Every great economic expansion in modern history has occurred on the backs of a expanding middle class. Sustainable economic growth can't occur without IT – wealth growth of the middle class. The current fragile economic growth period has been propped up by the use of 7 trillion in global Quantitative Easing by central banks that has created a global wealth explosion in stocks, bonds, derivatives and real estate for the the rich. The worlds middle class has actually lost ground as the top 10% have taken 106% of asset appreciation. This new global wealth has been obtained by the rich due to its first access to money creation. The past seven years has not seen increase in property and business ownership in the middle class as we saw in the 50's, 60's, 80's and 90's. In addition real wages are down in the new global economy due to global wage arbitrage and technology. For this reason there has been no wealth creation in the middle of the wealth pyramid thus little velocity of economic growth. Basic math here missed by 99% of economists as they focus on GDP where all growth is due to the top. The proposed plan recognizes escape velocity is not possible without more QE and basically SWITCHES the punch bowl away from the most wealthy and creates a QE plan that enriches the middle class and even the working poor. QE can be used for main street and create a powerful economic multiplier by allowing the middle class to use the same leverage tools to use its savings for capital investments to increase personal, and here's the ticker, community wealth that is sustainable and lays a strong foundation for wide spread economic growth to be experienced by many. In this plan middle class savings is no longer the enemy (“paradox of thrift”) but the very engine for economic growth. The middle class will get higher returns of 600 - 1,500 basis points than basic money markets today and also benefit from tighter spreads as a borrower. This is how we increase the velocity of economic transactions wealth creation for the middle 60%. This plan allow for middle class families to get use leverage and have first access to money and provide needed credit by using their own savings. Please contact us with your feedback.

1. This document has been released by Out Of Oz Economics in rough draft format to elicit
feedback. Please contact Curtis at outofozeconomics@gmail.com
“You become rich not for working harder but because you leverage harder”
Curtis Brown
Chief Myth Buster
Out of OZ Economics
QE For Rainier Valley
Making Quantitative Easing Work For The Middle Class Instead of The Rich Thus Increasing and
Enlarging Economic Growth
Executive Summary
Every great economic expansion in modern history has occurred on the backs of a expanding middle
class. Sustainable economic growth can't occur without IT – wealth growth of the middle class. The
current fragile economic growth period has been propped up by the use of 7 trillion in global
Quantitative Easing by central banks that has created a global wealth explosion in stocks, bonds,
derivatives and real estate for the the rich. The worlds middle class has actually lost ground as the top
10% have taken 106% of asset appreciation. This new global wealth has been obtained by the rich due
to its first access to money creation. The past seven years has not seen increase in property and
business ownership in the middle class as we saw in the 50's, 60's, 80's and 90's. In addition real wages
are down in the new global economy due to global wage arbitrage and technology. For this reason
there has been no wealth creation in the middle of the wealth pyramid thus little velocity of economic
growth. Basic math here missed by 99% of economists as they focus on GDP where all growth is due
to the top.
The proposed plan recognizes escape velocity is not possible without more QE and basically
SWITCHES the punch bowl away from the most wealthy and creates a QE plan that enriches the
middle class and even the working poor. QE can be used for main street and create a powerful
economic multiplier by allowing the middle class to use the same leverage tools to use its savings for
capital investments to increase personal, and here's the ticker, community wealth that is sustainable and
lays a strong foundation for wide spread economic growth to be experienced by many. In this plan
middle class savings is no longer the enemy (“paradox of thrift”) but the very engine for economic
growth. The middle class will get higher returns of 600 - 1,500 basis points than basic money markets
today and also benefit from tighter spreads as a borrower. This is how we increase the velocity of
economic transactions wealth creation for the middle 60%.
Problem
Seattle's Rainier Valley is a middle class neighborhood with its fair share of poverty and crime. The
area lacks education and employment opportunities. Traditional economic plans before or after the
great recession by the City and local groups have not provided the economic development the
community has desired. And while the City itself has become one of the nation's most wealthy, the area
has not seen the level of economic activity that has occurred in most of the other parts of the region.
The other issue is even if economic development occurs gentrification occurs and local residents fail to
take part in the economic prosperity. There is no current economic plan for this area or any other area
that has the ability to create meaningful and wide spread growth.
Or just describe a generic local region anywhere in the USA(regional economies not national)

2. Solution
We are going to apply the principle of QE on a regional basis empowering middle class and poor
families instead giving cheap money to the rich to increase the wealth gap and hope money trickles
down. The fund will take savings from the middle class and the poor and will leverage that with funds
borrowed from foundations and wealthy individuals which will act like the Fed window and will
supply capital for real estate purchases, rehab, upkeep and refinancing, credit expansion, small business
loans and business start-ups. The money goes into creating a real economic multiplier on a regional
basis. The fund will be primarily a lender of developers and entrepreneurs but will also do
investments.
The exceptional aspect of this plan is that it encourages savings for investments in job and wealth
creating assets for the middle class. All these investments are done on a regional basis with the aim to
increase participation and the velocity of money. All the current QE has done is punish savers and push
high yield secondary market investments that create high-end financial jobs but actually have
encouraged corporations to reduce human and capital expenditures and investments in favor of stock
buybacks.
The savings will be used to spur local investments and depositors will take interest dividends from the
profits through loans on small businesses, real estate developments, loans, stocks and treasury bonds.
This is creating middle class wealth on both sides of the savings by benefiting from the access to credit
and the profit of providing it. In addition be part in and benefiting from creating robust growth.
The Rainier Valley is an ideal place to execute this model because it has a extensive diverse middle
class along with a large population of working poor. The area makes for a safe investment in that the
demand for property in Seattle exceeds supply but most investors fear the area. Those that fear the area
miss the changes of surrounding neighborhoods including.... (the rest of the section is only available to
investors and can be found in addendum 2)
Raising funds from Fed
We will approach major donors, foundations and corporations to raise money build up a fund that will
act as a mechanism like the Fed window works today. We can take PRI,. loans and donations.
Investments will pay .25%*. We will raise 10,000,000 at that rate. While it is a loan the ROI would be
at least 200 basis points less than if they were to buy a 10-year bond. This difference, while not
counted technically as a donation, in all reality it is. We bring this point up definitely not as a selling
point but to show how the Federal Reserve is making hundreds of billions of dollars in donations to the
elite rich instead of the middle class. It's no wonder there is growth in the wealth gap. Of the 10
million we would like about 10% of that be grants that will be used as seed capital for small business
ventures that are of higher risk. In addition, another $3,000,000 will be raised from local community
middle class and poor families. These monies will be leveraged with the seed capital borrowed at .25%
This means a poor family could save a $1,000 but leverage that at 8 to 1 and turn that into an 8,000
investment. They will get a much higher return on these savings than a traditional savings account or
bond purchase that does not even meet the real inflation rate. Buying into this stock market at its hefty
valuations is neither safe nor a desired risk option for many. Below details the type of returns for
different people groups.
Raising investment funds age averaged
Leverage levels will be determined by a families level of liquid assets divided by their age of the
head of household. Families can't have liquid assets above 1 million and age plays a role as you

3. move down the matrix. A single person age 30 with a 900,000 in liquid assets would not be
eligible but a family of 4 with the head of the household at age 57 would. At the this level the
leverage could only be 2 to 1. See addendum for matrix.
Example:
Brighton Apartments needs to borrow $5,000,000 at 3%.
300,000 invested on an average of 4-1 leverage = .03x4(300,000)= 36,000 interest - .25%(300,000)
=$750 in interest cost for a net of 35,250 which is roughly 12% rt
1,000 invested 6 to 1 .03x6(1,000) 180 interest 18% return
Actual rates would be less since funds would need to be set aside for any losses on other projects.
Payout of Return
This is where the plan gets focused and creative. The payout of the return would be executed in two
forms. One third of payout is returned to increasing the investor's basis. The other two-thirds comes in
a form of an ACH transfer to a debit card that is only good at participating local businesses in the area.
Additional businesses outside of the area could be added if they are significant trading partners or
investors to the area.
Payout rates would also adjust to length of investment like a bank.
Issues of Solvency:
In the case of bad loans and investments, unlike the Fed model, risk would be shared equally among
investors and “Fed Window” loans. The fund will make every effort to not invest in speculative
ventures and keep asset purchases marked to market. Both of these positions are not like the current
risk-free models the banks run with lack of risk mitigation but our conservative positions and hedging
will NOT put our make believe Fed Window or investors in too much risk.
What will the Fund invest and make loans for:
Assets to purchase
• Rent to own for community members
• Partial/shared mortgages for community residents
• Multifamily developments
• Loans for appliances and other needs for community residents
• Pay day loans Extending credit - work with local credit unions....
• Used car loans
• School loans
• Small business loans
• Commercial developments
• Land purchases for development
Job Creation Business Options
• Robotic Hamburger joint
• 3D print shop and software training – partner with Cleveland HS why wait for teen job creation
• Back to the Future Produce grow and delivery
• Used Car and Care (lease/share used cars ) and Uber like Neighborhood Transportation

4. • Linked-in Neighborhood Employment and Vendor Network
• Same day delivery
• Air BNB use of rooms and homes....
• Uberize the inner city
Adaptability
Economic change is part of life. However, current banking is unable to adapt to changing
environments of local communities. This is mainly due it its size which creates a structural dis
economies of scale. The multinational bank also is only concerned with its profit and only its well
being. These two characteristics keep it from making adjustments to loans to ensure success for the
business, homeowner or creditor. Our model allows for loan adjustments to ensure both individual and
community success. If a homeowner looses a job a loan can be restructured to lower a payment for a
period for exchange in equity or for a larger payment later. The small and regional aspect allows for a
greater deal of flexibility thus a much more powerful free-market system that benefits and empowers
more to withstand most environmental difficulties. Will there need to be foreclosures or repossessions?
Of course, but at a much smaller level and only as a last course of action. This plan puts the human
face back on economics.
Execution Through Free-Markets and Competition
This plan works best if not worked through a single funding entity. It would be best if 1-3 cooperating
competing organization existed to encourage fresh ideas for execution. Plans like this fail because the
use of a single gate-keepers creates a ineffective and narrow investment portfolios that fail to generate
growth. Single entities can also get political which can cause failure. There is room for cooperation by
using a single entity locally or nationally to manage all the holdings and distributions but the offering
and investment portfolios could be done by multiple groups. This concepts defeats the pitfalls of
centralized planning yet encourages cooperation to benefit from appropriate economies of scale.
Conclusion
If successful, this plan offers a powerful monetary alternative for the Fed to offer an accommodating
money creation option for regional economies that are main street focused. Under our plan for QE,
savers earn returns much greater than inflation, increase local spending and velocity of money, plus
small businesses, nonprofits, the middle class and poor get access to community generated credit. Our
plan pays out interest and reinvests funds. Nonprofits will be able to refinance their properties at
smaller fees and possibly lower rates. Job creation accelerates as builders and businesses buy from
each other as part of the loan covenant. And all the lending leads to ownership of property, process and
profit. This is what will change the economic front.
People's savings are reinvested backed by strong assets. Savers are not crushed. In this plan savers are
rewarded and savings are spent in the local community strengthening the local economy and not used
to gamble on stocks and commodities.
The plan's focus of strengthening existing residents with ownership and wealth reduces the impact of
gentrification that usually follows economic changes. This plans aggressively encourages migration
into the area of higher income families but NOT at the expense of moving out current residents.
In the end this brings back what banks are supposed to do, with a modern financial twist, by using the

5. Fed model of QE to create money for the middle class and poor to access. This part has never been
tried. Real Estate projects that now that don't pencil out will due to access to long-term cheap capital
that increases the ROI both for investor, saver and local companies that will benefit from the job and
wage creation. If the Fed had been doing this for the last five years our economic outlook would be
much better. This real life model is set to prove this.
This model reinvests in the middle class and is doable because it bypasses a dysfunctional congress and
empowers a accommodating Fed board to inject stimulus into local communities hopefully reducing
the politics of the process and empowering main street to becoming the foundation to economic
growth. And while conservatives will fight the debasement of the currency the use of free markets in
lieu of national debt may win some converts. While a compromise this plan offers win win win for all
parties with negligible downside. It is hoped that the success of this model will create a movement to
pressure the Fed to restructure how it implements its accommodating policies from top down to middle
down then around.
Addendum
Let's be clear if there is not some QE type program for the middle class there is no way to
bridge the gap of income inequality. This inequality occurs due to first access to capital as it
is created and leveraged. First access to capital allow for purchase of assets at their
cheapest and leverage and arbitrage allow for mass quantity to control markets. Controlling
markets and money created the ever widening gap. Allowing middle class access to a “Fed
Window” first gives them first mover advatage plus the needed leverage to create wealth only
if it is tapered to the rich. There needs to be a new fractional reserve banking system for
money creation for the middle class. Such a system is very possible with today's technology
and such a process would diminish the major banks potential to destroying our economy and
liquidity. The bottom line is wages or investing in the stock market will not change the
GROWING wealth inequality.
The current QE fails because it diminishes savings as a virtue for investment and forces
everyone into one side of the trade of stocks and bonds creating a bubble that has no
mitigation against a drop because the middle class has been left out of this recovery. When
and its not if the stock and bond markets take a dive there will be no strong middle class to
keep our economy stable. There has been very little middle class wealth creation. Moving
forward we must demand a QE program that is middle class focused that bypasses the TBTF
banks.
*Moving lending to local levels reduces securitizations at the macro level and reduces
movement of capital at the tob in the early stages. Wall street profits in the short term will
reduce. Moving lending at the local level will increase inneficencies early on but by not
centralizing capital risk the macro economy is at lower risk as the cascading effect of the
previous implosion becomes less likely. This lowers economic risk and thus will create an

6. environment where corporate america can take more risk and hold less cash due to
deminished economic risk. Dimishing systemic risk allows for more corporate investmetn and
less hoarding. Additional profits at the lower end increases consumer spending to connect to
increased corporate investment. This is the real multiplier we want as the middle leads in
activity and the top responds. This is real economic growth based on middle class wealth
creation. When you create an environmnet where the best corporate investment is not to
invest then that is what they will choose.
*There would be an interest rate mitigation part of the covenant that if rates took off that the
PRI investments would see some inflation protection.
*Using the Fed window is the preferred method of creating the currency versus how the banks
sell the fed treasuries and MBS and then pocket the sales through open market operations
and draw interest from the fed. They then use these proceeds to purchase high risk assets
not lend. This process has created more debt for and inflated prices to pay without income to
match. Banks are at record profits without lending or offering savings to depositors, Not a
winning combination for the middle class. Its critical that current QE is more about creating
local investment and money creation versus debt creation. Our process eliminated the middle
man the banks and send the money without debt right to the middle class. All this backed by
strong community assets and of course the Federal Reserve.
*Columbia City. All those young people buying condus in Belltown and Lake Union will need
to buy homes at some point as families enlarge. Demographics along with its location on the
light rail and its lack of population density make the area very appealing. Gentrification has
already begun.
Leverage Matrix - Conceptual Only! Real Equations Being Developed
Points Liquid Assets HH Income Age HHS
1 1000000 250000 21-27 1
2 700000 175000 28-33 2
3 500000 140000 34-38
4 300000 110000 39-44 3
5 100000 850000 45-49 4
6 60000 60000 50-56 5
7 25000 36000 57
9 10000 25000
Leverage Levels

7. Points Leverage Levels
0-7 No leverage
8 to 12 2 to 1 leverage
13 to 17 3 to 1 leverage
17 to 20 4 to 1 leverage
21 to 25 5 to 1 leverage
26 up 6 to 1 leverage
Those with incomes with 250,000 and 1 million in assets cant qualify for a leverage higher
than 2 to 1 no matter the point total. No one above both the numbers together qualify for
leverage but can invest.