“I founded DiamondWare, a software company which I sold to Nortel Networks on August 19, 2008. It was the last acquisition Nortel ever did.
All my wealth was in cash. And suddenly, the world was collapsing into a global financial crisis. As Lehman fell, and Countrywide was not allowed to fail, I first moved my accounts to some too-big-to-fail banks. As events unfolded, I thought about how I could better protect myself.
I looked at real estate, including in remote and isolated places like New Zealand’s south island. Real estate can’t go to zero. But it can crash, especially if buyers can’t get credit. I also thought about stocks, but then (as now) many formerly-successful business models were wiped out when the world changed.
Real estate is not a financial asset. It is illiquid in the best of times, and is impossible to sell when credit is contracting. Bonds are financial assets, but corporate bonds dropped. Although government bonds went up, spending was spiralling out of control (although nothing compared to 2020). I did not want to be a creditor to the government. Stocks are also financial assets, but companies like Nortel can declare bankruptcy which it did, a few months after they bought my company).
Tangible assets are illiquid. Financial assets are liquid, but they incur counterparty risk. It seemed a dilemma with no way out. Then it hit me.
Gold is the way out. It’s the financial asset which is no one else’s liability. In 2008, the price of gold dropped the least of all assets. And in 2009, it was first to make new highs. Stocks did not recover their prices until years later, and real estate (in America) never did.
I founded Monetary Metals with a simple idea. Everyone should be able to earn interest on their gold, in gold.”
Keith Weiner is the CEO of Monetary Metals