Podcast

Peak Prosperity

Adam Trexler: A New Way to Hold Gold (2016 Update)

Right alongside the bills in your wallet
Sunday, April 10, 2016, 8:03 PM

What if you could carry and exchange gold in the exact same manner as you do with the dollar bills in your wallet?

Two years ago, we introduced the precious metals community to a company called Valaurum, which has developed a technology that's making this possible.

From that write-up:

Democratizing Gold

In short, a fractional gram's worth of gold is affixed to layers of polyester, creating a note called an "Aurum" similar in dimension and thickness to a U.S. dollar bill. This gold (usually 1/10th or 1/20th of a gram) is commercially recoverable. So an Aurum offers similar potential as a coin or bar, in terms of providing a vehicle for storing and exchanging known, dependable increments of precious metals just in much smaller (and more affordable) amounts than commercially available to date.

The big idea here? In a world where a 1oz coin of gold costs over $1,200, an Aurum will let you hold a few dollars' worth of gold in a single note. If you've got pocket change, you can be a precious metals owner.

And you don't have to change your behavior. You can store and transport an Aurum in your billfold along with your dollars.

Understanding the Aurum

As the saying goes, a picture's worth a thousand words. Here's a picture of an Aurum designed for Peak Prosperity that the Valaurum team produced for us:

You'll see that with even just 1/20th of a gram of gold involved, it's enough to make the Aurum appear to be "made of" gold. The characteristic luster, color, and shine of the 24-karat gold used is immediately apparent.

The Aurum is designed to be handled in the same manner as we do with our "paper" money. And, despite having a more 'plastic' feel to it (resulting from the polyester backing), it's as flexible, lightweight, and familiar-feeling as paper currency.

The big difference, of course, is that instead of being a claim on something else, it simply is what it is: a fractional gram of gold. It can be stored, traded, or melted down just like a coin or bar.

Here's a brief video that gives an overview of the production process:

Implications

Being able to hold gold in this form is significant for several reasons. 

First, it makes gold ownership available to all budgets. Many of the world's households have been priced out of gold to date. This changes that completely.

Second, it enables the potential for everyday transactions should we ever return to a precious metal-backed monetary standard. It answers the challenge: How will you pay for your groceries with gold? With an Aurum, it's now easy.

Whether Valaurum's product emerges as the winning horse or not, the world definitely needs this type of solution (i.e., convenient fractional physical metal) to go mainstream. 

I'm very excited by this new innovation in the bullion industry, and I explore the matter in depth in this podcast. If you're similarly intrigued, it's worth the listen.

The response to that podcast was tremendous. It quickly became one of the most popular in Peak Prosperity's history. If the description above interests you, and you haven't listened to it already, you can do so by clicking here.

So, what has happened with the aurum over the past year? With gold increasingly looking like it put in a long-term bottom back in Dec 2015, and modern-day hyperinflationary currency crises underway in countries like Argentina (33% annual inflation), Ukraine (50% in 2015), and Venezuela (720%!), the wisdom of not only owning precious metals as a means of wealth preservation, but holding them in some small-denomination tradable form, makes more sense than ever.

Is the concept of the aurum note catching on with precious metals investors?

We've invited Adam Trexler back to the program to find out. In this week's podcast, he shares with us a number of positive updates about adoption of the aurum, demand by the bullion dealer community, and product enhancement to the gold note itself.

Introducing The 2016 Peak Prosperity Aurum Note

The Peak Prosperity aurum notes we've printed up in the past quickly sold out. Demand was much higher than we had expected.

For those who did not have the chance to purchase any -- or for those who did, and are interested in collecting each new series that gets produced -- we have good news: the new 2016 Peak Prosperity aurum (1/4th gram) is now available for purchase.

Note that this year's aurum note contains more fractional grams of gold than both the 2014(1/20th gram) and 2015 (1/10th gram) versions. In the podcast, Trexler mentions that Valarum's technology innovations now allow for a thicker note, so we thought we'd give it a go this year.

Also note that the premium-to-spot price of this year's aurum note is lower due to several factors, including the higher denomination and technical efficiencies Valaurum has put in place over the past year. But in addition to that, Trexler and his team are giving Peak Prosperity readers a discount of 15% on the 2016 Peak Prosperity aurum note. To receive the discount, enter the code PEAK16

Click the play button below to listen to my interview with Adam Trexler of Valaurum (44m:09s):

Transcript: 

Adam Taggart: Hello and welcome to the Resilient Life podcast. Resilient Life is part of PeakProsperity.com and it’s where we focus on practical and actionable knowledge for building a better future. I’m your host Adam Taggart and today we welcome back Adam Trexler as our guest for the program. Adam’s the president of Valaurum, a very interesting company that we have profiled over the past two years. Valaurum has introduced an entirely new way to own and hold gold using a proprietary technology it injects gold directly onto a polymer surface creating a note coated in gold which they call an aurum. Dimension wise it is very similar to a dollar bill you carry in your wallet. Basically it gives you the ability to store, carry and transact or share fractional grams of gold with other people. Our previous podcast with Adam had gone deep into the technology of producing aurum as well as the growing interest around the world for such a portable form of gold. They have also been some of our most popular podcasts ever. If you haven’t listened to them yet, you should. The story of aurum is fascinating.

Today we’re going to talk with Adam about the progress aurum has made over the past year. Is this new form of gold catching on? He has got some exciting updates for us including the launch of the new 2016 Peak Prosperity aurum note. Adam, thanks for coming back on the show.

Adam Trexler: Adam, thanks for having me. It’s always a pleasure.

Adam Taggart: It is always fun. Well let’s dive right in. For the few people listening who haven’t listened to our earlier podcasts with you can you very briefly summarize what the purpose of Valaurum’s note is?

Adam Trexler: Absolutely. So the aurum is a new way to hold gold. And if you think about the historical forces involved and take a step back over the last 40 years gold has gone from cost of about $40 a gram to well over $1000 today. The result of that is that traditional coins and bars that have been used for 3000 years to hold gold are simply unaffordable and not very useful in today’s world. The supply of gold has not increased at the same rate as the number of people who want to own gold has increased. As a result we need new technologies to make physical gold affordable and usable and holdable by everybody.

Adam Taggart: Great. And Adam, I just wanted to interject here. You mentioned pricing going from about $40 to $1000 I think you mentioned gram but I think you maybe mentioned to me in ounce there is that correct?

Adam Trexler: That is correct - that is per Troy Ounce. We as an international company tend to describe our products in terms of grams. Of course it is just metric not imperial.

Adam Taggart: Great. Yea, so.

Adam Trexler: Thank you for clarifying.

Adam Taggart: No worries at all. Maybe it is just worth spending a second describing you know the form of the aurum note and all of that.

Adam Trexler: Sure. So it feels a bit like a – a plastic sheet. It’s fairly sturdy, but very much flexible. And it is actually it feels like an integral thing like a single sheet, but it is really a miracle of material science. The reason for that is it is composed of one layer of flexible polyester and in that layer on top of that layer there is a very precisely controlled layer of 24 carat gold printing also goes in the middle and then there is another layer of polyester on top of that. Effectively what you have is a gold sandwich if polyester is the bread and gold is the meat or cheese. It makes it possible to have a very precise amount of gold in a small quantity.

Adam Taggart: Great. From a form factor it is pretty much the same size as US Dollar bill maybe slightly different in dimensions but basically can easily fit in your wallet right alongside your one dollar, five dollar, 20 dollar notes. One of the things I like about it is that level of convenience. It doesn’t require any behavior change on behalf of the person who is already carrying currency in their wallet. If they want to have a little bit of gold in their wallet I mean right now it is probably a little bit more of a collectible or curiosity. But if we ever got back to the day where people were exchanging precious metal for every day transactions they wouldn’t have to change any of their behavior in terms of how they carry their money around with them. And for those who have yet to see it and you will see pictures on the website accompanying this podcast you know the fractional amounts of gold that are used are enough to make this thing look like gold. I mean it has the sheen, the luster, the color. It looks just like gold except it has that flexibility you talked about because of the polymer.

Adam Trexler: Absolutely and what you are seeing isn’t the gold – the polyester we use one of the dozen characteristics we had to select and we do use a proprietary polyester is that it has a very good optical quality. So one of the advantages of the aurum is that you are really seeing all of the gold or a very high percentage of the gold. There is another advantage of gold in this form which is if you have a bar there is a lot of material that is hidden in the center of the bar which makes it possible to counterfeit it to have something that is gold coated.

Adam Taggart: Right. Everybody always worries about getting a fake that is gold coated but it has Tungsten or something inside of it and you are saying here you are seeing the entire surface area and there is really nothing hidden beneath it. it is just fractional amount of gold.

Adam Trexler: That’s right and there is – it is theoretically possible to have multiple layers of different material. To do that it would be highly cost inefficient and it makes cheating on this kind of product much, much more difficult than cheating on a bar or a coin. So the confidence that somebody can have in it should be much higher.

Adam Taggart: In previous podcasts we have really gone into the technical elements of production and everything from security to counterfeiting and all that stuff. But I do recall you saying it is relatively easy to test these as well for authenticity to make sure that it is not a counterfeit material. Can you just briefly speak to that?

Adam Trexler: There is. We are actually talking to a new firm that is interested in making a device for this that would allow you to test each individual one. Probably the easiest thing to do is a fire assay and a jeweler would have the equipment to do that. So basically what is done is that there is a two step melting process the plastic – the remaining chemicals from the plastic is pulled off and the gold is perfectly recoverable. And we would never make a product where you couldn’t recover the gold that you would have to be able to convert it to other uses for you to still be a commodity product.

Adam Taggart: Great. Great. I don’t want to go back down as far in the weeds as we have in the previous podcast, but obviously the intent of the aurum is to be an exchangeable amount of gold, but if you did decide that you wanted to melt it down for its spot value you can, correct? You can put one of these in a crucible and you end up with a little tiny ball of gold, correct?

Adam Trexler: That’s correct. Like I said it is a two step process. You need some borax and if anybody is really interested in that I’d be happy to talk to them about how precisely to do it. But it is a – it is a bit involved if you just burn it up that doesn’t quite do it.

Adam Taggart: Well that makes a heck of a lot of sense to me too because you would really only melt something down to exchange it for something and these notes are in such a sort of ideally exchangeable form I am not really sure what you are getting by melting it down but that definitely gives people some piece of mind to know if they wanted to they easily could melt these things down.

Adam Trexler: I have two things to say – sorry, I just wanted to interject two points about that. The first is that we believe this is a higher value form of gold than a melted pellet and in the same way that you would ever melt down gold eagles to make a piece of jewelry. The gold is too valuable in that form in addition to it being a sovereign currency. You want - gold coins has a natural premium over melted gold and the aurum certainly fits into that category.

Adam Taggart: Completely understandable.

Adam Trexler: We see that yeah.

Adam Taggart: I know when you talk to your dealers if you walk in with a sovereign gold eagle they know what it is. They have a high degree of confidence in it that they can inspect it very quickly and make a decision whether it is authentic or not and they know that they can sell it to somebody. Where you walk in with a misshapen lump of gold that you have melted down and they have a lot more concerns based on that. Everything in the aurum to my understanding is that it is sort of hyper standardized and so if you walk into a dealer with an aurum who is familiar with the aurum they are very quickly going to know whether it is authentic or not.

Adam Trexler: That is correct.

Adam Taggart: Since we are sort of on this production theme I know that one of the big bits of news you have since the last time we talked a year ago is that you made a number of important production improvements that I believe have allowed you to create bigger notes. And by bigger notes I mean a greater amount of fractional gold as well as maybe being able to offer better pricing. Can you talk about that?

Adam Trexler: Absolutely. Well this is one of our great success stories. When we first did our first podcast we were just really starting to sell the aurum and we created a tremendous demand or we saw an incredible demand in the marketplace for gold in this form. It was so great that we over ran our original productive capability and really had to go back to the drawing board and look at every step of our process. Of course speed, production speed and production efficiency go together. And as we have worked on it we have worked very, very hard on everything from printing to how we put the metal down to the processes eliminating several steps and we have really been able to drive down the premiums. One of the things we found just very recently in the last three months or so is we were doing a bunch of R&D about what are our physical limits about what we are able to put down. And originally when we first started we thought it was closer to a 20th of a gram and we brought it up to a 10th of a gram and now we have found ways to have something that is 250% thicker and indeed bring the premium down quite a bit again maybe by 40%.

Adam Taggart: That is fantastic.

Adam Trexler: One thing that is not immediately obvious to people is that when you pour a coin or pour a bar or stamp a coin, pour a bar there is not necessarily premium based on the size of that thing. With our process we are depositing the gold atom by atom in a vacuum chamber that is about equivalent to deep space. The result of that is that you have very high machine costs, these machines have not been around nearly so long as 2000 years of stamping coins and we – a lot of that process is dependent on how thick it is. So our costs don’t go down based on having a higher denomination or a higher wage. In fact, we are spending pretty linearly that much more machine time. So to bring the cost down and have a heavier weight are both significant achievements from an engineering point of view.

Adam Taggart: That is great to hear. I know in our previous podcasts we have had some education to do for folks. If you do the math the fractional gram units of gold have a much higher percentage premium than buying an ounce or fractional ounces of gold and you know it is actually the natural math curve as you go down in terms of the smaller the increment basically mathematically the higher the premium a spot has to be in terms of the effort that is involved in manufacturing. What is interesting is that is true at the gram level meaning premium is higher on a gram level than it is on an ounce level but what you are saying here is once you get to the level at which you are dealing with it is actually more expensive for you to manufacture something that is – or it is less costly to manufacture something that is a smaller increment because of the machine time – is that accurate?

Adam Trexler: That is right. So for us to manufacture a 10th of a gram is certainly cheaper than to manufacture a quarter gram, but the flipside of that is that having a process that involves this kind of atomic deposition is just vastly different than making a tiny coin. People do need to understand that.

Adam Taggart: Right. The fact that basically it sounds like you know since we started talking a few years ago it sounds like you have been able to get the cost associated with the premium down a round 40% you said?

Adam Trexler: I would say 30 to 40% over the last year and we probably cut it in half the year before that. So we have really been working hard on that. of course it doesn’t add up to 80% but sort of half and then half again or something close to that. We just worked very hard to – what I am focused on is delivering value to our customers. I think that really opens up the market.

Adam Taggart: That is what I really like because one of the hang ups valid or not has been people looking at the premium despot and saying wow it is a lot higher than what I pay for an ounce level. Again, we have done the math for them there is clearly mathematical reasons why the smaller you get the higher the premium goes but it still is a high mental hurdle for some folks and the fact that you are working so hard to get that down as low as you can especially over such a short period of time with the progress you have made is really impressive and to me it really speaks to how important it is for you guys to address whatever hurdles people have to getting comfortable with this new form of gold. Anyways, kudos see you guys on your team and what you guys are doing to me I just hear that and I think wow you know a great option for gold holders just became even greater.

Adam Trexler: Well I really appreciate that and my real aim is to democratize gold ownership. I want to see many more people owning gold. And what I see is that gold will continue to become more expensive relative to paper currencies. It is a limited commodity and this will become more and more important as the vehicle for precious metal ownership and I want to make that available to people and I want to pass on whatever we are able to do to create value to the people who would be our customers. And that is what I see as my job.

Adam Taggart: Okay. Let’s shift gears then and follow that vein. So we have gotten kind of detailed into the production aspects of the product which I think are really interesting and they are important for people to understand but at a higher level I think at a higher level we see the world similarly in the sense as you said gold is a limited commodity, there really is no upward bound theoretically to fiat currency and certainly what we have seen over the past seven years is that central banks have been pretty unchecked and fearless in terms of how many trillions of paper – monetary units they are willing to create. I guess digital is probably a better word at this time. But you know, basically.

Adam Trexler: One fascinating thing if I could interject is that we tend to think now about currency and currency innovation in the digital space and that is both public and private. We know that governments have been creating digital dollars and we also know that a lot of innovations like PayPal have been in that digital space. What I find really fascinating is that one would expect as that digital currency expanded physical currency would contract. They would not need to actually physically print paper dollars, paper pesos, what have you. The opposite is actually true and the quantity of paper currency has been rapidly expanding too. Not quite at the same exponential levels but I believe there will always be a need for a physical currency and it is just not going anywhere. In fact, it is becoming more intense as we have a digital world because you need both physical and digital.

Adam Taggart: Right. I am sure especially too when you talk about democratizing gold you can see some of the more advanced western nations if we move to a digital dollar era or you know if I don’t think this is going to happen bit BitCoin becomes the coin of the land and the country or whatever. It is an advanced western country. Maybe everybody does get their own sort of personal digital dollar card that you are able to use for payments the way people can use their SNAP card here in the US. That is going to take a long, long time to get into the majority of the world’s countries. In a lot of those countries too given the price of gold on an ounce basis is pretty hard to own gold when you know, your family is making a couple of dollars a day in terms of household income. And the great thing about the aurum note is you are putting it in such small fractional units that it is just actually a couple of dollars and you know, you can have that family that is basically kind of doing more or less subsistence living if they can scrape up $10 worth of savings they can actually own some gold which is something that is just sadly too far out of the realm of possible for them today.

Adam Trexler: I think that is right. And what I am really interested in is having a standard storage of that value that is exchangeable from people very high net worth down to people who are at subsistence level. What I think is distinct about us is having that physical gold tangibly in your hand. And as that becomes a recognizable means of storing value it becomes very useful to people. It is easy to find a dealer to get value back out when you need it, but also have a means of diversifying what you are holding.

Adam Taggart: I go to where we ended our last podcast on which is you kind of gave us a really interesting tease about a sovereign central bank that you said had contacted Valaurum and was working with you guys to potentially and I guess this was quite serious you know replace their country’s fiat currency with an aurum based note. I think that it would have essentially made them the first country in the world to go back onto the gold standard in terms of its monetary system. Is there any update you can tell us about what is going on there?

Adam Trexler: That is very interesting. I do want to clarify something – I think what would happen in the first instance if you would have an aurum note sitting alongside paper notes and effectively people would be able to choose do you want your money printed on gold or do you want your money printed on paper. And I think that would be a first step for a country.

Now to answer your question that is kind of a fascinating and sad story. We were working with a central bank. We are still in conversation with them and actually two more as well. And when I say in conversation with them all three we have met with the head of the central bank and having very high level talks with them.

Adam Taggart: In person meetings with the heads of the central banks there.

Adam Trexler: Yes. And the country I was talking about last year Valaurum representatives and myself I think had nine total trips there. So this was – we were very, very close to doing something when we spoke last year. What I saw or what happened was the economy of the country in question fell apart and I’m sure all your readers know about what has happened to the price of oil. You had a country that was very exposed to the – to commodities prices. The price of oil dropped. Gold dropped a little, but nothing compared to oil and it really tanked the economy suddenly had hundreds of millions of dollars of short fall in the government. I had a conversation with the governor of a central bank where I said yes, we are going to do this. Didn’t get to a signed contract and in the meantime the price of oil fell apart and the whole deal fell apart because they were printing paper to pay their shortfalls.

Adam Taggart: To cover the shortfall. Got it.

Adam Trexler: It kept devaluing their currency. So you went from the possibility of the hard money product to the most painful kind of devaluation of currency over night. And it was sad for me to see because I saw it as a real opportunity both for the people of my country and the country itself and you know we will – I believe we will have a country do this and a number of them, but sometimes you are witness to enormous forces and the price of oil I think is an enormous force certainly for a company the size of Valaurum right now.

Adam Taggart: Sure. Sure. And the collapse in the price of oil over the last year has been historic. Bad timing I guess. You said in addition to that country though you are talking to two others as well.

Adam Trexler: We are and have put in formal proposals and I think it will work. It is something that a country can benefit from. They can take it to future advantage. It is something that is likely to be very popular with the public and we are eager to help wherever our country wants to use our services. And in that case we would be acting as a private mint. And a lot of countries actually have private currency printers or coiners, mints that provide them with the physical currency. The government would be the issuer of the currency.

Adam Taggart: Okay. When you are having these discussions with these other central banks what are they listing from your perspective what are the biggest draws of getting out of the fiat game if you will and going back to a precious metal backed currency? I love the aurum because it is not really a precious metals backed currency. It is a precious metals currency. You don’t bring it in to exchange it for anything it is what it is. What do you see as the central banks’ primary motivations here? Because it is a big risk for them I imagine.

Adam Trexler: Well it is and it isn’t. When you are making money, literally you are making money – traditionally one of the main roles of a government was to mint coin and there is a necessary natural mark up over bouillon so raw filter, raw gold when you turn that into coin. And the government of the country – you know, England for instance made money by minting coins. People would – private citizens would bring in bars of gold, bars of silver and they would get coinage back. This is a way for a country to effectively make money. And at the same time the public likes it because they have currency that has an intrinsic value. I think there is a real hunger throughout the world for real coinage. I could point to a couple of things about that. One of them is that even when the price of precious metals has gone down over the last couple of years the demand the public demand for coins had actually gone up. A lot of it price pressure has been from electronically traded funds where people were speculating on gold silver. Not mainly people mainly you know large market makers. But the general public demand for coinage has only increased and that is very, very interesting to me.

The other interesting statistic I point to is the US state quarter program. I think if you check your pocket you probably have quarters with states on the back of them. This netted the US Government with $3 billion. And what that means is that $12 billion extra quarters and actually it was more than that because they had some costs – 12 billion quarters disappeared from circulation because people wanted to hold them. People were excited by the idea of having quarters and not just a bank balance. I have some and I suspect a lot of our listeners will too. There is just this incredible demand for something that feels physical, something that feels tangible and as it becomes something with real gold in it I think that will be even more in demand by the public. We stand to be servants of that force.

Adam Taggart: It is interesting. If we have any listeners that are listening from Argentina or Venezuela I am sure they are saying I wish we had this circulating in our economy over the past couple of years because when you mentioned earlier when the initial country you were talking with the deployment would likely be to have a side by side aurum type of note as well as the domestic paper currency. I would love to see that just to see physical manifestations aggressions law in action. And aggressions law for those that aren’t familiar with it that says basically bad money drives out good money. Meaning when you have competing forms of currency during times of trouble people hoard the types of currency that they have the greatest faith in and they want to get rid of the bad currency – the currency they have the least faith in first. So the currency that tends to really circulate is all the bad currency and the good notes or the good forms of coin or whatever are the ones that basically disappear. It would be interesting to see how quickly these aurum notes kind of get hovered up by the population and how they basically demonstrate that they prefer the precious metal currency versus the paper one. At least that is how I think it would go. It would be interesting to see a real time – a real world example what really happens.

Adam Trexler: I think that is actually very right. I think that the public would tend to very much collect gold notes. And look if I have a $20 paper bill and an aurum in my wallet given the chance to spend one I’m keeping the gold.

Adam Taggart: Right. Exactly.

Adam Trexler: A simple, rational decision. Particularly if they have the same face value of course the aurum that we sell now did not have a denomination at all. They are not $20 or $10 they are simply the weight of the gold. We are not a government so we can’t say this has a face value. We simply say what gold is there.

Adam Taggart: You talked a little bit about the demand for coinage that we are still seeing in the world and quite frankly, growing demand. I think the big part of that too at least that we pay attention to at Peak Prosperity is the imbalance of demand for coinage coming from Asia versus the west and how we are seeing a lot of our coins and bars basically fleeing out there. I’d like to ask real quickly over the past year or so have you seen any change of interests from the dealer community – the coin dealer community in terms of the aurum product? I know when we first started talking to you it was very new. You were really just doing some sort of pilot deployments and we were fortunate enough to be one of your early partners there. Are dealers beginning to wake up to this and are you beginning to see any support from them?

Adam Trexler: They are and it is really exciting. You know we have actually done better in Canada than the United States just from a series of accidents. We have had some really great partners there. The aurum is more available in shops there.

One of the things that has been interesting is that I think that dealers have tended to focus on melt value. I don’t necessarily think that is a healthy perspective. I tend to be more interested in the spread. So melt value just as a quick brush up melt value means what can you get for a coin if you basically destroy it and extract the raw gold. Spread means what is this coin – what can this coin be bought for and what can the coin be sold for? I don’t think that the best use of an aurum is to melt it. I think that the best use of the aurum is to sell it hopefully to a dealer or another interested party and I think that there is a sort of educational process in the industry where we need to understand that we shouldn’t be melting coins, we shouldn’t be melting aurum, we should be creating real value for consumers by having a good spread for them.

In addition to that thought people do want to make sure there is good amount of gold and silver there. And as we have been able to bring down the premiums I think we are going to see us entering more and more markets. What I’d really like to see is that you can walk into any sort of – any town’s coin dealer and be able to buy aurum. As we are able to do that it really makes the value of the product much greater as people know about it, as dealers know about it as they are more and more comfortable that there is already a market for it. That is really what my focus is going to be over the next year in terms of that bouillon market is growing that. I’m very interested in having local dealers. I am very interested in national dealers and we just want to create a broader network for this product.

Adam Taggart: You are making me think of something in real time here as you are talking. You know the role of a gold dealer, broker/dealer basically is to give their clients access to previous metals in the forms that these people want to hold it and part of that is them clearly knowing the standards that are out there and being able to buy and sell gold and silver with confidence that they are indeed getting what they are buying in terms of quality and what not and authenticity. As new forms come on the market I’m sure there are some guys that are early adopters but I would probably imagine the majority of folks they are not really too enthused on taking a risk to buy a new form that they haven’t really seen before unless they are hearing from their customers that it is what their customers want. I remember bringing in some aurum to my local coin dealer and for sure it was the first time he had seen anything like it. Definitely caught his attention. This is where I used to live so I can’t tell you for sure if he is offering aurum in his shop today. We have had a number of people hundreds of people at least on Peak Prosperity who have bought aurums in the past – might be an interesting idea for them to consider walking down to their local coin shop with one of their aurums in hand and just showing it to the person there and letting them know it exists and getting their feedback from – from the dealer. We as an audience of aurum holders might actually be able to kind of help goose the adoption there by just letting dealers know that this is a form that we find kind of interesting and again if it is not on their radar already at least putting it on their radar for them to consider. My guess is having brokers become aware of the demand will certainly help them more easily make the decision to stock this. Am I thinking clearly here?

Adam Trexler: I just really appreciate the thought. I think that’s right and the more people know about it the more useful it becomes the more of an option it becomes for people. If Peak Prosperity – the Peak Prosperity audience wanted to do that then I would be very grateful. I think it would help the dealers as well having the products that people needed is important for anybody who owns a store. We are just happy to work with anybody who is reputable and wants to make our products available.

Adam Taggart: It is an interesting idea and I think at a minimum for our listeners to go do that you will at least have an interesting conversation no matter comes out of it. I think that you will still have an interesting conversation with your dealer about what they think about this new format. I should say too that Peak Prosperity does not have any sort of business investment in Valaurum. We don’t own any of the company. We don’t participate in its upside. I am simply just a big fan of what they are doing. Ideas like this one we are not promoting it because we think Peak Prosperity might gain in any way we just think it is a good idea.

Alright, well that said we talked about brokers I am just curious too as we are coming to the end of our time here have you had any – I guess since we’ve talked which was about a year ago has there been any material feedback or insights just from regular retail users? Are you seeing a growing demand for this product or for products like it? What are you actually hearing form the real people?

Adam Trexler: You know, people are just very excited about it and now we are really cultivating a loyal following of people who are buying them every month which is really nice to see. I am excited to be on here and talking about the quarter of a gram I think that’s a huge story. I think that having roughly $10 of melt value is very cool and I – I think people are very excited about that and I love talking to – effectively our audience. If you call up on a given day it is very likely you can get through to me. I am very accessible and you know, I’m just very grateful for the people who have been following the story from the very beginning and I think it is going to continue to grow.

Adam Taggart: It is a great story and just to sort of give everybody a background on the interconnectivity of things here I found out about Valaurum because a participant in our annual seminar in Rowe, Mass. Shameless plug, we have got one coming up in a couple of weeks. I think was an early advisor to you at the company and he handed me an aurum at the Rowe seminar and I thought it was really cool. Of course, came back to California and I called you and learned at the time your production facilities were in the town over from me which was just a real interesting twist of fate. Yea, I think it really is just kind of word of mouth getting out for a solution like this exists and of course people who are interested in this type of thing will hopefully continually gravitate towards it.

You mentioned in particular that the 25th gram note the new one is big news which I totally agree. So we are having a new Peak Prosperity aurum not that has been designed for 2016 and I believe it is now available for sale is that accurate?

Adam Trexler: It is. It will be up as soon as this podcast goes up.

Adam Taggart: Fantastic.

Adam Trexler: I really love the design you guys came up with.

Adam Taggart: Thanks. Largely kudos to Jason our designer and he has done the previous done aurum notes for 2015 and 2014 and I know we have a number of folks who have bought the previous two and might want to have this one to complete their collection. The difference between the previous notes as well is that this one is going to be a 25th gram note so it is going to be a bit thicker, bit heavier melt value as Adam was talking about.

Alright, so yea we will have a—

Adam Trexler: To jump in there really quickly it is a quarter gram so it is 250mg.

Adam Taggart: Great. Sorry.

Adam Taggart: Quarter gram. We had a 1/20th gram and a 1/10th gram and now this is going to be a 1/4th gram or quarter gram. We will have a link to anybody who is interested in learning about how to get their hands on that aurum. That link will accompany this podcast. And just in closing Adam thank you so much for giving us an update on where you guys are, continue to be a big believer in what you are doing. I think the movement to democratize gold is an incredibly worthy mission.

I hold a number of aurum myself. I carry a few around in my wallet all the time. It is a wonderful conversation starter for the value of a precious metal backed currency and I find no matter how often or how much I can verbally tell people about it. It is when I actually pull the aurum out of my wallet and let somebody hold it in their hands and look at it that makes the biggest impact. There is just something very authentic, just carries a lot of weight, has a lot of gravity when you put that shiny, lustrous aurum note in their hand. Their eyes go wide and they just really begin to kind of get it.

Adam Trexler: Right.

Adam Taggart: Anyways, hope many more people begin to discover this. I really wish you well on your endeavors with the central banks. Please do keep us in the loop. Absolutely would love to cover this - you know if and when you have got some big news about entering into one of these monetary relationships with an actual sovereign country. I mean it almost sounds too fantastical to actually happen, but I have got my fingers crossed for sure. Wish you all the best there.

Last question is whenever we do one of these podcasts there is invariably a lot of comments. I answer them as best as I can, but I am just an intermediary for you. If people have questions about either the aurum notes, about Valaurum as a company and its mission in general what is the best way for them to get a hold of you? Should I just put a link to Valaurum.com up on the site and people can contact you through that?

Adam Trexler: Absolutely and I will give you a good email address for that too and I reply to about half the emails. I am just very interested to talk to people and I think it is important that people understand about what this is. I view my mission as educational. I want people to understand exactly what we are and what we aren’t and let them make their own informed, rational decisions.

Adam Taggart: Fantastic. I really appreciate you making yourself so available too. Alright, well with that, Adam we will hopefully connect people with the new 2016 Peak Prosperity aurum to the extent that they want it and I am sure we will be talking to you again in either about a year or maybe sooner if you have got some big news in the interim.

Adam Trexler: Excellent. Thank you so much, Adam. I really enjoyed this.

Adam Taggart: My pleasure, Adam.

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50 Comments

Adam Taggart's picture
Adam Taggart
Status: Peak Prosperity Co-founder (Offline)
Joined: May 26 2009
Posts: 3107
Premium to Spot Price

Last year, we had a few commenters who complained about the premium over spot of aurum's fractional gold notes. 

I felt their arguments made mistakes on both the math and the logic for these notes, so I'm summarizing my responses from last year here at the start of the comments thread, in hopes to get everyone grounded.

The premium over spot we pay (anywhere) for gold bullion goes up as size increments become smaller due to the relative amount of production cost per unit value

Now, let's look at the premiums for other small-increment bullion products. The premium-to-spot on the average 1 gram coin or wafer is 25%. For a 0.5 gram coin/wafer, the premium-to-spot jumps to 65%. So the premium jumps by more than 2x as the denomination is cut in half.

Of course, this is an exponential process, not a linear one, so we should expect a 0.25th gram to have a premium substantially higher than twice 65%. With this math, the 70% premium-to-spot (inclusive of the discount Valaururm is offering us) for the 0.25 gram aurum looks extremely generous.

Bottom line: you do not buy very small-increment bullion products to get the best premium-to-spot price. If you're looking for that, buy 1oz Krugerrand coins or higher denominations of PAMF Suisse bars. Of course, you'll need to shell out at least $1,275+ at today's prices.

You buy very small-increment gold bullion products for the smaller value. Usually, as a hedge in case you ever want/need to use them to transact for everyday purchases.

Valaurum's aurums enable you to do that for transactions of $20 or less (much less if you're using their 1/20 gram notes), the smallest of any provider that we're aware of. This is not a "rich man's" product. Quite the contrary. For as little as $10, nearly anyone can give themselves some piece of mind that, should there be a collapse of fiat currency, they'd hold a form of money that may still buy a meal (or more, as the relative value of gold would likely skyrocket in such a situation).

I challenge anyone here to find a superior offering at the extremely small increments that Valaurum offers (1/4 gram, 1/10 gram or 1/20 gram). By superior, I mean lower premiums, ease of handling, high product integrity and standardization, and anti-counterfeit protection. If you find one, I'd sure love to see it.

Simply put: if you're interested in having the ability to make very small price transactions using physical gold, do you have evidence of a better solution that this? I don't.

Shamba's picture
Shamba
Status: Member (Offline)
Joined: Mar 10 2010
Posts: 9
link works fine

I just tried it out, discount and all, to make a purchase of aurums. Worked great, thanks. This reminds me of my teen years when my Dad  collected  our silver dimes and quarters and he gave us the newly minted non-silver coins. I have the coins now.

timot78's picture
timot78
Status: Member (Offline)
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Posts: 11
Aurum 1 gr (4 x 1/4 gr) selling at 100% premium over spot

Adam, Not to search too far, Kitco.com sells sheets of 50 x 1 gr gold (Au) (Degussa) @ 2134 (4/10/16), i.e. ~$42.70/ 1 gr. The premium over spot ($1248/oz) is much less steep , and it is 7% (or $1335/oz). The proposed Aurum, 4 x ¼ gr =$80/gr makes the Aurum 1 gr unit (4 x 1/4 gr) to be at premium of 100% (1 gr = 0.032 troy ounces , the Aurum’s issuers sell 1 oz of gold at a whopping $2500/oz). For what? To have some gold-denominated pocket change? A bit absurd, by my standard. I don’t think there will be a need for smaller quantities than 1 gr Au, even if the currencies collapse. If one needs smaller denominations, one can purchase silver (Ag) sheet of 100 x 1 gr (Valcambi) for $94, i.e. $0.94/1 gr Ag (same Kitco.com). This also carries a hefty premium, approximately 90%. BTW: 1oz of Krugerand is selling today at $1280 (same Kitco.com). i.e at premium = 2.6%. Just one man’s opinion. -Peter

Adam Taggart's picture
Adam Taggart
Status: Peak Prosperity Co-founder (Offline)
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Posts: 3107
Letting your beliefs cloud your math

Sigh...

Peter, you clearly did not read carefully what I wrote.

Of course a full 1 gram of gold has a much lower premium-to-spot than a 1/4th gram: 

The premium over spot we pay (anywhere) for gold bullion goes up as size increments become smaller due to the relative amount of production cost per unit value

Now, let's look at the premiums for other small-increment bullion products. The premium-to-spot on the average 1 gram coin or wafer is 25%. For a 0.5 gram coin/wafer, the premium-to-spot jumps to 65%. So the premium jumps by more than 2x as the denomination is cut in half.

Of course, this is an exponential process, not a linear one, so we should expect a 0.25th gram to have a premium substantially higher than twice 65%. With this math, the 70% premium-to-spot (inclusive of the discount Valaururm is offering us) for the 0.25 gram aurum looks extremely generous.

Bottom line: you do not buy very small-increment bullion products to get the best premium-to-spot price. If you're looking for that, buy 1oz Krugerrand coins or higher denominations of PAMF Suisse bars. Of course, you'll need to shell out at least $1,275+ at today's prices.

You buy very small-increment gold bullion products for the smaller value. Usually, as a hedge in case you ever want/need to use them to transact for everyday purchases.

Valaurum's aurums enable you to do that for transactions of $20 or less (much less if you're using their 1/20 gram notes), the smallest of any provider that we're aware of. 

This is why, in my opinion, contrasting premium-to-spot on a 1 gram wafer to a 1/4 gram note is an obtuse-minded exercise of comparing apples to oranges.

You go on to express your belief that:

I don’t think there will be a need for smaller quantities than 1 gr Au, even if the currencies collapse.

Hey, that's your belief. I'm not going to try to change your mind. I do ask that you understand that, just because it's your belief, that doesn't make it correct. Maybe time will prove it to be, maybe it won't. But not everyone shares it. Personally, I can easily envision scenarios where fractional gram gold notes could be preferred for small everyday purchases (food, gas, etc) over silver.

And as for the premium-to-spot on these aurum notes, my challenge still stands. Almost no one else can produce fractional gram products at the 1/4, 1/10 or 1/20 gram denominations, and not at the same price or utility and quality levels.

As a data point, here's one of the very few 1/4 gram units I could find, offered by the Great American Coin Company, selling for $20.16. That's 18% more expensive than our aurum note, for a brand I'm unfamiliar with in a form factor that's much less convenient.

Find me a better apples-to-apples comparison on both price and product integrity and I'll be happy to listen. 

timot78's picture
timot78
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Posts: 11
I don't think so. Letting your interests cloud the common sense?

Adam,
We always will pay extra price for convenience, in this case for small divisible unit of gold. I get it. But, at the end, what matters is the face value, and not what I paid for a unit of the new currency, i.e. Aurum.

Here is a semi apples –to-apples comparison between Aurum and gold ingots.
If we have a currency collapse, then I will pay for my 4 gallons of gas to power gas generator , lets say 0.30 gr of gold. So I can pay in 2 different ways:

1. 3 x 0.1 gr Aurum. (today this will cost me 3 x 11.75 = $35.25, per: https://silvergoldbull.com/aurum-gold-wafers, or maybe I will get 15% “discount”).

2. 0.5 gr gold bar and should get a change of 0.2 gr Au (maybe 2 x 1/10 gr Aurum or extra 2.4 gal gas).
a. (today that will cost me (per: http://bullionexchanges.com/1-2-gram-istanbul-gold-refinery-igr-bar-9999...) = ($24.80-0.2 gr back) . (If I assume that 0.1gr Aurum costs in retail $11.75, I almost paid nothing for my 4 gal of gas!?).

In any of these potential transactions, neither the buyer nor the seller would care how much did I pay for a fraction of a gram of gold and whether I carry 0.5 gr bar or multiple 0.1 gr Aurums. What matters is the face value, i.e. 0.30 gr gold to be paid.

How does the today’s price of $35.25 compare to ($24.80-0.2 gr Au)?

Isn’t this a fair comparison? How can a premium of 100% for ¼ gr Aurum unit (over spot) be a justification for making small units( 1/128 oz) available? At the end, what matters is the face value and not what I paid for this small Aurum unit. Nobody will compensate me for 100% premium I paid.

In the above example I brought up 0.5 gr gold units. These are available and cost $24.80/0.5 gr Au.
How does this compare (apples-to-apples) to $20/0.25 gr Au for Aurum, i.e. $40/0.5 gr Au? I say Aurum is extremely overpriced compared to the face value. My prediction is, it will go down in nominal (USD) price by at least 30%-50% to represent a “value” to a conscious customer. There will be also a crowd of less knowledgeable people who cannot really compare value-to value (Au spot, price per troy ounce, conversion to grams, then conversion to fraction of a gram, fancy look of the Aurum, etc.) -they will be the potential uneducated buyers. I would expect PeakProsperity to not promote Aurum for the reasons spelled above and rather steer people toward much lower premium products like the one is provided link to (again: http://bullionexchanges.com/1-2-gram-istanbul-gold-refinery-igr-bar-9999... )

Regards,
-Peter

mvmorejohn's picture
mvmorejohn
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Posts: 7
Transactable Gold

"Simply put: if you're interested in having the ability to make very small price transactions using physical gold, do you have evidence of a better solution that this? I don't." 

I do. https://www.bitgold.com This Fintec company offers a prepaid Mastercard in various currencies fully backed and funded with your physical gold purchased and vaulted through them. !% in !% out with no storage fees. The future is looking bright for Bitgold with nearly 1 million customers using this platform. PP should host a podcast with Roy Sebag or Josh Crumb. Great guys.

 

 

Uncletommy's picture
Uncletommy
Status: Platinum Member (Offline)
Joined: May 4 2014
Posts: 589
Liquidity vs. fungibility? Confessions of a hypocrite.

As usual, PP has again provided an excellent forum for the discussion of resilient assets in this world of ever increasing complexity. When I consider the breakdown of my assets, I find my liquid assets provide me with a greater sense of value than my fungible ones. However, having said that, I find my that my beer, beans and beef downstairs in the basement don't quite compare to to the nominal bits and bytes represented on one of the many statements I receive from various financial institutions every month detailing my net worth. I will continue to put seeds into the ground and purchase bank stocks as a hedge to any imminent catastrophe. Laminated gold or gold dental work. One's fungible and the other isn't.

Love the comments from everyone on both of the last two featured interviews. Great food for thought.

pinecarr's picture
pinecarr
Status: Diamond Member (Offline)
Joined: Apr 13 2008
Posts: 2247
Expected better from PP

Adam said:

This is why, in my opinion, contrasting premium-to-spot on a 1 gram wafer to a 1/4 gram note is an obtuse-minded exercise of comparing apples to oranges.

The way I read this, you are inferring that Peter's line-of-thought is "obtuse-minded".  Mirriam on-line definition of obtuse:

stupid or unintelligent : not able to think clearly or to understand what is obvious or simple

Really?  Denigration of another person's stand on a topic does nothing strengthen your argument against it.    And it is beneath the typical high-standards of respectful argument that Peak Prosperity aspires to.

JohnShippen's picture
JohnShippen
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Posts: 16
Alternatives

BitGold and Silver Eagles seem far more practical and cost effective alternatives in my humble opinion. 

Jim H's picture
Jim H
Status: Diamond Member (Offline)
Joined: Jun 8 2009
Posts: 2387
Diversification...

I don't think (either) Adam is promoting Valaurum as a means to hold large quantities of one's Gold... that would be silly based on premiums.  It is though a great way to hold some portion of your holdings if you are amenable to Gold, and maybe if you were a very small holder it would be a reasonable way to hold most of your Gold.  If you have ever held a 1/20 ounce coin, the smallest denomination practical, you know how marginal this size is.  While worth something like $80 dollars (~30% premium).. it's so tiny it could be easily lost if not kept in a holder, and you can't really see the design details on it without taking a magnifying glass to it.

http://www.gainesvillecoins.com/products/171177/2016-1/20-oz-gold-lunar-...

All arguments dissolve if we get to $8000 or $10,000 Gold, because now this .25 gram sheet becomes a perfect vessel for holding value.  For me, philosophically, the Valaurum is more like jewelry in the way it exemplifies the beauty, or bling value of the Gold.  I also love the juxtaposition of a high tech manufacturing process (PVD) with the oldest form of money.  I will be buying a stack for those inevitable teachable moments...          

      

newsbuoy's picture
newsbuoy
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Posts: 259
Not available to US Customers

Bitgold is very interesting but Americans are prevented (in an exceptional freedoms kind-a-way) by law from using it.

Adam Taggart's picture
Adam Taggart
Status: Peak Prosperity Co-founder (Offline)
Joined: May 26 2009
Posts: 3107
Exactly Right

Jim -

You're exactly right. And thanks for the opportunity to clarify this point.

If you're like most of our readers, with access to the full range of bullion denominated formats, we do NOT advise holding a large percentage of your gold in fractional physical units -- be it aurums, wafers, or whatever. It just doesn't make mathematical sense given the premiums over spot. 

But holding *some* of your stack -- 1% worth, perhaps? -- in fractional units does make sense to us, as insurance, in the (hopefully) unlikely event there's ever a period where fiat money suddenly loses its ability to pay for living essentials. With 720% hyperinflation raging today, you can bet folks living in Venezuela wish they had more fractional gold units in their possession right now with which to buy food, medicine, fuel, etc.

And during such a time, we think the form factor of the aurum note could offer an advantage. It's easy to share yet familiar to handle (just like a bill note), much less losable like the tiny fractional ounce (not gram, mind, you, which is much smaller still) example Jim mentions, and difficult to counterfeit.

But we're not pushing the aurum, specifically, on anybody. If you prefer a different form factor, that's completely fine with us. We just think having the insurance offered by a few fractional gold units -- after you've built your core bullion holdings, of course -- is a good thing to add to your preparations, if you're able to. (And by the way, we love silver, too. We're in no way discouraging folks from folks from owning that.)

As an addendum, I also agree with Jim about the "teachable value" of the aurum notes, which I spent a fair amount of time describing in my first podcast with Valaurum. I find placing one in someone's hands is more persuasive in conveying the gravitas of gold as a store of value than a 10-minute explanation...

Adam Taggart's picture
Adam Taggart
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Posts: 3107
Apples-to-oranges

Pinecarr -

I'm sorry if my word selection didn't sit well with you.

I find it frustrating that despite my specific request for critics to find examples of superior offerings  -- at the same denominations that Valaurum manufactures (1/4, 1/10 and 1/20 gram) -- they instead compare vs higher denomination formats (1 full gram, etc), which have an inherent mathematical advantage in terms of premium-to-spot.

This apples-to-oranges argument unnecessarily siderails the discussion, in my opinion. Not just in this thread, but in the previous ones with Valaurum, as well.

If these folks want to argue that holding fractional units of gold in general is too costly on a premium-to-spot basis vs higher denomination formats, that's fine. That could be an interesting discussion to have (for example, what is the size below which things become 'too costly'?). But it's not the one I've asked the critics to engage in. And the repeated ignoring of my clearly-worded request, as well as the calculations I've provided to lay out the price curve, is beginning to seem intentional.

My specific question remains: in terms of owning physical, fractional gold bullion are there examples of :

a superior offering at the extremely small increments that Valaurum offers (1/4 gram, 1/10 gram or 1/20 gram). By superior, I mean lower premiums, ease of handling, high product integrity and standardization, and anti-counterfeit protection. If you find one, I'd sure love to see it. 

mvmorejohn's picture
mvmorejohn
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Joined: Jan 26 2016
Posts: 7
Bitgold availability

cello55, The Bitgold platform of savings, payments and redemption in gold and the prepaid debit Mastercard is available for use in the US. The send gold payment function is currently not available to US citizens but should change in the future according to a statement from Bitgold.

 

Adam Taggart's picture
Adam Taggart
Status: Peak Prosperity Co-founder (Offline)
Joined: May 26 2009
Posts: 3107
No physical in-hand Ownership

BitGold is increasingly interesting to me, but I admit it has taken me a while to warm to it. I still have reservations that have yet to be completely addressed, though.

In the context of this particular thread I do want to point out an important distinction: it is not gold-in-hand ownership. Instead, you have a Mastercard that draws from an account backed by physical bullion.

For the worst-case scenario (which admittedly I don't spend a lot of time worrying about), where the grid is down or the infrastructure of our financial system is not functioning, all you have in hand is a piece of plastic.

mvmorejohn's picture
mvmorejohn
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Posts: 7
Bitgold in-hand Ownership

Agreed, but just to clarify, as an additional holding option you can choose to redeem your Gold from Bitgold in 10gr cubes or various Gold Coins. However, they are clear about not trying to be a bullion dealer but do offer a physical gold delivery service that is fulfilled by Dillon Gage in Texas. Note: All the Gold held by you thru Bitgold is allocated in the Brinks vaults and is designated in Kilo bars only. The BG Aurum ledger keeps track of your ownership percentage. 

pat the rat's picture
pat the rat
Status: Silver Member (Offline)
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Posts: 120
financial trouble

When there is financial trouble how long would it take to get this gold? This is the problem!

Jim H's picture
Jim H
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Posts: 2387
BitGold

My criticism of BitGold is that it's Gold on the IRS' radar.  When you own Gold in a financial account.. you have to report on it yearly.  Correct me if I am wrong, but this is a reportable account.  

I have followed the advice of Egon Von Greyerz and others who feel that it's important to own physical Gold, in your name, outside of your country, outside of the banking system.  It's that last part where I think BitGold fails.  Everyone needs to do their own due diligence on a solution that fits their situation best.... and I am not knocking the idea of holding some BitGold.. but I feel that having a position that fulfills the list above is more critical.  

mvmorejohn's picture
mvmorejohn
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Posts: 7
Bitgold is decentralized

"it's important to own physical Gold, in your name, outside of your country, outside of the banking system.  It's that last part where I think BitGold fails"

Jim,

This is where BItgold is a profoundly different platform. It is indeed outside of the banking system but within the regulatory system. The customers gold is held in their name in a Brinks vault of their choice, 6 of which are outside the US. They have done their homework.

http://support.bitgold.com/customer/en/portal/articles/1946269-ownership...

scotthw's picture
scotthw
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Posts: 60
Just bought a batch

Very cool!   Can't wait to get my hands on these.

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Time2help
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mrees999's picture
mrees999
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Posts: 428
Are you really planning on going back in time?

I could give you a long argument of why this idea is backwards - but this talk I've linked explains my thoughts wonderfully. You still think in paradigms and the world of 100 years ago. It no longer makes sense in a modern world. How often do you do face-to-face transactions anymore?  

Counterfeiting? Assays? Guarantees? How do you shove those things into the internet to pay for your airline tickets etc?

This may be the beginning point where you start to get a vision of the future... not last century. We didn't invent an automobile engine, then strap it on a horse. Blockchains are an idea whose time has come.

Infrastructure Inversion

 

 

 

 

 

reflector's picture
reflector
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Posts: 269
re: Bitgold is decentralized

@mvmorejohn

while i very much like the concept of bitgold, as well as goldmoney, i don't believe it's accurate to say that bitgold is decentralized.

bitcoin is decentralized - there is no specific server to target; if the bitcoin.com domain were to be stolen by federal government agents, no big deal, bitcoin would be just fine.

can you say the same for bitgold.com? and what about the brinks vaults where bitgold is kept? these are critical points of failure that the federal government, or other persons with malicious intent, can target.

so, i just don't think it's correct to say that bitgold is decentralized.

mvmorejohn's picture
mvmorejohn
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Posts: 7
Bitgold decentralized?

 This will explain the platform much better than i can here. 

https://www.bitgold.com/safety-security

"Bitgold is a closed loop system and decentralized from economic analysis". 

As co-founder Roy Sebag says.

KugsCheese's picture
KugsCheese
Status: Diamond Member (Offline)
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Posts: 1449
BitGold

I wouldn't use "Bit" in the name to ride on BitCoin because: 1) is scares some persons away; 2) it has nothing to do with Block Chain technology which is at heart of BitCoin.   "gCard"?

What intrigues me is BlockChain as this could be applied to many kinds of money that compete.

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drbost
Status: Bronze Member (Offline)
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Posts: 65
Delivery of aurum notes

With my apologies if I've missed it, but how are aurum notes delivered to a buyer?

Adam Taggart's picture
Adam Taggart
Status: Peak Prosperity Co-founder (Offline)
Joined: May 26 2009
Posts: 3107
From Valaurum's

drbost -

From Valaurum's website:

Methods of Shipment

1) USPS Priority Mail

Estimated shipping time for Priority mail for U.S. orders is 2-3 business days. For international orders, 6-10 business days. 

This map can be used to find a closer estimate for Priority Mail shipping. Valaurum ships from Zip Code 97232.

2) USPS Priority Mail Express

Estimated express shipping time is 1 business day for U.S. orders. For international orders, 3-5 business days. All orders over $1000 use USPS Express Mail.

 

Shipping Insurance

Insurance is offered as an option on all orders. 

drbost's picture
drbost
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Posts: 65
Valarum shipping

Adam --

Thanks so much for the info (see post #27, above).

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pinecarr
Status: Diamond Member (Offline)
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Posts: 2247
Thanks for your response, Adam

I do see the potential value of having very small denominations of gold like this.  The trade-off as you acknowledge is the higher premium (kind of like those little bottles of liquor I bought for barter purposes if need be... you have to decide if the premium is worth it).  And I do see that you are only recommending a small % of one's PMs in these smaller increments, which makes sense.

Given that, though, I do have a question on the the use of Valaurum.  Do you have any concerns that if we hit a SHTF scenario where you'd want to use Valaurum  as money, that you might have difficulty doing so because they are not a well-known/recognized form of gold (at least they are new to me)?  Or would you be counting on cashing them out with a PM dealer who'd be more likely to recognize their value?

 

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herewego
Status: Silver Member (Offline)
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Posts: 152
Yes, actually

I have to answer you that yes, many of us here DO expect we might end up going "backwards" to less-complex, more local, less specialized and much more basic ways of life.  This is not because of some sudden change in the nature of humanity's technological tendencies.  It is because of the 3E issues that underlie and support our civilizations, including our technological path.  So far, technology requires loads of energy to function.  Every example Andreas Antonopolous used to explain his infrastructure inversion idea happened on the way up the exponential increase in available energy that's been the norm for the past 100 years.  How that can continue unless we find a comparable energy source yesterday? 

Mr. Antonopolous is smart and entertaining, but he makes absolutely no reference to the energy context of his thesis.  He also doesn't seem to notice that in his lifetime we have moved from the age of unlimited expansion into the age of limits - real, planetary limits on multiple fronts.  People, countries, biospheres and resources are going down.  So how can we expect the procession from older, simpler, less energy-intense technologies to new, complex, energy-gobbling versions to continue to unfold in the same way?  Horses to automobiles happened at the very beginning of the exploitation of the most energy-intense substance ever discovered - fossil fuels.  Now we are at the end of cheap, easy oil, with nothing to replace it, unless Arthur is correct.

I don't know much about blockchains, but I'm guessing they will work well about as long as we have loads of energy to keep the computers running non-stop.  War?  EMP problems? An effective infiltration of our power system's computers?  How about a good banking crisis?  Would all the ones and zeros survive?  I'm going to risk my hard-won and insufficient wealth on something that fragile?  Why?   I'd rather have physical in some form, a few fruit trees in the 'hood, a lot of good soil, seed saving know-how and neighbors with skills.  Back in time sounds like one of the better outcomes.

Cheers

Susan

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timot78
Status: Member (Offline)
Joined: Sep 18 2010
Posts: 11
Responding to your "challenge"

Adam,

Since you are so persistent in promoting Aurum products, which in my opinion carry disproportionately high premiums, I have to ask you directly for full disclosure:
- A. Do you or PeakProsperity have or anticipate in the future any business gains from promoting Aurum products?
- B. Do you have a business relationship with Valaurum who is the manufacturer of the Aurum products?

Also up front, I would like to ask Chris for expressing his opinion about Aurum product(s), in particular is it PeakProsperity’s opinion that maybe up to 1% of PM holdings of an individual would be worth of holding in Aurums?

I apologize to the readers for the uninspiring explanation I will provide below why I think the Aurum product is NOT the right gold bullion/”film” to buy for an average PM holder. I thought that in my previous note, the example given would be convincing enough to close this discussion. Apparently Adam in NOT convinced, and he insists on apples-to-apples comparison, no matter whether it makes sense or not.
Let me start with two tables to make the unit conversions and gold spot pricing in troy ounce and grams clear to the reader

 

So I found two equivalent weight gold bullion products overlapping with Aurum units. This is comparison of Aurum products (0.25 gr and 0.1 gr ) vs. gold bars found on-line (LBMA –approved bullion). These are found on E-bay w/o shipping cost. So Adam, just to satisfy your repeating challenge about finding the cheaper equivalent products , here you have in Table 2 bullion @ 0.25 gr and 0.1 gr being cheaper by 15%-20% than Aurum official prices. References included. And I was not searching too extensively.

Seems like this is your major promotional point for Aurum, and seems to me it does not exist, if one compares face value of Aurum vs. equivalent bullion. (Also keep in mind that Ebay prices of bullion carry Ebay 6-9% and PayPal premiums). To be fair to Valaurum, their website does not promote Aurum for buying groceries or equivalents (as Adam) but quote: “…The result (i.e. Aurum) is a new, beautiful way to use gold for artistic, commemorative and branding purposes”. Aha, this I get. They promote it for these specific reasons, and therefore the premium is secondary. But Adam promotes it for buying "groceries", and here we are dealing with a money (Aurum currency) which can only buy the most ½ of groceries, based on Aurum face value (premium exceeds 100%) as compared to low(er) premium gold/silver/copper products, like bars w/ higher denomination (or even gold grains). So, to summarize my point (again, I stress one man’s opinion), Aurum product (currency) carries very poor value for low denomination “change”/ money in crisis. It is not designed, according to the manufacturers, to satisfy this role. I fully agree with them. It is also important for the readers to understand clearly the conversion of 1 troy once unit (and its widely followed daily spot price) to Aurum units (1/20 gr, 1/10 gr, 1/5 gr) . This is, based on my observation, poorly understood in US. Therefore, for an average reader / potential buyer there isn’t a clear explanation what are the premium involved. Valaurum website is not helpful here neither, because the only gold spot price being quoted there is in (you guessed it) Troy Ounces. Why then their products are not denominated in Troy Ounces of Gold (say 1/100, 1/200, 1/500 oz t) but in fractions of gram? I leave the answer to the reader. Please remember though, that the major point behind selling complex products like life insurance, etc. is making the facts complex and non-transparent, so the buyer cannot really compare apples-to-apples. But isn’t Adam insisting on apples-to-apples? Why does he not ask the founder of Aurum products to explain the details of Aurum valuation? Isn’t it important? Why is his interview, frankly, shallow? This, basically, prompted me to respond to the original Adam’s post to express my opinion about poor value behind Aurum products. Hope that we can close this silly discussion. And thanks to pinecarr who asks Adam for a bit higher level , non-personal exchange of opinions. Regards, Peter

timot78's picture
timot78
Status: Member (Offline)
Joined: Sep 18 2010
Posts: 11
Responding to your "challenge"

Adam,

Since you are so persistent in promoting Aurum products, which in my opinion carry disproportionately high premiums, I have to ask you directly for full disclosure:
- A. Do you or PeakProsperity have or anticipate in the future any business gains from promoting Aurum products?
- B. Do you have a business relationship with Valaurum who is the manufacturer of the Aurum products?

Also up front, I would like to ask Chris for expressing his opinion about Aurum product(s), in particular is it PeakProsperity’s opinion that maybe up to 1% of PM holdings of an individual would be worth of holding in Aurums?

I apologize to the readers for the uninspiring explanation I will provide below why I think the Aurum product is NOT the right gold bullion/”film” to buy for an average PM holder. I thought that in my previous note, the example given would be convincing enough to close this discussion. Apparently Adam in NOT convinced, and he insists on apples-to-apples comparison, no matter whether it makes sense or not.
Let me start with two tables to make the unit conversions and gold spot pricing in troy ounce and grams clear to the reader

 

So I found two equivalent weight gold bullion products overlapping with Aurum units. This is comparison of Aurum products (0.25 gr and 0.1 gr ) vs. gold bars found on-line (LBMA –approved bullion). These are found on E-bay w/o shipping cost. So Adam, just to satisfy your repeating challenge about finding the cheaper equivalent products , here you have in Table 2 bullion @ 0.25 gr and 0.1 gr being cheaper by 15%-20% than Aurum official prices. References included. And I was not searching too extensively.

Seems like this is your major promotional point for Aurum, and seems to me it does not exist, if one compares face value of Aurum vs. equivalent bullion. (Also keep in mind that Ebay prices of bullion carry Ebay 6-9% and PayPal premiums). To be fair to Valaurum, their website does not promote Aurum for buying groceries or equivalents (as Adam) but quote: “…The result (i.e. Aurum) is a new, beautiful way to use gold for artistic, commemorative and branding purposes”. Aha, this I get. They promote it for these specific reasons, and therefore the premium is secondary. But Adam promotes it for buying "groceries", and here we are dealing with a money (Aurum currency) which can only buy the most ½ of groceries, based on Aurum face value (premium exceeds 100%) as compared to low(er) premium gold/silver/copper products, like bars w/ higher denomination (or even gold grains). So, to summarize my point (again, I stress one man’s opinion), Aurum product (currency) carries very poor value for low denomination “change”/ money in crisis. It is not designed, according to the manufacturers, to satisfy this role. I fully agree with them. It is also important for the readers to understand clearly the conversion of 1 troy once unit (and its widely followed daily spot price) to Aurum units (1/20 gr, 1/10 gr, 1/5 gr) . This is, based on my observation, poorly understood in US. Therefore, for an average reader / potential buyer there isn’t a clear explanation what are the premium involved. Valaurum website is not helpful here neither, because the only gold spot price being quoted there is in (you guessed it) Troy Ounces. Why then their products are not denominated in Troy Ounces of Gold (say 1/100, 1/200, 1/500 oz t) but in fractions of gram? I leave the answer to the reader. Please remember though, that the major point behind selling complex products like life insurance, etc. is making the facts complex and non-transparent, so the buyer cannot really compare apples-to-apples. But isn’t Adam insisting on apples-to-apples? Why does he not ask the founder of Aurum products to explain the details of Aurum valuation? Isn’t it important? Why is his interview, frankly, shallow? This, basically, prompted me to respond to the original Adam’s post to express my opinion about poor value behind Aurum products. Hope that we can close this silly discussion. And thanks to pinecarr who asks Adam for a bit higher level , non-personal exchange of opinions. Regards, Peter

jgritter's picture
jgritter
Status: Gold Member (Offline)
Joined: Dec 13 2011
Posts: 273
Silver coins

People have been using silver coins for small transactions for thousands of years, why change (no pun intended) now.  I can buy Constitutional "junk"silver coins over the counter at my local coin shop for $2 per ounce of silver content over spot.  If I can buy genuine, American minted, legal tender, unlikely to be counterfeited, silver coins at a 12.5% premium, why would I buy something that looks like a candy wrapper with a 100% premium?

Also, I don't find it difficult to imagine a situation were there might be a premium on paper bank notes due to capitol controls in the future.  If such is the case I imagine that there will probably also be a premium on the more widely recognized forms of silver coins as well. 

All that said, all this might be moot as the number of precious metal stackers is so small that PMs might only be a very small part of a future economy.  I carry a silver Eagle in my pocket and have shown it to people when the subject of what the future might bring comes up.  I have yet to have anyone recognize it for what it is.

2 cents from a doomer in the pucker brush,

John G.

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jamster777
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Joined: Jan 2 2012
Posts: 21
Where are the premium reduction in PP Aurums?

I have to say that I think the Aurums are really cool and I have purchased some of the 2014 and 2015 PP versions.  However, I do share the concerns many others are expressing regarding the premium, especially with silver being a much cheaper alternative for smaller denominations. Accordingly, I was very interested when Adam Trexler said that the Valaurum had been able to reduce the premium by 30% last year and 50% the year before that.  However, this did not jibe with the amount I have been paying for my PP Aurums, so I went back in my email and looked at my invoices.  I found that I paid $8 for 1/10th gram Aurums in both 2014 and 2015 (I had to purchase 10 each time to get that price).  By my calculations, this translates into $2488/troy oz both years, which is a premium of 101% in 2014 and 107% and 2015. If I buy some of the 2016 Aurum today, I would pay $2488 per troy oz (exactly the same amount to the cent as 2014 and 2015) resulting in a premium of 102%.  Am I missing something here?  If not, were is our 65% savings in premium (50% and 30% compounded) that we should have seen since 2014? 

pat the rat's picture
pat the rat
Status: Silver Member (Offline)
Joined: Nov 1 2011
Posts: 120
bell hop

This is the story of the bell hop from Germany in the 1920 with one gold coin he bought the whole hotel. Who told him to keep the coin till just the right time? This is an inflation hedge till the right time.

pat the rat's picture
pat the rat
Status: Silver Member (Offline)
Joined: Nov 1 2011
Posts: 120
bell hop

This is the story of the bell hop from Germany in the 1920 with one gold coin he bought the whole hotel. Who told him to keep the coin till just the right time? This is an inflation hedge till the right time.

KugsCheese's picture
KugsCheese
Status: Diamond Member (Offline)
Joined: Jan 2 2010
Posts: 1449
Shipment

Received shipment.  Very impressive tech.   This should be the USA's money!

KugsCheese's picture
KugsCheese
Status: Diamond Member (Offline)
Joined: Jan 2 2010
Posts: 1449
Bell Hop from Germany in the 1920 with one gold
pat the rat wrote:

This is the story of the bell hop from Germany in the 1920 with one gold coin he bought the whole hotel. Who told him to keep the coin till just the right time? This is an inflation hedge till the right time.

Is there a verified reference for this story?   I doubt the story.

Shamba's picture
Shamba
Status: Member (Offline)
Joined: Mar 10 2010
Posts: 9
My purchase re iew

I ordered a few, like 3, of these the first day they were available and they came today, in Priority Mail as Valaurum said.  The company sent an email as soon as it was sent and it came 48 hrs later.  They are impressive looking!!  

Just wanted to report on how the order went and the company handled it all.  I may buy more later as budget permits.

Shamba

 

Uncletommy's picture
Uncletommy
Status: Platinum Member (Offline)
Joined: May 4 2014
Posts: 589
Some things will never change (ka-ching!)

For every buyer there's a seller. Oh Ya; and a middle man. Mayer Amschel Rothschild has taken a lot of heat over the past couple of centuries about his business practices, but you have to hand it to him; he was good at what he did.

badScooter's picture
badScooter
Status: Silver Member (Offline)
Joined: Jun 20 2011
Posts: 152
this dog don't hunt

Could hunt some day, but not right now.  I share the skepticism of more than a few based on the premium.  There are other vehicles right now that are far more available, affordable, and recognizable.  This idea could go somewhere at some point, but not until spot price becomes stupid-high so the production costs become proportionally smaller yielding a more "reasonable" premium...and they become super recognizable to many.  PM people, I think, are a hard headed bunch about this sort of thing, with pretty sharp pencils.

I imagine I'll pick up a few irregardless, for my own numismatic enjoyment and as props/training aids.  Will stick with different vehicles for small value denominations.  Just how it is.

Mike

treborholland's picture
treborholland
Status: Member (Offline)
Joined: Apr 18 2016
Posts: 2
Cost savings?
jamster777 wrote:

I have to say that I think the Aurums are really cool and I have purchased some of the 2014 and 2015 PP versions.  However, I do share the concerns many others are expressing regarding the premium, especially with silver being a much cheaper alternative for smaller denominations. Accordingly, I was very interested when Adam Trexler said that the Valaurum had been able to reduce the premium by 30% last year and 50% the year before that.  However, this did not jibe with the amount I have been paying for my PP Aurums, so I went back in my email and looked at my invoices.  I found that I paid $8 for 1/10th gram Aurums in both 2014 and 2015 (I had to purchase 10 each time to get that price).  By my calculations, this translates into $2488/troy oz both years, which is a premium of 101% in 2014 and 107% and 2015. If I buy some of the 2016 Aurum today, I would pay $2488 per troy oz (exactly the same amount to the cent as 2014 and 2015) resulting in a premium of 102%.  Am I missing something here?  If not, were is our 65% savings in premium (50% and 30% compounded) that we should have seen since 2014? 

 

Hi. I've just purchased a couple of notes ($40 excluding shipping costs to the UK). Like jamster777 I've purchased notes in 2014 and 2015. I can confirm $8 per 1/10th note in 2015 and something similar in 2014. I don't see this 65% combined saving either. So I've bought 1/2 gram rather than 1 gram this time. Is someone able to explain the lack of saving? 

I llike the product, from a collectable standpoint at least. Not sure where I sit with regards to its eventual use in a post carbon world. I think a lot of good points have been raised and it's hard to know how things will pan out. But I'm partial to anything trying to change the current money system. Good luck guys! Oh this may have been asked in the other shows but would a silver aurum work just as well as a gold one?

treborholland's picture
treborholland
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Joined: Apr 18 2016
Posts: 2
Potential advantage of Aurum

Didn't really explain why I think Aurum might have advantage over gold and silver.

Gold has properties ideal for currency. Hence the saying "gold is money". However, it's intrinsic value is not just derived from those properties but also the cost of production digging it up and processing it into a tradable form. Therefore following that logic, if Aurum is gold that is processed into a form that is a more ideal currency (more divisible and harder to counterfeit), the currency is more valuable: intrinsically and due to the increased cost of production). As the result, the question surely becomes when will we choose to hold Aurum over gold? I would think that threshold would be crossed when the extra benefits of Aurum outweigh the the extra cost of production in making the currency over gold. This can be solved two fold: increasing the benefits or reducing cost of production. Currently, the company seems to be working considerably hard on the latter. Is the extra security and divisiblity enough to make it more valuable (in a transaction sense) as a currency compared to more prolific, cheaper perhaps more easily forgeable silver currencies? I'm not sure, depends how the world turns out over the long term. I think this is why it's hard to compare the value of Aurum to digital currencies backed by precious metals. What is considered more valuable would shift depending on what kind of economy we have. Maybe now, in an era of fossil fuels with cheap and plentiful computing resources the latter is more valuable as it's easier/cheaper to use in transactions now. But in the long term maybe when fossil fuels are no longer able to sustain the scale of complexity we have now the former may end being much more valuable. As way of example, if computers become 'extinct' over the long term then the latter would be worthless. On the flipside, if that never comes to pass the former might be worthless. A currency values would depend on the structure of the local (or global if such think still exists) economy. Your perceptions of the future shapes the perceived value of Aurum relative to other currencies. Furthermore, how you use it and when you it play a role. Maybe even one's wealth plays a role. The value of an Aurum would vary from individual but whether it will be considered valuable by the world will depend on the future and the perception of the future. Being a specialised form of gold could be a blessing or a curse.

darcieg76's picture
darcieg76
Status: Bronze Member (Offline)
Joined: Jan 3 2016
Posts: 78
Maybe this would be more

Maybe this would be more suitable for the precious metals discussion group, since it doesn't relate to Aurum, specifically, but I feel conflicted about trying to acquire products whose extraction is, from what I hear, so damaging to the environment and to the people who extract it. Anyone have insights/thoughts on this?

Yoxa's picture
Yoxa
Status: Gold Member (Offline)
Joined: Dec 21 2011
Posts: 297
I wrestle with this question too
Quote:

 I feel conflicted about trying to acquire products whose extraction is, from what I hear, so damaging to the environment and to the people who extract it

I wrestle with this question too, and it applies to many things besides precious metals.

One way I deal with it is by purchasing used items when I can, rather than new production. It's not the only reason I like junk silver coins or vintage sterling spoons, for example, but the fact that their extraction costs happened decades ago and they've had a long useful life since makes them feel like a smaller addition to my footprint than new bullion bars would be.

Ditto for just about everything else in life. A good vintage item is a prize. If you need to buy something new, shun cheap junk. Look for high quality and excellent design that will serve you for a long time.

trexleradam's picture
trexleradam
Status: Member (Offline)
Joined: Oct 8 2013
Posts: 6
On the question of premiums

Deleted for repetition.

trexleradam's picture
trexleradam
Status: Member (Offline)
Joined: Oct 8 2013
Posts: 6
premiums, pricing, and digital exchange

Deleted for repetition

trexleradam's picture
trexleradam
Status: Member (Offline)
Joined: Oct 8 2013
Posts: 6
premiums, pricing, and digital exchange

I really appreciate everyone's interest in the Aurum, and also folks' concerns about premiums.

We're very grateful to Peak Prosperity readers, and our goal is to make the best gold product on the market.

I want to respond to three issues: the relationship between the Aurum and spot price, the specific price of Peak Prosperity offerings, and the relationship between the Aurum and digital exchange methods.

First of all, Valaurum's belief is that the bullion industry's obsessive focus on melt value is misleading for consumers. As some in this thread have pointed out, gold earns a different premium depending on several factors, including both increment and form. Naturally, the cost of delivering a rough kilo bar is less per unit than the equivalent 32 finely minted troy ounce coins. Actually, I'd argue that the 1 ounce coins are likely a better product: they're more recognizable, more difficult to counterfeit, and easier to sell. (There's also an aesthetic consideration.) We know of lots of people who stack silver coin, rather than buying heavier bars, for the same reasons.

The rational thing to do with coin is not to melt it, because the gold is more valuable in a coin than as a lump of gold. Melt guarantees a value, but *formed* gold is more valuable than the lump. A lot of this difference is accounted for by spread--the difference between what a dealer will buy and sell the product for, rather than straight melt value. Valaurum has tried to create highly recognizable, difficult to counterfeit, and interchangeable units of value; we're at the beginning of that process, but I think it's what will ultimately serve our customers. There are tiny bits of gold available in the same increments, from 'bars' that are more properly foil to tiny 20k nuggets (timot78 found some of these). They actually sell for around the same premium as the Aurum, and I invite folks to handle them. When they have, I think the advantages of the Aurum really speak for themselves. Our atomic deposition process creates a product that's far harder to counterfeit and easier to handle, and I just haven't come across a good alternative in the everyday increments we're talking about.

On the specific price of the Peak Prosperity offerings: we really like the Peak Prosperity community and it really helped us get started a bit over two years ago. I have always tried to make limited offerings that are very good deals for its listeners. Our previous offerings were actually under wholesale prices in some cases, because we did an enormous volume of 1/10g in a very short period of time. (We were shocked and humbled by the demand, to be honest.) Although some Peak Prosperity readers got a price of $8/Aurum (about 200% of spot), our bullion dealers have often sold them for $11 or so (~275%). We have worked very hard to bring down our production costs and to pass those savings to our dealers. The current offering of $17 with a coupon for a 1/4g Aurum is 170% of spot; we expect a retail price of ~$20 but I wanted to make sure Peak Prosperity readers got a very competitive deal. We will continue to try to bring down costs, while also increasing features. It's worth noting, also, that the costs of depositing gold in this way scale linearly with thickness: a 1/4g takes about 250% of the machine time as a 1/10g. 

(A sidenote about troy ounces and grams: we've gone with grams rather than troy ounces because the fractions are pretty ugly in troy ounces. The correct increment there would be grains, and I looked at making a 'grain'-based product, but even fewer people understand that increment than gram. Gram is internationally recognized, but troy ounces are more familiar to most of our current customers in North America.)

On the question of digital exchange and physical gold:

I like BitGold's offerings. I used paypal today and we regularly make USD transactions by wire and direct debit, just like most people in the developed world. They're immensely convenient and the transaction charges are quite cheap. To me, physical gold is another thing entirely: I trust gold I hold in my hand in a way that is completely different to money that is electronically stored or subject to counterparty risk. I've been on panels with Josh Crumb and I've told him that I think BitGold needs a physical delivery method that's comparable to the increments they are facilitating. A 10g cube is not an everyday transaction. The answer to that problem is the Aurum. We're simply not in the same market.

For those who say physical value products are disappearing, I point them to the issuance of (physical) paper dollars. In our supposedly hyper-electronic world, one would expect paper dollars to disappear, but actually the supply has continued to grow quite rapidly, to where there are approximately $1.4tn of them in circulation. That's quite a market. Interestingly, the US did away with denominations above $100 and $20 is the most common transactional increment. There remains a clear need for physical stores of value. Valaurum hopes to continue to address this need.

The discussion on this thread has often been on a very high level, and I'm very grateful for the attention people have paid. The Aurum probably isn't the vehicle for everyone, but we will continue to make it more attractive, more difficult to counterfeit, and a better value, and we believe it is a sign of the future. 

 

trexleradam's picture
trexleradam
Status: Member (Offline)
Joined: Oct 8 2013
Posts: 6
environmental impact of gold and silver

I'm glad people asked about the environmental impacts of gold and silver. 

I've been very concerned about this as well, from the very beginning of my time with Valaurum. In the first year, I traveled to artisanal mines in Costa Rica and looked into a number of technologies for mining gold without mercury and arsenic. 

One of the biggest problems with gold is that it is so fungible. In practice, gold is often refined in large pools that make traceability very difficult. This has made the certification of conflict-free gold very difficult as well. 

Quite a bit of gold is recycled, though historically the United States was far behind the rest of the world in this respect. The ubiquitous "We Buy Gold" signs that popped up around 2008 were in part due to the recession, but were also because the rising gold price stimulated a gold recycling infrastructure. Industrial gold is also commonly recycled. 

I am very interested in bringing out a pure recycled gold product, and I would love to hear from Peak Prosperity readers if they feel this is something that would interest them. 

darcieg76's picture
darcieg76
Status: Bronze Member (Offline)
Joined: Jan 3 2016
Posts: 78
Thanks for responding, Adam.

Thanks for responding, Adam. It makes me feel better that you've thought about this and looked into solutions. I'd definitely be interested.

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