Monetary Metals has released its first Gold bond. The interest return (paid in Gold) is… wait for it… 13%.
But there is more to this, far more, than just a sound investment with a great rate of return. The ironing out of the ‘i-dotting’ and ‘t-crossing’ of the first bond will lead, quickly, to more bonds. The subsequent regular appearance of additional bonds, will put upward pressure on interest rates. Why invest for zero rates in what could be construed as the most risky investment environment in the history of Western Civilization, when you can invest in a Gold mine for 13%? We don’t label a great investment ‘a Gold mine’ for nothing. 13% for investing in a Gold mine, or 0% for parking your ‘money’ in the bank – your choice!
1/ Interest rates are going to be forced upwards beginning in 2021.
But there’s more, to participate in the bonds requires the ownership of Gold. Monetary Metals borrows Gold and lends Gold. If you don’t have Gold to lend then you can’t participate. So, this will cause upward pressure on the dollar price of Gold ($POG).
2/ The $POG will rise (i.e. the price of the dollar will fall).
A predictable response to the $POG rising is that more Gold mines, currently mothballed, will want to reopen. That will require capital.
3/ The demand for Gold bonds is going to rise.
It is a self-reinforcing, ascendant spiral.