The Monetary Metals Story
Just before the global financial crisis erupted, Monetary Metals® founder Keith Weiner sold his previous company, DiamondWare, which developed 3D voice technology. On August 19, 2008, Nortel Networks acquired DiamondWare in a $10 million deal.
The acquisition was a humbling experience. After many years of hard work, building a great team, developing a massively scalable voice operating system, and proving the value, success came down to timing. Keith didn’t realize it until later, but Nortel would not close any more acquisitions. DiamondWare was the last. Any additional delay would have been fatal.
The crisis hit the markets hard, and Nortel even harder. At first, life felt surreal to Keith. He just sold his business to a company that was collapsing. His wealth was entirely in cash. Stocks and real estate seemed to be going on sale.
However, Keith soon realized that this was not a normal market correction. It was a crisis. There was not only a major market crash, but at the root was a debt problem. Seeking to find safety for his newfound wealth, Keith began to study economics and markets. With his math and science background, he wanted a deeper level of understanding. He wanted to know what might come next.
His studies led him to a radical conclusion: the monetary system has a flawed design. The flaw is that it lacks any extinguisher of debt. Debts are paid in dollars, but the dollar itself is credit, because it’s an I.O.U.—it’s the liability of the Federal Reserve (the Fed). When you pay a debt in dollars, you merely shift the debt. The debt does not go out of existence. So debt just goes on increasing (exponentially). However, we cannot accumulate debt indefinitely. A crisis is inevitable. One occurred in 2008, and another will occur again.
This understanding would change Keith’s career. Keith began to think of his next venture, and realized it had to be in the gold space. He did not want to replicate any of the standard gold industry business models such as dealer, vault, broker, refiner, or mint. These markets were all well-served by existing companies.
He wanted to help people adopt gold, to use it for something important. As money.
He considered building an Internet-based gold payments system. This is a business model that could make money, and in 2012 when he founded Monetary Metals®, there was little competition. However, the problem is that people may be happy to be paid in gold, but they don’t want to pay out gold. Such a business may make money, but it cannot change the world.
The reason is simple. People have income in dollars. So, to spend gold, they must first buy the metal. And the recipient most likely needs to sell gold to get cash. Buying and selling has a cost, which is a loss. Few will go through this process, except as a speculation that the price of gold will rise by a greater amount than the cost.
Keith had a business insight informed by these economic views.
This leads us to the Monetary Metals® Mission.