Page 32 - Bullion World Volume 4 Issue 2 February 2024

Bullion World | Volume 4 | Issue 2 | February 2024

An Insight into new Gold

Investments Amidst Shifting

Banking Dynamics

Mr Heini Beretta, Chief Investment Officer, Gefion Capital AG

Banks have traditionally provided yields to investors
from lending for long terms to generate X on assets,
while paying Y to depositors at call. (lending long and
borrowing short or maturity transformation). This profit
X-Y works beautifully until more depositors want their
money back than borrowers can afford to repay. As
of recent years, motivated depositors have left the US
Banking system in favour of higher returns available
to them via money market funds. Luckily for the
remaining depositors the United States Secretary of
the Treasury; Janet Yellen and the Chair of the Federal
Reserve; Jerome Powell have always issued new USD
into existence to make depositors nominally whole.
Case in point was the Silicon Valley Bank depositor
bailout and across the Atlantic, the forced merger of
UBS and Credit Suisse also serves as a guide.

When it comes to macroeconomics in 2024, the
elephant in the room is the US debt and deficits, you
could argue that it has become a “banana republic”
in which the tax receipts don’t even cover the interest Mr Heini Beretta
bill on their debt. There is USD 8.2 Trillion worth of
US treasuries maturing this year on top of a projected
deficit of USD 1.85 Trillion, total US Federal debt now compounded interest on their gold, albeit outside the
exceeds 100% of GDP. traditional banking system.

As the importance of gold returns to investment Taking this evolution a step further, Gefion Capital AG
portfolios, so does the need for diversification of recently received approval from FINMA, the Swiss
investment methods. You would be ill advised to store regulator, to manage a Gold Denominated Note. With
all your gold at home or in a Bank ETF which is priced its base currency in XAU (symbolizing one troy ounce
in fiat terms. Savy investors should always start with of gold under the ISO 4217 currency standard), this
the physical, perhaps a few silver coins at home or security offers investors an opportunity to trade over the
gold bars stored in non-bank vault. At the other end of counter using well-established banking infrastructure.
the risk scale, gold mining stocks have been enduring The Note is backed by a diversified portfolio of Monetary
a torrid decade despite gold prices near all-time Metals gold leases and gold bonds, delivering a 6-8%
highs. So it is high time that an intermediate-risk gold net yield on gold, paid in gold®. Gefion's management
investment becomes available such as a Gold term approach is a balance between the high returns of gold
deposit with measured returns generated from credit bonds with the safety and liquidity advantages of gold
risk with an acceptable loss of liquidity. leases.

Keith Weiner's 2016 launch of Monetary Metals In conclusion, as banking dynamics undergoes shifts and
marked a pivotal moment, introducing the concept challenges, Gefion and Monetary Metals apply historical
that interest serves as a catalyst for bringing gold into practices with the enduring value of gold at its core. This
the market. The idea revolves around the premise that approach more effectively addresses the requirements
people seek a return on their gold investments, and of savers compared to those who benefit from continual
a return incentivizes them to engage with the market, currency devaluation. Qualified, Non-US investors
providing a significant utility to gold beyond mere can explore more about this innovative investment
hoarding. The yield on gold, a revolutionary concept, opportunity through the note mini-site
allows individuals to grow their savings through at www.mmdgin.com

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