What if you could carry and exchange gold in the exact same manner as you do with the dollar bills in your wallet?
Last year, we introduced the precious metals community to a company called Valaururm, which has developed a technology that's making this possible.
Here's the write-up from last year:
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.
Big News
So, what's happened with the aurum over the past year? Has the concept caught 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.
But most exciting is this: a (small) sovereign central bank is deep in negotiations with Valaurum to replace its existing national currency with aurum notes, creating a true precious-metals backed monetary system. As best we know, this would make it the only one in existence in the world today.
If this indeed occurs, it could be a game-changer. Changes in trust and perception always begin with a non-conformist having the courage to depart from the herd's consensus. Even a small country rejecting fiat money in favor of a gold standard will catch the attention of others. And as the current currency wars exacerbate, as they inevitably will, more countries will increasingly look to adopt monetary regimes that work better. Perhaps that will be a return to gold, in this new form.