Monetary Metals is quickly becoming a leader in the precious metals investment space by offering a unique platform that allows investors to earn interest on their gold and silver holdings. Unlike traditional companies that profit from fees on sales and storage of metals, Monetary Metals earns its fees from businesses that utilize these precious metals productively. This approach benefits investors but also supports businesses in various industries, including gold miners and producers.

Keith Weiner, founder of Monetary Metals, shares the inspiration behind the company’s inception: “I am a serial entrepreneur. I sold my last company (a software technology developer) on August 19 2008. As the markets careened over the edge shortly thereafter I was sitting with the money I made in the acquisition in a few too-big-to-fail banks. At first I felt bemused. And lucky. But as events progressed I was alarmed. I started studying markets and economics to understand what had happened.”

Weiner’s journey led him to a critical realization: “I eventually realized that the monetary system is based on irredeemable currency. And this system has an unstable interest rate and exponentially growing debt. These are features not bugs.” This understanding became the foundation for Monetary Metals, with a mission to reintroduce gold into the economy by offering interest on it. “If gold earns no interest then people just hoard it. It remains a dry asset and it won’t circulate. But interest draws it out.”

Monetary Metals’ leasing program allows investors to earn a yield on their precious metals without selling them. This method contrasts with the traditional approach of buying gold and waiting for its value to increase before selling. By earning a yield, investors can enjoy a return on their gold holdings while retaining ownership. As Weiner puts it, “Traditionally you buy gold and wait for it to go up. Then you sell it. You make dollars and only by getting rid of your gold. The yield is a way to make an evergreen return on your gold without selling it. It’s like having your cake and eating it too!”

The company offers various lease and bond options tailored to different investor needs. Weiner explains, “Leases are for businesses who use gold or silver as inventory or work-in-progress such as jewelers refiners recyclers coatings manufacturers etc. What makes a lease a lease is that the metal is physically present. We could show up scrape all the metal together put it on a scale and it weighs more than the lease amount. It does not belong to the lessee is not on their balance sheet and is not available to their creditors in any possible bankruptcy.” Lease rates typically range from 2.5% to 5%.

For businesses that earn income in gold or silver, such as mining companies, Monetary Metals offers gold and silver bonds. “Loans which we sell as a securities offering called a gold bond (or silver bond) are for businesses who earn gold or silver income. Such as mining companies. The metal is sold to pay for equipment contractors payroll diesel fuel etc. The risk is obviously different than in a lease. Interest rates will be mid single digits to upper teens (our current silver bond open for investors at the moment will pay 12%),” Weiner elaborates.

To ensure the security of investors’ metals, Monetary Metals employs a rigorous due diligence process. This involves getting to know the business owners, directors, and officers, checking credit and criminal records, reviewing financials and track records, and conducting on-site observations. “Obviously you can’t give gold to just anybody. We have a 360-degree process. We get to know the people (owners directors officers) of the business we talk to other industry people who know them we pull their credit and criminal records we look at their financials and track record we go on site to observe their processes in actual operation,” Weiner explains. For mining companies, additional diligence includes examining geology, mine plans, and metallurgy.

Recent developments at Monetary Metals include the release of their Gold Outlook Report, which provides economic analysis and price forecasts for gold and silver. Weiner highlights key insights from the report: “I think the main takeaway is that interest rates must necessarily resume their long falling trend. This is because there’s little demand for credit at higher rates. Little demand means little new supply of bonds.” He adds, “Another is that the gold and silver markets changed character post covid with the incredible increase in government deficits that began then (and has not let up since). We are now in a bull market unlike 2012-2018.”

Monetary Metals has also introduced new lease and bond offerings, such as a silver lease paying 5% annually. “We are always working to match supply of leases and bonds with demand or to put it another way to match demand for metal with supply. As our marketplace grows we are increasing the number and size of both lease and bond deals. We want to make sure every gold and silver owner has an opportunity which fits his risk-return profile,” says Weiner.

The company’s expansion plans include opening an office in Dubai to tap into a market of gold-savvy investors and enhancing their client platform to streamline the process of buying metal and transferring cash. “We have connected our client platform to the banking system so now clients can buy metal and through the same screen direct their bank to send the cash via ACH,” Weiner mentions. They have also completed a SOC-2 level 2 audit, ensuring compliance with business and IT procedures designed to safeguard their systems and client assets.

In their latest investment round, Monetary Metals secured significant funding, including a gold bond issuance that raised over $11 million. These funds will boost marketing efforts, improve their software platform, and streamline operations, ultimately enhancing the investor experience. “We of course will increase our marketing efforts to make the world aware of what we are doing. And also we are investing more in our software platform and operations to make the process easier and smoother for investors. We also issued a gold bond to add to our coffers. We raised 4700 ounces (over $11M),” Weiner explains.

Monetary Metals differentiates itself by paying a return on gold, addressing a common objection to owning gold made by serious investors like Warren Buffet. They have successfully executed 57 leases over eight years, creating a liquid market for yield on gold. This innovative approach offers a compelling opportunity for investors looking to benefit from their precious metals holdings while supporting productive enterprises. Weiner sums it up: “We are trying to help the world rediscover the merits of gold and using gold to finance productive enterprise. We do this by paying a return on gold which also happens to answer the main objection to owning gold made by serious investors like Warren Buffet.”

The above references an opinion and is for information purposes only. It is not intended to be investment advice. Seek a licensed professional for investment advice. The author is not an insider or shareholder of any of the companies mentioned above.