Harry Jarin sells world-class precious metals. He has built his company, Modern Coins Direct, up to a top-rated supplier of silver, gold, and more. Built with a personal philosophy of flexibility and responsibility, Jarin’s company embodies the entrepreneurial spirit. We’re excited to have Modern Coins Direct as one of our business partners.
Praxis: How did you become an entrepreneur? When did you get into precious metals sales?
HJ: I was in an undergraduate business program when the 2008 crisis hit. I wasn’t satisfied with my professors’ explanations for the crisis, and I discovered Austrian economics. That’s where my interest in precious metals came from initially.
About two years ago, someone asked if I could find them a deal on silver bullion. I guess I’d been talking about gold and silver so much people assumed I’d be able to sell them some! I called up a cousin, who was already in the business, and brokered the sale. The next day, my cousin emailed me – really just an afterthought, the subject line was “by the way” or something unassuming like that – asking if I was “feeling entrepreneurial” enough to sell some of his excess inventory on eBay. I’d already been trading gold and silver futures contracts, so it wasn’t that much of a stretch. I figured it might be a fun little side project, so I arranged a line of credit and got started.
Even after figuring out the basics of selling on eBay and building up a solid reputation over the first few months, I still didn’t think it would grow into anything substantial. But I found myself in a difficult financial position and needed some extra income, so I started turning over my inventory a little faster. Soon I was selling more each week than I’d been selling each month previously, and I thought to myself, “Hey, maybe this could be a real business!” That was the tipping point. I haven’t looked back since.
Praxis: Why precious metals?
HJ: For the first time in history, the world’s currencies are not backed by precious metals. That’s what gives central banks the ability to artificially create money, screw around with interest rates (creating bubbles), and bail out bad banks (creating bigger bubbles). But that’s not a sustainable financial model, and a currency crisis is looming.
We never actually dealt with the risk that’s been built up in the financial system over the past thirty years – we’ve just shifted it around. Governments around the world wouldn’t let the stock market crash in 2008, so they bailed out the banks and issued huge amounts of debt to pay for it. By doing so, government debt markets assumed the financial system’s risk. Then, when the debt markets started to come under pressure in 2009-10, central banks came in and bought bonds to keep prices afloat (and interest rates low). By pledging unlimited money to stabilize the debt market, they shifted the risk again: this time into the currency market.
So we have this series of backstops: the bond market keeping the stock market afloat, and then the currency market keeping the bond market afloat. But what’s keeping the currency market afloat? Nothing! The central banks are the last stop, there’s nothing after that. All of the risk that’s been built up over thirty years of bailing out irresponsible financial institutions – this economic cancer – it’s now in the currency markets.
Precious metals are old school; they’re not very advanced technology. But when there’s concern over the stability of more “advanced” currencies, the market will flock to the safety of precious metals. Just do the math: what happens when a bloated financial system with hundreds of trillions of dollars in assets worldwide comes tumbling down on the tiny gold and silver markets?
Sorry for the doomy-and-gloomy explanation, but that’s where we’re at. One day the economy will get back to doing what it does best – providing real goods and services – but that can’t happen until we resolve our monetary problems. Money is the foundation for everything else.
Praxis: What are some of your intellectual and entrepreneurial influences? What is your philosophy/what motivates you?
HJ: I always tell my clients that I’m not a finance guy – I’m a history guy. I love to read history, but I focus on economic factors, which many historians tend to ignore. I’m a very strong economic determinist, meaning that I look at economic events as the main driver of history.
For example, there were plenty of social and political factors that led to the Communist takeover of China in 1949, but you never seem to hear about the hyperinflation of 1948. What happens when the middle class of a society has their savings wiped out? What kinds of regimes arise when people have nothing left to lose? The results aren’t pretty. That’s why the prospect of a currency crisis is so terrifying.
I think we’re on the cusp of one of these big moments in history. Our mission is to get people ready by supplying them with a means to preserve their wealth during a time of economic turmoil. Most of our customers are not wealthy; many buy an ounce or two of silver at a time, whenever they get a paycheck. These are middle class people who will be the hardest hit in an economic crisis – it gives me a tremendous sense of purpose to think we’re helping them preserve their savings. It could make a huge difference for them.
Studying history also gives you a sense of perspective. We think we’re so technologically advanced, but we’re just pulling the same economic tricks that almost every civilization has tried at some point. We can give money printing a fancy name – “quantitative easing” – but it’s still money printing. Every civilization has tried to pull this crap at some point, and it always ends the same way.
My family is also a huge influence. Both my parents are self-employed and I grew up with both of them working out of the house. Of course, I was always told to find a stable job at a large company – I guess they knew how hard it is! But they’ve been very supportive. I had no reservations about setting off on my own, and I credit them with giving me that confidence.
My extended family is also full of business owners and entrepreneurs. My great-grandfather owned a Judaica shop in Philadelphia. One of our major suppliers is a cousin. Two of my employees are also cousins, and each of them have an entrepreneurial streak. It’s a really special family, I’m really lucky to have grown up with so many brilliant people and entrepreneurial role models around me.
Praxis: Do you view yourself as offering a product consumers want, or do you, more often than not, have to convince them that they want your product?
HJ: There’s tremendous demand for these products. That’s the crazy thing about the eBay auction format: you just put a product up there and people bid on it. Especially in the early days, I would put up everything at auction starting at a penny, and just let it go with no reserve price. Whatever someone wanted to pay for it, that’s what the sale price was. And it was a liquid enough market that I could afford to do that; the demand was so strong that we’d almost always make money. So for a long time, we didn’t have to put any effort into marketing, and the only constraint on our sales was how much inventory we could acquire.
As we’ve grown bigger, that’s changed. We’re driving more traffic to our website and doing more business directly with customers. Now I feel like we’re becoming more of a traditional retailer with all the emails and flyers and coupons. New or unusual products might not do as well in the auction format because there isn’t that liquidity; these items definitely benefit from a bit of marketing.
Praxis: What’s the best part of being an entrepreneur?
HJ: The ability to work on your own terms. I put in just as many hours as my banker friends in New York, but I’m not trapped in a cubicle for ten hours. There’s nobody to give me dirty looks or chew me out if I want to go out for a quick walk. Most nights I don’t have to set an alarm clock. Again, that’s not to say I work any less, or that the work isn’t hard. But there’s so much less stress! It’s so much healthier to have that freedom. Human beings should not have masters. Two of my employees have young kids; I try to be flexible for them, too.
Praxis: What’s the hardest part of being an entrepreneur?
HJ: If you work for Goldman Sachs and you call in sick, Goldman Sachs will continue to function without you. You’ll probably get yelled at, but the company itself will be fine. Quarterly results probably won’t be materially affected on account of any single employee’s Wednesday morning hangover.
On the contrary, if I don’t take care of business, there is no business. I can’t just “take a day off.” I might get to set my own deadlines, but I’m the only one enforcing them. Having the discipline to put the business first and yourself second, and to keep that up relentlessly: not everyone is willing to do that.
So the flip-side of having that flexibility is the responsibility it entails. Working on your own terms is a privilege, and it has to be earned.
Praxis: What is your advice for young people looking at building a fulfilling career?
HJ: Stay flexible. Don’t box yourself in. Have skills and knowledge that are adaptable to different fields. The economy moves so quickly, and we’re on the cusp of such fundamental changes; you don’t know what it’ll be like in four or five years. I applied to colleges in late 2006, at the peak of the bubble; my class graduated in 2011. It was a totally different world, especially in the financial sector, where many expected to find jobs. A lot of people were counting on a paradigm that had existed for decades – until one day it didn’t. Our generation can’t take anything for granted.
And I don’t just mean flexibility in terms of what you study: the next big opportunity might be on the other side of the country, or the other side of the world. You might be looking at a smaller paycheck at a start-up, or you might come up with a great idea that would require you to quit your current job. Would you be willing? Prepare yourself to take advantage of any and all crazy opportunities that may arise. The irony is that by worrying now about “building a fulfilling career,” you’re probably going to make more conservative decisions, and you’re less likely to actually build a fulfilling career.
Here’s another thing to think about it: the past thirty years have been very focused on the non-physical world. The rise of computers, the internet, and the technological innovations that followed, particularly in the financial sector – those parts of the economy have become dominant. But the cycle is starting to turn. The challenges of the 21st century are very much rooted in the physical world. Finding enough energy, growing enough food, caring for aging populations – think about what sectors of the economy will benefit from that change. I hear high school seniors these days still talking about getting finance positions after school, but nobody’s talking about farming or mining. It’d be almost laughable. But that’s all going to change, and the rewards will be enormous for those who take a risk now and get ahead of the crowd.
Praxis: If you could do one thing differently than you did, what would you do?
HJ: If I’d dropped out of school when I was 19 – like I nearly did – and started a business then, I’d be on an island by now. You’d need a canoe, a parachute, and a satellite to do this interview.
Praxis: Thanks for taking the time to speak and helping us break the mold in everything you do!