How to monetize your gold and silver

How to monetize your gold and silver

Companies that unlocked the productive potential of underutilized resources have taken off in the last decade. Uber with cars, Airbnb with housing, and even the digital cloud using extra computer space. What about monetizing underutilized gold and silver? Jeff Deist and Ben Nadelstein discuss.

Connect with Jeff and Monetary Metals on X: @JeffDeist @Monetary_Metals

Additional Resources

Start Earning Interest on Gold

The Case for Gold Yield in an Investment Portfolio

How NOT to Think About Gold

6 Reasons why Gold is the Best Money

Is Gold an Inflation Hedge?

W.H. Hutt

Podcast Chapters

00:00 – Jeff Deist 

00:17 – The Gold Exchange 

00:40 – Financializing Underutilized Resources

02:19 – Entrepreneurial Resourcefulness 

04:47 – Idle Resources

08:23 – Subjectivity of Value

12:06 – Precious Metals Bonds

16:10: – How to Participate


Ben Nadelstein:

Welcome back to the Gold Exchange podcast. My name is Ben Nadelstein. I’m joined by the General Counsel of Monetary Metals, Jeff Deist. Jeff, how are you doing today?

Jeff Deist:

Ben, I’m doing great. How are you?

Ben Nadelstein:

Jeff, I want to talk about this idea of financializing or monetizing underutilized resources. So in the past decade or so, we’ve had some interesting financial innovations. Uber, Airbnb, even cloud computing can be an example of people finding a way to monetize underutilized resources. Jeff, what do you think about this financial innovation and where do you think it goes from here?

Jeff Deist:

Well, I’m for it, provided it’s a legitimate market response to conditions. How’s that? In part, that’s what we’re trying to do at Monetary Metals. We’re trying to bring back a use case, a moneyness for gold and silver to be used in productive finance for companies that go out and do things. That’s a big part of what we’re trying to do. But we have I’ve seen some really interesting examples. You think of everybody just about has a car sitting around in their garage or their parking space. They’re probably not using it most of the time. So someone came up with the idea of Uber to take up this slack and cars just sitting around. Maybe someone who is maybe sitting home watching TV or just surfing social media would actually like to go out and make a few dollars using their automobile in their spare time. And so that was a pretty fascinating idea in the sense that, in one sense, cars, personal automobiles were underutilized. Also, it was just better than taxis because you had the software tracking where your ride was. You could stay inside, let’s say, the nightclub or restaurant and wait till your ride was actually there instead of going out in the cold or the dangerous neighborhood while you waited.

You didn’t have to go find a taxi. There’s a million reasons we know in hindsight that Uber is better than taxi. But at the time, that was quite a risk, an entrepreneurial risk by the people who came up with the idea of Uber. And what they really did as entrepreneurs was they identified resources and how you could reassemble them in ways to make them more productive. And you can say the same thing about the Airbnb market. People have second homes or homes that they don’t use very often in maybe vacations. Sometimes, as you pointed out in our earlier conversations before the show, sometimes people just use a spare bedroom while they’re home. That’s a great way to use otherwise underutilized resources and to apply entrepreneurial judgment to new business combinations. What’s so fascinating about this, of course, is that progressives in particular love to talk about IDLE resources, and they talk about this in the context of employment, especially. There are lots of different resources. There’s all kinds of capital. There’s money itself. We would consider gold and silver to be money. But there’s also labor. When we’re thinking about any of these resources, the goal is not just to use them for their own sake.

I think this is a shibolith of the Keynesian consumption model, which is that any spending is better than no spending, and any utilization of resources is better than no utilization. And we know, Ben, that that’s not true. Sometimes resources appear to lie fallow, but there’s a reason for that. All we have to do is look at the housing market. There There are lots of apartments for rent where if the owner simply dropped the rent by 500, they would rent that day. But he or she doesn’t do that because they see a longer term benefit in waiting, perhaps for the higher rent. Same thing with the price of any home that’s been for sale more than a month, let’s say. You could probably sell it pretty rapidly at any given price, but people don’t do that. There are reasons why people hold or own resources. In a way, they’re not using them in terms of what a Keynesian consumption model would view as used. But there is still a benefit to them for holding it unused in this sense. And that benefit is psychic. You and I talked offline about William Hutt, the English economist who doesn’t get all that much love.

He was born around the turn of the century, died in the 1980s. And he wrote about IDLE resources, but he also wrote a famous article called The Yield from Money Held. And what he basically says is, Hey, sometimes Sometimes people hold on to cash balances because they just are worried about the future. They like the certainty or the flexibility that cash provides as the most liquid asset of all. And so they’re not saving, investing or spending it. They’re just holding it. In the consumption mindset, that’s a bad thing. But it isn’t a bad thing because subjectively, they get more benefit from holding it than they would spending, saving, or investing it. You could apply, I believe, that same analysis to any resource and say, Well, it may appear idle, but there’s an owner who may have a reason for that.

Ben Nadelstein:

One way to think about that is for most people, at some point, we’ve been looking for a job or had a job and are looking to switch. It is technically true That while you’re searching for a job, you could just take the first available job. It could be sweeping floors. It could be working at a accounting office. It could be lots of different things. But there is a search time, generally, that people will say, Okay, I’m going to give myself a month or two. I’m going to eat my cash buffer a little bit. And I’m going to try to find not just a job, but the job or the best job that I can find for myself. And in the meantime, yes, I’ll be weaning down some of my cash reserves. But the idea is that while I’m idling and waiting to find that better opportunity, that idling time, that time where I’m not just taking the first job, I will hopefully find a job with higher income or a better salary or for some psychic benefit where I work less hours or it’s more enjoyable. And from someone from 50,000-foot view, they could say, Well, Ben is technically unemployed, and there’s an open opportunity at Starbucks.

He could work at a Starbucks. But subjectively, I can look through myself and my own preferences and say, Well, I could work at Starbucks, but that will obviously be an opportunity cost in the sense that I can’t be working somewhere else, or I can’t be searching for another job. So that difference between a personal, subjective understanding of either yourself as a labor resource or the car in your driveway that spare bedroom, you can say, Well, maybe I do want to monetize that idol or underutilized resources. But that’s a personal and subjective feeling versus from the outside, someone saying, Well, Jeff, I noticed that your car is in the garage. Why don’t you monetize that?

Jeff Deist:

Well, first of all, everything is subjective. That’s what we have to understand. The way people value things is highly subjective, the value that humans ascribe to things. When we try to force the economy, which is a very vague concept, which is really just another word for millions or even billions of people getting up every day and doing the things they do. When we try to describe that or model that in a mechanistic fashion, I think we miss a lot of the subjectivity. Let’s say that a neurosurgeon with highly sought-after skills left one job in one hospital. They’re not going to go work at Starbucks. They probably have money in the bank because they’re a neurosurgeon and they’re going to look for another opportunity that really would avail themselves with those skills. We all get that. But let’s talk about a minimum wage worker straight out of high school who doesn’t have a lot of marketable skills. Let’s say he or she is really interested in marketing. And wants to get a job in that field, and they did an internship, or they have a little bit of experience. Sure, while they’re looking, they could go work at Starbucks.

But what this mechanistic view ignores is that there’s friction involved in that, just like there’s friction involved in moving or using any resources. That applies to labor as well. For example, working at Starbucks isn’t nothing. You have to learn quite a bit. They got a lot of complex drinks in the register and the customer service and being on your feet and all kinds of things about Starbucks corporate. So there’s a learning curve for that job. But also there’s the friction of perhaps you’ve onboarded with your manager. Your manager has gotten used to you working certain evening shifts. You become part of the crew. They can’t to have too many employees, but they have to have enough so that the drive-through doesn’t back up. Well, if in truth, you’re going to quit the minute you get that marketing job, in a sense, you’ve created friction, and in maybe an ethical sense, even created a little bit of a problem for that Starbucks manager who hired you thinking, Well, you’re at least going to be here three months or six months or whatever it might be. The same thing goes for the apartment. The same thing goes for any inventory of any resource.

There’s friction involved. The various combinations in which it can be utilized are not always so apparent the way that Uber is now apparent to us in hindsight. It’s very apparent in It’s a mindset. At Monetary Metals, we think about gold and silver. The hard core gold and silver bucks think of them as money. They want to hold on to money, and particularly, they think of it as good money. They don’t want to spend it Gresham’s law, they’d rather go spend their paper dollars. Especially, there happens to be a tax consequence to converting gold into cash. That’s another drain on that. But nonetheless, hard core people like to think of it as money. It’s a resource that you might hold in the same way you hold several thousand dollars in a money market account. But when it comes to more of the use case, thinking of Uber as it applies to gold and silver, well, there hasn’t been a lot of thinking in that area. I mean, obviously, there were legal constraints on that use from the time of Roosevelt all the way till Gerald Ford, God bless him, with an executive order made it possible, once again, to contract in gold and silver.

Now, I think Keith Weiner deserves some credit for thinking outside the box of what could be done with these metals other than just their base industrial uses. I mean, people have used gold and jewelry, people use silver in a variety of manufacturing applications. But what use could it be put to in finance? Maybe because of that many decade doldrums from FDR to Gerald Ford, it just wasn’t dawning on people. You have an asset that, like a car in the Uber context, is sitting around. It’s costing money. You have to hold it in your home or in a private vault. You have to pay to insure it if you care to. Unlike an apartment or a vehicle, it doesn’t really depreciate. Physically, gold and silver can be melted down and reformed, so they have that wonderful quality. It’s not like an apartment where your tenants are making a little worse each day or more miles on a car. But nonetheless, gold and silver have been underutilized resources. I think that if we can come up with some new entrepreneurial combinations to put them to work in leases, bonds, or otherwise, there’s a lot of other finance insurance options we’re considering as business lines.

I think that could be a huge untapped market.

Ben Nadelstein:

Jeff, let’s talk about Monetary Metals’ Silver Bond offering. This is a way for people who own silver to earn interest on their silver paid in ounces of more silver. Can you describe what a silver bond is or a gold bond is, as well as a gold or silver lease and how owners of the precious metals can actually earn a yield on their precious metals paid back in ounces?

Jeff Deist:

Well, a Again, it’s novel. To our knowledge, there hasn’t been a silver lease, excuse me, a silver bond in many, many, many decades. We’re digging around, trying to find historical examples. The last time that might have been, Monetary Metals has done the first gold bonds in many decades as well. But basically, we have an opportunity to finance a publicly held mine out in Idaho that produces silver amongst other metals. And so a silver bond in this context operates just like any other bond. We form a company, and that company issues debt to raise money. It’s just that that debt happens to be raised and denominated in actual physical ounces. And then lent to the silver mine itself in actual physical ounces, which is the same thing they would be producing, mining silver. Their books would be… They’d be holding on their books the same thing that they would be producing as inventory for sale. It’s a very interesting concept. It’s going to allow this mine to get into real production very soon. On the investor side, pay those investors, actually a double-digit yield rate in silver. So you get more silver for your silver. Obviously, silver has been in the doldrums price-wise.

It hit $40 back in, I think, 2011. And so the silver bugs have been in a grumpy mood for quite some time. So the recent movement in silver up above $30 has made a lot of people happy. But it’s also, I think, reanimated interest in the mining itself and in some of the industrial uses. So it’s really an interesting way to, again, bring this moneyness back to silver. We also offer leases. Leases are a different animal. In a lease, you actually own your precious metals, your physical gold or silver throughout. You simply allow someone else to use them in the same way you would with the example of an apartment apartment that we discussed earlier. It’s really two very separate businesses. But I think that there’s a lot of interest in the junior miners, again. There’s a lot of interest in where gold and silver are going as commodities. I think a lot of that ties to just a very unstable world, everything going on in Russia and Ukraine, everything going on in Israel and Gaza, and perhaps more importantly, everything going on with what appears to be a very shaky economy in the US and Europe.

Jeff Deist:

In In less certain times, I think gold and silver tend to do better.

Ben Nadelstein:

One way to think about this is that for some people, owning gold and silver has been a hedge, a financial insurance policy. It, for some people, has been a safe haven asset which they keep under the floorboards or under the mattress somewhere, collects dust, and that’s just the way they like it with a psychic benefit knowing, Hey, I’ve got some physical ounces of gold or some physical ounces of silver at home. Monetary Metals is offering a way to monetize or financialize some of that silver and gold that has so far laid fallow, sometimes in central banks, sometimes in regular banks, and sometimes at primary residences. And this is a way for people to say, If I want with some percentage of my ounces, I can actually earn income with it the same way that not every single person wants to Uber their car or rent out their apartment for Airbnb. But many people now have a financial opportunity to earn rental income or passive income in those other opportunities paid in dollars through monetary metals paid in ounces of gold and silver. So this is unlocking another marketplace and another opportunity for those who find in their own self-interest that they’d like to participate.

Jeff, where can people learn more about participating in the gold leases, silver leases gold bonds, and silver bonds?

Jeff Deist:

Well, I think first and foremost at our site, be sure to follow Monetary Metals on Twitter because we’re tweeting out everything about our various products and our various lease and bond bond offerings. You can follow me at Jeff Deist on Twitter as well. I always retweet monetary metals stuff and just keep abreast because some of these bond offerings down the road, we’re actually going to be able to advertise. We’re going to be seeking accredited investors, but we’re going to offer some of our future bonds in a way that allows us to advertise generally to the public.

Ben Nadelstein:

Jeff, thanks so much for explaining this interesting topic. Make sure to subscribe to the channel. If you’re interested in learning more about earning interest on gold or silver, check out

Additional Resources for Earning Interest in Gold

If you’d like to learn more about how to earn interest on gold with Monetary Metals, check out the following resources:

The New Way to Hold Gold

The New Way to Hold Gold

In this paper, we look at how conventional gold holdings stack up to Monetary Metals Investments, which offer a Yield on Gold, Paid in Gold®. We compare retail coins, vault storage, the popular ETF – GLD, and mining stocks against Monetary Metals’ True Gold Leases.






Case for Gold Yield in Investment Portfolios

The Case for Gold Yield in Investment Portfolios

Adding gold to a diversified portfolio of assets reduces volatility and increases returns. But how much and what about the ongoing costs? What changes when gold pays a yield? This paper answers those questions using data going back to 1972.




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