Monetary Metals Closes First Gold Fixed Income Deal at 5%

19 responses to “Monetary Metals Closes First Gold Fixed Income Deal at 5%”

1. Congratulations Monetary Metals!!

2. Wishing you outstanding success!!

3. where’s the gold drop-box?

4. wink!

5. What is the advantage of the Aurum over a coin with the same amount of gold (alloyed for small values)?

   1. Weight and volume are the problem with high alloy (in the past Cu) content of small, fractional gram, Au content coins. In large quantities, this adds significant logistics and storage costs. The traditional 10% Cu alloy to both Au and Ag coins added circulation resiliency and somewhat complicated those who would, for whatever reasons, melt legal tender coinage. To have a viable coin of even 1g Au, one would probably need at least a 100% (1:1 Au:Cu ratio) alloy. Sub gram coins would be even more problematic. This is why, historically, Ag was the money of day to day living – relatively small earnings and transactions, and Au was money par excellence as a store of value. Aside: this is why I advocate a return to sound money with a 10g Ag “new” dollar, alloyed 10% Cu (notes and account balances demand redeemable,) and Au legal tender coins of 10, 25, and 50 grams (10% Cu alloy) but without new $ face value. Current physical market exchange rate of Au gram in 10g Ag dollars would be the value at the time of transaction. Fractional physical Au gram “notes,” which is what the Aurum appears to be, really only makes sense in a world of fiat currency gone mad.

6. Thank you everyone.

   jham: click on fixed income, and there’s a webform which is the closest thing to a drop box at the moment. :)

   pauleis: you couldn’t hold a 0.1g (that is 0.003 ounces). It is a very small denomination, in a convenient package.

   1. Suppose it was alloyed with copper @ 30:1. That would be a 3 gram coin (like the penny) containing 0.1 grams of gold.

7. I applaud your work. And thanks for the Aurum I received as part of your recent survey.

8. Congratulations, M.M.! You’re doing well by doing good.
   Valaurum seems like a key product for any coming age where gold has to circulate in daily commerce.

9. So, if I loan you/valaurum a kg @ $1300/oz you will return me 33.76 oz. in a year?

   1. The Valaurum deal is closed. We are working on the next deals now. :)

   2. As an example, a kilo is 32.148oz of fine gold, so if you leased gold in one of our deals which paid 5% pa then in a year the leasee would return you 33.755oz. As this is a gold denominated lease, the gold price has no role in the deal terms.

      1. Thanks for the clarification re the gold price relative to the lease deal. So, I know you’re not a tax expert but your answer raises another question: In the USA, how is the 5% pa gold return treated tax-wise? You’re not receiving interest income since gold is not money, correct?

         1. All countries have laws dealing with “barter” transactions. Just because a transaction does not involve official fiat money does not avoid tax on what economically would be income or capital gain. Just because the lease fee is paid in gold does not make it invisible for tax purposes.

            1. My question does not revolve around “tax avoidance” or tax “invisibility”.

               Since I do not know where Monetary Metals is domiciled I have assumed that it is in the USA. Therefore, I, as perhaps a prospective participant in a future Monetary Metals structured gold fixed income deal, am curious as to how MM structured its “first” deal.

               If MM is USA domiciled, then how does it report interest income that is paid in gold bullion? I know nothing about taxes but is this an instance of “payment in kind” (pik). If that is the same as barter, then what’s the benchmark that MM uses for its base loan? Is it the fiat gold price when the deal is struck? If so, when the bullion interest is paid is its base price established at the prevailing fiat gold price?

               Hope this is not too confusing a subject and thanks for your indulgence.

            2. We don’t benchmark or set a gold price when the deal is struck, the lease is denominated in ounces and the interest is paid in ounces. While we don’t give tax advice and I’m hardly an expert, the “value” (in inverted commas because one could argue being denominated in ounces is good enough to determine its value) of the interest in fiat dollars for tax purposes will depend on whether the tax payer uses cash or accurals basis.

10. Is there a clause in the deal that says that if there is no Gold available at the end of the term the customer will receive the value in currency?

    1. Not sure I understand the question. These lease deals are only to businesses who use gold productively – the gold is not allowed to be sold short by the lessee.