Gold Real Bills
A Gold Real Bill is a short-term credit instrument used to clear transactions in a supply chain from manufacturer to end consumer. In practice, a Real Bill is nothing more than the invoice of the supplier on their customer with payment terms of less than 90 days, which is paid in full upon the sale of the goods it financed.
A Real Bill does not earn interest, and there are no monthly payments. Instead, it sells in a marketplace for less gold than its face value, based on the discount rate and the time to maturity. For example, if the discount rate is 1%, then a 100-ounce Bill would sell for 99.75 ounces 90 days from maturity. When the merchant has sold all of the goods to consumers in three months—and thus has all of the gold—he pays the bill with 100 ounces of gold.
Given its short duration and link to real goods in steady and high demand by gold-paying consumers, the Real Bill is the highest quality earning asset, and the highest quality asset aside from gold itself.
Any business transaction that requires longer-term credit is more appropriately financed by a True Gold Lease or a Gold Bond. The Gold Real Bill is not suitable for the risk associated with longer-term credit as there is some element of speculation, storage, and uncertainty in such activities.
Monetary Metals® is in ongoing discussions with business in the gold supply chain about the benefits of Gold Real Bills. To be notified of the opportunity to invest in Gold Real Bills when they become available, fill in our inquiry form on the right or contact one of our Relationship Managers at +1 (646) 653-9729.