Explain Like I'm Five

Now now, he's not lying lying, he's just really into "alternative appraisal and accounting methods". Kinda like that aunt who does her own research and swears by essential oils and homeopathy, but with money.

Let me give you an example. Let's say that I have a truck load of coarse sand, like 25 tons. I manage to sell a single 10mg grain of sand for 1 USD. By appraising my sand based fortune on this single data point, I could claim that a gram is worth 100 USD, thus I have 2.5 billion USD tied up in sand. We both know that I obviously can't liquidate my sand for that amount, but that doesn't matter, because all I need is to convince a bank that my appraisal is sound and then use the sand as collateral for a 100 million USD loan. Some of that loan I'll further invest in the sand business, after all it's booming. More sand equals more collateral, and seeing as one bank was satisfied with my collateral, then I will be able to get other banks in on it too. And now I can live like a billionaire, all because I have invested in coarse sand. And if the banks figure out that I'm full of it, then what are they going to do? Take me to court and look like idiots for buying into my sand appraisal? And risk bankruptcy as it's revealed that the collateral the bank has for its lending business is worthless? Better to keep quiet and prop up the sand mogul.