rate, if they invest their money with a bank there. The resulting inflow of funds is then used by the banks for loans in another country – in this case: China. – A firm sells an asset to another firm with an agreement that the asset will be bought back at an agreed time in the future. Such agreements usually have the sole purpose of inflating revenues (this tactic is used to increase the apparent amount of revenue and sales that have been made during a specific period of time). – The sale and shortly thereafter purchase of a security or commodity contract on the stock exchange in order to simulate turnover, also called wash sale (such transcations are done to create the impression of great demand). – The practice of borrowing at one rate of interest and lending the same money at a higher rate. – See carry trades, capital movements, international, cobra effect, crystallization, market activity, fake, market manipulation, Pairoff, Rebbes, reverse flows, sham transactions.

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University Professor Dr. Gerhard Merk, Dipl.rer.pol., Dipl.rer.oec.
Professor Dr. Eckehard Krah, Dipl.rer.pol.
E-mail address: info@ekrah.com
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