Luzerner Zeitung: Money should become “tangible” again

7. July 2021

Dani Stüssi (left), CEO of RealUnit Schweiz AG in Baar, and Lucerne banker Karl Reichmuth, who founded the investment company. Both have family roots in Schwyz, which is why they had their photos taken there. Image: Boris Bürgisser (Schwyz, June 25, 2021)

Article from the Luzerner Zeitung, 03 July 2021 | by Maurizio Minetti

Banker Karl Reichmuth is entering the market with a company that wants to offer a kind of private currency alternative.

Anyone who hoards money in a savings account will become poorer in the long term. Because of low interest rates, banks charge so-called “balance fees” for larger amounts. So their capital slowly evaporates in the long term. “The money we have today has lost its value preservation function,” says Daniel Stüssi. The 47-year-old has headed RealUnit Schweiz AG, based in Baar, since April. This young company has a vision, as Stüssi explains: “Our goal is to be a simple investment solution for long-term wealth preservation.”

The founder of the Baar-based company is private banker Karl Reichmuth. The 82-year-old has been dealing with money for decades professionally, having built up the Lucerne-based asset manager Reichmuth & Co. In addition, Reichmuth is always pondering possible reforms of the monetary system. He has published several papers; “New Currencies in Sight” is his latest book (see note).

Massive currency devaluations

RealUnit Schweiz AG is Reichmuth’s brainchild. The company has existed since 2017, but until now only served friends and family close to the banker. Only now is the company opening up to the public.

But what exactly does RealUnit do anyway? Stüssi explains: “One of the problems of today’s system is that, unlike in the past, money is no longer tied to something real. Gold as an anchor of stability has been abolished practically everywhere. In recent decades, therefore, state currencies have experienced massive devaluation measured against the prices of consumer goods.” Not only the U.S. dollar and the euro are worth less than they used to be, but also the Swiss franc, he said. The zero interest rate policy and the expansion of the money supply by the central banks had further exacerbated the problem.

“This is a problem because the more units of a government currency there are, the less each unit is worth,” Stüssi explains. Anyone who puts money aside in this environment cannot be sure that this money will be worth more or even the same in 20 or 30 years. “Only if the money is backed by something tangible will its value be retained – or hopefully even increase.” This is where RealUnit Schweiz AG comes in. The company invests at least 60 percent of customers’ money in real assets. By real assets, we primarily mean gold and silver bars, which the company stores securely. However, real assets can also be industrial metals or shares in listed companies. “But only from those that are developing stably, have more equity than debt and thus low debt, and have a crisis-resistant business model,” says Stüssi. Later, real estate could also be added.

Customers are automatically co-owners

The funds invested in this way are unlikely to lose value. Stüssi and Reichmuth believe that the real value of a currency can only be maintained if its performance on a long-term average can at least keep pace with the economy. “We are aiming for growth in line with Switzerland’s gross domestic product,” Stüssi says. However, this also means that if the Swiss economy contracts, the value of RealUnit’s investments also shrinks. “However, purchasing power would tend to be preserved because the GDP and the currency would remain in line,” Stüssi said. “And money would thereby regain its value preservation function.” The RealUnit is thus intended to become a kind of private currency alternative in the long term. The RealUnit team has also developed their own investment system: Customers receive a “piece” of the company in the form of shares, so they are automatically co-owners. In this way, they stand to benefit from the long-term development of the share and also have a say at general meetings. A prerequisite is that the shares of RealUnit Schweiz AG are traded on a stock exchange. “We are planning a stock exchange listing for next winter,” announces Stüssi.

However, the RealUnit is not suitable for quick profits and speculation. “We are targeting investors with a long term mindset,” says the managing director. Currently, the company only manages a double-digit million amount, but the sum is to increase markedly, says Stüssi, for example through capital increases. New funds would then be reinvested in real assets. With an expense ratio of 0.9 percent, the company is relatively lean: The company employs only a handful of people in Baar. Recently, however, the investment company has brought various heads from the banking scene on board. They should help transform Karl Reichmuth’s idea from theory to practice.

Note

Karl Reichmuth and other authors from the financial industry and the world of cryptocurrencies shed light on the upheaval in the monetary system in the book “New Currencies in Sight” from Axel Springer Verlag (ISBN 978-3-03875-385-8). 176 P., 45 CHF.

Image: © Boris Bürgisser (Schwyz, June 25, 2021)
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