In this episode we sit down with CEO Keith Weiner for an in-depth look at the current gold market, the economic outlook for the remainder of 2025, and the mechanics of earning a yield on gold, paid in gold. He breaks down how gold leasing works, why yields are rising, and what it all means for those looking to put their metal to work.
Follow Monetary Metals on X: @Monetary_Metals
Follow Keith on X: @RealKeithWeiner
Additional Resources
Earn a yield on gold, paid in gold
The Marginal Productivity of Debt
Transcript
Dominik Starosz:
I’m Dominik Starosz. I’m the Content Director at Golden Meadow, and we’re sitting down with Keith Weiner, who is the CEO of Monetary Metals, which is a ground-breaking company that helps investors earn interest on gold, paid in gold. As a respected monetary economist and entrepreneur, Keith offers a unique perspective on gold, credits, and currency, Today, Keith urge his PhD from the New Austrian School of Economics and also serves as the President of the Gold Standard Institute in the United States. Today, Keith will go over the mechanics of monetary metals, how it works, how you can benefit by buying gold through monetary metals and earning interest on it. We’ll also delve into the subject of gold, the dollar, what’s current state of affairs, what Keith thinks is ahead for gold, and the economy, perhaps. Keith, welcome.
Keith Weiner:
Thanks for having me, Dominik.
Dominik Starosz:
All right, Keith. What I wanted to start off by asking you a very simple question here. You’re the CEO of Monetary Metals. You’re the founder. Not everybody who’s joining us today knows what Monetary Metals is about, what you guys do, how people can make some money by purchasing your products. If you can, please just go over the basics of how Monetary Metals works. What are the mechanics behind it?
Keith Weiner:
Our brand promise is we pay interest on gold in gold. We call it yield on gold, paid in gold. How do you do that? In contrast, I have to bring up crypto because there’s a lot of places that promise interest at all kinds of crazy interest rates. But they try to do it in the self-referential way. They want a self-contained platform that somehow is going to generate interest. And that’s like a perpetual motion machine self-contained on your table. To generate interest, you have to be financing something productive. That’s really the bottom line. And anything else is either a Ponzi scheme or it’s speculation you’re betting on chips in the casino. One strategy that people talk about is you have goals and then you sell calls. We call it selling covered calls. And that’s fine. And then when the price really runs away, all your gold is called away, you’re left with a pile of depreciating dollars. So what we do is fundamentally different from that. We are financing productive businesses. Our main program, and the one that’s open to everybody, is leasing. There are a number of industries that have gold as inventory or as work in progress, and that inventory has to be financed somehow.
I mean, if it was copper, copper is $4 a pound. You just buy the copper you need in your business, and don’t worry about it. But gold is $3,000 something dollars an ounce. And it’s not that difficult for, let’s say, a jewelry store in the Middle East to have 50 kilos or 1,600 ounces of gold, physical gold content in the store. If you do the math, that’s like $5 million-ish. So that has to be financed somehow. Nobody has $5 million lying between the cushions and the sofa or into the pocket. Convinced If you were to borrow a financial finance before monetary metals, what would they do? They go to a bank or go to some lender and borrow $5 million. Okay, borrow $5 million, buy $5 million worth of gold. Everything’s happy. Until you think, wait a minute, what if the gold price dropped 10%, which it could do, almost did recently. Now, price has recovered a bit. We’ll see whether that was the bottom or whether the price drops further. So let’s say it drops 10%, which is 500,000 million dollars. So now you have an asset worth 4. 5 million dollars, but you still owe $5 million dollars to the bank.
You’re insolvent. And if the bank is paying attention, they’re going to say you’re in violation of your loan covenant, and you either have to come up with more cash, like by selling shares, raising equity capital, or they’ll just take the company and wipe you out. So what these companies What they generally have to do is they borrow not $5 million, but let’s say $6 million or $6. 5, buy $5 million worth of gold, and put a million or a million and a quarter in a brokerage account so they can hedge the gold price, which means short in gold futures, generally. So now you’re playing around with leverage. You’re hiring some trader, maybe a 26-year-old kid with a newly minted MBA in finance, and you’re giving them the keys to a margin account with a million dollars in it. And if it’s a futures account, they offer 20 to one leverage. So you’re saying to this kid, Here’s an account with 20 to one leverage and a million dollars in it. It’s like taking your brand new Bugatti, whatever the latest model is, with 1,100 horsepower, and giving it to the valet and say, I want you to take this down the street to the car wash and wash my car for me and bring it back.
But please don’t do anything I wouldn’t do. And you’re given a 26-year-old 1,100 horsepower supercar. Giving somebody that margin account, just similar to that. And then basically, you’re short in gold futures. So now you have a problem if the gold price goes up. I mean, in theory, you’re hedged, you’re net neutral. The problem is your inventory is going up in value, but the futures broker doesn’t see your inventory. That’s in your jewelry store, let’s say. But your futures position, which is short gold, is losing value as the gold price goes up because you’re short. If it goes up enough, then you have a margin call there and you may not have more cash, so your head just wiped out. So if you’re borrowing dollars to finance a gold inventory, there are a number of risks, and you can try to hedge the risks And in so doing, you create other risks. And it’s a mess. It’s just one of those things like the world before Uber just wasn’t particularly good. I mean, the taxi experience was terrible. You’re sitting in a restaurant with friends, It’s time to go, and you have to go all the way to the corner on the avenue, and it’s cold, and it’s raining, and whatever, and you’re waiting for a taxi at 10: 30 at night.
There’s not so many taxis anymore. Travis Kalanick showed us that you could have something that’s so much better and so much simpler. Pull out your phone, hit a few buttons, and you can actually watch the car. Not only does it come out to the front door of the restaurant, you can actually watch it arrive, and you don’t have to get up and go out into the cold until the car is there. It just completely transformed the experience. And so that’s what a gold lease does for the jewelry, refiner, mint, fabricator, platings, coatings, recycler. There’s about a dozen different verticals where they have very substantial amounts of inventory, and we provide that to them on lease, which basically means we swap gold that we have on behalf of our clients for their inventory. So the clients take title to the jeweller’s inventory, and then we lease it back. It was a consent to the client, obviously, it’s the whole point of our program. We lease it back to the jeweler in exchange for a lease fee or a rental fee or interest?
Dominik Starosz:
Okay, because that’s what should be my question, actually, Keith, because after reading through your various materials there and listening to videos for Monetary Metals people can make approximately 4% interest per year by purchasing gold through your guys. That’s on top of if the price of gold goes up. That’s also on top of that. My question was going to be, Keith, If these jewelers, these mints, the refiners, recyclers, all these businesses that require gold in order to function, perhaps they produce something from gold, they may use it for some industrial processes. When they take that gold that is provided to them through you guys, am I understanding you correctly? Yeah. They’re using that, for example, to either sell it or to make something with it. Then how is the person on the other end, the client who’s purchasing gold to a monetary metals, how do they have that guarantee that their gold is still there when the business that is on the other end is using it for whatever they need it? That was my main concern in question that I was wondering about. Where does that substitution happen?
Keith Weiner:
Each industry is a little bit different, so we customize the deal for the industry and try to fit the business like a glove. But take a jewelry store. Think of the jewelry store as you have very high fixed cost. You spend a fortune on high-end fittings and fixtures, everything from leather sofas to all the halogen and the supply cases and everything. You’re in the high-rent district, and then you generally have a lot of staff in a jewelry store, which you can’t have people walking in that are… It can’t be like a Walmart. So you have very high fixed cost, and you only get, for all of that fixed cost, and you have advertising and everything else, you only You have X number of people to walk in your front door every day. So if you don’t have the style that the customer just falls in love with, and you don’t have it in the right size, customer walks out, and that’s an opportunity lost forever. So the solution to this is the jewelers have to have quite a lot of inventory. As I said, certainly in this part of the world, I’m in Dubai at the moment.
It’s not uncommon for a jewelry store to have 50 kilos or 1,600 ounces of gold content. So the display cases are just stuffed with, here’s all the bracelets of this style, here’s all the bracelets of this style, and so on. Here’s all the necklaces, and all the different sizes, and all the different styles. So the inventory isn’t turning over that much, but you have to have a lot of it. And the way the lease works is we want 10% more inventory than the lease amount. So If we’re doing a 50 kilo lease, that has to be 55 kilos of inventory in the store. That gives you the headroom to sell some inventory. But you can’t, in one of the cardinal rules of this, you can’t sell the gold that we lease you. The lease has to be physically backed at all times. That is at any moment, we could literally walk into the store, scrape all the gold, cut it on a scale, and it would weigh greater than the lease amount at all times. That is a required condition. We track the inventory very aggressively. We have outside firms monitoring, doing stock takes, all those sorts of things to make sure the gold is physically present.
It’s not a financial It’s a centralized product. This is not a credit. You can’t sell the gold and give us an IOU that I promise, Wink, Wink, Nudge, Nudge, I’ll get you back. I’ll gladly sell your gold today and repay it next Tuesday, according to Wimpie on a pop like cartoons. No, no, no. Gold has got to be there all times. We go to exotic links to make sure that’s the case in designing the legals, in designing the operational procedures, the covenants. And we do We do monitor it, we inspect it, and ensure it for that matter.
Dominik Starosz:
There’s a well-structured safety net because people are probably wondering, Well, what happens to my metal once it’s leased? As you’re saying, there is a well-structured safety net in place where that gold is being monitored.
Keith Weiner:
On top of that, there is always- We do lots and lots of things to try to mitigate the risk. We try to take out as much risk as possible. But it does have to be said, there’s no such thing as a return without risk. Anybody promising you a return without risk, run, because that person is either a fool or a liar or both. And the risk isn’t zero in our program. The lease is the lowest risk thing that we can think of that will still generate a return, but it isn’t zero, and shit can happen. We think we’ve got the process nailed, and we think that we do a lot of due diligence on the counter party. We don’t just give gold to any Tom, Dick, and Harry that walks up and asks for it. There’s insurance, there’s a whole lot of things going on here, but it is possible that there could be a loss, and everyone needs to understand that. And that’s why you’re getting paid interest to compensate for both the liquidity, where you’re locking up your gold for a year in a lease, typically, and the risk of loss.
Dominik Starosz:
That means it’s approximately It’s a year % per annum, right?
Keith Weiner:
It was 4%, which means if you give us 100 ounces of gold at the end of the year, you have 104 ounces of gold.
Dominik Starosz:
So over a period of five years, that would be 20%? Or would that be actually more? Is there a compound?
Keith Weiner:
It would be a bit more because you’re getting paid the interest monthly, and we have leases coming along more than monthly. It was really quick. You’d put all the interest into the next lease and be compounding. So yeah, it would be more than 20%. I don’t have a compounding interest calculator in my head, but 23% or 26% whatever that would add up to be.
Dominik Starosz:
Plus, theoretically, let’s say that gold goes up in price of that, that’s also on top of that.
Keith Weiner:
Yeah, you own the gold. That’s your metal. So at the end of the day, if you sell it, We’re selling it at whatever the market price is at that moment of time. Over long periods of time, obviously, the gold price is going up, which is really just the inverse of… I’m known as a party pooper, a buzz kill in the gold space because a lot of people get excited. They think gold is going up. And I always point out, gold is not going anywhere. Imagine gold is like a lighthouse sitting on the rocks on the edge of the land, and you’re on a ship, and it’s a storm, and there’s 20 meter wave is going up and down. And on top of that, the ship has a leak, and it’s slowly sinking. So the ship is going down and up and mostly down. But if you’re standing on the deck of that ship looking at the lighthouse, you say the lighthouse is volatile, okay, from your vantage point, I suppose you could say that, and the lighthouse is going up and down and more up than down. Well, yes, but you have the wrong vantage point.
And so you’re not making money by holding gold, you’re simply avoiding the losses of holding the dollar. The dollar is designed to go down. That’s what does managers promise you on their website. This isn’t some conspiracy theory from some bank corner of the Internet, right on the Federal Reserve website, they tell you that their mandate is price stability or stable purchase, whatever the term they use, which means 2% chronic inflation forever. I mean, Orwell would be either proud or rolling over in his grave, depending on your perspective of it. And that’s what they’re trying to do. They’re trying to take 2% a year. And of course, they can slip and, Oops. And it’s not a exact science. It’s not just like, okay, increase the quantity by 2%, and therefore it loses value at 2%. There’s all kinds of machinations of what they’re trying to do, and the dollar could lose a heck of a lot more than that. So what this lease is doing, there’s two value transfers from the perspective of the, let’s say, the jeweler. One is they’re getting the finance they need. The other is they’re shifting the price away, which to them is an existential risk.
You have $5 million worth of inventory in your store. And then if you’re a jeweler, a large jeweler, you have 200 or 300 stores, that is a massive amount of price risk. You can’t take that. I mean, You’d be dead with that price risk. And so that is shifted to the investor. The investor is taking that price risk on purpose as part of a portfolio allocation. And most of our clients, I mean, There’s a lot of people that have a much greater percentage of their net worth is in gold, but most of our clients would have low single-digit percentage of the portfolio is gold. And if the gold price drops 10%, now, they’re not super thrilled about that. Although usually that means the rest of the portfolio is doing just fine. And so at the end of the day, it doesn’t take food off their table. It’s not my example.
Dominik Starosz:
Which is gold, right? You guys also have silver as well.
Keith Weiner:
Silver, that’s right. Yeah.
Dominik Starosz:
I mean, as far as I remember, correct me if I’m wrong, that silver itself is actually used in more, has more uses than gold, actually, in industry, right? Is that the case?
Keith Weiner:
Yeah, because of the price. I mean, silver is 33 bucks an ounce. You can find a lot more uses that make economic sense at $33 than $3,300. That’s a pretty strong disincentive. I mean, gold does not have antiseptic properties, but if If it did, nobody would be putting it in baby diapers and paper towels for its disinfecting property. That’s $3,300 an ounce. Just is not going to happen. Silver, 33 bucks an ounce. Okay, yeah. They coat countertops with it and all kinds of thing.
Dominik Starosz:
I’m curious, Keith, when people buy gold through Monetary Metals, do they have… Well, gold or silver. And that was my question. Do they have a choice of whether they’re purchasing gold or silver, or is that It doesn’t matter. It’s all included in the package or something like that.
Keith Weiner:
No. It’s very important that the client is in control at all times. So nothing happens without client explicit direction. You give us an order, do this, do that. And by the way, they can also deposit physical metal. So if you have Gold eagles, Silver Maples, Krugerrands, whatever, we’ll take LBMA bars, we’ll take it’s a positive metal or a wire. If it’s a wire, yeah, You got to tell us what you want to do with that. We don’t do anything at our discretion. It’s all at the client’s control. And the same thing with going into leases. It’s not going to happen without your express consent. We show you a slide deck saying, Here’s who the lessee is. Here’s the location. Here’s what they’re doing. Here’s the process. Here’s the risks. Here’s the mitigants to the risks. And it’s your decision. Here’s the interest rate. It’s your decision whether you like the deal or not. Don’t like to sell it.
Dominik Starosz:
So they can sell physical gold or silver directly to you guys, or they can purchase it through that lease program. Yeah. Okay. And I remember that there is also something in the form of gold bonds, but that’s for registered investors only, right? Accredited investors only.
Keith Weiner:
Yeah. So the SEC has the concept called accredited investors, which basically means you have a million dollars in investable net worth, not including your primary residence. And that’s net worth, that has to be net of all debt that you have. But assuming you get over that threshold, then we also have gold bonds, which finance gold loans. So a lease is for businesses that have gold inventory. It’s not a credit, it’s not their asset, it’s not on their balance sheet, it’s not available to their creditors should they fall over. It remains title to the metal. If the The metal is physically present, and the title to the metal remains with the investor. In the case of a bond, it is a credit, it is on balance sheet, it is subject to credit risk. Now, we put ourselves in first senior secured position. We file liens, all the full Monte. But the bonds are to finance companies that don’t have a gold inventory, but a gold income. So think of a gold mining company, but there will be industrials as well. A mining company doesn’t have a bar sitting around. The moment they produce it, they sell it, because they have to pay payroll, diesel fuel, truck tires, debt service, et cetera, et cetera.
And now we’re providing them debt, again, as what’s the least, the finance matches the asset. So they don’t have to have it, reduces their risk. It’s just simpler for them. And it’s another product that offers interest to investors. Much higher interest rates, by the way, on the bonds. That’ll typically tend to be double mid to maybe high teens interest rates on the bonds.
Dominik Starosz:
I remember reading somewhere that you guys issued the first gold bond in 80 something years or something like that. You guys were the first to. Yeah.
Keith Weiner:
Before 1933, I assume most of your viewership would be familiar with President Roosevelt and what he did in 1933. Three. So he confiscated the gold, did whatever he could get of it. I don’t think he got most of it. And then he made it illegal to possess and he voided all the gold clauses. Now, before that, all the bonds were gold bonds. I gave a talk at the Harvard Club in New York one time, and before the talk, I was just wandering around in the room outside the room where the talk was actually in. They had all this memorabilia. The walls were just damn packed with this stuff. And one thing that caught my eye was an old bond certificate that was from 1902 or 1906. And it was gold bond for a railroad company. And it was 90 something year matured. It matured in the 1990s and specified that it was payable in gold coin, which would have been the liberty dollar in those days. And of course, 1933, that was voided. And then it was just… Because it did say dollars. But in that time, a dollar was roughly a 20th of an ounce of gold.
It wasn’t like you had the dollar and you had gold and then some price fixing scheme. No, the definition of dollar was a weight of gold at that time. And so they just took that away and said, okay, after that, the bond will continue, but now it’s just going to pay irredeemable government credits. And so most of the life of that bond, unfortunately, was the Harvard Endowment Fund owned that thing, and they got totally ripped off after 1933. But before that, bonds were gold bonds. So after that there was no issuance of gold bonds. Obviously, in the US, it was illegal, and the rest of the world was headed towards war, and the European powers had largely, by then, ended their gold standards anyway. Before the US, each country had a different date of what they did and when. Switzerland still clung to it, but everybody was gearing up for war. I think this wasn’t a thing that was really going on then. Nixon defaulted on the gold obligations of the United States government to foreign central banks and foreign governments in 1971. It’s almost 40 years later, in 1975, they realized it was Nixon said it was temporary, right?
So it took a few years. And then finally everyone realized, okay, gold is not coming back into the monetary system. There’s no reason to have it be illegal anymore. So Congress re-legalized in 1975. And then after that, they said, Oh, let gold trade on the futures exchange, extra frozen orange juice and pork bellies. Ha-ha, it will go to $7 an ounce. That’s what they said. Well, we know that’s obviously not what happened. But after that, gold was not thought of as a vehicle for finance ever again. It was just thought of as just another chip in the casino for betting. It goes up in price. And during the 1970s, boy, did it go up, although there were some wicked drawdowns along the way, by the way, in 1970s. And then you get to 1980, and then after that, it was 20 years of sideways to down. Most of the people that were excited about in the 1970s probably gave up. By the time gold finally made its low price around the year 2000, England famously sold half of its, or the UK sold half of its gold at that time. And then post 2000, 2001, new bull market again.
But nobody thought it for borrowing and lending and financing. They just thought of it as a dry asset, to buy and selling only. And so, yeah, in 2020, 87 years after Roosevelt’s unconstitutional and illegal gold grab and presidential edict, we issued the first gold bond to finance an Australian mine called Shine Resources. And then after that, we did… So last year, we did the first silver bond in, I I think 200 something years, because after 1834, the Coinage Act undervalued silver as money. And I don’t think silver would have been involved in the banking system after that. And so if it wasn’t in the banking system, there weren’t silver bonds. So I think we did the first silver bond in a very long time, almost 200 years, 190 years or whatever.
Dominik Starosz:
Keith, now that there’s a huge renewed interest in in various forms of investing in gold. Is there some optimal client that you guys have that could benefit from buying gold to you guys? Is there someone that this is most geared towards, or are there various There’s categories here based on, for example, I remember that there is approximately 10 ounces minimum that people have to purchase.
Keith Weiner:
So to open an account, you’re looking at over $30,000. So obviously, that’s not for everybody. For most investors, we I think the bar is that high. But what I would say is this is for people that either own gold or ready or at least have come to the realization, I should, and maybe they haven’t because the idea of going to a coin shop and putting a significant amount of wealth into something you can hand carry, it can’t be insured. You’re walking to the coin shop looking over your shoulder, but if someone grabs it, you just lost a big chunk of your life’s savings. So there’s some people that haven’t bought gold, that just haven’t found the right way to do it. We’ve worked for people that have gold. For the people that are the diehard paper bugs, for the people, Oh, you baby boomers in your stupid rock, they’re probably not going to be clients. You’d be surprised. Sometimes they are. Sometimes people have vocal political opinions, but when it comes to their own wealth, they take a little more care and a little more respect.
And then there’s a spectrum, right? So you have on one extreme, the hardcore paper bug, diehard Keynesians, whatever. On the other end, you have the diehard Prefers, who think the world is going to end next week. And they have their bunker, and they have their AK-47 or M16 or whatever. And they want to have their gold in one hand and their machine gun in the other hand. And they’re probably not our client either, because they don’t trust anybody. Their gold is not going to leave their sight. It’s certainly not going to leave their possession. And we have most of the middle. So the people that would look at gold as something in the portfolio all the way through, people that are pretty diehard, but not maybe quite that level of I’m trading gold for bread.
Dominik Starosz:
But that’s in a zombie-apocalypse situation, but that’s a conversation.
Keith Weiner:
We’re not a doom and gloom zombie-apocalypse company. That’s not how we promote what we do.
Dominik Starosz:
I would say it’s one interesting thing about you guys is that when people think When you think about purchasing gold, well, of course, they’re gold-related ETFs, and of course, they can be purchasing gold coins or something like that. But one interesting thing about you guys is that what got me I’m excited, actually, is that by purchasing gold to you guys, it’s connecting with how gold is used. It’s actually being used to do something, to make something. That’s pretty exciting in that it’s not just to store and with the expectation that it will go up in value. Yes, of course, but it’s also like it’s almost like you’re connected with something a little bit greater, and then it’s being applied and it’s being used for something. That’s pretty exciting, actually.
Keith Weiner:
Yeah, we ultimately have a vision of trying to bring back the use of gold as a monetary system or monetary alternative, whatever you want to call it. You have to get it into circulation, into usage. Just buying and selling, it doesn’t really matter whether the price is 300, it’s 3,000, it’s 30,000. It will never really circulate. Interest is the key to the whole thing, and financing production is the key of interest. That’s really the broader vision. A lot of our clients, not all of them, some of them are just pretty hard-bitten and just wants a return, which is great. A lot of our clients are aware of that aspect of our mission, and they’re pretty excited to help bring about the return of honest money. Because at the end of the day, if honest If the company has an alternative, the savers will choose it, and the savers will ultimately then determine, Hey, we’re going to another monetary system. It’s not going to be this crazy fiat irredeemable dollar anymore. If the savers just want to move to gold. But in order to do that, you have to finance things in gold.
Dominik Starosz:
Because that’s what the gold standard institute that you are the President of the United States, it serves as an educational organization, right? To spread awareness of what you were just saying, Keith, right?
Keith Weiner:
Yeah, it’s really to talk about economics of it, why honesty in money matters. It’s just a statistical thing. Most people define inflation, essentially a statistical measure. You gather up all these consumer goods, come up with some weighted average of price. Next year, if that weighted average is higher, we call it inflation. It’s just statistics. And nobody really gets excited. What’s the expression? Nobody goes to man the barricades over a statistic. But I define, and the goal of Institute promotes this view that inflation is counterfeiting. There’s a dishonest aspect to it. They call it borrowing. But if the borrower has neither the means nor the intent to repay, because I don’t know, let’s say they’re just pissing it down the welfare dream, then it’s really a counterfeit, it’s a fraudulent, it’s not really borrowing because they’re never going to repay it. And that’s the system we have today. And so now, whether you like Trump or hate Trump or whatever, one thing is clear, the deficit is going up, which now my contention is the deficit is going up every minute of every day since 1971, when they made the dollar irredeemable, and the debt is going up exponentially, and nothing’s changing now.
That’s continuing. That is very alarming, right? I mean, now the debt is, let’s just say, well over $30 trillion. We have sidelines to $50 trillion, $100 trillion. At some point, it’s all going to blow up. Nobody can exactly say when. The mechanism of it is going to be very complicated I’ve written about it. The system is a mess, and it’s having for it’s a finite terminus, which is what we’re trying to create gold as a monetary alternative.
Dominik Starosz:
If the Fed lowers interest rates, will that affect the rates paid in gold from Monetary Metals?
Keith Weiner:
Very interesting question. So the Fed obviously hiked interest rates. We have our program has been going since in 2016, and the Fed was hiking after 2022. And I can tell you the theory, which is that each currency is a closed loop. And what happens to the interest rate in one currency does not necessarily mean other currencies. So for instance, right now, the interest rate in the Swiss franc is not rising, but it is in most of the other major currencies, the Euro, the Yen, oh my God, the Yen, the dollar, et cetera. And the same thing with gold is not necessarily impacted. That’s the theory, and I can talk about the theory until I turn blue in the face. But it’s a market, right? And a market is based on the preferences and the choices expressed by the individuals who comprise the market. And I can tell you that the interest rate did go up in our marketplace relatively recently from 3% to 4%, because that’s investors. And in the case of gold, here’s a really important thing. In the case of the dollar, you don’t really have a choice. If you don’t like the interest rate, what are you going to do?
If you’re going to hold the dollar, you are a creditor. You can be a creditor to the Fed, you can be a creditor to the Treasury, you can be a creditor to a bank. And if you’re a creditor to the Fed or a bank, you’re financing the treasury anyway. So you are disenfranchized. That’s the real meaning of what FDR did in 1933. But in gold, and this is why they hate it so much, you actually have that choice. You don’t have to be a creditor. You can hold physical metal. And so in any gold, forget gold standard, let’s just say gold yield marketplace, this is what we call ourselves. If we don’t like the interest rate, you’re just going to say, No, I’m good holding my gold. Thanks, bro. And you can’t ever presume on the saver the way the monetary system does today for dollars. The market interest rate has to reflect the preferences of the market. If it doesn’t, then we’re not going to fill the deals.
Dominik Starosz:
Can you further detail how the leasee, the jeweler, guarantees their interest rate risk by leasing gold from monetary metals versus hedging? Can you explain the mechanics between hedging versus leasing gold via monetary metals for the leasing? This is from Alon Hauss. Thank you very much for the question, Alon.
Keith Weiner:
Leasing isn’t fixing an interest rate risk problem. It’s fixing a price risk problem. So if you borrow what we call money dollars to buy the gold, you own the gold, and therefore, you own the price risk, which is precisely what a jeweler doesn’t want because they have too much gold, and it’s all on leverage, right? It’s all on borrowed money. So by leasing the gold, they shift the price risk off to the investors. The interest rate isn’t really a risk because it’s fixed during the one-year term of the lease. So the hedging is all about the price risk. And if you’re leasing the gold, it’s not your gold. The price isn’t your pricing. Even on this exposure, it’s not your problem. Yes. I hope that’s clear.
Dominik Starosz:
Okay. Lorne, if you have If you have a follow-up question to that, please put that in the Q&A panel if you feel like that has answered your question there. Let’s go over to another one here. Thomas is asking, So can I really invest 100 ounces gold with you and it will turn into 121 ounces in five years? We did go over that a little bit where you mentioned, Keith, that the interest rate plus the actual price in gold. But perhaps you can shed a little bit more light here on Thomas’ question.
Keith Weiner:
Yes, you really can. My only hesitation is I haven’t done the math to know whether it’s 121 ounces or 123. 2 ounces. That’s a compound that’s up to. But yes, you really can. We really are paying 4% in gold. So the end of year one, assuming you compound the interest, you have 104 ounces. End of year two, you have 108 plus whatever the interest is on the four and so on. Yes.
Dominik Starosz:
Okay. Got here a question from three here. I understand that the point of gold when held is that it eliminates counter party risk. I also understand that it must accept a risk to get the 4% yield from gold from you. I understand your ship, the Whitehouse metaphor. Nonetheless, I want to correctly time my purchase of gold from you and lease it back for the yield. I am a gold bull, but not a permo goal. What are your thoughts on what the fair value of gold today should be 3,300 US dollars per ounce, 2,800, 2,200. Okay.
Keith Weiner:
So we really look at the price of gold as the inverse of the price of the case, it was a dollar as measured in gold. And so the dollar keeps falling, right? So 1913, before they created the Fed, the dollar was about 1,500 milligrams. I tweeted, I don’t know if it was a month ago, two months ago, when the dollar broke down below 10 milligrams. And then it hit nine milligrams and then bounced up a little bit from there. So in the middle of a fall the rolling dollar as a reduction in gold, which means a rising gold price. What’s the fair value today? We have a model, and I always have to proceed any discussion of this by saying that there was a guy box that said, all models are wrong, some models are useful. Well, this is a model in that spirit. That calculates what It essentially attempts to back out the actions of the leveraged futures market betters. So what would metal be clearing at if you didn’t have leverage in the futures market? And as you can see, the price is noticeably above the market price. And there’s times, in fact, there’s long periods of time when the fundamental price that we calculate match us or even is below.
And you can see right here in this graph. In February, the The fundamental price was below market, the places where it matches it almost perfectly, and then it begins to deviate to the upside in April. And so right now we have $3,800-ish, something like that. I can tell you what exactly that is. 38,54. 63 cents is what we’re calculating as of yesterday. So that’s my Partial answer to that question, what’s the fair market value? Well, a bit above market, i. E. $500 or thereabouts. At the moment, take that with a grain of salt. There is some predictive power to that. It is saying, Hey, we’re in a bull market. I think everybody knew that, but it’s interesting to see that’s calculated without any particular bias. And there’s definitely times when it’s a bearish indicator as well. I had a reputation for most of that period of 2012 through 2018 of being a perma bear, because every time the price would blip, all the usual suspects were the little pictures of moon rockets and whatever. And I’m like, this isn’t the moon shot you’re looking for, obi-1. Sorry. Anyway, now it’s particularly bullish. Okay, if you want to time it, there’s a lot of research that says most Most people are not particularly good at timing it.
But if you want to time it, wait until the setup is looking bullish for you, and that’s when you send us a wire. You’re doing your own thing.
Dominik Starosz:
Well, speaking about the dollar, Keith, because you said that reading your various articles from you guys, that gold is not in the bull market because of inflation, but because the dollar is in a bear market. And it also said that, well, the fee-out currency is like a Ponzi scheme. And the dollar is in decline. Now, it makes me… That also ties in to what’s going on right now with Trump’s tariffs and how potentially those can be applied to to gold, perhaps to precious metals. Although, and you also said somewhere, I remember reading that you don’t think that will actually happen. But also tying into this, there’s also a lot of talk, and then this is not new talk. It’s been making the rounds for a while now, all the talk about the dollarization or stepping away from the dollar. Do you think that given the current climate, that is actually happening, that there is some a possibility…?
Keith Weiner:
It’s a serious topic, and it deserves a serious answer. I don’t mean to be flippant all. It really is a dollar world, and all of the other paper currencies are like local company’s script. I can imagine in the 19th century, people living in a company coal mining town, where they were all forced to use the company’s script. They might have been proud of their script, and they might have said, Oh, yeah, this is going to beat the US dollar in one day. And they might have sincerely felt that. But anybody looking at an objective is a little bit like, You got to be kidding. Xyz, West Virginia, a coal mining company is not replacing the US dollar anytime soon. The whole world is a dollar world. All the other currencies, maybe that, possibly with the exception of the Euro, essentially have zero demand outside their borders, and the demand for the dollar is universal. I tweet about this a lot. I call it a taxi cab driver litmus test. But anywhere in the world, you get to the end of your taxi ride, if you pull out US dollars, do they accept it? And in my experience, usually they take credit cards, and I’m not there to pull experiments.
I just want to pay for my taxi and move on. But there was one time when, in Switzerland, I took a taxi ride. I didn’t think to check to see if they accepted credit cards, and they didn’t. I don’t change physical cash over anymore. There’s too much losses in it, too much of pain in the ass. And you always end up with a little bit of a change from the currency of the country you just left. It’s just too much. Anyways, I didn’t have any Swiss francs. And so the bill in Swiss francs was 20. 6 or something like that. And the Swiss franc at that time was a dollar two, a dollar three. So it was like $21. And I just took out and I said, I don’t have change, I have a $20 bill. He smiled happy to take a $20 bill, which actually was underpaying him slightly by the value of the franc to the dollar and what the fair was. He was happy to take it, desired it. That would not be the case if you had Swiss francs and you had a taxi in the US. I guarantee you that.
Dominik Starosz:
Yeah, absolutely. I can see it being- So a lot of people may not really think of this.
Keith Weiner:
There There’s something between half and three quarters of a quadrillion dollars of derivatives contracts that are out there. This is a terrifying beast that’s been created by the twin unhedgeable residual risks of interest rates and foreign exchange rates. So it’s mostly interest rates and NFX. Do you know what percentage of all those derivatives have the dollar on at least one side of the trade? 99%. Okay, it’s a dollar world, period. The idea that some other paper currency is going to replace it is preposterous. It’s just there’s no way that that could happen. The network effects of the dollar is too strong, the liquidity is too great, the depths of how liquid the markets are. And then, meanwhile, you’ve got most Most of the leading contenders. People talk with a BRICS country. Yes. Have capital controls designed to force their people to be locked in because if the people in China had a choice, they would all be dumping the Iran for dollars. And so in order to have a birthday from… In order to stay off currency collapse, they make it illegal to dump the Taiwan. Okay, so Yuan is a value because you made it impossible to sell it.
But what have you really proved? So the same thing with the Russian Ruble, the Indian Rupee, the South African Rand. The only one that has a semi-open capital market is Brazil. And so I tweeted about this one time, and I got a Brazilian guy, and he said, actually, there’s basically capital controls in Brazil as well. He said, if you’re a retail consumer and you want to take 2,000 or 3,000 dollars out of the country, nobody’s going to say, boo. If you’re a corporation and you want to take millions of dollars out, yeah, there’s capital controls. So all the contenders, supposedly to replace the dollar, are locking their citizens in because they’re terrified of the currency collapse they would get if everybody was free to sell It’s not the US dollar. That’s going to replace the US dollar? I’m sorry. Not even… But the theory is that you are. Everybody focuses on the problems in the US, both fiscal problems and monetary problems, but Because it’s more transparent. Ironically, it’s much more transparent on these other markets. Transparency is something that people are going to demand, presumably a replacement. It’s much more transparent. So we all love to bash on the dollar, bash on the US government, the fiscal picture and so forth.
It’s not that these other governments and other currencies are better. It’s just that there’s far less data that’s available, and much of the data that is available is not really data, it’s more like propaganda. And so is that really arguing against the dollar, or is that really saying, yes, we’re transparent, and that’s why we’re going to talk about it? But no, there’s no paper currency that can replace the dollar and all the other paper currencies or US dollar derivatives anyways. There is one thing that can replace the dollar. And as I always say, ain’t nobody want that. That’s gold. And very, very few people, some of them in this audience here would say, yeah, I want it. But very, very few people really seriously want gold to replace irredeemable currency today. That’s the one thing that could. Gold has a liquidity. It has a depth. It’s a very, very big market. So today’s prices, it’s like $21 trillion worth of gold out there by official estimates, And I think the official estimates underestimate. People have been hiding gold from their governments and from their nosy neighbors for thousands of years. I mean, at least 5,000 years, I think 65, 100 years.
And you can’t inventory, you can’t do a stock take because people don’t want to share. They don’t want to fess up. They just have it. They don’t tell their kids until they’re deathbed. I mean, it’s just always been very secretive. When it comes to gold, because, of course, in most places, in most times, they’d kill you if they knew you had it. So people don’t really bring it out to the open. And then it’s okay, we’ve added it all up. We’ve done a stock take by counting up all the boxes of the cereal at the grocery store every Monday when they do an inventory at 2:00 AM or whatever. You can’t do that in gold. But anyways, according to the official estimates, $21 trillion of gold. That’s a massive market, extremely liquid, gold trains have extremely tight spreads, tens of cents per ounce in something that’s $3,000. I mean, the bid offer spread is much tighter than any other commodity, almost as tight as the treasuries or the dollar itself. And it has the liquidity, it has the depth, it has the market cap to do everything that has to be done.
But who the hell wants that right now?
Dominik Starosz:
And Keith, supposing people may not, for example, want the goal to replace the dollar, but let’s say somebody now wants to invest in some gold and in some gold through monitoring metals. What steps would they take to do that? Let’s say they were seriously thinking about that. They’re curious, Oh, okay, well, monitoring metals is a pretty exciting way to do this, what would then their next steps be? Would they take advantage of that calculator that you guys have to see, Okay, does this make sense for me? I remember putting in some stuff on the calculator on on monetary metals just a few days ago, seeing if I was seeing what came out of that. Is that the first step or should be-Yeah, we got a lot of resources on the website to explain how the program works and what it does and all that.
Keith Weiner:
And then there’s no substitute. Take that first step, reach out to us, tell us that you want us to contact you or contact us, and we can start the process of education and ultimately opening an account.
Dominik Starosz:
Keith, before opening up an account, somebody can have a one-on-one and some consultation with you guys as well, right? Before they do that.
Keith Weiner:
We have a relationship management team. They are very patient people, and they will answer all your questions and walk you through the process.
Dominik Starosz:
That’s cool. I have to say that your company is a very It’s very interesting. Like I said before, it’s a different way of actually coming into contact with gold investing. It’s completely different than everything else that’s out there, pretty much, because of that applicability factor and how gold is applied to industry, for example, and in its various uses. I have to say it’s such a fascinating world It’s very interesting to talk to you about all these things. I have an entire array of questions, and I hope that we can actually go through some of these at a later time in another webinar, actually, because there’s just so much to touch upon here. I do hope that we’ll get, hopefully in a future webinar, we’ll get more questions, and we’ll be able to touch on more subjects here. Keith, is there anything, any concluding remarks that you wanted to perhaps throw in here before we-Yeah, I think I’d leave it this way, which is before monitoring metals, the only way you could profit from owning gold is to sell it.
Keith Weiner:
So you buy it because you don’t want to be exposed to the dollar, and then you sell it to get more of the dollars that you don’t want exposure to. And that’s just the nature of any asset that is bought for speculation. And now that we’re paying interest on it, you need never sell the principle. You pay the interest, which is current income, and then you can liquidate that to buy groceries or whatever, but keep the principle intact. And of course, that’s how it always was until they created central banks and the obcenity that we have today. And then suddenly, it’s all about speculation, betting on the price, but then you have to liquidate the asset that you presumably wanted and loved. You have to liquidate it in order to take profits. We’re fixing that, giving people a different option.
Dominik Starosz:
Keith, actually, I just wanted to ask you something just before we leave. This is connected to another question here from one of our attendees, and that is, does monitoring metals have the means to offer their leases, life bond solutions via retirement accounts? Sorry, I’ll just leave this as a last question here just before we wrap it up, because I think that’s pretty important as many people who are elderly, we do consider investing in gold, and that would be something that they’d be thinking about.
Keith Weiner:
So the answer to that is a little bit more complex. I don’t know if they give us a call and we can talk you through the regulations of governing gold in an IRA. We’ve got solutions, but the government has made it unduly complex.
Dominik Starosz:
Okay, so it’s for one-on-one consultations more of it?
Keith Weiner:
Yeah. Okay.
Dominik Starosz:
All right. Keith, again, thank you very much for having and taking the time to be here with us today to talk to us about monetary metals. Again, to me, it’s fantastic. That is something that I’m very curious about and very interested in. Hopefully, we can pick up on this in the near future and have another webinar with you, at least one more, if not many more. So thank you again, Keith, for joining us.
Keith Weiner:
All right, thank you.
