You can watch a video of this article:

When I was 19, I started getting these weird heat rashes.

Every day, whenever I got hot, these debilitating, paralysing heat rashes would envelop me. Burning, bumpy, red weals suddenly covered my body. So itchy—you wanted to scratch everywhere, though scratching brought no relief. Once the rash started, there was nothing I could do. I just had to wait for it to pass, which would take about half an hour.

I didn’t even have to get so hot that I broke sweat for the rash to come on. Just walking briskly would do it, getting flustered, wearing a layer too many, even having a shower.

And it came every day, usually mid-morning.

I thought it might be stress that was causing it, but it was the other way around: these rashes were causing the stress.

I found a way of coping with it: do intense exercise every morning and actually induce the rash. Then it seemed to burn itself out for the rest of the day.

But the next morning, it would be back again.

I went to see doctors about it. None of them knew what it was. As GPs often do when they don’t know the answer, they brushed it aside, “Oh, it’s probably stress.” I wasn’t making this up! But unless I actually had an attack in front of the GP, there was no way of showing them what it was.

I saw a dermatologist, who gave me anti-depressants. I saw Chinese herbalist after Chinese herbalist, who all concocted these disgusting teas for me to drink. Lord knows what damage I did to my liver drinking that stuff. I saw an acupuncturist who declared brightly that he could cure it. But he couldn’t.

It made my life a nightmare, because you never quite knew when the rash was going to hit. What if it came on when I was on stage? During that all-important meeting? When I was with a girl I liked? It was a source of acute embarrassment.

The condition disappeared, bizarrely, if I went to the tropics. Why, Lord knows. But as soon as I got home, back it came.

Then I noticed the condition also disappeared in the summer. What was that about? I realised the antihistamine I was taking for hay fever also prevented these rash attacks.

But I didn’t want to take antihistamine every day—that couldn’t be healthy—so, once the hay fever season was over, I would go back to keeping it at bay by trying to do intense exercise every morning and burning it off.

When I got married and had kids, aged 30, this became impossible, so I resigned myself to daily antihistamine. This started with Clarityn (Loratadine), moved onto Zirtek (which I hated because if I drank alcohol, I used to get incredibly drunk and that led to a lot of bad decisions and mistakes) and, eventually, Xyzal, which I found I only needed to take every other day. The potential long-term damage of sustained anti-histamine use was a gamble I was prepared to make to avoid the daily nightmare of this condition.

If you are buying gold to protect yourself in these uncertain times, then let me recommend The Pure Gold Company. Premiums are low, quality of service is high and you deal with a human being who knows their stuff.

Eventually, I discovered that the problem I had was a condition called heat-induced cholinergic urticaria. I went to see a specialist at St Thomas' Hospital. “There is no cure,” she told me. “Sometimes it clears up by itself,” she told me, “sometimes not. You’re lucky antihistamine stops it. For many that doesn’t work.”

I volunteered to be a guinea pig so she could experiment on me as part of her research into the condition. I would go to the hospital, have a hot bath, my skin would erupt, and then she’d prod me and prick me and nod and mutter, but it got me no nearer to a cure.

Here I am at 54, and it has not cleared up.

What is the cause?

I’m still not quite sure if something I did caused it. Urticaria is from the same allergic school of illnesses as asthma, eczema, and hay fever, from which I suffer a little (asthma especially if I run or am near cats), so it might be hereditary or genetic. It affects young men more than any other group, which is what I was.

I’ve been on numerous forums where fellow sufferers discuss the condition, and a lot of us took the antibiotic tetracycline. I took it for years as a teenager to help with my acne. God, it makes me cross that I was allowed—even encouraged—to take it for so long. Bloody doctors, or one in particular (no longer with us so I won’t name him and speak ill of the dead), and my mother’s blind trust in them. I thought it might be tetracycline.

I had spent two months in Egypt just before I got my first outbreaks, and I got very ill with Giardia, a form of dysentary. Maybe I lost some essential bacteria in my stomach or something, or got leaky gut. (I’ve taken a million probiotics and all the rest of it—didn’t work).

Also just before the first outbreaks, I got the sh*t kicked out of me in a park in Milan by a group of young Italians - I mean properly beaten up, 7 v 1 and I made the mistake of fighting back - so maybe it was somehow related to that.

Maybe it was the accumulation of everything.

Nature’s magic superfood comes to the rescue

One of the unintended benefits of my health drive in recent years is that my asthma, which I’ve had since I was born, appears to have, for no apparent reason, gone. I haven’t been near cats to test it there, but I no longer need my puffer to play football. (Don’t know why. It might be an age thing; a health thing, most likely a seed oil thing).

Then I forgot to take my antihistamine for a few days, and I noticed that I wasn’t getting urticaria attacks either. Praise the Lord! I thought my urticaria might’ve cleared up too.

No such luck, as it turned out. It hadn’t. I went abroad and, after a few days, it came back.

Then I realised there was something I’d been taking at home, and I hadn’t taken it away with me.

It made all the difference.

That mysterious ailment you’ve had for ages and can’t rid of. this might sort that out too.

You can watch a video of this article here:

Robert F. Kennedy has been grabbing headlines this week, not just for his alliance with Donald Trump, but for his criticisms of the American food industry, which he holds responsible for the epidemic of obesity and poor health.

I can’t believe what he has to say is even considered controversial, when it’s so obvious it’s true. Yet Time, The Guardian, The New York Times, and all the usual suspects have all come out to smear him.

Surely it’s clear? Processed food is bad for your health. Processed food causes obesity. Processed food is the cause of many modern illnesses. Don’t eat processed food. It is bad for you.

I’m not a doctor. Then again, I’m not an economist either. I’m just a guy who gets interested in stuff, especially systems—how they work and what their effects are.

In the noughties, I became very interested in our systems of money, largely because I couldn’t understand why houses cost so much relative to what people earn. Before long, I felt I had a good grasp of how money works. I ended up writing a film that became an internet sensation (and got horribly plagiarised in the process), several books, and umpteen articles, all making the case that if the West is to save itself and create a level playing field, we need sound money. Whether that’s based on gold or bitcoin doesn’t really matter. Money needs to be independent, rather than a tool  of government.

Recently, I’ve become very interested in health - on particular, improving mine. For years, I have been unable to understand why I—and millions like me—could never keep weight off.

I have become convinced that seed oils are to health what fiat money is to the economy. It is that fundamental, in my mind. Thanks to bitcoin and gold, the fiat money narrative genie is out of the bottle. Fiat is not going to die tomorrow—it will probably take decades —but more and more people are realizing how bad it is and are taking steps to escape the system via alternative money.

The same thing needs to happen with seed oils. I find myself becoming as passionate about this as I was about money 15 years ago. Why are so many people obese? Why are so many people, who work on their health, diet, and fitness still 10 or 20 pounds heavier than they’d like to be? Why were so many people skinny in the 60s and 70s, but not now? Are people greedier now than they were then? They can’t be. We are the same human beings. Indeed, we exercise more.

What’s changed is processed food. It barely used to exist. Now it’s almost impossible to avoid. The main enabler of processed food, the thing that gives it such a long shelf life, is seed oil.

What are seed oils?

"Seed oils" is a catch-all term for the various vegetable oils that have replaced animal fats to become a mainstay of the Western diet: sunflower oil, rapeseed oil, canola oil, soybean oil, corn oil, palm oil, margarine, and so on. Anything hydrogenated is bad.

Seed oils were mostly invented for industrial purposes, but because of their price and properties, “entrepreneurial” companies, assisted by regulators, quack research, and lots of PR, gradually added them to their food products, so that seed oils have now, mostly, replaced animal fats

Just look at how they’re made. You gather seeds from plants such as soy, corn, cotton, safflower, or rapeseed; heat the seeds to extremely high temperatures, so the fatty acids oxidize; process the seeds with petroleum-based solvents such as hexane to extract the maximum amount of oil; add chemicals to remove the foul smell (this deodorization process produces harmful fatty acids); and then add more chemicals to change the colour and appearance of the oil. Not healthy.

One of their properties is that they don’t break down easily (they can thus help lengthen food’s shelf life). The problem, it seems, is that the human body can’t properly break them down either.

Okinawa in Japan became famous for its longevity, with many people living well into their 90s and 100s. Then along came Western processed food, and suddenly there is an increase in obesity, diabetes, and other modern illnesses. The once famously long-lived population is now seeing both a decline in life expectancy and an increase in health problems that were previously unknown.

When correlation equals causation

This chart shows the consumption of vegetable oil in the US since the late 19th century. We didn’t used to eat seed oils; we ate animal fats. You can see they change in diet.

Sugar often gets the blame for the rise in obesity, but if you look at current US sugar consumption, it’s not that different from what it was in the 1930s or 40s. Obesity has grown, while sugar consumption has remained broadly flat.

Now, let’s look at vegetable oil consumption and obesity rates. They correlate. And in this case, correlation is causation.

In the last few years, I have gone from this to this.

I’ve written about my weight loss before, but, just in the last two or three months, something has really accelerated, and I’m not quite sure what.

I’m now 54. I’ve suddenly got a six-pack. Well, sort of. A four-pack. I’ve lost 48 pounds (22 kg). My metabolic age has come down from 57 (when I was 51) to 49. I am super fit and bursting with energy.

Even at the age of 22, when I had just left drama school and won a British Open Martial Arts Tournament (BOMAT 1991 - I’ve got the trophy somewhere if you don’t believe me), I don’t think I was nearly as defined. I’m the same welter weight as I was then too.

What’s the secret? There isn’t one. I’d love to say this was all deliberate, but really, it has happened by accident. I was overweight, started fasting to lose weight, and it spiralled from there. Normally, I put the weight back on, but this time it’s not only stayed off, but I have lost more weight and got into better shape.

I thought I should describe some of my habits here, in case you find them beneficial. I don’t think it is one thing that has done it. I think it is the aggregation of everything.

So here we go: 12 habits to transform your health. If you are interested in following me down this route, don’t try and do all of these at once. Do one, then gradually add others. Baby steps …

1. Fast

Do the 5:2 diet. It takes effort, but it works. It is probably the single most effective thing you can do to lose weight. Fasting brings mental clarity too. Watch videos, listen to podcasts, read, indoctrinate yourself, then do it. After a while, you look forward to the feeling of being hungry and the good feeling you get after: I call the morning after a fast the inverted hangover because you feel so good.

2. Avoid Seed Oils

By seed oils, I mean all the industrial oils that have only entered our diet in the last 50 or so years and that human beings were never supposed to eat - vegetable oil, sunflower oil, rapeseed oil, canola oil, palm oil - all that stuff. These things were invented to be industrial oils, and they’ve made their way into our food supply and they are poison.

Why is obesity such a problem? Look no further than seed oils for your answer. 100 years ago, Americans got zero calories from seed oils; now they make up a third of their daily intake. In this case, correlation is causation. Things like olive oil, butter, tallow, and coconut oil are fine.

Seed oils are in everything. Assume what you are considering eating contains seed oil and only eat it when you have ascertained that it doesn’t.

Tell someone you know about this.

3. Dead Hangs

I think these might have been the transformer, as I’ve only been doing them a few months. Get a pull-up bar. You can get ones that you hang in your doorway or, better, get one outside for your garden and hang from it. At first, you will only be able to hang for a short time, but keep hanging every day so that eventually you can hang for two minutes. Then do two two-minute hangs per day.

I only started doing dead hangs to cure my various neck ailments (too much computer), but they have had all sorts of unintended, beneficial side effects. They improve your posture, they stretch out all the evils of sitting in front of a screen all day, they sort out your neck problems, your shoulder problems, they stretch through your torso. I can’t think of a more physically beneficial way of spending two minutes than a dead hang.

4. Get a Whoop

Whoop is a health and fitness tracker watch which focuses on sleep and recovery. I got one to improve my sleeping habits. Sleep is the new exercise, as I’m sure you know. It measures, among other things, heart rate variability (HRV), which plummets when you drink. You then get a big red warning which puts you off drinking.

The unintended consequence, then, of getting a whoop was that my alcohol consumption has gone from having a couple of drinks or more most days - half a bottle of wine a day kind of stuff - to almost zero. I now crave not drinking. It’s not just the calories in alcohol, it’s the bad decisions you make after drinking, particularly late-night bingeing. Not drinking also improves sleep and general health. I did not plan to give up booze. I like booze. I love beer. I love wine. I like drinking. If you told me I had to give up drinking, I would’ve said no. But that’s what happens when you get a Whoop. So get a Whoop. Plus your sleeping habits improve too.

5. Have a partner you want to look good for

I had one - now sadly no more - but I’m sure it made me generally up my physical game. She was also extremely health-conscious and got me into all sorts of good habits. It helps to have a partner with whom you can eat well and exercise well. It makes you accountable too.

Sometimes splitting up with someone you like or love can be great for your weight too. Maybe that’s what happened to me!

You really should subscribe to this wonderful publication.

6. Cider vinegar

It’s better for you than Ozempic. It’s cheaper than Ozempic and it reduces your appetite. More here on the glories of cider vinegar.

7. Supplements

I’ve gone from taking zero supplements to taking so many so that I don’t know which ones are actually doing good. But I’m pretty sure Tongkat Ali and Fadogia Agrestis have had an impact. I sometimes think the act of taking supplements is more effective than the supplements themselves.

8. Water

Don’t know if it did anything, but I stopped drinking tap water where possible and only try to drink mineral water. (Next worry is microplastics).

9. Exercise

I try to do some form of exercise every day, and I mix it up between cardio, stretching, and weights. I probably could do more weights: I only do one session per week with some dumbbells at home. I need to join a gym. I find cycling good because it doesn’t hurt your joints. When I run, I usually only run two or three miles, but I live near a steep hill, so I do four 30-second sprints up the hill at the end. I play a bit of tennis and a bit of footy. Swimming is also good, but I don’t like chlorine, so that is more of an occasional summer pastime when I can do it outside .

10. Two meals a day

Do you really need three? Skip breakfast, have an early lunch, and go to bed early. And no seed oils.

11. 15 Minutes of Sun

The first thing I do every morning is drink a pint of water, make myself a cup of tea, then go and sit in the garden for 15 minutes and get some sunshine. This is supposed to help regulate your circadian rhythms and sleeping habits. I have been getting to sleep much more easily since I did this. Even if it’s cloudy and it’s winter, go and sit outside for 15 minutes first thing in the morning.

12. Count Calories

I have only just started counting my calories using the Calorie Counter app. The thought of putting your calories into this every time you eat deterred me from doing it sooner - yet more time on my wretched phone - but I’m actually quite enjoying it and I keep it probably 85 or 90% accurately. Eating discipline definitely improves if you get one. Ultimately, losing weight is basic maths: fewer calories in than out, and you lose weight. Net immigration is the same.

Share this with your friends.

A Bruce-y Bonus. Learn to stand up from the ground without using your hands

This is supposed to be an indicator of longevity. A few months ago I was hopeless. I could barely stand up from a yoga block. But now I can do it. Here’s the proof.

So there you go. I hope this helps. As I say, don’t try to do everything at once. You can’t. Baby steps. This is a case of the power of incremental gains and compounding.

Diet is the most important thing. If you don’t get that right, it doesn’t matter how much you exercise. You can’t outrun a bad diet.

Until next time,

Dominic

PS Don’t forget the mining show - the Edinburgh link is here. And the London link is here.

Plus -

Charlie Morris is one of my closest mates and he writes what I think is one of the best investment newsletters out there, in fact a suite of them. I urge you to sign up for a free trial.

I went to a mining conference on Monday - the Mining Journal Select London. As well as being on a panel, I wanted to catch up with the management of a couple of companies I hold shares in and get a feel for the state of the industry.

Mining is cyclical. If there’s a shortage of some metal or natural resource, the price of that resource will go up. Rising prices encourage people to start looking for more said resource, investing in it and mining it. Suddenly there’s a mining boom.

This eventually leads to an increased quantity of whatever the resource in question is, and the price comes back down again. The price of mining companies comes back too. Investment goes away. Suddenly we have a mining bust.

In today’s fiat world of wild price swings, boom seems to turn to bust with increasing rapidity and violence. We are definitely not in the boom phase of the cycle.

“Look at the room,” an investor came up to me and said after the panel I was speaking on. “It’s empty. It’s a classic bottom-of-the-market sign.”

I can’t help thinking he may have a point. But I also want him to be right, as my own portfolio is so exposed to mining.

An analogue industry in a digital world

In our 21st-century world of billionaires, leverage, booming tech stocks and cryptocurrencies doubling overnight, value is digital and digital is quickly scalable.

Ten grand can be enough to be trading portfolios in the hundreds of thousands. Write a bit of code, upload it to the app store and it can be downloaded billions of times. Upload a funny video, watch it go viral and find yourself with a million followers.

And then there is old analogue mining. Getting to some remote and unexplored part of the globe. Sampling a bit of rock. Getting a licence. Sticking a drill into the rock. Hopefully, finding something. Sticking a few more drill bits in. Hopefully finding something more. Getting what you have evaluated. Persuading investors that what you have is meaningful. Getting more permits. Drilling more, evaluating more, persuading investors more and on and on for 20 years until you eventually complete the mine construction and start producing.

It takes an average of 16 years to take a mine from discovery to production, more if you factor in prior exploration. 16 years before the company is profitable. Who’s got 16 years in today’s fast-paced world? 16 years is a lot of time for something to go wrong. There could be a change of government, a change of local attitude to mining, a change in underlying commodity price or a change in the investment landscape to name just a few of the risks.

Mining is slow. Mining has not seen the breathtaking improvements in technology that other industries have seen. Yes, there are massive trucks, and huge machines, but the basic principles, extract metal from rock, are not far off what they were in the Bronze Age.

And yet mining is essential. We could not enjoy the world we enjoy without mining. The picture below is of a cabinet at the Camborne school of mines that shows the 70 different elements we need to make a typical smartphone: copper, silver, gold, tin, indium, tantalum, silicon, not to mention the gadolinium, europium and dysprosium.

These elements cannot be digitally created. Midjourney serves no purpose here.

Should investors ignore mining stocks?

At present, retail investors shun mining. So do institutions. Who can blame them? Never mind the ESG deterrent, the sector is down around a third or more on this time last year. The small-caps by much more.

It takes time, I was constantly told yesterday, but investors don’t like looking at stocks in their portfolio that are down 30 or 50% from where they were last year. They don’t have 16 years.

At the conference, there was some dissatisfaction that retail investors are no longer interested in mining, but can you blame them?

Culture is a factor too. Most mining investment comes from people within the industry who understand the sector. Here in the UK, mining is no longer part of our culture as it once was. People like to invest in things they understand.

Mining requires so much capital, it needs promoters. It needs the guy with the suspiciously white teeth telling you that this stock is going to the moon and that you are going to be a millionaire. Without the promotion, without the blue sky, it can’t raise the capital it needs. The problem is that a lot of promoters are scoundrels. Investors get ripped off. What did Mark Twain say about a mine being a hole in the ground with a liar standing next to it?

But even without the scoundrels, capital gets destroyed. Sometimes unscrupulous governments in far-flung parts of the world seize control of profitable mines. Sometimes unprincipled governments bow to environmental lobbies and remove their licences. Most of the time the regulator is Mother Nature. The mine is simply uneconomic. There is not enough metal in the ground to justify mining it at current prices. Metals prices need to be twice as high or more before this mine is viable.

Just one in a thousand exploration properties make it to production. Think of the capital destruction of those other 999 properties. Few prudent money managers invest with those odds.

Even the mine that makes it is, 90% of the time, comes in late and over-budget.

In this fast-paced modern world, no wonder the industry is on its knees.

High commodity prices will drive more spending

They say the cure for high prices is high prices. You could say the same about low prices. Mining needs higher metal prices

Having to tighten their belts, the conduct of those in the industry is much better than it used to be. Execs are staying at the Travelodge, not the Savoy. The numbers being presented are better. Companies are having to work harder, there is more competition for capital - this has all contributed to improvements in standards, as is often the way in bear markets.

I’m slightly obsessed at the moment with AI and the economic boom that is coming as a result of the improvements to productivity it is enabling. I was delighted to meet two different people who are looking at ways to employ AI in this most analogue of industries.

Anyone who has ever been to a core shack will tell you, there is a lot of data in mining. Miles upon miles of drill core stored in shacks, with the rock contents recorded and analysed.

Surely AI will have a role to play in analysing all that data, comparing it to the data of existing producing mines, as well as failed, non-producing discoveries.

One of the chaps I spoke to said he thought his AI might be able to get to a point where the success rate gets from one in a thousand to one in three.

Then again, he did have very shiny teeth.

We need mining. We will always need it. Our failure to invest in it is going to come back and bite us very hard.

Meanwhile, we soldier on and try to find the best projects, with the best management, with the highest probability of success.

We also need patience.

Interested in buying gold? Then visit The Pure Gold Company, whether you are taking delivery or storing online. Premiums are low, quality of service is high. They deliver to the UK, US, Canada and Europe, or you can store your gold with them. I have affiliation deals with them.

Please consider becoming a subscriber.

An earlier version of this article first appeared at Moneyweek

In your time bestriding the narrow world like a Colossus, you might have heard the term, “bearer asset” or “bearer instrument”.

That would be an asset that you take physical possession of - cash or bullion, for example - an asset that is effectively owned by whoever has possession of it, that can be transferred from one person to another by just handing it over.

The ownership of the asset is not registered with a central authority, so that makes it vulnerable to theft or loss, but it also means the asset is nobody else’s liability. Unlike money in the bank or a government bond, it carries no promise from a third party. The value of the asset is thus not dependent on the creditworthiness of any issuer or guarantor, but rather on the inherent value of the asset itself.

So, in today’s interlinked financial world, a bearer asset becomes an asset outside the system.

Like Tottenham Hotspur, bearer assets have their strengths and their weaknesses. Their strength is that they are nobody else’s liability. Their weakness is that their liability is yours. 

The two main bearer assets in today’s financial marketplace are gold and bitcoin. 

Bitcoin rallies as investors seek safety 

Bitcoin is not a physical asset of course. But the technological genius behind it means that it is a “digital bearer asset”. No such thing previously existed. 

With bank runs, bail-outs and another banking crisis now upon us, both gold and bitcoin have suddenly fetched a bid. No surprise: they both are means to store value outside of the system. You don’t have to rely on third parties. 

I thought, given everything, we should check in on both today.

Here’s bitcoin, which, at $28,000, has broken out to 9-month highs

Is that a bullish, inverted head-and-shoulders pattern I see before me? I think so. 

On that basis, what would the target be? The distance from the top of the head (around $15,000)  to the shoulder line at c.$25,000 is $10,000 - so you would have a target of around $35,000, perhaps a little higher.

Some are even calling out for hyperbitcoinisation: a hypothetical scenario in which the widespread adoption of bitcoin occurs so rapidly that its price rises dramatically and it becomes the dominant form of money in use. 

In this scenario, bitcoin would be widely accepted by merchants and individuals alike. The term "hyper" refers to the extreme and rapid level of adoption. 

In a way, it is an inversion of hyperinflation. The fiat system would remain, it wouldn’t necessarily collapse, it would just be overtaken and superseded by bitcoin.

There are many who believe hyperbitcoinisation is both inevitable and desirable. Bitcoin is better money than fiat. The traditional banking model is dysfunctional and reliant on constant bailouts. 

One such advocate is billionaire Balaji Srinivasan, who has grown so concerned at the goings-on in US banking, he has made a million-dollar bet that bitcoin will hit $1 million by June 17.

The odds are against him. Some are suggesting he is just doing it for the attention. But to be fair to Balaji, he has a good track record spotting trends. 

I’m a bitcoin bull, but maybe I lack ambition. I can see it getting to $35,000 or $40,000 by June. I’m not so sure about $1 million. But hey, I’ll take $1 million dollar bitcoin if it’s offered. 

I’ve heard this kind of prediction before. You used to hear them all the time about silver. I’m not holding my breath.

My rather drab observation is that, after a miserable 2022, tech has suddenly caught a bid. Even Meta’s going up. Bond yields have fallen with the banking panic, and suddenly growth stocks look attractive again. Sorry to be so prosaic and unsensationalist. 

Meanwhile, that other bearer asset, gold has also found a bid, and with it silver and platinum. Gold this week has been flirting with $2,000.

The gold price surged after bank collapse 

My buddy Josh Saul at the Pure Gold Company reports to me that, with the panic at Silicon Valley Bank, his company saw a 385% increase in new enquiries last weekend and a 274% increase in investors purchasing physical gold bars and coins last Monday, compared to its normal daily average. “One client said they are moving £16 million out of their current bank provider owing to fears of instability”, he says.

Volatility in the stock market isn’t helping either. “This year, we have also seen a 712% increase in people removing exposure to equities and cash in their pensions and SIPPs in order to purchase physical gold bullion in the same vehicle”. 

My other buddy Ross Norman reports that visitors to his site Metals Daily have risen 763% in a month.

Gold is now at all-time highs in almost all currencies, except the US dollar. What do new highs normally lead to?

In the short term, gold , breathing down the neck of $2,000, is a little overbought by most sentiment readings. The miners have been quite flat in comparison, which is not a good sign. That suggests the spike is temporary.

But longer term I think it goes higher. I have long argued that everybody should have exposure to both gold and bitcoin in their portfolio, and it is crises like this one that demonstrate why.

Few people realise that by keeping your money in a bank, you are lending the bank money. The difference between money and credit has become conflated, along with many other things in this mad world. Even Switzerland no longer looks safe. 

All the same arguments we heard in 2008 are coming back. At the heart of them lie fundamental questions as to the nature of money and banking. Fractional reserve banking, and even full reserve banking, became sujets du jour. The words fiat money entered the lexicon.

In 2008 there was a chance to address and put right the fundamental flaws in the system. It was not taken. Bail-outs brushed the problems under the carpet, and left them for another day. 

The free market meanwhile came out with an alternative, bitcoin. It is now a trillion-dollar economy, and there are no bailouts. With each collapse - there have been plenty and there will be plenty more - the system gets stronger.

But with traditional banking, however, the more you bail out the system, the more precarious it becomes. You can’t take the risk out of a market. Without risk, you have no market. With risk comes responsibility. 

Don’t blame the players. It’s the game that’s at fault. 

If you are interested in buying bitcoin, my guide is here:

My current recommended bullion dealer in the UK is The Pure Gold Company, whether you are taking delivery or storing online. Premiums are low, quality of service is high. They deliver to the UK, US, Canada and Europe, or you can store your gold with them. I have affiliation deals with them.

An earlier version of this article first appeared at Moneyweek

With the latest developments in AI, ChatGPT, Midjourney et al, we are experiencing something that, in terms of impact, will prove as big as the internet was in the late 1990s, if not bigger.

Following on from my chat with Andy last week, which has had really good feedback from those watched/ listened (some haven’t had time yet), we have another really interesting conversation for you today about the implications of the amazing developments that are happening in the world of tech, this time with Danny Richman.

It is only for paid subscribers. I will make it available to one and all in due course, when I will also release the podcast version for those who prefer to listen.

Danny is a seasoned tech professional with 38+ years of experience helping organizations like BBC, Vodafone, and Salesforce streamline operations and improve online visibility. He's now focused on practical AI applications in business, education, and non-profit sectors. Danny volunteers for the Prince's Trust, supporting disadvantaged youth to start their own business. Follow Danny on Twitter.

Going forward, I am looking to make more of these videos - please let me know what you think in the comments, or by liking and sharing (assuming you like!).

If you want to watch or listen to my chat with Andy, it is here.

Once upon a time, the business model of war was straightforward.

You attacked some neighbouring realm, overpowered it, then plundered and taxed the conquered people.

The Vikings were great pioneers of the model, as was Ancient Rome: it worked for as long as the empire kept expanding and Rome kept winning wars. When the expansion stopped, Rome had to replace the plunder with some other form of income. That’s when the currency debasement started.

Often, but not always, the conquerors built infrastructure - buildings, roads or train lines (in the case of the British) - they stabilised the currency and introduced functioning bureaucracies, leading to the common argument that the conquerors actually improved things, which in many ways they did.

The business model didn’t always function well, especially if the fight was ideological or, more importantly, if you lost. Europe “came second” in the Crusades and the grand part of the bill fell to the lowly European tax-payer. The various tithes of Henry II, Richard I and John, for example - with the Saladin tithe being the most famous - have gone down in history as some of the most punitive taxes ever imposed. There were even cowardice taxes, “scutage”, for those who didn’t want to go to war.

On the other hand, the Catholic Church and the papacy, which, broadly speaking, initiated the expeditions, made extremely good by the whole affair: the church experienced an enormous increase in wealth and power, the papacy especially.

Something changed with the great wars of the twentieth century. The Nazis may have vigorously pursued the traditional business model of war - to overpower, plunder and then tax. But the Allies emerged victorious and Britain, in particular, did not enjoy the spoils of victory that were enjoyed after the wars of previous centuries. There was little plunder, loot and taxation. Instead, the cost of the war fell on the British citizen.

Taxation in 1947 was three times as high as it was in 1938. The cost of living doubled between 1938 and 1951 - put another way, the pound lost 50% of its purchasing power.

The US supplied Britain with all sorts of essentials during the war and then after the war provided all sorts of credit. But it would not accept pounds as repayment, instead demanding gold or dollars. It took Britain two generations - 60 years - to settle the debt. Germany, on the other hand, had its debt written off in 1953. The British were not rewarded for their sacrifice.

Today, the US’s enormous military-industrial complex has had its coffers tremendously enriched by its various wars in Vietnam, Iraq, Afghanistan and elsewhere, and through America’s role as world policeman. From defence contractors such as Lockheed Martin and Boeing to oil giants, such as Halliburton, which benefitted from lucrative contracts gained in the aftermath, billions have been made. But who actually foots the bill?

Broadly speaking, there hasn’t been the “traditional” plunder and taxation of the newly conquered territories in the wars that the US nominally won, and it lost quite a few others. Some of the cost has been covered by the “exorbitant privilege” of the US dollar and the ability the US has to print and loan. But probably the largest portion of the cost of war falls on the US citizen, paid for in taxes.

Roughly 12% of total US government spending (21% of federal spending) - so roughly 12% of everything an American pays in tax - will go on what the US disingenuously calls defence (I don’t recall any nation actually invading the US).

That same citizen will be the one hit to get hit if/when those debt chickens come home to roost.

With the enrichment of the military-industrial complex, and the worship of many of those who operate in it, there are many parallels between today’s US war business model and that of the Crusades. Some large organisations are enriched and empowered by it, others pay.

You might say the current model is unsustainable, which would be true. But that doesn’t mean it can’t go on for a long time. The Crusades went on for two hundred years.

And what about the current war in Ukraine? At first glance, I suggest Russia was hoping for a traditional plunder-and-tax affair with its invasion. But Ukraine has since attracted vast support, the original source of which is the western tax-payer. I guess we have a blend of the two models.

Thank you for reading The Flying Frisby. This post is public - please like and share.

West End gig alert!

This May, wearing my comedy hat, I’ll be coming back to Crazy Coqs in Brasserie Zedel for another night of “curious comedy songs”. That’s this May 7th. Please come if you’re in town. They are super nights.

AI and the Future

I recorded this 90-minute interview about AI the other day with Andy - super interesting - and it’s now available to free subscribers:

Gold

Interested in protecting your wealth in these extraordinary times? Then be sure to own some gold bullion. My current recommended bullion dealer is The Pure Gold Company, whether you are taking delivery or storing online. Premiums are low, quality of service is high. You can deal with a human being. I have an affiliation deals with them.

The Flying Frisby is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Jonathan Johnson, from recruitment company, Auxato, got in touch and asked me to write a piece for him, explaining how it is I got from being stand-up comic and voice actor to a renowned (his words) longstanding, financial writer for Money Week. I thought readers would like it and he kindly gave me permission to republish it here. The questions are Jonathan’s.

Stand-up comedy – what life skills did it teach you?

Stand-up comedy teaches you lots of things. How to stand on stage in front of a bunch of strangers. How to present yourself. How to entertain people. How to cope with pressure. How to deal with difficult situations and difficult people. How to think on your feet. Communication. Clarity.

These are all really useful life skills that you might call upon in any number of other situations. Everyone should go and be a stand-up for a bit.

But there is a lot more to being a stand-up than what you see on stage. Behind the scenes, every comic is running a small business. Every day you are trying to get gigs. You’re sending out emails, making phone calls, posting on social media, all with the aim of pushing your brand, getting noticed and getting better work. 

You’re running a diary. You’re invoicing for the gigs you have done. You’re chasing money from slow payers, while trying to extract money from the unsavoury promoters who are trying to wriggle out of paying you at all.

You are travelling up and down the country four, five, sometimes seven nights a week to places you have probably only ever heard of, meeting all sorts of different people. As a result comics often know the country as well as anyone - all the while trying to keep costs down so that you can exit the gig at a profit. 

On top of all of that, but most fundamental of all, you have got to write an act that people find funny. 

You learn so many skills doing comedy. Even if you are not destined for stardom, which most of us aren’t, the discipline still equips you for life. You just need to look at the many people who started out as comedians who have since gone on to achieve huge success in other fields, from Joe Rogan to Volodymyr Zelensky, to know there must be something in it.

Yet, if you’re a potential employer looking at someone’s CV and you see the word comedian, I bet that makes you less likely, rather than more likely, to call them in for an interview.

In fact, most comedians who decide they’ve done it for long enough and now want to try something else, find it near impossible to find employment because of the fact they have comedian on their CV. The only option for most is to set up another business. 

Please tell your friends on Twitter, Linked and Facebook about this really interesting article.

What a random hotchpotch of a career you have. How did it happen?

I’m now 53. The longest I’ve ever lasted in a “proper” job is three months. This was back in 1992, when I was 23. I used to get up every morning, get the tube into Leicester Square and then do 10am to 6.30pm in an office. I hated it. It was not that bad a job either, but I hated being stuck in an office all day with no fresh air and not owning my own time.

That’s not to say I’m not hard-working. I’m extremely hard-working. You just need to look at my output to see that. 

I would spend the next 15 years working occasionally as an actor, regularly as a voiceover (for some reason I always got more voiceover work than acting) and then, from 1997, as a comedian. All the while, I was trying to get stuff published - I wrote two novels and a million articles - but never with any success. I think I got one article in the Big Issue.

But by 2006, I had made a bit of money, some in property (by accident) and some from voiceovers: I had been, at various points, the voice of such eminent products as First Direct, Nintendo 64 and the National Lottery. My dad had made a bit of money, too. Between us, we were trying to figure out how to turn our bit of money into a lot of money; because we were trying to raise five million quid to bring Kisses on a Postcard into the West End. 

From what I was reading at the time, commodities and gold, especially, seemed to be the place to invest, particularly with all the growth that was taking place in China. There were all sorts of people talking about it. But how to meet them and talk to them, without having to pay them? A podcast …

What gave you the inspiration for the podcast interviews?

I always knew I’d be a good presenter, even though I’d never actually done it. I was good at hosting comedy clubs and other such stuff. I approached a mining PR company called Commodity Watch and suggested we start a podcast. They didn’t really understand what I was talking about, so I did it anyway and began interviewing all these various people I’d heard on the internet talking so wisely about stuff.

My very first interview was with the billionaire, Jim Rogers, who had run the Quantum Fund with George Soros. My next two were with noted silver analyst, David Morgan, and the gold expert, James Turk. 

I quickly learnt that you could secure interviews with people “above your station” quite easily, if they have something to promote, such as a book. A lot of the time people are happy to help out, even if they don’t have something to promote. To my surprise, there were far fewer walled gardens in the worlds of investment and commodities than in comedy and TV. People were much more open.

Subscribe to The Flying Frisby.

What brought about the job at Moneyweek?

One of the people I interviewed was Merryn Somerset Webb who, at the time, was editor at Money Week. “We need people like you to come and write for us,” she said. “Come into the office next week and meet Toby, the MD.”

So I did. Here I am, 17 years later and I am still writing the same weekly column, a column that has been popular and, in terms of longevity at least, successful. I’ve since published three books with a fourth on the way. I’ve written several documentaries, one of which was a huge internet sensation (even if I was never properly credited) and more besides. I think it’s fair to say that partnership with Moneyweek has worked - for them and me. 

But if I had sent my CV in to Merryn, all she would have seen was stand-up comedian, voiceover artist, occasional actor, Johnny-come-lately podcast host and unpublished novelist. I don’t think she would for a second have gone, “I need to get this bloke writing for us.” Pretty much any employer would have looked at my CV and passed it by.

I now have this ridiculously random hotchpotch career that I can’t begin to explain. I’m a financial writer, comedian, singer-songwriter, comedy music video maker, TV presenter and voiceover artist. A very nice chap who works in internet marketing and likes my output - but despairs at its lack of clarity - with whom I correspond frequently, put this graphic together to try and explain what I do.

What can we learn from that episode with Merryn?

Two things. One, I don’t believe there is any substitute for face-to-face meetings. Meeting someone in the flesh inspires trust in a way that not a million emails can.

(That, by the way, is, I think, why I never had stuff published. I just sent it in. I’m not even sure it got read. It’s much easier to ignore a letter or an email than someone in person).

Often it works in reverse too. You really admire someone online for whatever it is they’ve written or said, but then you meet them in person and realise this is not the type of person you should be listening too.

Second, when you meet someone through the medium of an interview for a podcast, rather than just a meeting, it’s like a heightened encounter. You get through so much more in an hour than you otherwise would.

Get to know anyone who hosts a regular podcast and you will see they are total mavens. How many people do Joe Rogan, Konstantin Kisin or Steven Bartlett know as a result of their podcasts? How powerful are their networks? They are super connected - and trusted. Any introductions they make will carry weight.

As it turns out, stand-up comedy was the ideal training ground for being a financial writer. In comedy, if the audience doesn’t understand you, they don’t laugh. If they don’t laugh, you die. Thus does the comedian quickly learn the vital discipline of clarity. 

You also learn that you have to entertain people if you want to keep their attention.

No such discipline exists in the world of financial journalism. Obfuscation is everywhere. It almost pays to be obfuscatory because then you can say, “Oh I didn’t mean that, I meant this.” 

Some of the broadsheet journalists - guys who regularly win Finance Journalist of the Year or whatever - are as dull as ditch water and about as clear. Half the time, you have no idea what it is they are droning on about. I barely make it past the first paragraph.

But do you know what? They probably got the job because their CV was right. 

Thank you for reading The Flying Frisby. Please like and share this post if you enjoyed it. .

Other stuff:

West Eng gig alert!

This May, wearing my comedy hat, I’ll be coming back to Crazy Coqs in Brasserie Zedel for another night of “curious comedy songs”. That’s this May 7th. Please come if you’re in town. They are super nights.

AI and the Future

I recorded this 90-minute interview about AI the other day with Andy - super interesting - and it’s now available to free subscribers:

Gold

Interested in protecting your wealth in these extraordinary times? Then be sure to own some gold bullion. My current recommended bullion dealer is The Pure Gold Company, whether you are taking delivery or storing online. Premiums are low, quality of service is high. You can deal with a human being. I have an affiliation deals with them.

Here is some more info about Auxato: At Auxato, we don’t just rely on your CV to get to know you. A key aspect of our approach to recruitment for our clients and candidates is the importance of building a long term relationship, learning about those skills that don’t make it onto a CV. Want to experience a different recruitment way? Get in touch with us today and start your journey.

A 90 minute interview about AI, the latest developments and the implications for our future with Andy.

Andy is an experienced technical architect and lifelong technologist, coder and hacker.

He designs systems that span security, finance, automation, IoT and proptech - and devotes a lot of his time to thinking about how technology will continue to transform our world.

I’ve seen it happen with so many niche commodities - potash, graphite, antimony, rare earth metals, cobalt, vanadium - and I am pretty sure it is happening again.

There is some substance you’ve barely heard of. Suddenly, it’s essential to some new technology which is going to save the earth in some way, but nobody’s producing it. 

Why is nobody producing it, if it’s so essential? Because prices are so low.

Prices then start going up, because everybody wants it and nobody’s producing it. 

Suddenly, a load of natural resource companies which aren’t going anywhere, especially in Canada and Australia, “change their focus” and “pivot” They start exploring for said commodity. Some of them acquire half-explored development projects and re-drill them.

Investment capital piles in. Some of the above companies actually make discoveries that start producing. Existing producers up their output.

Within a few years, there is a surplus of said commodity, where once there was a shortfall, and the price comes back down again. The bigger the previous rocket launch, the bigger the subsequent crash. 

Those companies that aren’t profitably producing hit the skids. Those that are have to tighten their belts. The bull market has morphed to bear.

Nothing fixes high commodity prices like high commodity prices runs the adage. 

If you can time these cycles well, you can make a great deal of money. But you can also lose a lot of money.

The bull market in an essential commodity bursts 

I think we are seeing one such turn right now in lithium. Perhaps even in the broader battery metal space. 

Fossil fuels are destroying the planet. Electric vehicles are the answer. But they need lots of lithium? Yes. Who makes lithium? I don’t know. But the price is going up. Quick, let’s invest in lithium. Let’s start a lithium company. Lithium is going to save us. Tesla can’t get enough lithium. Tesla’s going to buy a lithium company. Lithium, Tesla, EVs, Net Zero, Climate Change, BUBBLE!!!

Much as I love niche commodities for these repeating cycles they display, I’m afraid I missed the lithium bubble. I didn’t catch the early phases of the bull market when it had a good run in 2016 and 2017.

In 2018 and 2019 the lithium companies had a miserable time, and I felt somewhat vindicated. But after the Covid lows of 2020, they exploded - I missed that one too, as I was away with other commodities. 

I felt I was too late to join the party. I clicked my tongue as the price went up without me. I clicked my tongue even more as the bull market went on for longer than I thought it would . I then watched with a certain amount of confusion as the companies pulled back while the price of lithium carbonate kept on rising. That’s not normally a good sign.

In any case, now the price of lithium carbonate has stopped rising. In just a couple of months, it’s lost over 30% - having risen tenfold. 

Here’s the price action since 2017.

And here is the Global X Lithium ETF (NYSE:LIT) - the lithium companies - over the last ten years.

Supply up, demand down 

Lithium is not actually that hard to produce. Many of the problems are regulatory.  But there was a frenzied rush by electric vehicle makers to secure supply over the past two years, which sent lithium prices to the moon. 

Whoever could get producing first would win the race to secure contracts. The slower movers would suffer. 

Then late last year China announced it would halt subsidies for the $87 billion industry. 

Demand for electric vehicles dropped, just as lithium supply started coming on-stream. There is now a lot more supply on its way from China, Chile, Australia and North America and that is only going to send prices one way. Australian supply alone is set to rise by 32% this year.

Lithium giant Albemarle (ALB.N) has said the lower car sales are a “temporary weakness”, given the early Lunar New Year in China. I’m not buying it. 

As my buddy, asset manager Simon Catt of Arlington Capital, alerted me in an email yesterday, the AUD$12.5bn market cap, Aussie producer, Pilbara Lithium (ASX.PLS) announced last week that their latest shipment of 15,000 tonnes of 6% spodumene concentrate was unpriced. “UNPRICED! Hold the phone,” he cried.

Chinese battery giant CATL, the largest Chinese battery manufacturer, is selling its batteries at little more than cost to automakers. The discount includes an assumption that prices of lithium carbonate would fall by over 50%.

“Lithium - First Leg Lower”

Goldman Sachs just put out a report titled, “Lithium - First Leg Lower”, noting much of what I have just said and more. 

Chinese lithium demand is down 52% versus the three-month moving average, while production is unchanged. Prices “have more room to fall before spot demand recovers, in our view.” Goldman notes the end of subsidies, falling EV sales, falling spot prices, falling demand from EV battery production, and rising EV inventory putting a further dampener on demand and rising supply from China and Chile. 

It would seem the battery wheel is come full circle, if I may misquote the great man.

This is not the end of lithium demand, nor the end of the electric vehicle. Both will play an enormous part in our futures. But my hunch is that this is the end of a two-year bull market that saw lithium carbonate and spodumene up many times over. 

Supply can now meet demand. The market has solved the problem in the market. Now the market has another problem: falling prices. It will solve that too. And so the commodity cycle turns. 

West Eng gig alert! This May, wearing my comedy hat, I’ll be coming back to Crazy Coqs in Brasserie Zedel for another night of “curious comedy songs”. That’s this May 7th. Please come if you’re in town. They are super nights.

Interested in protecting your wealth in these extraordinary times? Then be sure to own some gold bullion. My current recommended bullion dealer is The Pure Gold Company, whether you are taking delivery or storing online. Premiums are low, quality of service is high. You can deal with a human being. I have an affiliation deals with them.

This article first appeared at Moneyweek.

Today I wanted to expand on a theme I have been writing about for a while: that the green energy revolution is anything but green. 

In fact, the amount of metal required and the amount of fossil fuel needed to be burnt to make it happen means it will be extraordinarily damaging to the environment, while unprecedented amounts of CO2 will be released into the atmosphere.

Moreover, unlike the inflation that resulted from Covid and the Ukraine war, which might yet prove temporary, Net Zero will produce inflation that will be prolonged and entrenched. 

In other words, Net Zero is not only deluded, but it will also be extremely damaging, both to the planet and to people’s lives.

Here we explain why - and what to do to protect your wealth.

How much more metal do we need to achieve Net Zero?

I stumbled across a super talk this week by Mark Mills, author and senior fellow at the Manhattan Institute, called "The Energy Transition Delusion: Inescapable Mineral Realities". 

He argues that the current energy transition to renewable is based on a flawed understanding of the resources required to make it happen. Most of the evidence cited here is cited from that talk.

Today the world gets a little under 4% of its total energy supply from wind and solar. That’s one-third as much energy as it gets from burning wood. I couldn’t believe that stat when I read it - are we still burning that much wood? - but that’s what the International Energy Agency (IEA) says. Wood still provides 350% more energy to the world than all the world's wind turbines and solar power combined.

To get to this 4% level the world has directly spent something like $5 trillion (more than double UK GDP) in the last 15 years, and probably the same amount again in indirect spending, says Mills. 

An electric vehicle requires 400% more metal than a conventional car. To build a machine to replace a gas turbine, you need 1,000% to 2,000% more mineral to deliver the same unit of power. To deliver the same mile of driving, the same hour of heat, the same hour of lighting or the same hour of computer time the extra minerals required amount to anything from 2,000% to 7,000%

Overall this amounts to an increase in mineral demand in the order of 700% to 4,000%. 

“Not to put too fine a hyperbolic a point on this,” says Mills, “this would be the largest single increase in demand or supply of metals in all of human history. It's never happened.”

Where is all this metal going to come from?

Mining cannot increase output whether by 700% or 4,000%, not in the next decade, nor in time for the Net Zero deadlines.

We are thinking in terms of kilowatt hours instead of in terms of tonnage - and tonnage is what’s required to get those kilowatt hours. Mills says, “It requires both the extraction and movement of a quantity of materials equal to or greater than the quantities of materials that humanity extracts and moves and grows for all other purposes combined. The world's not capable of doing that with the technologies that exist.”

Where is all this new metal going to come from? To take a mine from exploration and discovery to production takes 16 years. Even if you relax regulation (unlikely) and accelerate investment (not so easy) you are only at best going to shave a few years off that. 

To go out and explore for mines and develop them requires investment, which the industry has been starved of since 2011. What’s more, there’s no guarantee you will ever get a payback: exploration has a success rate of about one in a thousand. Let’s say you do discover something and start building a mine, what if commodity prices come down? You lose a lot more than your shirt.

Then there’s the political risk, whether from activists campaigning to get your mine closed (many mine plans in Chile, for example, which is supposed to be a mining hub, have lately been ditched because of such objection) or from governments seizing the produce. Burkina Faso's energy & mines ministry issued a statement on Tuesday saying it had "commandeered" 200kg of gold from Endeavour Mining’s operations for "public necessity". The company will be compensated for its value, the statement added without providing further detail. 

Mining is starved of finance yet “the mining industry needs to deliver new projects at a frequency and consistent level of financing never previously accomplished,” says energy research company Wood McKenzie. Currently, the world is not even investing 10% of what’s required. 

Then there is the issue of refining. This is a major geopolitical and strategic issue. China dominates refining. 40% of the global copper supply is refined there, 35% nickel, 65% cobalt, 87% rare earth, 58% lithium. 

Never mind the strategic questions of handing China that much power, how environmentally friendly do you think Chinese refining is going to be? Chinese coal production for power generation hit a record last year. 

What will happen to energy and metal prices in all of this? Currently metals prices are a whisper in the broader inflation clamour. A sustained increase in the price of metals and energy of 300% or 400% will push up overall inflation. There is only so much you can hide with subsidies. 

Now let’s look at another cost, the environmental cost.

As humans have extracted natural resources from the earth, they have become increasingly difficult to find and extract. A hundred years ago average copper grades were 4%. That is to say for every hundred tonnes of ore you process you might get four tonnes of copper. Today average grades have fallen to 1%. Other rarer metals require much more ore to be processed.

“A half tonne battery,” says Mills, “requires 250 tonnes of ore to be processed somewhere”.  

How the energy transition leads to pollution and climate change

To produce the materials needed to realise Net Zero “will see the world consume fuels and emit carbon dioxide at levels that are unprecedented in mining history”, says Mills. Just nuts.

Every time someone buys an electric vehicle (EV), they are essentially purchasing the previous consumption of 25 barrels of oil equivalent - half oil, half coal and natural gas. These hydrocarbons will have been burnt before even the first electron moves into its batteries on the road. 

By the time the electric vehicle first makes it to the parking space outside your home, it has already emitted 14 tons of CO2, compared to the 5 tonnes for the conventional vehicle. It’s not until the vehicle passes 60,000 miles that you end up with a net reduction. 

Humans require more and more energy as we grow more sophisticated. The Industrial Revolution increased energy demand. The automobile increased energy demand. The aeroplane increased energy demand. Computing increased energy demand. Drones and robots and AI are all going to increase energy demand.

Surely, the answer is not to turn our backs on fossil fuels. The focus should be on developing cleaner and more efficient fossil fuel technologies, as well as improving renewable technologies.

Unfortunately, the focus on renewable energy technologies has diverted attention and investment from the development of the cleaner and more efficient fossil fuel technologies we need.

How to invest in the Net Zero transition 

So how to play all this? Do you think Net Zero diktats are going to change? I don’t. Governments are too scared of the environmental lobby to change tack. 

The way to protect yourself, I’d say, is to be long energy and long commodities. The likes of BHP or Glencore at the safer end of the market to juniors at the riskier end.

However, what I have described above is not currently being displayed in energy and metals prices. 

Either the market has already digested and discounted the story, or it feels it is too far away to matter, or it thinks that governments will pivot, or it is not yet priced in. What do you think?

The case for a secular bull market in commodities remains strong.

If you are interested in natural resource companies, I cover them extensively. Please consider becoming a paid subscriber.

Interested in protecting your wealth in these extraordinary times? Then be sure to own some gold bullion. My current recommended bullion dealer is The Pure Gold Company, whether you are taking delivery or storing online. Premiums are low, quality of service is high. You can deal with a human being. I have an affiliation deals with them.

This article first appeared at Moneyweek.

The bitcoin price has been quietly moving up and, almost inevitably, I am getting messages from people asking how to buy it.

Bitcoin should make up a core part of your investment portfolio. Never mind the noise, the doubts, the FUD (fear, uncertainty and doubt), the “but I don’t understand how it works”, bitcoin is an incredible computational breakthrough with enormous implications for the world. It’s the most technologically brilliant form of money ever invented. My advice is to own a share of the pie - it is in limited supply.

So here, by popular demand, we outline the best ways to buy bitcoin in the UK and elsewhere.

This is a reversion of an article I put together for paid subscribers last year, but I am making it available to one and all.

I wrote the first (and many say the best - who am I to disagree?) book on bitcoin from a recognised publisher back in 2014. So I know a thing or two about it.

“A great account. Read it and glimpse into the future,” said Richard Branson. Though it’s not clear he actually read it.

When he was Chancellor, Rishi Sunak, like George Osborne before him, gave it the big one about turning the UK into a hub for cryptocurrencies and the industries of the future, but these are just words. In practice, the UK regulator, the Financial Conduct Authority (FCA), has made life very difficult for the UK investor who is interested in cryptocurrencies. It has banned the sale of crypto derivatives and exchange traded notes to retail investors, which means traditional brokers are out, and it it has made sending money from a bank to a crypto exchange very problematic.

Fear not. The guide will explain all.

My first dollop of advice is this: before putting any significant sums to work, research as much as you can. Read about bitcoin, listen to podcasts and, above all, try out the tech. Buy small amounts, get a friend to do the same, and practice sending small amounts of money to each other. When you have got the hang of things, then you can invest more significant sums.

Bitcoin’s repeating cycle

Bitcoin seems to go through four phases with every cycle - and these cycles repeat.

* There’s the Quiet Accumulation. Few outside of the bubble of ardent bitcoiners take notice, as it discreetly creeps up. 

* The Frenzy and Blow-Off Top. The price rises accelerate. There is a rush to buy. The media is all over it. Everyone on social media is crowing. There’s a huge row about whether bitcoin is in a bubble or not. I get invited onto the BBC to talk about it. You get a phonecall from your mate’s nan asking how to buy it. Dean from up the flats starts holding court in the cafe about irresponsible monetary policy at the Federal Reserve. Bitcoin has one of its blow-off tops. See 2013, 2016 and 2021 for more details.

* The Monster Correction. Bitcoin loses over 50% of its value. Economists who missed the boat go on telly and declare they were right, ignoring the fact that the price to which bitcoin corrected to is several hundred percent above where the quiet accumulation phase began. Earlier in bitcoin’s evolution these corrections could be 90% or more. Now they have “scaled back” to more like 80%.

* The Frustrating Consolidation. Bitcoin goes into a period of range trading, consolidating the gains of the previous bull market. This is a period of relative quiet, at least by bitcoin standards. There are rallies that get many excited, we might even be seeing one of those now, but they prove to be false dawns. Investors get frustrated by the grinding action. The media loses interest. Many forget about it, and so we gradually drift into another Quiet Accumulation phase.

We have just had a classic-of-the-genre Monster Correction, during which bitcoin lost 80% of its value, going from around $68,000 back to just under $16,000.

Since December it has been quietly rallying and today we sit around $23,000.

It might go back and re-test $16,000. It could fall another 80%. Then again it could go up and up and up from here.

The best time to accumulate is during the Frustrating Consolidation or the Quiet Accumulation phase, and I suggest that is where we are now. Somewhere in stage 3 or 4 of the cycle.

There are many who dismissed it late last year as it fell to $16,000. I take the other side. Given the spate of bankruptcies, the Sam Bankman-Fried saga and more, I think it’s pretty amazing that it didn’t go lower.

The best ways to buy bitcoin

There are three ways to get hold of bitcoin: you can earn it, you can buy it or you can mine it. I suppose you can steal it as well. But that’s not something we cover here. Or anywhere.

Forget mining for now. Bitcoin mining is beyond the scope of this article.

Earning bitcoin is simple. All you need is a wallet. As long as the buyer of whatever product or service you are selling is happy to pay you in bitcoin, you just send them your wallet address, instead of your bank details, and they can pay you in bitcoin, just as they would any other form of money.

There are countless wallet providers. I like Exodus, because it works on both your phone and your desktop, and Muun, because the interchange between bitcoin and the lightning network is very user-friendly.

Follow the instructions they give you to get started. They have videos to help you. Keep a note of your seed phrase and store it somewhere safe. Put aside an hour to have a play, and familiarise yourself with how it works.

So that’s how to earn bitcoin. What about buying it?

To buy bitcoin, you need to go through an exchange - the equivalent of a broker or bureau de change.

The best exchanges to buy bitcoin

There are so many exchanges now, and they all have their pros, cons and idiosyncrasies. The best for UK investors are probably any of Coincorner, Gemini, Kraken, Binance, Bitfinex, CEX.Io, Bitstamp, Poloniex, Bittrex and eToro. The one I use the most is Coin Corner. I have an affiliate deal with them.

Opening an account with an exchange is a bit tiresome with all the ID checks, but it has to be done – broadly speaking, the more you want to buy, the more paperwork you have to fill in. And do make sure you set up 2 or 3FA. Most exchanges insist on it.

Kraken, Bitfinex and Binance seem to have the cheapest commissions, but they are badly lacking in customer service and, if something goes wrong, you won’t get much help. Also - don’t buy off the front page. You will end up paying higher commission. Buy through the trading apps using a limit order. Commission rates are lower there for some reason. I guess it’s a way of snaring newbies.

As I say, the one I use the most is Coin Corner. You can’t buy sh*tcoins with them. It’s good to have this temptation removed.

Easier options for small amounts include Bittylicious or even bitcoin ATMs (but both their commissions and spreads are vast).

Revolut makes it easy to buy bitcoin (and easy to open an account), but you can’t then move your bitcoins elsewhere. You can only sell back to Revolut, which is somewhat besides the point. But it also means Revolut solves the storage problem for you, though I wonder, for reasons explained here, how much protection you’ll have if they get hacked.

Advanced users and purists will prefer the decentralised exchanges, but we will leave those for another day.

Sending money to an exchange

Once you have your account set up, you’ll experience the delights of sending money to your exchange via a bank. You might end up having to make a phone call to the bank at this point (and you’ll wait a while; banks’ response times have become very slow). The FCA-registered exchanges, such as Gemini, tend to be the easiest in this regard. (You can use a debit cards with CoinCorner and most of the others).

I got so frustrated with HSBC blocking my transfers to crypto exchanges, that I switched bank to “challenger bank” Starling. Starling were fine at first, but now they have changed their rules. Conducting some research on Twitter, Barclays and Natwest are hopeless. HSBC, Halifax, Nationwide, Santander and Lloyds might let you after a few phonecalls. Revolut and Monzo are ok.

In order to use crypto exchanges and send “significant” sums of money, my advice is to open an account with Monzo or Revolut. Send your money from your normal bank to them, then from them to the crypto exchange. (But a word of warning: don’t leave large amounts of money for long periods with Revolut. I have heard some nightmare fraud stories).

To open an account, have your passport to hand and it can be done on your phone, simply, in just a few minutes. This seems a long-winded way of doing things, but it works.

Send however much you want to spend on bitcoin to your Monzo account, and then from Monzo send it to an exchange.

Share this post with anyone you know who might want to buy bitcoin.

Other ways to get exposure to the bitcoin price

If you’d still prefer some sort of listed option, there are various options, even to UK investors. Not as good as the real thing in my view, and during this bear market they have been very weak, much weaker than bitcoin.

There is Microstrategy (Nasdaq: MSTR) which has become something of a proxy for bitcoin as it owns so much. Coinbase (Nasdaq:COIN) is another option. London has a listed bitcoin miner, Argo Blockchain (LSE: ARB), and both Vaneck and Han have crypto-related ETFs.

And if, after all that, you prefer gold, my guide to buying gold is here.

Please subscribe to this esteemed publication.

Disclaimer: I am not regulated by the FCA or any other body as a financial advisor, so anything you read above does not constitute regulated financial advice. It is an expression of opinion only. Crypto is a famously risky sector so please do your own due diligence and if in any doubt consult with a financial advisor. Markets go down as well as up. Especially crypto. I do not know your personal financial circumstances, only you do, but never speculate with money you can’t afford to lose.

A few weeks ago, an Irish friend of mine was contacted by the Irish Postal service. A package had arrived for her from abroad, but there were a couple of euros and change of duties to be paid. This had happened to her before - she buys a lot of stuff on the internet, clothes especially - and she duly got out her debit card and paid up.

A week or so later, she was sitting in a meeting, when she started getting updates from Revolut notifying her that money was being sent from her account to Binance, the crypto exchange. 

She doesn’t have an account with Binance.

She contacted Revolut and then found money had also been sent to the crypto exchanges Kraken and Coinbase, and then, of all places, to Deliveroo. The perpetrator was ordering dinner.

She thought she had frozen her account, but it seems Revolut had already done this ten minutes earlier - their fraud detection system had been triggered and the customer alerted.

The Revolut rep advised her that the transfers had not been completed yet, that they would be halted and that in a few days the money would be returned. My friend calmed down.

The following day, however, she saw that the transfers had gone through. She got in touch with Revolut again. Only this time the rep told her that yesterday’s rep had given her the wrong advice. Those payments could not have been halted and the money would not be returned.

After several days’ back and forth, Revolut then confirmed that the money was gone and that they would not be refunding it to her. If she had any complaints she should take it up with the police. 

In total, she had around 7,000 euros stolen from her account. Someone had stolen her debit card details, most likely that person supposedly from the Irish postal service, and that is how the fraud was perpetrated.

She reported it to the Gardai (the Irish police), spending several fruitless hours on several different occasions at the station, where notes were taken on bits of paper (not digitally) and she was given titbits of advice such as, “ah, well, you don’t know what’s going on with them foreign banks.” 

There was one detective, apparently, who was helpful, but, apart from that, fruitless. They then told her to speak to the financial ombudsman, which she did, to be told that it was too close to Christmas and she should try again in the new year. She would eventually be given the run around by the ombudsman as well.

She asked another of her banks what they did in this situation, and they suggested she try and find a solicitor. But this, it seems, was hard too. Most specialise in defending organisations against fraud, but few act for individuals, she says, and certainly not in her price bracket.

She then started getting repeated calls from another company - a Florida number, but based in Israel - asking her for €1,000 upfront to recover the money, which they say there is a “good chance” of doing.

Eventually, she got in touch with me to see if I could help. The whole story seemed extraordinary. I read the conversations she had had with the Revolut representative telling her not to worry. I couldn’t believe Revolut then saying she had no protection, when she was clearly the victim of a debit card fraud. Surely, even with Revolut’s non-banking status, it has to abide with EU customer protection laws, doesn’t it?

I’ve had money stolen from my account, when I lost my debit card. Whoever found it went on a shopping spree round the supermarkets of South London. I had to fight to get the money back, and go through endless phone calls and form filling - and even then HSBC “forgot” to re-instate the stolen funds - but I did eventually get the money. 

I’ve never had such problems with credit cards, which is why I prefer them to debit cards. But even with HSBC’s delaying tactics, I never got a flat refusal in the way that my friend was given by Revolut.

The ability to hold numerous different currencies in Revolut, the ease with which you can send and receive money internationally and indeed send to crypto exchanges, where many traditional banks will block transfers, make it a tempting option. But the convenience it offers seems to come at a cost and that cost is the safety of your money.

I got in touch with Revolut here in the UK saying I was writing a story about this and I wanted to hear Revolut’s side. Revolut replied straight away. I spoke to their representative, who was extremely helpful (he doesn’t want his name mentioned here).

He recognised that I was working to a deadline, looked straight into the case and then came back to me a couple of days later with a resolution. “The experience of [unnamed] fell well below our high customer support standards and we’re sorry for the distress this caused her,” he said. “We have reimbursed her stolen funds in full as a gesture of goodwill.”

I’m not sure my friend’s experience would have been the same had she not had a friend who is a financial journalist, but I have to commend Revolut and this employee in particular for the way he acted as soon as I came banging on the door. 

He also had this to say: “Criminals use increasingly sophisticated techniques to steal your details and your money. If you receive an SMS message from any person or business, be on guard, particularly if the message asks for your details or includes a link or number. Do not share authorisation codes or passwords with anyone, ever, even if they claim to be from Revolut.”

And, there, I suppose is the moral of this tale. Debit and credit card fraud is rampant, and its perpetrators are a lot more wised up than most ordinary consumers - than you or me, in other words. 

I’m not a writer who specialises in this kind of consumer finance, but I would also add that my experience is that you seem to get more protection from credit cards than debit cards, so use them. Use 2 factor authentication wherever possible. Have your payment notifications switched on, so that every time there is a transaction you get notified. That way less will slip by you. Cyber crime is everywhere.

Revolut also added: “If you think your card details may have been compromised, freeze your Revolut cards immediately in the app by tapping “freeze” on each of your cards and report the fraud to Revolut immediately by contacting a customer support agent via the in-app chat.” That’s exactly what my Irish friend did though!

My eldest daughter is about to go on a backpacking trip. She has a Revolut account - she likes Revolut - and she’ll be taking a Revolut debit card with her. But she will keep her core funds in another account, for which she won’t have a debit card with her, thereby leaving it less vulnerable. She’ll only transfer money to Revolut when she needs it. It may seem long-winded, but it adds a layer of protection. 

Thank you for reading this. Be sure to check out my recent piece on the Great Decline, if you have’t already. It as caught a real nerve. And be sure to check out Dr John’s latest: My Top 5 Investment Trusts to Own for the Next 20 Years. You do not want to miss that.

If you’re buying gold, my current recommended bullion dealer in the UK is The Pure Gold Company, whether you are taking delivery or storing online. Premiums are low, quality of service is high. You can deal with a human being. I have an affiliation deal with them.

If you’re buying bitcoin, be sure to read my special report.

And make your Number One resolution for 2023 to listen to Kisses on a Postcard.

This article first appeared at Moneyweek.

IMPORTANT: somebody has been impersonating me on here and asking readers to message them on WhatsApp. Obviously it is not me. Don’t engage. Stop engaging and block, if you have started. And DON’T send any money.

It’s a question that comes up a lot. In fact, a friend was asking me just this week, so let’s try and resolve it here and now, once and for all: gold or silver - which should you buy?

Full disclosure: in my own portfolio at one stage I was geared as much as 70% towards silver and 30% towards gold. But in 2011, when silver went to $50, I rolled into gold and never went back. My physical allocation is now probably something like 90% gold and 10% silver.

(For clarity’s sake: we are not talking about mining companies - these are a different kettle of fish altogether - just physical metal).

Make no mistake: silver has a great deal more potential than gold. There is every possibility that the silver price could triple or quadruple from today’s price just below $30/oz. It could even go to $200. But my experience of 20 years investing in silver is that if it can find a way of disappointing, it will. The out-and-out silver bugs all scream manipulation, and maybe the silver market is manipulated and repressed. For sure, if all the longs on the futures exchanges were to hold out for delivery, the silver price would go shooting up. There is not the physical supply to deliver on all the contracts. That applies to many commodities, though none, it seems, consistently to the same extent as silver. But why invest in something if forces stronger than you are repressing it?

It is unlikely, meanwhile, that gold will triple or quadruple from today’s price of $2,300/oz unless we enter into some kind of currency crisis or extreme inflation.

Then again, the silver price could easily halve from $30/oz. I don’t think a 50% correction in gold is likely, outside of some deflationary financial panic or liquidity crisis such as we saw with COVID in 2020. In any case, any such correction would be temporary.

Reasons to Buy Silver

My friend was told to buy silver because the silver-to-gold ratio at 80 is high and should come lower. Let’s consider that argument.

There is 15 times as much silver in the earth’s crust as there is gold, and throughout all of history, the monetary ratio between the two reflected natural supply. Fifteen silver coins got you a gold coin.

But silver stopped being used as money in the late 19th century. The many gold rushes of the period increased gold supply so that most countries around the world followed Britain’s model and adopted pure gold standards (more on this here). By 1900, China was the only major country in the world on a bi-metallic standard, which included silver. Every other nation was on gold.

In my lifetime, the silver-to-gold ratio has only once gone back to its natural levels of 15, and that was in 1980 for an afternoon, when the Hunt brothers’ attempt to corner the silver market reached its climax. The reality is that the silver-to-gold ratio has been gradually getting higher for a generation now, averaging between 50 and 85, though going above or below those levels at times of market extremity. In 2020, it went to 125.

Reality check - this is a long-term uptrend.

I accept that the silver-to-gold ratio “should” be 15. In fact, perhaps it should be even lower because silver gets consumed, while gold does not. But in practice, I don’t think that ratio will ever go to 15 in my lifetime, certainly not for any extended period.

The other argument that my friend was given to buy silver instead of gold was that silver has many industrial uses. This is indeed the case. It has many more than gold, even if gold’s biggest source of demand is jewellery. (More on gold’s industrial uses here).

Gold’s use throughout history has been to store or display wealth. Silver’s has been to exchange it. Silver no longer has that use, nor is it likely to. We don’t use metal as a medium of exchange anymore, nor are we likely to. Money is digital.

Gold is the store of value, not silver, which is expensive and bulky to store. Gold is the constant.

We don’t buy gold to become millionaires. We buy gold to protect the value of what we have already earned. Gold will continue to do that. Silver might not.

Silver is much more speculative. It has the potential to earn you more money than gold, but it also has the potential to lose you more than gold.

Why not own a bit of both?

Where to buy gold or silver?

I’ve used many bullion dealers over the years. The dealer I like most, and with whom I have an affiliation deal, is the Pure Gold Company. Premiums are low. Quality of service is high. You get to deal with a human being. You can take delivery of your gold or store it online with them in their vaults. They deliver to the UK, US, Canada and Europe. (If you speak to them, tell them I sent you). I also like Goldcore.

Why are you buying gold or silver?

Are you buying precious metals because you think fiat money is going to collapse and, in this hyper-inflationary scenario, you’re suddenly going to become a multimillionaire, sweeping up assets at bargain basement prices because you own precious metals?

Or are you buying them because you think the purchasing power of fiat will continue to erode over the next 10 or 20 years and you want to protect what you have?

If your purpose is speculation and you want to get rich, then maybe silver or silver options are a way to do that, or silver mining companies, or even gold mining companies or cryptocurrencies. Maybe even silver itself. But they are all also means to get poor.

But if your purpose is simply to protect what you have earned, then gold is the way.

There is a definite case for both. But understand why you are buying the metal and be truthful with yourself as to why you’re buying it. That will give you the answer between gold and silver.

In the end, I recommended my friend buy 75% gold and 25% silver. I have to say, at $30, the silver price looks a bit frothy to me and it could correct. My ambivalence towards silver is long-standing.

But I don’t think my friend is going to listen to me. I think he’s gone 100% gold and that makes a lot of sense.

If your purpose is protection, insurance, and safety, then gold is the way.

If your purpose is speculation and something more aggressive, then silver.

My Biggest Silver Position

On the subject of silver mining, I thought I should give you a quick update on the silver company that represents one of my largest mining positions and certainly my largest position in a silver mining company.

Something is very wrong with my country. Something big and something bad. 

We can all feel it, though we might not agree on what is actually wrong. 

The great institutions of state are falling apart. Mighty institutions that I grew up trusting for their integrity, respected around the world, seem to be crumbling amidst incompetence, incoherence, corruption and more.

The government, essentially unelected, is unpopular and ineffectual. Not that a properly elected government would make much difference. Sir Humphrey and the Blob still seem to run everything. The system seems set up to look after the system, rather than its people. The opportunities for change and reform that were first, Brexit, then Boris Johnson’s sweeping 2019 election win, have been squandered. The government is unable to carry out even its most basic function, which is to defend the borders.

The Bank of England has for many years been destroying the value of money. Inflation, which apparently was unforeseeable, is now at 9%. And that’s just official inflation – we all know actual inflation is higher. The Bank’s monetary policies, together with planning laws, have given us an intergenerational wealth divide which means anyone born after about 1985 can’t afford anywhere to live. They delay starting families as a result, and they have smaller families, with the long-term consequence that the local population is eroded away. This then gives rise to the argument that, as locals aren’t reproducing, we “need” immigration.

I can’t remember trust in the police, who seem more concerned with online wrong-think than violent crime, ever having been so low. I wrote that sentence before the David Carrick scandal. The courts are overwhelmed and the court system is both expensive and antiquated. The legal system is manipulated and exploited, only affordable to the very rich or very poor. The penal system is inadequate. 

Google “NHS and news”, if you want to see what state healthcare is in. Radical progressive ideology has enveloped education. Even the armed forces have been afflicted by it. Universities are overpriced and increasingly irrelevant to the modern work environment. 

The BBC, the national broadcaster, is loathed for its bias, and its output is, for the most part, crap. Luxury green ideology has left us with sky-high energy prices. Royal Mail only occasionally delivers - I’m still getting Christmas cards now. The trains are useless and expensive. Who knows how well the civil service is doing? It’s opaque. 

The electoral process has become meaningless. You get the same blob whoever you vote for. Representative democracy is neither representative nor democratic.

I could go on. You get the point.

Everywhere that is not functioning involves (or has involved in its recent history) the heavy hand of the state. You could look at, say, shops, tech, restaurants or media – areas where the state is less involved – and user dissatisfaction levels are not comparable. Airports actually ran better when the border force went on strike. It’s as though the state is inherently incompetent. Why there aren’t more libertarians, I’ll never understand. 

Meanwhile, all of these institutions are costing a fortune. Spending on most is at all-time highs. By the time you factor in inflation (which is a stealth tax - even the Chancellor recently admitted as much), taxation levels are comfortably in excess of 50%. That is to say: more than half of everything you earn is taken from you by the state to pay for stuff that doesn’t work. 

That’s before we get to the tax on the future which is debt and deficit spending.

And then there’s the waste. Here is just one example:

Imagine how much better off we’d all be, if citizens, rather than the government, could choose where to allocate the money they earn. You spend your money better than they do.

Culture wars and mass migration

It’s not just crumbling institutions and state overreach. They call it the Culture Wars, but we are in the midst of a religious war, an ideological struggle. What Elon Musk calls “the woke mind virus” – an aggressive, radically progressive ideology born out of an obsession with identity politics – has taken over, especially within institutions and education, and is wreaking havoc. 

From male rapists being put into women’s prisons to expensive green initiatives that actually damage the environment to a pandemic of cancel culture. Again, I could go on. I don’t need to spell it out here. You know what I’m talking about. 

Small government and libertarianism solves this too, by the way. The virus would not be able to survive and spread without the oxygen of public money.

Meanwhile, the demography of the country has changed, and as a result, so has its identity (though few have yet realised that). Last year, 1.1 million people migrated to this country –  that’s just the ones who were granted visas. There are plenty more that weren’t. In effect, roughly one in every 65 people you meet in this country only came here last year.  

The London of the 1970s that I grew up in has vanished. The archetypical Londoner used to be the Cockney – the white working-class man or woman born within the sound of Bow Bells. Today the Cockney, once such an instantly recognisable English type and one that has had an incredible influence on Britain, barely exists. They’ve all gone. Almost every other UK city is on a similar journey to indigenous British white minority.

As the song goes, “you don’t know what you’ve got till it’s gone”. Whatever we had has gone and we will never get it back. 

It’s not just the UK. It’s the whole of Western Europe, and probably much of North America too. My German friend jokes that Buenos Aires will be the last European city. 

On which note, it was incredible to watch the World Cup Final between Argentina and France. By the time the game ended and the substitutions had been made, it was, essentially, a match between Africans from Europe and Europeans from South America. 

I am not “anti-migration”, by the way. If anything, I am pro it. In my National Anthem of Libertaria I argue for free movement. The mass movement of people is an inevitable tide in the affairs of men. People have always moved, and always will. But I also view conserving our culture, identity and communities as paramount, and the state is failing to do that.  If such things were not state responsibility, but locals’, and people were empowered by lower taxes and the greater responsibility that comes with a smaller state, the outcome would be different.

Mass migration is inevitable. People think it’s going to decrease. It’s not. It’s going to increase. There are more people in the world than ever before and – whether it’s those displaced by war, by lack of water, by poverty, hunger or (probably the primary factor) lack of opportunity – more and more of them are on the move. Because of modern communications, more of them are aware of better lives to be had elsewhere. Because of modern travel, more of them are able to travel further and faster than ever before. As a result, we are in a migration of people of historically unprecedented proportions. It’s only going to increase.

Terrified of being labelled racist, Western governments have no coherent philosophy, let alone an actionable strategy, to deal with it all. Especially as both the public and the media have lost sight of the difference between what is legal immigration, what is illegal and what is asylum. Moreover, it has become impossible for all the shouting “racist” to have a grown up conversation about how much immigration we actually want - 100,000 a year? 500,000? Net zero? How pertinent is the Douglas Murray title: The Strange Death of Europe.

The world is changing fast. For good or for bad, the Britain we once knew has left Middle Earth. I don’t think anyone voted for it. I don’t see many leaders trying to stop it. 

Locals who have paid taxes all their life and now receive inadequate services, or see that tax money being spent on these new Britons, while they go overlooked, not unreasonably feel betrayed, angry, frightened and more. 

Accountable local government with local borders might be better able to act on the wishes of its people, and defend against this sudden influx that is disrupting so many communities – if so desired. But that is not possible with Britain’s remote, centralised, unaccountable state. Given its record elsewhere, when the state is in charge of borders, why should it be any surprise they don’t function properly?

A genuinely free market-driven economy might be happy with open borders and quickly able to adapt – more people to sell products to, a greater choice of people to employ – what’s not to like? 

But the state systems – schools, hospitals, transport infrastructure – cannot cope. As Milton Friedman observed, you cannot have open borders and an expansive and benevolent welfare state. You can have one or the other, but not both. Yet currently, both is what we have (or are attempting to have). That’s why everything is falling apart. In effect, we are paying for ourselves to be colonised.

Maybe it’s multi-culturalism and expansive state welfare that are incompatible: the latter may only properly function in more mono-cultural societies, such as Japan.

(Similar arguments can be made about crime levels. They tend to be lower in mostly mono-cultural cities, especially in Asia, to those in the the more multi-cultural west).

Whether it’s Hull, Skegness, Mansfield or any other provincial town, when boatloads of young men from different cultures, with no instinctive loyalty to the UK or its ways (and sometimes a contempt for it), are dumped in a community and the community is given no say in the matter, and locals have no power to resist, any anger felt is pretty understandable. There are incidents when the young men are put up in four or five-star hotels, while there are locals, homeless, in tents outside. It is not what people want, nor what they voted for. As I say, representative democracy is neither representative, nor democratic. The model is broken.

Brave New World, digital nomad-ery, robot takeover — or something worse?

Finally, there are incredible developments in technology: the new worlds being designed for us by nameless, and, in many cases, slightly autistic coders in far away places, the extraordinary expansion of surveillance and the erosion of privacy. Those who have monitored ChatGPT will know that before long as much as half of the content on the internet will be generated by bots. But they are not neutral - they are politically biased. What are the implications of that and the extraordinary influence these nameless coders will have to shape the global narrative?

Never mind whose fault this all is, or the rights and wrongs of it all. We all have our ideas. Plenty of them.  What I want to know is: where is this all going? I’ve been thinking about it a lot.

Many draw parallels with the Fall of Rome and the invading barbarians at the gates. Others say we are headed into totalitarianism akin to George Orwell’s 1984. Many of my Eastern European friends think we are making the same mistakes they once made and headed into some kind of 21st century Marxism. My Venezuelan friends think the same. Some see a new rise of fascism akin to the 1930s.

Some look to Isaac Asimov and the rise of intelligent machines (see my piece on ChatGPT, if you want to know just how advanced machine learning is now). 

My genius bitcoin billionaire mate, who has long since disappeared somewhere remote in New Zealand, thinks we are going into a world where everybody is housed in Butlins/CentreParks/Club Med (depending on your socio-economic status)-type holiday resorts, with virtual reality headsets on all day, while robots do all the work. That vision tallies somewhat with Aldous Huxley’s Brave New World.

Another compelling scenario comes in James Dale Davidson and Lord William Rees-Mogg’s, in which they describe a two-tiered society. On one tier, thanks to advances in technology and communication, there will be a class of largely untaxed digital nomads, travelling from place to place, operating independently of nation states and government structures. Meanwhile, there will be a much larger class of people trapped in their nations, working in the physical economy (rather than the stateless digital one), heavily taxed and indebted. 

Hard-money advocates argue that some kind of hyperinflation and the destruction of fiat money is inevitable, or that, with the emergence of the Shanghai Cooperation Organisation, the US dollar is soon to lose its reserve currency status, with major implications for the international balance of power. In that case Western Europe is probably going the way of once-wealthy Argentina.

“Great Reset” theory, in the wake of Covid and the vaccine furore - that powerful, yet secret actors and organisations, especially the WEF, are planning all of this - looks rather more credible than it once did.

There is also a persuasive argument that the expansion of NATO, Vladimir Putin’s ambitions and the conflict in Ukraine is going to take us eventually to nuclear war. 

There is a lot to worry about. These really are incredible times.

So back to the underlying question: where is this all going?

The South Africanisation of everything

I was in the pub with my friend, the director Alex McCarron, the other night, when this subject came up. He had a simple but compelling answer: South Africa. The South Africanisation of Everything.

There are many parallels: crumbling institutions, widespread corruption, mass migration; failing rule of law, rising crime rates – especially violent crime; inadequate policing and reliance on private security; identity politics, siloed, ghetto-ised communities within a so-called multi-cultural country; race-based crime, justified because of history; many cultures, each with their grievances, thrust together and by no means living harmoniously. 

It’s a credible scenario and one I can envisage. One small example: private security vehicles are ubiquitous in Johannesburg. You never used to see them in the UK. My friend sent me this image, spotted this in Notting Hill the other evening. I think such sights are going to get more and more become commonplace. It’s another symptom of a failing state.

My view is that we are going to see all of those above scenarios. 

Nevertheless … things are better than we realise

In all of this negativity, in many ways, things are much better than we may think and the world is in a better state than it has ever been. We are living longer than ever. There are fewer people living below the poverty line than ever. The number of people dying from natural disasters is lower than it has ever been. Information technology means we have greater access to information than ever. 6.8 billion people now have a smart phone - think of all the possibilities that open up as a result. More than 80% of the global population now has access to electricity. With modern transport we are able to go further than ever, quicker than ever. The world is, as a result, more accessible than ever. We might not enjoy her status, but most of us live with luxuries Marie Antoinette could never have dreamed of. Life is so much easier for us than it was for our ancestors and we should be grateful to them for the benefits we enjoy, as a result of what they went through. Wonderful things are possible. There is much to be positive and excited about. There has never been a better time to be alive.

But something is missing. Something is wrong. We can all feel it.

Our belief systems are awry. I am sure it’s to do with the absence of religion. Naive worship of incompetent state institutions has replaced it.

Am I right about this? Please post your thoughts in the comments below.

And how do you navigate it all, as an investor, and protect/grow your wealth?

Gold and bitcoin are the obvious “anti-state” choices.

Please share this article on Twitter, Facebook etc (if you liked it).

Meanwhile, if you want to listen to Alex and I discuss the South Africanisation of everything – that podcast is here.

Interested in protecting your wealth in these extraordinary times? Then be sure to own some gold bullion. My current recommended bullion dealer is The Pure Gold Company, whether you are taking delivery or storing online. Premiums are low, quality of service is high. You can deal with a human being. I have an affiliation deals with them.

My guide to buying bitcoin is here.

Make your Number One resolution for 2023 to listen to Kisses on a Postcard.

The Flying Frisby is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

There has been a discernible change in the narrative over the past few weeks regarding Covid-19 vaccines.

From the Andrew Bridgen affair and questions in the House of Commons regarding the unusually high seasonal death rates to the publicity that came with “Novacc” Djokovic winning the Australian Open, to the sudden collapse of Thailand’s Princess Bajrakitiyabha, daughter of the King, and the resulting (likely fabricated) story that Thailand is nullifying its Pfizer contracts, the powers-that-be - and I’m still not sure who they actually are - seem to have lost control of the narrative.

The take-up of boosters was low and there is now widespread doubt amongst those who had the vaccine that they did the right thing, while there is both pride and vindication amongst those who didn’t.

In a world awash with both censorship and misinformation (which is worse? - there is another thing I’m not sure about), it is difficult to know who or what to believe.

We do, however, have price. 

There is a truth to price. Price, like the truth, can change every day, many times per day, but the price of something, or should I say the price of a publicly traded asset, reflects all the available information about that asset at any given moment. In that respect, there is a truth to price.

The price of Brent Crude Oil, currently $84, reflects all the available information there is about current and future oil supply, current and future demand, current and future government policy, net zero, global risk appetite and more. 

All the information, opinion, and research, the truths, the half-truths and the lies, the ideals and the realities - everything is distilled into those two digits: 84 dollars.

And so today, with all this in mind, I thought it would be informative to ask - how are the vaccine stocks doing? How’re they are doing might tell us about the vaccine narrative itself.

Covid-19 vaccine stocks 

The main vaccine stocks are as follows: 

* Pfizer (NYSE: PFE) - although not a “pure” play (its share price is determined by the success or failure of many of its products and patents), it did bring the world’s most famous and controversial vaccine to market. 

* Biotechnology company BioNTech (NASDAQ: BNTX), which teamed with Pfizer to produce its vaccine, can be seen as much more of a “vaccine bellwether” stock. Its messenger RNA (mRNA) technology was critical to the Pfizer vaccine.

* Moderna (NASDAQ: MRNA). The ticker’s on brand! Moderna was quick in the wake of Pfizer and BioNTech to win a US EUA for its vaccine. Unlike Pfizer and BioNTech, it doesn’t have to split profits. It’s also a ‘pure play”, so a good bellwether.

* Johnson & Johnson's (NYSE: JNJ) sold its vaccine at cost during the pandemic and it is so diversified with numerous other products that we can probably discount it as a vaccine bellwether. Still, we can include it on the list as it is a key player.

* Likewise AstraZeneca (LON: AZN) -was an early winner in the vaccine race, but then it got embroiled in disputes with the European Union. Like Johnson and Johnson, it is also heavily diversified with other products and it also initially delivered the vaccines at cost. So, again, it is not a “pure play.”

* There is the lesser-known Novavax (NASDAQ: NVAX), whose product is not as widespread as the others.

* Ocugen (NASDAQ: OCGN), also not very well known, is partnered with Indian drugco, Bharat Biotech, and has a vaccine authorised in India. 

* Finally, Vaxart (NASDAQ: VXRT), is developing an oral vaccination tablet. 

At this stage of writing this article, I haven’t yet looked at a single chart of a “vaxco”, so I don’t know what I’m about to discover. 

I’m going to post 4-year charts - ie going back a year before Covid - along with a 200-day moving average (200DMA) in green to help identify primary trends.

Let’s start with Pfizer (NYSE: PFE)

You can see the run it had since 2020. But, shorter term, since early December, it’s been falling like a boulder off a cliff. It’s not seen any of the rally that accompanied the broader stock market since Christmas. It’s below its 200DMA and trending down. 

On the other hand, it’s still at $43, above its October low, and well above its pre-Covid price in the low- to mid-$30s, so all is not lost. 

I do not like the look of that chart at all. I’m pretty sure its handle will no longer be a four but a three before long.

Next is BioNTech (NASDAQ: BNTX). This is a classic pop-and-drop and could just as easily be the chart of some crypto currency or junior miner.

At $140, it’s 70% down from its $460 high, and it too is in a downtrend. There is support at $120 and it’s still three or four times higher than it was before Covid. 

I wish I’d known about BioNTech in 2020!

Moderna (NASDAQ: MRNA) is next and like BioNTech, the other “pure vax play,” this is another pop-and-drop. Cynics would say pump and dump.

Gosh, this was a $25 stock in 2020. It went to $500. How fortunes can change.

Now it’s at $175, 65% of its highs, but above its 200DMA. The shorter-term trend is down, however.

Gosh, these vaxco stocks are volatile. As volatile as crypto. (I don’t see the FCA warning against them, or indeed banning them though).

Johnson & Johnson's (NYSE: JNJ) is next. Like Pfizer, it’s not a pure play, but I do not like the look of this chart at all. Double tops and stuff.

It’s come down hard in 2023. What does the market know that I don’t?

It’s below its 200DMA and trending lower. You want to see that October 2022 low, just around $158, holding, or failing that $152.

To be fair to Johnson and Johnson, and not wanting to get too sensationalist, it has previous when it comes to spiky, up-and-down action. See early 2022 for more details.

And so to AstraZeneca (LON: AZN) and this too could be displaying the worrying, early 2023 chart sickness of the vaccine major. Not as bad as the other two though.

I’m going to give this one the benefit of the doubt and say it's a standard pullback to the 200DMA, which is rising, amidst an ongoing secular bull market.

Pre-Covid it was around 7,000p, so it’s about 45% up on the back of the pandemic.

If they’ve banned cryptocurrencies, why the FCA hasn’t banned speculating in the likes of Novavax (NASDAQ: NVAX), I cannot understand. Where’s the consistency? Surely that is what we want from our regulators. 

In any case, this is one brutal chart, and it’s back where it was before Covid.

This was a $3 stock at the beginning of 2020. It went to $330. Somebody made a lot of money. Nancy Pelosi is my guess. Or maybe that Fauci bloke. (For the avoidance of legal doubt, I’m joking).

Now it’s a $10 stock. I make that a 97% drop. Somebody lost a lot of money.

By the way, here’s a chart of Novavax since its IPO in 1995. I don’t think I’ve ever seen anything like it. 

Talk about hype cycles. Fortunes have been made and lost in this company over and over. 

Remind me to buy it in about a year’s time at $5. It’ll be $150 or $300 a couple of years after that. (Then remind me to sell it).

Next, we have Ocugen (NASDAQ: OCGN). Cripes, it’s another one. From a buck to 18 bucks back to a buck. 

I need to get more into biotech. It’s extraordinary.

And last up, Vaxart (NASDAQ: VXRT) is developing an oral vaccination tablet. I almost don’t need to post this one. You know what’s coming.

From below a dollar to $25 back to a dollar - and trending lower.

So what can we learn from all this?

One: vaccines are dead in the water.

Two: there might be something nasty lurking in the pipeline for Pfizer, and perhaps Johnson and Johnson. My guess is something legal.

If you’re buying gold, my current recommended bullion dealer in the UK is The Pure Gold Company, whether you are taking delivery or storing online. Premiums are low, quality of service is high. You can deal with a human being. I have an affiliation deals with them.

If you’re buying bitcoin, be sure to read my special report.

And make your Number One resolution for 2023 to listen to Kisses on a Postcard.

This article first appeared at Moneyweek.

There are just three ways, I once heard someone say, to create real wealth:

* You make stuff

* You mine stuff

* You grow stuff

Everything else is just redistribution - pushing what is already there around.

We can argue about whether offering a service is “making stuff”. I would say, generally, it is.

I’ve always loved that as a maxim by which to view things. Pretty much all wealth creation comes under one of those three categories. You are bringing something new into the world that did not previously exist.

It’s why I have issues with forex. The foreign exchange markets are the largest and most liquid financial markets in the world. They are more than 25 times larger in daily turnover than all of the world's stock markets combined. Forex has made many people supremely rich. But is forex trading actually creating new wealth or is it another illusory consequence of fiat, and just pushing existing wealth around?

It’s a question for another time because it’s item two on that list - mining - that I want to talk about today, that loathed and despised industry, responsible for so much pollution, waste, injury, fraud and death.

Why mining is so important

We need mines. We cannot do without them. They are essential to human progress. Mines provide the raw materials that are the foundations for modern living. We would not have the world we have around us today were it not for mining: the primary means by which natural resources - metals, minerals and fossil fuels - are extracted from the earth. Human beings have been mining since before the Bronze Age and we won’t ever stop.

These natural resources can be used to make wonderful things: buildings, bridges, planes, trains and cars, electronics, and, of course, energy. Mining, and all the risks you have to take to do it, is to bring new and real wealth into the world that did not previously exist.

In the West we sit at our desks all day, in our clean, sanitised environments, and we forget that, for example, for the internet to exist, we need untold amounts of metal , be it steel, copper, silver or some rare earth metal neither you nor I know the name of.

With our cosseted western existence, we have in many ways lost touch with the world around us: the land, the environment, the animals and plants we eat. We have forgotten just how the things around us came to be. There was a time when you would build up a relationship with an animal before you ate it. I’m looking around me at my office and every single item - from my desk to my computer to my books to the house I’m in - would not exist without mining.

If Net Zero is to be realised (spoiler alert: it won’t be), and we are going to transition from fossil fuel to electricity, we are going to need to mine unprecedented amounts of copper and lithium (which in itself is going to entail extraordinary amounts of fossil fuel consumption).

But mining has a huge environmental impact. Though it’s hard to find a human activity that doesn’t have an environmental impact, mining is exceptional. Together with certain types of fishing, it’s probably the most environmentally damaging of all industries. That’s why there are so many rules and regulations in place. They’re there to attempt to minimise damage.

Mining will never have zero impact. There is a trade-off between the impact of the mine, the wealth it creates and the benefits it brings.

But it is because of the potential mining has to cause harm, to the environment, to local communities, to workers, that so many of us feel ambivalent about it, if not downright opposed.

The fellowship of mining

There are common characteristics to miners, visible throughout history and in all the myth and legend that surrounds them: brave, strong, hard working, fiercely proud, stoic, with incredible camaraderie amongst them - probably because of the incredible risks and effort involved in doing their job.

From Snow White to Middle Earth, you see it in the depiction of dwarves, the miners of mythology. Visit any of the old mining pubs in Cornwall, Wales or the North East, where the mines are no more, but look at the pictures on the wall, let your senses go and you can feel it there too. The old boys who used to work in the now closed mines still talk about the camaraderie.

Mining is hard. It always was and it always will be, even with modern machines. Never mind the financial and political risk, it’s dangerous. It’s a difficult business. You have to go to some of the most unsavoury parts of the planet.

Yet for decades we have been attacking mining. We attack this key industry, which instead we should support.

Protestors become heroes when they stand against this terrible industry. Lawmakers do not stand up to protestors, they bow to them.

The cost of regulation in the UK is so high, the mining industry barely here exists now. We have lots of coal, we have tin, we have copper, we even have tungsten and lithium, but producing mines are few and far between. We were once a nation once internationally famous for its mines and its miners. It’s why so many metals exchanges are here. It’s why so many international mining companies are based here.

We are using more metal than ever here in the UK, yet we are barely producing any of it. We are getting that metal from Asia, Africa, Australia and the Americas. Just because that mining is out of sight, it isn’t any less damaging to the environment.

Heaven forbid the war in Ukraine, or tensions between China and the West, or Islam and Christianity, could grew into some kind of global conflict. If it does, we have big strategic problems - because we barely produce any metal.

"The Battle of Production is the Battle of Life and Death,” said Winston Churchill to the House of Commons in September, 1940.

“It is being fought out every day in every mine, factory, and farm in the country. It is the Battle of the Coal Mines. It is the Battle of the Steel Mills. It is the Battle of the Harvest Field. It is the Battle of the Factories and Workshops. It is the Battle of the Shipping Lanes. It is the Battle of the Aircraft Factories. It is the Battle of the Munitions Works. And on the outcome of this Battle depends the life and death of the nation."

So it was with great concern that I read this article from Chris Hinde about mining graduates.

The state of mining in the UK

Cornwall’s Camborne School of Mines, founded in 1888, once used to be the most important mining college in the world. Through the 20th century, its graduates operated many of the world’s most significant mines - in Southern and Western Africa, Malaysia, Australia, South America, Mexico, the United States and Canada. It is now merged with Exeter University.

Do you know how many British people over the past two years have enrolled in mining engineering or mineral processing undergraduate courses there or indeed anywhere in the UK?

Take a guess.

The answer is not one. Not a single person.

As recently as 1990, there were over 300 mining graduates every year from five UK mining schools. Now there are none.

The UK’s Engineering Council has 1,237 registered mining and mineral processing engineers. 80% of them are over the age of 50. Half of that 80% are over the age of 66 - retired or about to be, in other words.

We used to export mining talent all over the world, but just to operate the few mines we have left here in the UK, never mind build new ones, the UK Mining Education Forum calculates the country needs over 60 new mining engineering and minerals processing graduates every year. We have none.

Everybody wants to work in finance or tech. With years of greenwashing, we have forgotten the essential contribution which mining makes to society. We have lost touch. The green narrative has done so much structural damage to our history, our identity and our industry.

Who is going to run Cornwall’s tin and tungsten mines, or extract its lithium? Who will operate Cumbria’s new coal mines (should they ever get planning approval)? If we don’t act fast, we will lose the self-knowledge of our own landscapes to be able to utilise their many and varied natural resources. This is not just a UK problem, by the way, it is the case across Western Europe.

One lesson of the soaring cost of energy is that the mineral resource industries need investment and support, not attacking. Why would you invest in future production, if you know the government is just going to impose windfall taxes?

The War in Ukraine, and especially the bind in which Germany finds itself, has demonstrated the strategic stupidity of being dependent on dodgy regimes for essential resources, when there is abundant domestic natural supply.

The ridiculous irony is that to import resources from unscrupulous corners of the earth is considerably less green than producing them ourselves.

A rather big country somewhere to the far east of us gets the concept of making stuff, mining stuff and growing stuff in a way that we no longer seem to. What are the implications?

Please tell your friends about this article.

And please consider becoming a subscriber to The Flying Frisby.

If you’re buying gold, my current recommended bullion dealer in the UK is The Pure Gold Company, whether you are taking delivery or storing online. Premiums are low, quality of service is high. You can deal with a human being. I have an affiliation deals with them.

If you’re buying bitcoin, be sure to read my special report.

And make your Number One resolution for 2023 to listen to Kisses on a Postcard.

Gold had an epic bull market in the noughties - I still remember the key numbers like it was yesterday.

There was the low in 1999 at $250/oz, marked for all eternity by Chancellor of the Exchequer, Gordon Brown, as he sold off two-thirds of British gold at the bottom of the market, when there were no compelling need to sell.

That low was re-tested in 2001 and we got a classic double bottom, followed by eight years of bull market, which ended, after a big wobble in 2006, in 2008 at $1,030/oz. 

Then the Global Financial Crisis came along. Gold plummeted along with everything else. An unstoppable rebound lasting three more years followed. First, the gold price broke out to new highs, and on it marched until it eventually peaked in 2011, with the Greek debt crisis, at $1,920/oz.

Then came the bear market. Five brutal years of pain. It went all the way back to $1,040/oz.

The period between 2018 and 2020 saw gold rally again, heading north of $2,000/oz, albeit briefly.

But here we are in early 2023. And guess what? As I write, gold sits at $1,920/oz - the same price as it was back in 2011. Markets remember prices.

What’s next for the gold price? 

Will it pull back from here? Maybe. Probably.

It has rallied $300/oz in barely two months. It’s overbought. Neither silver nor the miners are leading. That’s usually not a good sign. 

Charlie Morris says gold is trading above fair value. Charlie Morris is usually right.

You can get cute and try and trade it, but no one knows what is going to happen. It’s a precious metal and it’s a market. If they can throw you, they will.  

But then again, gold usually does well when trust in financial markets is low. I’d say that’s the case now. Do you risk your position in the hope that you can get back in lower? What if it goes up instead?

Or you can take the longer-term view. Like the famed trader, Old Partridge, in Edwin Lefevre’s Reminiscences of a Stock Operator, who never wanted to lose his position in a bull market, a view since echoed by a memed typo, you can just hodl on.

We must each make our own choices, learn from them and live with them.

What happens to the gold price if everyone starts buying? 

Here’s a nice little thought experiment. 

I’ve heard it before - but I’d forgotten it, and it was brought to my attention again by Winston Miles of Canadian investment house Eight Capital.

There was a presentation by strategist Grant Williams in 2016 called “What If?” when he asked what would happen if pension funds, which currently had a 0.15% weighting to gold, increased that allocation. Miles decided to run that scenario in today’s marketplace.

“According to the OECD’s most recent data, global pension assets are $56 trillion. I could easily see pension funds getting up to 1% of their portfolio in precious metals on average. But let’s be a bit more conservative and go with two-thirds of 1%, or 66bps… which is $373,903,924,800.

“That amount of money …  could buy every single company that makes up the Philadelphia Gold and Silver Index… which would set them back a cool $297 billion.  Then they could buy every share of GLD, even taking delivery of all that gold if they wanted, as it’s all sitting in a vault somewhere.  That would cost another $56 billion. Then with the scraps left over, they could buy every share of the GDX… GDXJ… SIL… AND the SILJ.” (Those are the gold and silver mining ETFs).

In short, there’s a lot of money out there. On a relative basis, there isn’t a lot of trade-able gold, and there aren’t that many gold mining companies. A small shift in the narrative could send the gold and silver markets a long way higher. 

“It’s an environment,” says Miles, “where almost no major pensions have a portfolio manager focused on metals and mining. The infrastructure is totally gone. It’s hard to add supply, the mines are old, it takes ten+ years to build new ones, these are really long lead time projects.”

You can conduct the same thought experiments with oil, gas and coal. Very little allocation (largely because of ESG), and very little investment leading to tight supply and long lead times.

You can conduct the same experiments with bitcoin. What happens to the bitcoin price, if bitcoin were to become a core, mainstream portfolio holding?

They all go a lot higher.

You can’t say the same about tech, the S&P 500, or government bonds. They are already owned.

The narratives for gold, fossil fuels or bitcoin may not change, but if they do, look out above.

On this note, here is the S&P500 relative to gold since 2000. When the chart is rising, gold is rising relative to the stock market and vice versa. 

At $1,920/oz gold is a lot cheaper today, relative to the stock market, than it was when it was $1,920/oz back in 2011. It’s a third of the price. 

To get back to those equivalent levels, assuming no change in the price of the S&P500, gold would have to triple. I like the sound of $5,700/oz gold!

$5,700 gold - that’s a stat worth sharing.

Gold and gold miners

Here are the gold miners relative to gold. 

With the plethora of new ways that opened up to get exposure to gold in the 2000s - ETFs, online bullion dealers, CFDs, spread bets and all the rest of it - investors stopped bothering with miners, and who can blame them?

Too much incompetence, too many frauds, too much political and environmental risk - and all the rest of it.

Miners have been falling since 2003. But they stopped falling in 2015. Since then they’ve gone sideways. They are, as the technicians say, “building cause”.

I reckon the low is in. It came in 2015. And we re-tested it last year.

What do you think? Post your comments below.

If you are interested in gold miners, please consider becoming a paid subscriber. I cover gold mining extensively.

If you’re buying gold, my current recommended bullion dealer in the UK is The Pure Gold Company, whether you are taking delivery or storing online. Premiums are low, quality of service is high. You can deal with a human being. I have an affiliation deals with them.

If you’re buying bitcoin, be sure to read my special report.

And make your Number One resolution for 2023 to listen to Kisses on a Postcard.

This article first appeared at Moneyweek.

It’s that time of year once again when I get out my crystal ball and tell you exactly what is going to happen in this the Year of our Lord 2023 (here’s how I performed last year).   

You can normally rely on your intrepid author to have strong, even if wrong opinions on markets, but I must confess to not feeling as strongly about things as I usually do. 

My biggest concern is how Chat GPT - the new chatbot that can generate intelligent text about, it seems, almost anything - is going to change the world. In fact, my greater concern relates to the extraordinary influence its designers are going to wield on the global narrative.

So it is a humble Dominic Frisby you find today, one lacking in clear vision, nervously looking up at the egg that is no doubt going to be on my face in a year’s time. 

Nevertheless here are 14 things I think we will see in the year ahead.

* Commodities have a good year. Oil is currently in a downtrend, so it may have a bit more to fall. Metals took their hit in mid-2022 and appear to have made their lows. For the last couple of months, they have been rising, but both fossil fuels and metals have suffered from many years of underinvestment, which has hurt supply. China opening up should see increased demand. I see a good market for metals and energy in the first half of 2023 at least. Possibly the second half as well. Let’s set some targets. Brent, currently at $80/barrel, revisits three figures.

* And Copper revisits with $4.80/lb.

* Yield becomes a thing again. With choppy, uncertain markets, but sticky inflation, investing for yield rather than capital growth becomes a much bigger theme in 2023 than it has been for a decade or more.

* This is a classic recessionary bear market. This bear market proves to be more of the recessionary variety, rather than an all-out collapse. It’s a tricky, grinding market, but the S&P 500 gets back towards its old highs at 4,800. Briefly.

* Emerging Markets outperform. That’s something we haven’t seen in a while, but their time has come again.

* Biotech becomes a thing again too. Remember how back in the day biotech was all the rage? Somehow it was overlooked in the last tech bull market. Not anymore.

* European banks have a good time of it too. Thanks to Swen Lorentz for pointing out to me just how uninterested people are in them. Normally a good sign.

* Bitcoin also has a good year. It’s hard to think of a time when sentiment in bitcoin has been as low as it’s been these past few months and yet it’s still $17,000. It has a market cap north of $300bn. The mining hashrate hit all-time highs this autumn, meaning the network is more robust than it has ever been. The tech is stronger than ever.Usage is growing in East Asia, Africa, especially in Nigeria, and anywhere there is a currency crisis (which is a lot of places - Turkey, Lebanon, Argentina, and Venezuela). 

It solves the many issues facing the member nations of the Shanghai Cooperation Organisation - China, India, Russia et al - which are desperately seeking a non-dollar alternative money to trade with that doesn’t rely on trusted third parties. (I doubt they’ll go for bitcoin by the way, even though it does everything they want it to).

Bitcoin’s Lighting Network solves the problems facing Elon Musk who is looking to incorporate a payments system into Twitter.There are so many reasons to be bullish about bitcoin, yet sentiment could not be worse. It will not always be this way. My prediction for 2023: bitcoin will have a good year.

Tell your friends about this amazing article.

* Silver fails to deliver yet again. I’m getting so complacent with my predictions about silver that I’m bound to be proved wrong. If you can count on anything in this cruel world, it’s that silver will let you down. Silver can’t get above $30.

* The US dollar - up and down. It’s perhaps the world’s most important price and it has periods of strength and of weakness, but it ends the year higher than where it started.  As I write, it’s at 102.

* CBDCs - they’re coming. Currently, there are two countries in the world with functioning CBDCs - the Bahamas and Jamaica. Several other Caribbean nations are at the pilot stage, including St Lucia, St Kitts, Dominica and Grenada. As demonstrated by the reaction to Covid-19, risk-averse governments tend not to trail blaze, but to follow the lead of their neighbours. In this regard, it is likely that a couple or more Caribbean nations could have functioning CBDCs before the end of 2023. Such a roll-out is easier in nations with small populations.But my forecast is that in 2023, probably in the latter part of the year, a nation with a population greater than 15 million rolls out its first CBDC, likely one of Canada, China, India, France, Saudi Arabia, Ghana or Nigeria.

* Ukraine. I know Dominic Frisby is the first person you turn to when you want insights into the Ukraine conflict, so here they are: The Ukraine War will not end before October. There will not be a nuclear war and Vladimir Putin will still be Russia’s president by year's end.

* Gold. Everyone always wants to know what I think about gold, however. "Well, this is a bull market, you know!" While it’s currently overbought, so don’t rule out a pull back, I think it goes up. Miners have a good time of it too. Gold retests its old highs around $2,080. But then it finds a way of being frustrating. It always does. It’s gold.

* Your Bruce-y Bonus sports prediction. Manchester City wins the League. Southampton, Wolves and Bournemouth go down.

So there we are folks. Everything you need to know about 2023 in one handy list.

Have a great year folks - and stick to those resolutions.

Make your Number One resolution for 2023 to listen to Kisses on a Postcard.

Interested in protecting your wealth in these extraordinary times? Then be sure to own some gold bullion. My current recommended bullion dealer is The Pure Gold Company, whether you are taking delivery or storing online. Premiums are low, quality of service is high. You can deal with a human being. I have an affiliation deals with them.

Please subscribe to The Flying Frisby. You’ll enjoy it.

Finally, folks, the good folk over at Visual Capitalist put together the graphic below. I thought you might find it useful.

This article first appeared at Moneyweek.

Later this week I’ll be posting my predictions for 2023, but first we revisit my predictions for 2022 to see how I got on.

This is more an exercise in entertainment than anything else because, in case you needed reminding, risk management changes - and so do forecasts - as events unfold. As Mr Keynes once said, “When the facts change, I change my mind. What do you do?” 

So when you leap back a year, and there’s stuff that’s wildly out, and I have egg on my face, because, for example, a certain man ordered the invasion of a certain country and that threw things off rather, by all means chortle at my expense - but don’t think I didn’t revise my opinions.

Right that’s the excuses over and done with. A reminder of the rules: I get 2 points for a direct hit, 1 point for close but not a bullseye, 0 for a miss and minus one for a howler. 

There were 14 predictions (you can read them in full here) and the first was a humdinger of a howler. My view was that, because of the scalability of tech, the Nasdaq would continue its relentless march higher and we would see 19,000. The opposite happened. Tech gave back all its post Covid gains. Minus one.

Prediction Two was that oil (Brent), which began the year at $77, would revisit $100. We hit that target in March, and some. Two points.

Prediction Three was that the US dollar would start weak, with support at 95, and later go higher. Longer term “the dollar looks like it can go a lot higher”. Support did prove to be 95, and it went a lot higher. Two points. 

Prediction Four was that gold, which began the year at $1,825, would go north of $2,000. It went to $2,080, then it went down. Two points.

Prediction Five was for the S&P500 to go to 5,000. Wrong. Bear market. Minus one.

Prediction Six was for the crypto market cap to go above $3trn. The year started quite well, but no. Minus one.

Prediction Seven was that two other nations would follow El Salvador’s lead and adopt bitcoin as legal tender. Just the one did - Central African Republic back in April. Zero points.

Prediction Eight was that copper goes above $5/lb. It did. For one day in March. Technically, it’s a two pointer but I’m only going to give myself one because it had such a horrible bear market later in the year.

Prediction Nine was for house prices to continue their inexorable march higher. Amazingly, house prices have marched higher. “Average UK house prices increased by 12.6% over the year to October 2022,” says the ONS. That will come down as the data for the last part of the year comes in. I’ll give myself a point, but not two. The backdrop for house prices is looking shakier than it’s looked in a long time.

Prediction Ten was that the pound would get to €1.24. It didn’t. €1.21 was the high, and it ended the year lower than when it started. Zero points.

Prediction Eleven was that silver would disappoint, as always, and can’t get above $30. You can always depend on silver. It disappointed. As always. $27, or just nigh, was the high. Two points.

And so to Prediction Twelve which was that, to everyone’s surprise, Boris would still be Prime Minister. Ha! We’ve had two since then. Prime Ministers are like buses. Uh-uh.

Prediction Thirteen, your Bruce-y bonus sports prediction, was that Manchester City would win the league and that Watford, Norwich and Burnley all go down. A bulls-eye, sir. This year’s table will be much harder to get right.

And, finally, my Prediction Fourteen, “based on my own instincts, not data or science” was that “Peak Covid has now passed and something akin to free movement can slowly return”. It looks obvious now. It was not then. I lost Christmas last year to Covid. 

And so to the score. Maximum possible would be 28. Minimum minus 8. Both so extremely unlikely as to be impossible. I’ve got a middle-of-the-road, deeply mediocre 11. Could do better, as my school teachers so often noted.

Happy new year, everyone, hope you have a great 2023 and that prosperity makes a welcome return to our portfolios.

And make your Number One resolution for 2023 to listen to Kisses on a Postcard.

Interested in protecting your wealth in these extraordinary times? Then be sure to own some gold bullion. My current recommended bullion dealer is The Pure Gold Company, whether you are taking delivery or storing online. Premiums are low, quality of service is high. You can deal with a human being. I have an affiliation deals with them.

Subscribe to this most learned of publications.

This article first appeared at Moneyweek.

This is a podcast recorded with director Alex McCarron, following a comment he made to me in the pub the other day, when I asked “Where is this all going?”.

“South Africa,” came the reply.

Indeed. We are witnessing the South Africanisation of everything.

Here’s a link to the the YouTube video, Science Must Fall, Alex mentioned in the discussion.

And here is the follow-up article:

Have you got you Kisses on a Postcard CDs yet?

If you are interested in buying gold bullion, my current recommended bullion dealer in the UK is The Pure Gold Company, whether you are taking delivery or storing online. Premiums are low, quality of service is high. You can deal with a human being. I have an affiliation deals with them.

I’ve been playing with a new technology this week, which, I think, is as potentially transformative as Google’s search engine, Facebook’s network or Apple’s iPhone. It’s that significant. 

Elon Musk says it’s “scary good”; Google management is so worried about it they have issued a “code red”; and it has achieved in just five days what took Netflix three and a half years. 

And it’s going to put me out of a job. 

This is Open AI’s latest offering ChatGPT - short for Chat Generative Pre-trained Transformer. 

Open AI, if you are not familiar with it, is a research institute that develops artificial intelligence.  

The company has developed language models that can generate human-like text and neural networks that can create images from text descriptions. Its founders include many of the world's most famous tech entrepreneurs, not least Elon Musk, and it is funded by private donations and research contracts. Its lofty “ultimate goal is to benefit humanity through the responsible development of AI”. 

I first heard about ChatGPT from my son when he came back from university last weekend.  

Apparently, loads of students are getting it to write their essays for them. Academics, reports the Guardian, say it generates exam responses that “would result in full marks if submitted by an undergraduate”.  

Programmers meanwhile, the Guardian continues, “have used the tool to solve coding challenges in obscure programming languages in a matter of seconds – before writing limericks explaining the functionality.” 

I was discussing it on Twitter and User @Peng33G got it to write a perfectly passable song in the style of Dominic Frisby.  

I urge you to go and have a play.

To give you an idea of how quickly this thing has found users, cast your eyes over the following, which shows the amount of time to reach one million users. 

Netflix → 3.5 years Airbnb → 2 years Facebook → 10 months Zoom → 9 months Spotify → 5 months Instagram → 2.5 months iPhone → 74 days ChatGPT → 5 days 

Share this really interesting article on Twitter, Facebook or LinkedIn.

To verify the above take would probably take me an hour of research. ChatGP did it in a matter of seconds.  

“The information you provided appears to be accurate”, it said. “Here is a brief summary of the growth of each of the companies or products you mentioned:

* Netflix: It took Netflix approximately 3.5 years to reach one million subscribers. The company was founded in 1997 and reached one million subscribers in 2001.

* Airbnb: It took Airbnb approximately 2 years to reach one million users. The company was founded in 2008 and reached one million users in 2010.

* Facebook: It took Facebook approximately 10 months to reach one million users. The company was founded in 2004 and reached one million users in 2005.

* Zoom: It took Zoom approximately 9 months to reach one million daily meeting participants. The company was founded in 2011 and reached one million daily meeting participants in 2012.

* Spotify: It took Spotify approximately 5 months to reach one million users. The company was founded in 2006 and reached one million users in 2007.

* Instagram: It took Instagram approximately 2.5 months to reach one million users. The company was founded in 2010 and reached one million users in 2010.

* iPhone: It took the iPhone approximately 74 days to reach one million units sold. The iPhone was released in 2007 and reached one million units sold in 2007.

ChatGPT has multiple uses in the real world  

My buddy, business consultant and tech entrepreneur, Danny Richman, mentors, as he puts it, “a young lad with poor literacy skills who is starting a landscaping business. He struggles to communicate with clients in a professional manner.” 

In less than 15 minutes, with no coding required, he created a ChatGPT-powered Gmail account to which the landscaper sends a message. It responds with the text to send to the client. 

Danny continues: “I also helped him use GPT3 to prepare an estimate, create a contract and respond to client enquiries. He just secured his first contract worth £220,000.  This would not have been possible without this tech”. 

So what will ChatGPT be used for?  

In the words of ChatGPT itself, slightly edited by me, “A wide range of natural language processing tasks, including language translation, text summarization, text generation, and language modelling” . 

So that might be chatbots and virtual assistants; “text generation tasks”, as it puts it - writing news articles or social media posts. 

It could also be used to summarise texts - anything from legal documents to the tax code to the bible, by generating a shorter summary of a longer piece of text. 

Its capabilities are likely to improve as it is further developed and refined. It is learning all the time. 

So what does all this mean for investors? And how do you invest in ChatGPT? 

How to invest in ChatGPT the technology shaping the world  

Earlier in the week, I looked at how the world’s largest companies by market cap change from decade to decade. 

Seven of the top ten in 2011 were natural resources companies. A decade later, in 2021 not one was. Nine were tech companies: Apple, Microsoft, Alphabet, Amazon, Facebook, Tesla, Berkshire Hathaway, TSMC, Tencent Holdings, Nvidia. Which of them will be there in 2031? 

Many of these, you might have thought a year ago, have near-impervious monopolies. But tech changes quickly, as this latest development demonstrates. Already Alphabet’s position looks precarious. 

Microsoft, though, was there in 2011 and in 2021. And guess what? It owns a large chunk of Open AI. It has made a number of investments in OpenAI, including a $1 billion investment announced in 2019. It is not known if Microsoft has a controlling stake in OpenAI or if it holds a minority stake in the company. 

So the way to get some exposure to this new tech is to own Microsoft Corporation (NASDAQ:MSFT), though it’s not exactly a pure play. Its stake in Open AI is minimal in the context of everything else it does. Moreover, will Microsoft still be one of the world’s ten largest companies in 2031? That would make three decades in a row. 

I also gather ChatGPT is costing a lot of money to run. $3m per day is the figure doing the rounds on the internet. The bot itself would not confirm: “GPT is a large language model that requires significant computational resources to run, as it is trained on a very large dataset and has a very large number of parameters. As a result, it is likely that running GPT would incur significant costs, depending on the specific circumstances”. 

But that’s the way with big tech. Get the users first, then worry about the profits. ChatGPT is doing that in spades. If the product is free, you, the user, are the product - and all that. 

By the way, I got ChatGPT to write some of this article for me (though I ended up subbing it quite a bit - stylistically, I still feel I’m a better writer - but only just). Can you tell which paragraphs?

Have you got you Kisses on a Postcard CDs yet?

If you are interested in buying gold bullion, my current recommended bullion dealer in the UK is The Pure Gold Company, whether you are taking delivery or storing online. Premiums are low, quality of service is high. You can deal with a human being. I have an affiliation deals with them.

The Flying Frisby is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

This article first appeared at Moneyweek.

I stumbled across a Gavekal Research Daily Comment over the weekend with a really interesting table that I thought we could discuss today.

Gavekal Research, if you don’t know it, is a financial research firm that provides analysis and insights on global economies, markets and industries. It was founded in 1999 by Charles Gave, Anatole Kaletsky, and Louis-Vincent Gave, and is headquartered in Hong Kong. 

It is, the internet tells me, known for its holistic approach to analysis. Holistic is one of those corporate buzzwords that I never really know what it meant. 

Again the internet is our friend: in the context of financial analysis, holistic analysis refers to considering a wide range of factors, such as economic, political, and behavioural, in order to gain a full understanding of market developments. 

It is a way of looking at the big picture rather than just focusing on specific details or individual factors.

Why didn’t they just say “big picture”? Such is the equivocal financial world in which we live.

In any case, Louis-Vincent’s Gave’s report is a compelling one. 

He describes how, roughly every decade or so, financial markets fall in love with a new narrative. This is something we have observed many times in the column. The 1970s were all about precious metals and energy. The 1980s went to Japan. The 1990s saw tech stocks take over and the 2000s were all about natural resources and extraordinary growth in China. The 2010s were all about tech.

So what about the 2020s. What are they all about?

What does the next decade have in store for investors?

Gave suggests that there are three narratives each with a core idea: “The opening of new markets to capitalism (Ricardian growth), technological breakthroughs (Schumpeterian growth), or the fear that in the coming years there will not be enough for everyone (the Malthusian constraint).”

Each time the narrative is persuasive and rooted in some truth, which is why it takes hold, but by the end of the cycle, valuations reach such extremes that they no longer make sense, a bear market sets in and a new narrative takes over. 

Asset allocation is everything, I have often argued - and it has been repeatedly proven that being int he right sector is more important than individual stock selection. All you have to do is shift from narrative to narrative. A lot easier said than done of course.

But here is Gave’s humdinger of a table.

Share this amazing article.

You can see how clearly the narrative has shifted with each decade. By the end of the 1970s six of the world’s largest ten companies were oil companies. By the end of the next decade, just one of them was.

By the end of the 1980s, eight of the world’s largest ten companies were Japanese. By the end of the following decade, just two of them were.

At the turn of the century, seven of the world’s largest ten companies were tech related. By the end of the following decade, just two were.

At the end of the noughties, seven of the world’s largest companies were natural resource companies. By the end of the following decade, not one was.

2022 seems to have marked the turning point. The Covid rallies in tech were the final spike in an amazing bull market. 

These are all huge companies that make the foundation on which portfolios are built. But how many of 2021’s top ten will be there in ten years' time? Not more than two or three I wouldn’t have thought.

You have to hand it to Microsoft. It’s been there three decades running. Perhaps that’s because, in a way, as much as it is a tech stock it is also a patent holding company. Apple has also made that list twice. 

So mighty are these companies and so entrenched in their monopolies, it is very hard to envisage them not being so mighty in ten years' time.  But this is the world of tech. New inventions can come along that quickly make old monopolies redundant.

In that regard, I’ve just been playing with a new Open AI chat bot that my son, who is at University in Bristol, put me on to and it’s extraordinary. It can write essays. It wrote a biog that I am now going to use on my site - and it’s a better biog than I’ve ever had. 

What the impact of it might be on, say, Google, who knows? 

The investment landscape has changed for good

Gave says waiting for the Fed to cut rates and being long the likes of Nvidia or Alphabet makes “about as much sense as sitting in Tokyo in 1992 waiting for the Bank of Japan to cut rates in order to buy Industrial Bank of Japan.”

In short, we are in a transitioning phase. What does the next decade have in store for us? 

Elsewhere Howard Marks of Oaktree Capital also argues that we are in a “Sea Change” - only the third we have seen in his career. That the model of success for the previous cycle is not going to work this time around. He suggests that the high leverage, asset owning, low-interest rate, low yield, low inflation models of the last cycle are behind us. The general landscape is much less optimistic. 

He suggests that stimulative rates are not coming anytime soon and that the base rate will remain in the 2-4% range. We are now in a full-return world, not a low-return world, and investors can get good returns from credit yield instruments -  high-yielding bonds and so on.

What worked before will not work now. What works now might be something that hasn’t worked for a long time.

Commodities could be winners 

Gave meanwhile suggests emerging markets and commodities. Even with a China slowdown/lockdown, the Fed tightening and a surging US dollar, the S&P Goldman Sachs Commodities Index (S&P GCSI) has still returned 27%.

This will be an even better story when these forces reverse - when China opens up, the Fed stops tightening and the US dollar rolls over. 

The GSCI has returned 27% mostly on the back of energy. Metals have been a rather different story. But with those three reversals in place - weak dollar, no more tightening and China open - the stage is set for metals.

What do you think the next decade’s narrative is going to be? It’s there percolating somewhere. Malthusian, Ricardian or Schumpterian?

Check out special report on helium, if you haven’t already, and Dr John’s latest on bonds. Both for paying subscribers, there is lots of valuable info to be had.

Please consider subscribing.

If you are interested in buying gold bullion, my current recommended bullion dealer in the UK is The Pure Gold Company, whether you are taking delivery or storing online. Premiums are low, quality of service is high. You can deal with a human being. I have an affiliation deals with them.

Have you got you Kisses on a Postcard CDs yet?

This article first appeared at Moneyweek.

Before we get started today, I just wanted to flag two articles from last week. First, my special report on helium. And, second, Dr John’s latest on bonds. Both for paying subscribers, there is lots of valuable info to be had, so please check them out.

So to today’s piece … Every December Saxobank puts out ten outrageous predictions for the year ahead.

It does not claim that these predictions will happen, but that they could happen. The purpose of the exercise is to stimulate thought, discussion and debate.

And that is just what Saxobank has achieved because today we consider its ten outrageous predictions for 2023.

The 10 outrageous predictions for 2023

I went back to look at their predictions for 2022 to see if any of them actually happened. 

The very first was “The plan to end fossil fuels gets a rain check.” Net Zero has not yet been abandoned, but this year has certainly seen a quite dramatic change in attitude towards fossil fuels. 

The second was “Facebook faceplants on youth exodus”. Facebook has certainly faceplanted. But I wasn’t aware the youth were ever on it.

After reading the first two, I was about to bestow Nostre Damus status on Saxobank, but the rest of their 2022 predictions did not really pan out. I won’t go through them here. They are in the past. Nobody can do anything about the past. It’s the future we need to worry about.

So to 2023. Saxobank describes the year as a “war economy”. The days of low-interest rates and a harmonious world built on renewable energy, equality and independent central banks are gone. Now “sovereign economic gains and self-reliance trump globalisation”.

That’s the macro. Onto the specifics.

Prediction one. The pressing global energy needs drive the world’s richest to launch an “R&D project in a size the world hasn't seen since the Manhattan Project gave the US the first atomic bomb”.

Well, you can bet your bottom dollar that they are talking about it. But I don’t think it happens. Not just yet, anyway. Somebody would have to organise it.

Prediction two says that, due to the political stalemate in France, and the rise of Marie Le Pen since the 2022 elections, President Macron resigns. 

I don’t see that happening either. France’s daft electoral system is what enabled him to be President. The political stalemate means he stays President. Presidents like Macron don’t resign unless they are forced to. Too big an ego. Though this McKinsey affair does seem to be hurting him.

The gold price surges to $3,000

Prediction three is that gold goes to $3,000. 

Now you’re talking my language!

“As markets and central banks realise that the idea that inflation is transitory is wrong and that prices will remain higher for longer, gold is sent through the roof,” says Saxobank.

To rocket, gold needs inflation expectations to be markedly higher than government bond yields - negative real rates in other words. In the US we do not yet have that. Saxobank is describing a situation where we do.

I’ve got to be straight with you guys. I don’t think gold goes to $3,000 in 2023. It’s got a better chance of going to £3,000.

Prediction four suggests an EU army is coming and that it forces the EU down the path to full union. 

We know that, despite denials, the EU has been talking about an EU army for years. With that man Mr Putin on the doorstep the need gets rather more pressing. It’s possible but it needs the US to take a backward step in its global policeman role, something President Biden and the US military-industrial complex seem unlikely to do.

Like many of Saxobank’s predictions, I’ve no doubt it’s coming. Just not next year.

We come to prediction number five and one that made me smile. 

“In an effort to become one of the global leaders on the path to net-zero emissions, one country decides to not only put a heavy tax on meat, but to ban domestic production entirely.”

I’d never thought about it before, but I do think about it now and I know it’s inevitable. 

Under the pretence of climate change, somewhere is going to impose meat taxes. I don’t think meat production will be banned - that’s too big a political ask - but meat taxes are coming. And, if you’ve read the definitive book on taxation that is Daylight Robbery, you will know that taxes are easily imposed, often for moral reasons, but not so easily gotten rid of. Meat taxes are coming - again maybe not a year, but they are coming. It will be for your own good. And once imposed they will stay. 

Outrageous predictions for 2023: time to wind back Brexit? 

Prediction six suggests that the UK will hold a referendum to wind back Brexit. 

Bregret is a big thing now in the UK. A recent YouGov poll found that only 32% now think leaving the European Union was a good idea; 56% say it was a mistake. 

The Conservative Party have made the most almighty balls up of the opportunity. The primary reason given for voting leave was sovereignty, yet, as the people trafficking and illegal migrant crossings show, they have been unable to even police our borders. No wonder only 21% think Brexit is going well.

There will be calls for another referendum. But the Tories won’t have it on their watch and I suspect Keir Starmer will be too scared of losing Red Wall votes to make it an electoral pledge. 

So I doubt we will see a referendum - not next year - even if the sentiment is there.

Prediction seven is next and that is for widespread price controls to cap official inflation. 

Inflation and price controls are forever partnered, and war is never far away from the dancing duo. We have already seen plenty of new price controls this year though. Will we see yet more? Probably.

The US dollar is dethroned

And so to prediction eight - and this is one I do see coming. Well, a watered-down version. And, again maybe not as soon as next year. “OPEC+ & Chindia walk out of the IMF, agree to trade with new reserve asset.”

De-dollarisation is a big theme, especially for those nations that make up the Shanghai Cooperation Organisation - which is Russia, China, India and Iran and pretty much every nation between.

They are not allies of the US and they want a non-US dollar asset they can trade with. The problem is what? (I have some ideas).

I don’t see them necessarily walking out of the IMF but some non-US-dollar international asset is coming. Or they’ll use an existing one. Before the end of next year? Possibly. 

It might be gold. It might even be bitcoin. It might be something else.

Prediction 9 - we are almost there. Japan fixes its currency to the US dollar at 200 as it overhauls its financial system. 

The yen has been a basket case - even worse than the pound, believe it or not. Here we see it against the dollar over the last decade. From 60 to 170 is quite some drop. (If the chart below is rising it means the dollar is getting stronger).

But this is as much a function of US dollar strength as it is yen weakness and Japanese monetary policy.

To go to 200 is not that big an ask, but the US dollar has pulled back quite a bit of late and may have made a long-term reversal. 

But to go to 200 and then get pegged. I’m not sure.

Outrageous predictions for 2023: bye-bye private equity 

And so finally we come to prediction ten. 

Tax haven ban kills private equity, says Saxobank. “The OECD countries turn their attention on tax havens and pull the big guns out, banning them altogether.”

The OECD has been wanting to do that for yonks. It has not been able to find a way. Maybe war gives them the excuse. I’m not so sure. The practicalities are difficult. You can’t ban Panama. You can’t ban Switzerland. 

Saxobank explains how it would work. The OECD would launch a full ban on the Cayman Islands, Bermuda, The Bahamas, Mauritius and the Isle of Man. 

“The ban means that corporate acquisitions in OECD countries cannot be made with capital arriving from tax haven entities and only from OECD countries or countries that adopt OECD transparency standards on capital, which would include the automatic exchange of information, beneficial ownership registration and country-by-country reporting”.

Ouch. It would decimate private equity. You can be sure that the motivation is there. Will it happen?

It depends on how nuts things get. And things are getting nuts.

Thanks very much for reading. I’ll have my own predictions for you, as is always my way, at the beginning of next year.

If you are interested in buying gold bullion, my current recommended bullion dealer in the UK is The Pure Gold Company, whether you are taking delivery or storing online. Premiums are low, quality of service is high. You can deal with a human being. I have an affiliation deals with them.

Have you got you Kisses on a Postcard CDs yet?

Please subscribe to this amazing publication.

This article first appeared at Moneyweek.

I am bringing my Edinburgh Fringe “lecture with funny bits” about the history of mining to London on October 9th and 10th to the Museum of Comedy. Please come if you fancy a bit of “learning and laughter”. The Edinburgh link is here. And the London link is here.

Let’s start with an overview of gold demand as it currently stands.

Never mind central banks, investment banks, or private investors—almost 50% of annual gold demand comes from the jewellery industry. It is, by some margin, the single largely buyer of gold. Another 23% is investment demand, and 21%—last year at least—came from central banks. Just 6% of demand is industrial (excluding jewellery, of course).

Jewellery, investment, and central bank demand have all been increasing in recent years. However, a change in macroeconomic circumstances could easily mean, for example, that central banks become net sellers. It's not like it hasn't happened before. But, while de-dollarisation remains a growing theme, I do not see that as likely for several years at least. Similarly, investment demand could easily shrink. Jewellery demand is more constant, and it increases when people feel rich and decreases when they don’t.

Gold’s main use has always been and will always be to store and display wealth—in other words, investment and jewellery. Technological demand is rather at the margin, but might we see demand growth there? Let’s investigate.

Interestingly, one huge potential increase in demand will come, ironically perhaps since that is where gold came from, at the final frontier in outer space.

At the Final Frontier - Also On Your Phone

Both silver and copper are better conductors of electricity than gold, but gold is more resistant to corrosion and oxidation. Therefore, it finds considerable use in electronics as a coating, especially where long-term stability is important. It is used to cover connectors, switches, and relay contacts; in printed circuit boards, microprocessors, and memory chips. This resistance means it finds considerable use in both aerospace and outer space, where it is used to coat satellite components and spacecraft.

It can reflect infrared radiation and protect craft from overheating—especially important in the wild temperature fluctuations of outer space. It is also used in the heat shields which protect sensitive equipment from high temperatures during re-entry into Earth's atmosphere.

The umbilical cord that binds an astronaut to their spacecraft is plated with gold. The visors of astronaut helmets are plated with gold to protect their eyes from harmful ultraviolet radiation. The MOXIE (Mars Oxygen In-Situ Resource Utilization Experiment) instrument, which forms part of NASA’s Mars exploration programme, is plated with gold. Its purpose is to create oxygen from carbon dioxide, effectively replicating the role of plants on Earth, so that a human mission to Mars can one day take place.

Ultimately, gold’s permanence is the fundamental reason for its use. You need durable materials. When you send a spacecraft to outer space, you can’t repair it.

This usage is not yet significant enough to radically alter gold demand, but that could change, and quite dramatically so, as space exploration increases.

At the 2022 Olympics in Tokyo, the metals to make the medals came from a recycling initiative. The Japanese handed in nearly 80,000 tonnes of electrical gadgets, including laptops, digital cameras, gaming devices and 6 million phones. The appliances yielded 32kg/1,000 ounces of gold and 3,500 kg/113,000 ounces of silver. There is, I learn, about eighty times as much gold in one tonne of cellphones than there is a typical tonne of rock at a gold mine. Increased high tech means increased gold demand, but perhaps not enough to effect the price.

Optics and Other High Tech Uses

Gold's reflective properties, combined with its stability, mean it finds use in optics—in lenses and mirrors, especially space telescopes, to reflect infrared light. Gold plates the mirrors of the celebrated James Webb telescope, the largest optical telescope in space, to optimise the mirrors’ function, allowing it to view objects too old, distant, or faint for the Hubble Space Telescope. For example, the first stars, the formation of the first galaxies, and the detailed atmospheric characterization of potentially habitable exoplanets.

There is a Canadian company, Totenpass, which has been developing some interesting gold tech, also related to gold’s longevity: “a permanent digital storage drive constructed from solid gold that requires no energy and has no movable parts. Digital data is written onto the drive by way of a proprietary light-diffraction process which imprints images, documents, and other files that can be stored as either human readable without the aid of computers or machine-readable with the employment of a smartphone. This technology allows for the permanent storage of precious digital data, thereby eliminating any future dependence on the internet and the vast amounts of energy required presently to store content. By consequence, this technology will empower both individuals and corporations to decentralize, preserve and fully control their precious digital data once and forever.” Here, it seems, is a very modern application for the extraordinary permanence of gold.

If you are interested in buying gold, check out my recent report. I have a feeling it is going to come in very handy.

My recommended bullion dealer is the Pure Gold Company.

Gold is being used increasingly in nanotechnology. Gold nanoparticles are used in photonics (the science of light waves), especially in the development of light-based technologies for imaging and sensors. Gold's inertness makes it an excellent material for nanoparticles used as catalysts in various chemical reactions. For instance, gold nanoparticles are employed in the oxidation of carbon monoxide in air purification systems. Researchers are also exploring gold's potential as a catalyst to improve renewable energy efficiency and solar cells. Again, its conductivity and resistance to oxidation make it ideal for nanoscale electronic components.

Gold is like the sun: it can kill but it can cure

As for the medical industry, gold and healing have a long, intertwined history. Gold was associated with the sun gods who bestowed health and vitality, or “helped the body produce vitamin D,” as we might put it today. (More and more health benefits from vitamin D are being discovered today, especially bone health and immune function). The Egyptian God of the Sun, Ra, the giver of life, was made of gold. Gold was the flesh of the gods. It symbolised health as well as eternal life. Apollo, the Greek God of the Sun, was often depicted with gold, and he was also the God of Healing, and father of Asclepius, the god of medicine.

Gold nanoparticles are used today in medical diagnostics and treatments, including targeted drug delivery and cancer therapy, because they can be easily detected and manipulated. Additionally, gold's biocompatibility ensures it does not provoke an immune response, making it suitable for use in various biomedical applications. In 2013, researchers found that gold nanoparticles reduced the ability of HIV to reproduce and infect new cells.

It is becoming one of the weapons in the battle against malaria. Of the hundreds of millions of malaria tests sold each year, many contain gold: gold nanoparticles bind with specific malaria antigens, which help quick and accurate detection of the disease. The test results can be ready in 15 minutes.

Golden Buildings

Gold nanoparticles also find use in occasional building materials to enhance strength and thermal regulation. Coating glass with gold can reflect the sun's heat in summer while bouncing internal heat back into rooms in winter, resulting in substantial energy savings. It is corrosion resistant too, which increases longevity.

But the main reason for its use in building is opulence. On the facades of buildings, gold will give your building unique and striking appeal. Toronto’s Royal Bank Plaza, the Grand Lisboa hotel and casino in Macau, and Al Yaqoub Tower in Dubai are all notable examples, as is Trump International Hotel and Tower in Las Vegas: its gleaming gold-tinted glass makes it stand out even on the Las Vegas Strip. The golden domed St. Michael’s Cathedral in Kiev is also a stunning example. To use gold on a roof or facade is extravagant but perhaps not as extravagant as you might think: an ounce of gold will cover up to 1,000 square feet (90 square metres) in gold plate and it brings substantial savings. Internally, gold also finds occasional decorative use: gilded furniture, fixtures and wall decorations, such as seen at the Burj Al Arab hotel in Dubai, which makes extensive use of gold leaf in its interior design.

Conclusion

All in all, exciting stuff, but none of this demand will be enough to significantly affect the price of gold. In most cases, we are talking about plate and nanoparticles. If every roof were to be coated in gold as part of some green energy initiative ordered by the government, or space travel were suddenly to get extremely popular, then I might change my mind, but neither scenario is imminent.

The main source of gold demand will be what demand has always been: as a store and display of value. Jewellery and investment, in other words.

Until next time,

Charlie Morris is one of my closest mates and he writes what I think is one of the best investment newsletters out there, in fact a suite of them. I urge you to sign up for a free trial.

What are you getting people for Christmas this year?

I have the solution.

Forgive me for going full salesman, but read on and you’ll see why I do that. This is life mission stuff.

First, there are all sorts of goodies in the Dominic Frisby shop, which I think you may like. We have CDs of all my various albums, the latest (and probably best yet) being Gammon and Proud. Digital versions are also available at Bandcamp.

There is Contains Swearing, an EP of unbroadcastable songs for the discerning listener. I daren’t release digital versions of this online for fear of the repercussions. You can only get the CD.

My other albums are there in the shop too.

The best thing I’ve ever done

And so we come to Kisses on a Postcard, which is the musical based on my dad’s story of his experiences as a vacky in World War Two, that I’ve been working on for so long. It has been my life’s mission to get this made and I consider it to be, artistically, the best thing I’ve ever done or been involved with.

But trying to get people to listen to it has been really hard. In the last few weeks, however, I’ve appeared on Triggernometry, James Delingpole and Lawrence Fox’s shows to talk about it and, suddenly, some real interest has ignited. I am getting constant notifications on my phone telling me we have sold another CD and I have been getting some of the nicest messages

“I spent most of today binge-listening to the podcast on the Apple platform and it has been one of the happier days of my life thus far,” Daamini from Dubai

“I just wanted to congratulate you on such a wonderful and beautifully touching musical. I was enthralled, I cried, I laughed, I spent my whole Sunday GLUED to this amazing show. A real quality production. I think this should be essential viewing for younger generations. It HAS to be in the West End, just HAS TO BE”. Angela from Ascot.

“A heartwarming, delightful musical that keeps you right to the end. The characters are wonderful. There is tragedy, heartbreak, bigotry, compassion, courage, joy and laughter and it is narrated beautifully. Thank you for giving it to us to enjoy, a real gift”. Nat from Penryn

People really like it - and that’s because it is really good. As I’ve said, artistically, Kisses on a Postcard is the most special thing I have ever been involved with, I urge you, if you haven’t already, to listen.

A Kisses on a Postcard CD - first edition - will make the most special Christmas present, especially for anyone you know who was some way connected to the evacuation. The artwork, says Ian from from Cheltenham, is “wonderful. Such a special gift.”

So I hope you don’t mind me going full salesman, but you can probably see how much I care about this project. You can find out more at the website here and you can order CDs either there or in the Dominic Frisby shop. Thank you.

Some interesting developments in the murky world of geopolitics to report on this week, as the currency wars heat up.

WWIII has already started. So says US economist Pippa Malgrem, who was Special Assistant to US President George Bush for Economic Policy and a former member of the President's Working Group on Financial Markets.

“We are in a hot war in cold places: Space, Cyberspace, Underwater, and high places, including the Arctic, and the Himalayas, and in proxy conflicts in places the media give a cold shoulder to like Africa.” (Not to mention the Pacific).

A cold war in hot places then - as well as a hot war in cold places.

We are also, of course, in a very hot currency war.

Vladimir Putin goes down the bitcoin rabbit hole

This week, with the aim of limiting Russia’s ability to finance its war in Ukraine, the G7 Nations, the European Union and Australia set a price cap of $60 a barrel on Russian crude oil. This follows the EU's embargo on Russian crude imports by sea, with similar pledges from the US, the UK, Canada and Japan.

As you would expect, Russia has said it will not abide by such price caps, even if it has to cut production.

Meanwhile, the world’s largest oil importer, China, seems to be slowly opening back up. Cities are easing COVID-19-related restrictions in the wake of recent protests, and it seems the country is set to further relax curbs as soon as today. 

I think it’s fair to say that if China had not locked down, oil demand would have been a lot higher - and so the oil price would have gone a lot higher. Same goes for metals, in fact most other commodities. 

And then we have another part of the puzzle. Russia’s President Vladimir Putin did his best bitcoin maximalist impression last week, as he called for an international, independent, blockchain-based settlement network. (Spoiler alert: it already exists. It’s called bitcoin).

“The technology of digital currencies and blockchains can be used to create a new system of international settlements that will be much more convenient, absolutely safe for its users and, most importantly, will not depend on banks or interference by third countries,” he said. “I am confident that something like this will certainly be created and will develop because nobody likes the dictate of monopolists, which is harming all parties, including the monopolists themselves.”

Here’s the link to bitcoin.org, Vladimir, in case you have self-googled and are now reading this.

Where is this all going?

I have a few ideas. So does Credit Suisse’s answer to Led Zeppelin, analyst Zoltan Pozsar.

Tell your mates about this amazing article.

You want my oil? Give me your gold.

“The oil market is tight,” he says. The oil price is lower than it might otherwise be not just because of China lockdowns, but because of the US release of its strategic reserves (SPR), as well as from OECD countries. But Saudi Arabia is now low on spare capacity and the SPR is finite. You can’t print oil after all. “Recent releases have brought reserves down to levels we haven’t been at since the 1980s. The 400 million barrels left in it isn’t much: it could help police prices for a year if we released 1 million barrels per day (mbpd), half a year if we released 2 mbpd, and about four months if we released 3 mbpd”.

Short of a sudden new surge in supply (where from?) or a sudden reduction in demand, it would seem then that the oil price is going higher.

Russian crude already sells at a $30 discount relative to Brent, which currently sits at $83, he observes with China and India the main buyers. “In the case of India, it is widely understood that Indian refiners are turning some of the imported oil into diesel for re-export. Buying Russian crude at $60 per barrel (pb) and selling diesel at $140pb makes for a nice crack spread, the petroleum market’s equivalent of 100 bps of spread in the land of OIS-OIS cross-currency bases. India and China thus serve as matched-book commodity traders (instead of Glencore or Trafigura), the former dealing in oil and the latter in LNG, keeping commodities in circulation.”

But Putin may be happy to sell to India or China at that discount - he won’t however cap prices to sell to Europe on point of principle.

Meanwhile, the US needs to replenish the SPR, especially if it wants to control domestic oil prices. “Gone are the days when the U.S. Deputy National Security Advisor warned India and other countries of sanctions if they bought Russian crude oil. The change in tune could be one backdoor mechanism to refill the SPR, and given the $30 dollar discount to Brent that India is paying for Russian oil, this would be below President Biden’s $75 target.”

But if Russian oil is exported for the purpose of replenishing the US SPR, Putin’s not going to like that either. What to do then? 

Only accept payments in gold, says Pozsar, not dollars or rupees. 

Sound a bit fantastic? “No it is not”, says Pozsar. “Look at the tit-for-tat measures so far: you invade Ukraine, I freeze your FX reserves; you freeze my FX reserves, I make you pay for gas in rubles; the West boycotts my Urals, I’ll ship it east...

...the West caps the price of Urals, let them, but I’ll make them pay in gold. And if some countries re-export Urals to the West, I’ll make them pay in gold too.”

Anticipating geo-politics from my desk in South-East London is probably not wise. The pub is a better location for such pontification. But we have long since argued that the re-financialisation of gold is the most powerful weapon there is in the currency wars and the Eurasian move towards de-dollarisation.

The problem with gold is settlement. You can’t send it over the internet. You have to use banks or gold dealers. If only there was a form of money that you could transfer from A to B across the net that eliminated the need for trusted third parties …

Oh! There is …

Subscribe to this amazing publication.

What are you buying people for Christmas this year? A CD of Kisses on a Postcard, the musical I have been working on about vackies in World War Two, would make a wonderful pressie. For something a bit more comic and stocking-fillery, how about a CD of funny songs? All are available here in the shop.

If you are looking to buy physical gold – coins or bars – let me recommend The Pure Gold Company in London, with whom I have an affiliation deal. You can take delivery or store it safely allocated to you in vaults in safe jurisdictions.

Today we consider the coldest substance on earth.

Which is?

I knew you knew. 

Liquid helium. 

I have been covering helium for several years now, and it’s time to revisit the theme today. The reason? I keep reading articles about helium shortages (and these have nothing to do with the controversial cryptocurrency of the same name).

Bull markets come along every few years in some niche but strategically important commodity. I’ve seen it in cobalt, lithium, graphite, phosphate, uranium, rare earth metals, tin and others besides. 

The story is almost always the same. Years of underinvestment have led to a shortage of supply of the said commodity. Government stockpiles are exhausted. And, now, suddenly, the commodity is essential to some new technology. Cue the bull market. 

What do we need helium for - and why is there a shortage?

Helium is the second most common element in the universe, so how can there be a shortage?

You could say the same about hydrogen and that’s even more common. There may be plenty of it up there, but there isn’t plenty of it down here and down here is where we need it.

Nor is helium a huge market. Annual global demand is estimated at around 6 billion cubic feet (Bcf) or 170 million cubic metres (m3). It’s hard to establish just what the current price is because prices tend to be agreed by contract between buyer and seller, but Cliff Cain, CEO of rare gas consultancy Edelgas Group, which studies the market and consults with most of the companies operating in it, gives me the figure of $1,800 per thousand cubic feet (mcf). A year ago the price was closer to $500/mcf.

The entire global market for bulk liquid helium is probably around $3bn.

Demand keeps growing though, mainly from the medical, tech and aerospace sectors, and “it will keep growing”, says Cain.

Helium is seven times less dense than air. Replace the air in a hard drive with helium, there is less turbulence, the discs spin better and so more discs can be packed into less space, while consuming less power. Helium-filled hard drives increase capacity by 50% and energy efficiency by 23%. Thus almost all high-quality data centres now use helium-filled high-capacity hard drives. 

It’s also used in barcode readers, computer chips, semiconductors, LCD panels and fibre optic cable.

Another rapidly growing industry that’s gobbling up helium is the space sector. Helium is used in fuel tanks for rockets and satellites. Physics requires it in particle accelerators. 

Its low density means it also finds use in deep sea diving, but perhaps its most essential use is as a coolant, especially for the magnets in MRI (magnetic resonance imaging) machines. They must be kept near absolute zero to maintain the magnets’ quantum properties and not lose their potential. A typical MRI machine needs 2,000 litres of liquid helium.

As someone who has recently broken his ankle, and also only discovered that I broke my neck in my younger days (it was never properly diagnosed), I can tell you the importance of MRI machines and the diagnostic clarity they bring. Some 38 million MRI examinations were carried out in the United States last year. Forbes suggests helium shortages may be the world’s next medical crisis.

“Given the importance of MRI in the medical profession,” it says, “the helium crisis should be front and centre for politicians, policy makers, physicians, patients, and the general public to discuss and find sustainable solutions for. The scarcity of helium is a serious matter and affects all of us directly or indirectly.”

And then there are the party balloons.

Subscribe now to this amazing publication.

Where do we get helium from - and why its price is going up

As Cain points out to me, if you are an aerospace company whose business relies on putting satellites in space, ideally as many as possible, or an MRI manufacturer whose business relies on selling MRI machines, you are not going to let helium shortages get in the way of your business. You are not going to stop producing the machines you produce - you are going to want to produce more and more of them. You will pay whatever price is necessary for the helium and pass the cost on. 

“Phones, computers, all modern life – it requires helium,” says Cain. “There’s no substitute. Without it, we go back to the Stone Age.”

Helium is produced as a byproduct of natural gas refining. The world’s largest producer is the United States (roughly 40% of supply), followed by Qatar, Algeria, and Russia. 

However, the world’s largest single source of helium for the past 70 years, the US National Helium Reserve, recently stopped its supply. It is letting its staff go and the pressure has come off in its pipelines. “It is now at 700psi when it needs to be at 1,200 to be producing,” says Cain. The system is now for sale, at least in theory. 

The paperwork has met with delays in the White House, this is likely to take some time to resolve and we won’t see any market until it does. Prospective buyers should also beware of contaminated supplies and ongoing legal suits.  

Russian supply from the massive new Gazprom helium plant in the eastern city of Amur is also shut down. That is unlikely to see any production before the end of 2023 as, Cain tells me, it relies on Western engineers and the West is, at present, rather reluctant to send staff to Russia. 

In any case, Russia will struggle to sell much beyond China and Russia. In fact, Russia has the potential to become the world’s largest producer, but it’s Russia.

There were two shutdowns in Qatar earlier in the year, though these have now re-opened, and all-in-all we have what has been dubbed Helium Shortage 4.0 – the fourth worldwide helium shortage since 2006. 

Opportunities in the helium sector 

As with Helium Shortages 1.0, 2.0, and 3.0, supply disruptions in a tiny industry have caused the upset. Cain is not crazy about this idea of Helium Shortage 4.0 – he says it's just the continuation of 2.0 and 3.0, a situation Cain describes as “never-ending”.

Put simply, the world needs new helium supply. 

The solution is to invest in prospective helium producers and developers. There are plenty out there. But, as with all natural resource companies, it’s a question of separating the wheat from the chaff. “75% of them,” says Cain, “are going to fail …” 

Please check out my special report on investing helium.

Subscribe now to receive my special report on how to invest in helium.

This article first appeared at Moneyweek.

This was supposed to go out to one and all last week, but for some reason it didn’t. So today we try again - and the article can also be the Sunday morning thought piece.

What problem does bitcoin solve? How does it make the world better?

Merryn posted those questions on Twitter yesterday.

It being Twitter, as you might expect, as well some measured, sensible stuff, it met with a barrage of outrage too, with responses ranging in scope from “it’s a Ponzi scheme” to “it’s destroying the planet” to “it’s going to give us world peace”.

I thought I’d answer Merryn’s questions today, sheltered from the mania of Twitter, in the calm surroundings of this blog.

I have been trying, on and off, to orange-pill Merryn since about 2014 and I think it’s fair to say, Merryn gets it. She gets fiat money, inflation, money printing, the harm it does, all that stuff. Not only does she get it, she was several years ahead of most of us on that one. She gets the need for apolitical money, lower taxes, less state, less central banking, fewer capital controls - all that stuff too. Cripes, she’s been writing about it all long enough.

She just isn’t crazy about bitcoin. 

I don’t want to put words in her mouth, but I think her objections come, broadly speaking, under three main headers.

First, she doesn’t like all the Wild West scams, blunders and ensuing losses that have accompanied this new financial technology. The FTXs, the Mt Goxs, the hacking, the extortions - and all the rest of it.

Yes, these are not bitcoin, but bad actors operating in and around bitcoin, but bitcoin has still been the enabler. 

Two, she doesn’t like the volatility. The price needs to be more stable, if it’s to be a legitimate form of currency or cash.

Three, even though bitcoin is, in theory, open to all, in practice it is only open to those technologically savvy or organised enough to be able to store keys, passwords, wallets, seed phrases and so on safely. Those - and there is no shortage of them - who are not comfortable with all of that tend to use third-party providers, which, in the unregulated world of crypto, leaves them vulnerable to those factors listed under “First” - and we are in a loop.

I think/hope I’ve summarised Merryn’s core objections - there’s probably something I’ve missed. They are all though, I think, legitimate.

So … here, in no particular order, are 17 ways bitcoin makes the world better.  

Tell your buddies about this amazing article.

1. It separates money and state.

If one body in a society has the power to create money at no cost to itself, while the rest of us must expend energy to earn it, it is inevitable that body will have disproportionate power and influence within that society. If you want to know why Western states have grown so large, bloated and invasive, look no further than fiat money systems and the power they give to the state. That money goes on welfare, waste, wars, wokery, whatever. You might agree with some ways that money is spent, or you might not; depends on your politics. Doesn’t matter: fiat centralises power in state.

Bitcoin removes the ability of the state, and those who operate in it, to print or debase money for their own political agenda.

Money, therefore, remains money. It cannot be a political tool.

2. It provides a lifeline

You tend to see high bitcoin use under regimes that have seen the greatest destruction to their national currencies - Turkey, Venezuela, Argentina. Bitcoin has provided citizens with an escape. 

3. You can send any amount anywhere

Sending money across borders is hard, even today, whether for large amounts or small. If I want to return the five dollars that somebody in New Orleans gave me last month when I forgot my wallet, or a pound to my friend in India to buy him a cup of coffee, or a thousand pounds to my friend in Iran, I am not entirely sure how I would do all those things. There are forex and other charges. There are processing fees. There can be capital controls. There might be a lot of admin and forms to fill in. Bitcoin is international, borderless, instantaneous and cheap.

4. No more capital controls.

Governments cannot control the flow of bitcoin capital in or out of the economy. 

5. It obviates central banking.

The bitcoin inflation rate is transparent and set in code. The central bank can’t start using dodgy inflation measures. It can’t set the price of money too high or too low for too long. There is no scope for human or policy error.

6. It increases financial inclusion

Around a quarter of the adult population remains unbanked. Around 1.5 billion people around the world (more women than men) still do not have access to basic financial services, such as a bank account. This, more than anything, roots them in poverty. 

Yet almost everyone (over 90%) now has a smartphone. All you need to participate in crypto, to start sending and receiving money, is an internet connection.  Bitcoin banks the unbanked.

7. It provides privacy. 

As the world goes cashless, your every transaction now relies on third parties, who know what you are spending your money on. This will get worse with CBDCs. It means there is no privacy. Unless you use crypto.

8. The unsolvable problem of digital cash

For decades computer programmers had wrestled with the problem of how to send cash directly from one person to another online without third parties, just as Person A might hand cash to Person B in the real world. No one could solve the problem, so much so that it was deemed insolvable. Then along came Satoshi Nakamoto with his blockchain. It is a major technological breakthrough.

9. Digital scarcity

One key reason the digital economy has eclipsed the physical over the last 30 years is scalability. I can upload an app to the App Store and it can be downloaded a billion times, but if I had to manufacture and distribute a billion widgets it would take a great deal more time and effort. 

Google can make one change to its algorithm, upload and within moments millions of people are benefitting. I can copy and paste some text, a picture, an MP3, any form of code, and send it out to millions. But if you can copy and paste money then it quickly loses its value. How then to create digital scarcity? Satoshi Nakamoto and his blockchain had the answer.

10. It educates

Bitcoin has got millions, if not billions, thinking about money and money systems, questioning them and their impact, in a way that has never happened in history. “In our time,” said the poet Ezra Pound, “the curse is monetary illiteracy, just as inability to read plain print was the curse of earlier centuries.” But he said that before bitcoin. 

11. Excess money supply

In a world awash with debt-based fiat money systems, the supply of which inevitably increases over time, here is a limited, censorship-resistant, deflationary (using the old definition) system of money, whose supply is finite.

12. It has created an entirely new economy and asset class  

Crypto didn’t exist 15 years ago. Now it’s a multi-trillion dollar economy, albeit one in a horrible bear market. Is it money? Is it a digital commodity? Is it a tech stock? It’s a new asset class.

13. It has provided the young with an opportunity for revenge 

You know how the economy is rigged against the young, whether it’s through house prices, the tax on the future that is debt, or income tax taken to pay for Boomer retirements. Incomprehensible (to the over 50s) crypto is their revenge.

14. It stops cancel culture

Remember how the Canadian truckers had their Go Fund Me support, which other Canadian citizens had donated, stopped? Or how Wikileaks had its funding turned off? Or PayPal blocked donations to the Free Speech Union? Or any number of other organisations with the wrong worldview have had their funding turned off? It’s much harder to do with bitcoin, where there is more freedom to transact. No more currency wars …

15. It stops energy waste and accelerates innovation

With bitcoin’s high energy use, it is accelerating energy efficiency, innovation in production and the adoption of renewables. Roughly 60% of bitcoin mining now derives from renewable energy. It costs three times as much to store a unit of electricity than it does to produce it and around the world so much potential energy goes unused or wasted, from gas flaring to hydroelectric in times of high water to nuclear. Bitcoin mining uses energy that would otherwise go wasted to create the most powerful computer network ever known to mankind. 

16. Who said and agreed to what, where and when

This one was pointed out to me by Christopher marshall on Twitter. The unhackable and permanent database that is the blockchain roots information permanently. “A universal witness that can't be corrupted, or censored, of denial of service attacked ... The legal/financial system's ability to prove who knew/agreed to what when is limited by a set of crude adhoc verification procedures.” Bitcoin transforms that.

17. It eliminates spam

Was that not the original purpose of hashcash stamps, proof of and re-usable proof of work?

Narratives take hold over markets, but price often leads narrative. At present, with bitcoin in one of its periodic winters and the price down 75% from its highs, negative sentiment has completely taken over. Few are talking up bitcoin now.

In fact with the price down 75%, it’s easy to argue that many of the above no longer apply - what is the point of a money if it loses 75%?

Fair enough. But that is also manipulating statistics. Look at the numbers over a five year period and the picture is very different. 

The volatility is a problem for bitcoin if it wants mainstream adoption. But then again the volatility is what attracts people to it in the first place. The narratives come next …

Come for the gains. Stay for the revolution.

Tell your mates.

And subscribe if you haven’t already. This is a superb publication.

This article first appeared at Moneyweek.

You can read an update to this article here.

Over the last year, I’ve lost over 2 stone - 14kg or 30lb, to be precise.

I say over the last year, truth is I’ve been trying, unsuccessfully, to lose weight for three years - in fact, since practically forever.

Given that most of us want to be somewhat lighter than we are, I thought I’d share my experiences with you today. They may be of some use.

Background

While I don’t really like going to the gym, I do quite a lot of exercise, I always have. I run, I play football, I walked the dog, but I always seemed to be 5-6kg (about a stone) heavy than is ideal.

I have a sweet tooth, but not as bad as some. I like beer and I like wine (not so much of a spirit man). I also have a tendency to eat and drink late at night, particularly coming home after gigs. I suspect it was a combination of eating too late at night and booze which left me in that semi-permanent state of slightly heavier than I would like.

I’ve tried all sorts of diets in the past. I lost loads of weight on the Atkins diet back in the early 2000s - that’s basically a low carb, high protein diet - but I also felt fatigued, weak and, as soon as I stopped, I put all the weight back on again and more.

I also lost loads of weight on the 5:2 diet in the 2010s. Again as soon as I stopped fasting, I put it all back on again. I would also piss off my partner on fasting days, by not participating in the communal activity that is eating.

After seeing Fat, Sick and Nearly Dead five or six years ago, I did the juice diet and lost more weight more quickly than with any other diet I have done. You can lose as much as a kilo (2 pounds) a day. It’s very hard to sustain though, and your kitchen quickly gets swamped with juiced vegetable remains. Again, a few months after stopping, I was back where I was weight-wise and some.

Between 2020 and 2021, I took up the 16:8 diet, where you fast 16 hours a day and eat only in 8 hour windows. I would have my first meal at lunchtime - 12-1pm and try not to eat or drink anything after 8 or 9. However, this is hard when you’re doing gigs and I often found myself breaking the rules.

I lost a couple of kilos, then plateaued. It meant, though, that I got into the fasting state every day, and I got used to the feeling of being hungry. It became normal.

Then I actually started putting on weight. I think it’s because my body got used to fasting, so it did all the things it did - conserve energy and calories - then I would consume too many calories in the evening, close to bed-time, and so, in this state of efficiency and fasting, the body conserved more calories than it otherwise would have and I ended up putting on weight.

I was fat

In September 2021 I went the wrong side 90kg (over 14 stone or 200lb). Too much for a man of my 5ft9 frame. A change of strategy was needed. 16:8 wasn’t working, but I was convinced of the efficacy of fasting, so I went back to 5:2.

Within a couple of weeks I shed 3-4kg (half a stone), but then I plateaued again. For many months. There was probably still too much of the eating and drinking in the mid to late evenings, especially after gigs, on non-fasting days. I was presenting Headliners on GB news at the time, and I would get home at 1am, not want to go to bed and often then crack open a bottle of red wine.

To avoid doing this, I took up fasting on the days I was presenting Headliners. On fasting days, it’s best to go to bed early. Presenting a TV show at 11pm having not eaten all day meant I was almost falling asleep, as it ended. Not ideal.

I left the show in March or April, and it was after that that the big weight loss suddenly accelerated.

In my new less employed state, I had a bit more time on my hands and I took up playing tennis twice a week with a chap I met on Facebook. I had fewer late night gigs, so less late night calorie consumption. I then got involved in a swimming challenge, so I started training for that. I also continued playing football once a week.

It was the combination of increased activity and fasting on the same day that made the weight fall off me. I got caught in this virtuous loop.

As I started to feel fitter, on my way to tennis, I would cycle up a really steep nearby hill four or five times and get in some HIT.

On non-fasting days I now found myself consuming less anyway. I would skip meals, especially breakfast, so found myself doing a mild version of 16:8 as well.

England cycling coach Philip Brailsford used to talk about the “aggregation of marginal gains”. So it is with dieting. There are lots of small things you can do, but it is when you put them altogether that the big changes occur. (The same happens in reverse).

So here in bullet points is the Dominic Frisby Diet.

Subscribe to this amazing publication.

1. Indoctrinate Yourself

I would say this is almost the most important part. Find a diet that works for you. A lot of people swear by protein diets, for example. I find them too hard to practically sustain.

I like fasting. It works. It’s proven to work. It’s simple: you are either fasting or you are not. On or off. And it only requires effort two days a week, which makes it sustainable.

But whatever diet you choose, you need to indoctrinate yourself. Read books, read blogs, watch videos, listen to podcasts, talk on chatboards. Totally brainwash yourself about the efficacy of the diet. You have to believe in it in order to carry it out. (By the way 5:2 works).

I’m sure that’s why many people on diets witter on about them so much, by the way. They have indoctrinated themselves. You have to. Turn it into a religion.

5:2 works really well by the way, if I didn’t already mention that. 2 days a week you consume no more than 500 calories (600 if you’re a man). The rest of the time you do what you like.

2. Habits, habits, habits

Fasting is hard at first, but once you turn it into a habit, you barely notice it.

Certain little things help.

Drink plenty of liquid. It’s amazing how often when you think you’re hungry you’re actually just thirsty. Fill up on water. Hot drinks are especially filling. Tea, herbal tea, coffee, broth.

Soups are a good food to eat on fasting days.

Cider vinegar is a good appetite suppressant. Stick a desert spoon full in a glass of water when you drink a glass of water in the morning, and you won’t be hungry till lunchtime.

Coconut oil does a similar trick. Stick a teaspoonful in some hot water or herbal tea.

Take lots of exercise, especially on fasting days.

Turn the above into habits, so they don’t require effort. You just do them.

3. Commit to sport

Exercise is easy to avoid if you do it by yourself. But if, for example, you have a regular tennis partner, or a football team, then suddenly you have an obligation to go and play, even if you don’t feel like it and it’s cold outside.

Commit to some kind of sporting challenge that you have to train for - a cycling challenge, a walking challenge, climbing a mountain, swimming a lake, doing a marathon. Create obligations for yourself, then you’ll have to take exercise even when you don’t fancy it.

Try and cheat it incidental exercise wherever possible - walk instead of driving or getting the bus. Cycle to work. Cycle to meetings if you can.

Cycling is a really good sport, particularly for the over 50s. You burn loads of calories (because you are using your legs and your legs are the biggest muscle group), but you don’t suffer the joint pain that comes with running. Take up cycling. And get into cycling up hills, you’ll be amazed at how good cycling up hills can make you feel.

Running is great for weight loss, especially with some HIT (high intensity training) thrown in. At the end of your run, do 4 30 second sprints, ideally up a hill.

Swimming is good. You don’t burn that may calories, but it is great for building muscle and you feel fab afterwards. I find it hard to run two days in a row - my joints ache too much - but you can run one day, then swim the next quite easily.

I bought some scales and a fitness watch, and I am forever looking at my stats. They are good because they keep reminding you to improve. The best time to weigh yourself is first thing in the morning after you wake up - that’s the only way to get a consistent measure. Even then it’s amazing how much your weight fluctuates.

But I cannot understate: the combination of fasting and taking exercise on fasting days will make the weight fall off.

4. Avoid stuff that’s bad for you.

There are two big evils here. The first is booze.

Much as I love beer and wine, alcohol is bad for you and the less you drink the better. Drinking also makes you put on weight. Never mind the many calories in wine and beer, it’s the poor decisions that follow, which usually involve food and more booze.

But not drinking is hard. Alcohol is addictive. Read Kick the Drink Easily by Jason Vale, if you want to give up booze altogether.

The beauty of 5:2 is that it stops you drinking - at least on fasting days.

Second there is processed food - especially seed oils.

I have recently been persuaded by the anti-seed oil arguments. Why is it people are so much fatter today than we were in the 1960s or 1970s? What has been the big change in our diets? I don’t believe we are that much greedier than we were forty or fifty years ago. There must be another explanation.

The answer lies in food processing and, especially, seed oils - rapeseed oil, canola oil, palm oil, sunflower oil, corn oil, vegetable oil, margarine. You can drive cars on those things. The body can’t break them down. That’s why they are so effective at preserving the shelf life of food.

The big change in our diets is not sugar or carbohydrate, it is these refined fats. They are very difficult to avoid altogether because they are in everything. The food industry and those who regulate it have a lot to answer for. Cut down on seed oils as much as you can. Fried fast food - fish and chips, MacDonalds, KFC - is killer. A lot of that heavily processed vegan plant food is bad too.

Don’t eat pre-prepared stuff (it’s full of those refined oils). Cook with ingredients in as natural a state as possible. Meat, fish and veg cooked in butter and olive oil.

Generally speaking, up the protein intake and avoid carbs.

Oh, one more food thing: nuts. I used to eat lots of nuts and raisins. I love them with yoghourt and honey - and I thought they were good for you. But I saw a video somewhere with a dude who argued that bears eat loads of nuts when they are trying to fatten up for the winter. Ergo: nuts are very fattening. Just the time my weight loss began to accelerate was when I cut nuts out. Might have been coincidence, but I thought I should mention it.

So there we go. Dietary advice from someone who has no qualifications whatsoever, save having lived it.

I like 5:2 because it only requires two days of effort. You can do what you like the rest of the week. And the morning after a fasting day, you feel amazing. It’s like being young again, you feel so good. It’s the opposite of a hangover. My friend Alex calls it, “the inverted hangover”.

The more of those things you do and turn into habits (so they require little willpower), the more the rules of compounding and incremental gains work in your favour. It’s hard, but when you are sufficiently indoctrinated and the habits entrenched, it all suddenly gets easy. Good luck.

Now comes the hard bit. Keeping the weight off.

Tell people on Facebook, LinkedIn and Twitter about this amazing article

Did I mention that he big results come from fasting and exercising on the same day? Or that 5:2 works?

Subscribe to this amazing publication and watch your life get 10x better overnight.

I’m delighted to report that The Flying Frisby is now a Substack Bestseller. Thank you to everyone who supports this bestselling publication!

By popular demand, today we consider bitcoin - and the amazing story that is FTX.

Gosh, this is some story - it’s difficult to know where to start. The more you dig in, the more that comes out. It’s a cautionary tale of the madness that engulfs crowds during investment manias and bubbles, of greed, delusion, risk, and more besides.

I’m sure many of you already know the story, even though there are new developments every day, so I’ll recap it quickly, before moving on to what it means for bitcoin.

Tell everyone you know about this amazing article.

The story of FTX

Sam Bankman-Fried was a geeky young crypto “entrepreneur”, born to an upper-middle-class Jewish family in California. His parents were both professors at Stanford Law School. Ironic.

In 2017 he set up the quantitative trading firm (that would be trading based on mathematical models) Alameda Research . Then, in 2019, came FTX, a crypto exchange that became phenomenally successful, phenomenally quickly. 

In July 2021, barely two years into its existence, FTX raised $900m at an $18bn valuation. That was Series A. Three months later came Series B - $420m at a $25bn valuation. Three months after that, in January of this year, it raised another $400m. This time the company was valued at some $32bn.

To put those numbers in some kind of context, the likes of Barclays, Soc Gen and Deutsche Bank - banks that have been around forever - all have smaller market caps in the $20-30bn range.

$32bn would be more than the UK collects in stamp duty in a year. Or fuel duty or alcohol and tobacco duties. It’s roughly five times what it collects in inheritance tax.

Bankman-Fried himself was worth $16bn, and at the age of 30, was on the front cover of Fortune Magazine, along with a headline asking if he was “The Next Warren Buffett?” 

FTX’s blue-chip and “smart money” investors included Japan’s SoftBank, venture capital firm Sequoia Capital and hedge fund Tiger Global. Even the Ontario Teachers’ Pension Plan put in $95mn. (What has your pension fund manager been doing with your money?)

There were rumours of another $1bn raise in September. However, that didn’t materialise and the bitcoin bear market meant the tide was going out in the crypto industry. We would soon learn who had been swimming naked.

Subscribe to this amazing publication. It’s a Substack bestseller.

FTX suffers in the bitcoin bear market 

Some started asking questions about FTX’s accounting and other practices. Short sellers also started taking notice - they expose frauds more quickly than anyone. Negative coverage started to appear. 

On November 6 an article at Coindesk raised doubts about the balance sheet of Bankman-Fried’s sister company, Alameda. 

Then things started to unravel quickly. 

Changpeng Zhao, CEO of Binance (the world’s biggest crypto exchange), which had been an early investor in FTX, announced that Binance was selling all its FTT coins - as much as $2bn worth. (FTT coins are part of the plumbing of the FTX exchange). The value of FTT started to fall.

Suddenly there was a scramble to withdraw assets from the exchange. It was thought to have had the assets to back the liabilities, Bankman-Fried tried assure everyone that client funds were safe, but it seemed this was no full reserve exchange and FTX didn’t have the funds to meet the run. 

In fact, it seems FTX had been using some of the funds - as much as $10bn - to shore up sister company Alameda, which had suffered significant trading losses over the past year. 

(Watch the interviews with 28-year-old Alameda CEO Caroline Ellison - said to be in a polyamorous relationship with Bankman-Fried - describing how she “doesn’t like stop losses”. Turns out she had barely any risk management at all).

Chain analysts noted that FTX didn’t have the funds to cover withdrawals. On November 8th Bankman-Fried said he had “enough to cover all client holdings” and that “he doesn’t invest client assets”, but the run continued. That evening withdrawals were halted. 

In an attempt to restore confidence, Zhao and Bankman-Fried announced that Binance would be acquiring FTX soon after. However, the following day, Zhao said that having done his due diligence, Binance would not be acquiring FTX. 

A day later, FTX filed for bankruptcy. 

Easy come, easy go: Bankman-Fried’s net worth went from $16bn to zero in barely 72 hours. Reports are FTX had $900m in assets against $9bn in liabilities.

And then, the day after that, some $600m in crypto was hacked from FTX’s wallets and syphoned lord knows where - Panama, Bermuda and Cayman, presumably. Apparently the hacker isn’t even that sophisticated and numerous Twitter feeds are now following the stolen crypto.

This story’s amazing - you need to share it on Twitter, LinkedIn or Facebook.

As FTX unravels stories start to emerge 

Since then all sorts of stories have emerged. Weird sexual goings on at the companies HQ - Alameda’s employees lived together in a luxury apartment the Bahamas and polyamory reigned. Bankman-Fried sharing the stage with Bill Clinton and Tony Blair. A key employee had run an online poker company and been convicted for cheating. Flight tracker apps showing private jets fleeing to jurisdictions where they can’t be arrested. 

The contagion has spread to other crypto operators such as BlockFi which have halted withdrawals. Author Michael Lewis of Big Short fame has apparently already signed a film deal - he had been tracking Bankman-Fried for six months. (Surely he must have been aware of what was going on).

Bankman-Fried was the US Democrat party’s second-largest donor in 2020, donating around $37m, and pledged upwards of $1bn if Trump were to run in 2024. Given these proceeds might effectively be stolen capital, should the Democrats return the money?

Heck, it’s even emerged that Ukraine had money with the business, that it has links to the WEF and that Bankman-Fried took advice from Gary Gensler of the SEC.

All the while the fraud was being perpetrated, Bankman-Fried donated to what he considered good causes - and talked up his giving even more. He spoke endlessly about charity, philanthropy, altruism and utilitarianism. His talks were peppered with motivational catchphrases, all delivered with geeky, beta-male sincerity. The double standards are breathtaking, given the magnitude of this fraud and the lives he has ruined. Even now his apologies are those of an errant rich kid - he seems oblivious to the magnitude of what has happened.

Illustrating the uselessness of rating agencies (as if 2008 were not enough), and ESG, FTX was given a higher leadership and governance rating than Exxon Mobil.

Its brand has sponsored sporting event after sporting event - baseball, basketball, F1 - star athletes such as Tom Brady (who appears to have lost hundreds of millions).

Rather like JP Morgan bailing out the markets in the Panic of 1907, Changpeng Zhao is now forming forming “an industry recovery fund, to help projects who are otherwise strong, but in a liquidity crisis”.

It’s all just extraordinary.

What does FTX’s collapse mean for bitcoin? 

It’s worth remembering that in the wild west that is this new financial technology we have been here before. Many times, in fact, most famously with Mt Gox. It’s hard to emphasise just what a big deal that bankruptcy was back then.

In 2014 Mt Gox was the biggest bitcoin exchange in the world, handling over 70% of bitcoin transactions, according to Wikipedia. When news broke that it had been hacked and it suspended trading, stopped withdrawals and filed for bankruptcy, the news precipitated an immediate 50% fall in bitcoin (from over $800 to $400). It would then fall by a further 50% to $200 in the ensuing bear market.

This time around bitcoin has “only” fallen by 20-25%, though other coins, Solana especially (FTX held a lot), have fallen by a lot more. The beneficiaries have been coins of which FTX did not hold vast quantities (so there hasn’t been the selling pressure).

These are the kinds of frauds that get perpetrated in bull markets with all the accompanying euphoria. I’d say it was very likely Alameda’s poor risk management was due to the fact that it was founded almost at the bottom of the previous bear market cycle and so they only knew bull market conditions, and that guided their behaviour. But then the bear market exposed the fraud.

Bottom line: it seems FTX was doing what banks have been doing (and shouldn’t be doing) ever since there have been banks, regulated or not. It was taking client money and using it for other purposes.

Fortunes have been decimated. Lives have been ruined. Many of the previous cycle’s crypto darlings are now headed for the scrap heap, if they are not already there. The list of the top ten coins by market cap is already very different to what it was a year ago. It’s completely unrecognisable from the previous cycle. 

But bitcoin carries on. 

There will be many who cannot distinguish between the sound, censorship-resistant money that is bitcoin, other dodgy cryptocurrencies and psychopathic fraudsters, tainting one with the other. 

There are many who will declare this the end of bitcoin. It won’t be. It’s a blow to bitcoin and crypto more generally. The optics are terrible. This is a fraud of Bernie Madoff proportions and more (estimates suggest FTX has more than one million creditors all of whom will be fighting over the scraps in the bankruptcy process). 

But remember just because criminals use the US dollar or cars does not mean all US dollar or car users are criminals. 

Bitcoin will survive and grow.

Don’t keep your money on third-party exchanges. “Not your keys, not your coins” as the saying goes. 

And if you are one of the people who wished they got in, but never did, now is probably not a bad time to dip in your toe. There is blood on the streets. As somebody richer than you or I once said, that is the time to buy.

Will this story mark the low? Nobody knows the answer to that, but let’s just say there is a lot more bad news priced in than good. The next big line of support is around $12,500.

Phew, that was some article. You should subscribe.

If you want to play it safe and buy gold, my preferred dealer is the Pure Gold Company, with whom I have an affiliation deal.

Tell everyone on Facebook, LinkedIn or Twitter about this amazing article.

This article first appeared at Moneyweek.

A number of people have asked me to cover bitcoin after this week’s insanity - and I will very soon, I promise, but today we consider fossil fuels once again.

While the oil and natural gas prices have not done a great deal these last six months - up a bit, down a bit, then sideways - the associated companies have done very well: the producers, the service companies and so on.

Many years of bear market and belt-tightening are now paying off.

However, we are not yet, I would suggest, at that point of excess and decadence that marks the end of a cycle - crazy mergers and acquisitions, insane valuations and Bacchanalian behaviour from the executive classes. So I venture today, as last week, that there is still plenty of gas left in the tank of this bull market.

With that in mind I wanted to share a few charts with you today that give an idea of what is possible.

Oil and gas stocks are on the rise 

The first of them shows the ratio between energy stocks and the rest of the market. Indeed, without energy stocks there would not be a rest of the market. A simple point that many, especially those who make policy, seem oblivious to. The world we live in today and the economic benefits we enjoy, relative to our ancestors, have been made possible by fossil fuel.

So here is the energy sector relative to the the S&P 500. The higher the chart goes, the bigger the relative market cap of energy stocks. 

You can see that, even with the rally we have seen in energy companies since 2020, on a relative basis, energy companies are, give or take, where they were at the turn of the century, when oil itself was around $10/barrel and that secular bull market was only just getting started.

You can also see that we are in an uptrend. Energy stocks are increasing in value, while the broader S&P500 is flat or falling.

It’s also worth noting that the relative market cap was almost three times as large in mid 2008, when oil went to $147/barrel. 

The inference is that the bull market has a lot further to run.

Tell the world about this amazing article.

Oil versus stocks

Next we consider the ratio between oil - West Texas Intermediate - and the S&P 500. 

You would expect this chart to trend lower over time because oil production and extraction techniques should improve over time, while broader economies and the companies who operate in them grow. 

Nevertheless we are below the levels we were in the early part of the century. You can see how high this ratio went in 2008 - and how low in Corona panic of 2020, when oil futures, somehow, went into negative territory.

It feels a bit like, as far as this ratio is concerned, we are in late 2003.

Relative to the S&P 500, oil is roughly where it was three or five years ago - I’d say it’s at its 3- or 5-year average. And it’s a lot cheaper than it was throughout that entire 2003 to mid-2014 timeframe. 

So even with the gains of the last two years, oil does not look expensive relative to the S&P 500. It is at the cheaper end of the range. Another sign there is more gas left in the bull market tank.

Here now we look at oil relative to gold. These two - as hard commodities - tend to trade in a much tighter range over time, but my observation again is that it is in the low to middle of the 20-year range and not at one of those points of extremity whereby you might consider rolling out of one and into the other.

For sure we are nothing like where we were went oil went to $147 in 2008. In fact, we are below where we were for most of the 2000s. On the basis of this chart, oil is probably the cheaper of the two.

Trade of the lustrum

As regular readers will vouch, oil is a drum I have been beating since 2016 when it was $25 or so, declaring it our “trade of the lustrum”. A lustrum is a five-year period - a useful and underused word I’d say.

That lustrum is now becoming a decade. We continue to beat the drum on oil, gas, coal and the related companies. Fossil fuel demand will continue to grow until at least 2030, the IEA has forecast (2040 in the case of natural gas). That means it is not just enough to maintain current production levels, they need to increase. Yet there have been seven or eight years of underinvestment - leading to today’s shortages. Partly because of ESG deterring investment, partly because so much capital has gone into green energy related companies instead and partly because of the excesses of the previous bull market still needed to be purged. The bull market conditions are still good and longer term, I think fossil fuel stocks go higher.

I’m a big believer in narratives within markets. The fossil fuel story is only slowly starting to change. Many are realising just how important they are and what they have made possible. Indeed, that there is a strong moral case for them, not against them.

But the narrative is not yet at end-of-cycle levels. When people start talking about Peak Oil again - that’s the sort of thing you want to be looking out for. That the need for alternative energy sources is not because fossil fuels are bad, but because we have consumed them all

I don’t know what the end-of-bull market narratives will be - that’s a story that is yet to be told. But if legislators and subsidisers start abandoning electric vehicle initiatives because the ultimate source of the electricity remains the burning of fossil fuels, and it’s really quite inefficient, never mind hypocritical - that is one possible scenario

So hold on to your positions - enjoy the ride.

Subscribe to this epic publication.

This article first appeared in Moneyweek.

Today’s missive comes to you from the Galapagos Islands out in the eastern Pacific, where two stories of noble energy initiatives reflect the broader realities of energy policy around the world. 

We tell these stories with a specific question in mind: how much gas, so to speak, is left in the tank of this energy bull market?

The Galapagos population is only around 30,000, but, as a fully functioning society, the same dynamics observed in this small ecosystem occur elsewhere, even if less visibly, so it serves as a useful case study.

So we come to the first of our two stories.

Not so green transport in Galapagos

In order to limit traffic, protect the environment in this most ecologically delicate of places and protect the taxi industry, the local government made it extremely difficult to get a vehicle licence. All sorts of problematic bureaucratic hurdles had to be jumped, and most people ended up using bikes or public transport.

But then in 2016 the powers that be, with a brighter, greener future in mind, decided that anyone could get a licence to own a vehicle, no permit required - as long as it was an electric vehicle. 

There was just one condition. The buyer had to have a family. 

Given that most people on the islands have relations, that was a pretty easy condition to meet, even for the single folk. 

There was a great deal of PR and fanfare about this new initiative: clean, green, sustainable - all that stuff - and a blind eye was turned to the increase in traffic, or of roadkill to the many tame birds on the streets of the island (this is a major problem).

At this point it’s worth reminding ourselves that there are, around the world, three main areas of energy consumption - transportation, heating and electricity. While cleaner forms of energy, such as nuclear or wind, might be increasing as sources of electricity, 84% of global energy still derives from the burning of fossil fuels, as the graphic below from Our World In data shows.

Even electricity, despite its green credentials, still relies on fossil fuels. The burning of the fossil fuel may be out of sight and, therefore, out of mind, but over 60% of global electricity still derives from it, as our second graphic shows. 

Wind and solar between them account for barely 10%.

Sign up to The Flying Frisby.

As we are all now discovering to our cost, despite many years of considerable investment, some might say over-investment, in green energy, there have, simultaneously, been many years of underinvestment in fossil fuel exploration and extraction, nuclear power (the use of which in electricity has, on a relative basis, been declining since the 1990s) and public grids. Hence the current energy shortages especially in Europe. The Galapagos Islands followed the international trends in this regard - which is one reason this story makes for such an interesting case study.

Here on the Galapagos Islands, the majority of electricity, despite what you may read, is produced by burning diesel. And at this point we deviate to story number two.

The Galapagos wind turbines.

There were, once upon a time, some wind turbines built by a consortium of overseas energy corporations, looking to advertise their green credentials to the world. Said corporations conducted a one-year study of wind on the island and concluded that next to the airport (where they would also conveniently be seen by everyone arriving at and leaving the islands) was the best place to erect the turbines.

The turbines were duly installed, the publicity was had - here is the world’s first airport that runs 100% on wind and solar, all that stuff - and the energy companies retired back to their nation states.

It turned out that year of the study had been an outlier for winds, and they hadn’t built the turbines in anything like the windiest spot. 

Then the wind turbines stopped working, but nobody on the islands knew how to fix them. Nor was it clear whose responsibility they were. 

Ever since, the turbines have sat there, stuck - even when the wind is blowing up a storm. Ask a local for the story, and you’ll get a wry shake of the head and a smile at the stupidity of it all. Lord knows how much fossil fuel was burnt mining the necessary materials, manufacturing the turbines, transporting them to the islands and erecting them, only for them not to work, but that is, despite the good intention, what has happened. There they remain, motionless, like statues from a fallen empire. But how now to get rid of them?

The episode is neither clean, green nor sustainable.

Tell the world about this amazing article

So back to story number one and the attempt to make the islands greener with electric vehicles (EVs). 

With the easing of regulation in 2016, the locals who had previously wanted a vehicle but couldn’t get one (a lot) piled in and bought electric vehicles, much to the benefit of the EV manufacturers.

But as diesel is the major source of electricity on the islands, so more diesel than ever was now burnt. Again, neither clean nor green. 

In fact so much diesel got burnt, and so much electricity was consumed, that the shortcomings of the grid and the lack of investment therein were exposed. Power outages soon followed. Multiple and regular. 

The power outages got so bad that just three years after the EV fanfare, in 2019 a moratorium on electric vehicles was discreetly declared - no fanfare this time - and the islands went back to their old ways.

I can’t help thinking that the West is travelling a similar path. As consumers,, encouraged by the green credentials, adopt more electric vehicles, has there been a concomitant investment in power grids to meet the new demand? In many - dare I say most? - countries there hasn’t. What proportion of this rising new electricity demand will entail more burning of fossil fuel, coal especially? Will there be power outages as a result?

It’s stupid to expect us to consume less energy. As civilisations progress, they consume more energy. They also get better at consuming energy. A civilisation that consumes less energy is a civilisation in recession and decline. 

We should not be advocating the consumption of less energy, but advocating the better and more efficient consumption of energy, and that means we have to invest in the exploration and production of fossil fuels. 

How else is the developing world to pull out of poverty without the benefits of fossil fuels? 

The International Energy Agency (IEA) forecast in 2020 in its World Energy Outlook that growth in global oil demand will only end in 10 years and that “global natural gas demand growth might stop around 2040”. Those two landmark years - 2030 and 2040 - are not when we stop using oil and gas, just when the demand for them stops increasing. (And they are probably optimistic forecasts).

That means that, to meet demand, not only do we have to maintain oil and gas production at current levels, we have to increase them - or prices will go a lot higher. That means greater investment in coal, oil and gas is required. And that means this bull market is far from over.

The whole narrative needs to change, as it is slowly starting to do.

There have been at least ten years of underinvestment in coal, oil and gas - partly because of the excesses of the last secular bull market and partly because of the powerful anti-fossil fuel story. That now needs to be corrected.

There is also now a strong case for a reversion to traditional auto manufacturers, as opposed to the likes of Tesla. But that’s a subject for another day.

The Flying Frisby is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Interested in buying gold? Check out the Pure Gold Company.

If you are in or around London on November 24, wearing my comedy hat, I’m doing a gig with the Gilets Jaunes - that’s my band - at Crazy Coqs in Piccadilly Circus underneath Brasserie Zedel. It’s a fantastic venue for this kind of thing. It’s going to be a great night. Please come on down.

Thank you for reading The Flying Frisby. This post is public so feel free to share it.

This article first appeared at Moneyweek.

The highest form of charity, argued the 12th-century Jewish philosopher Maimonides, is when the help given enables the receiver to become self- sufficient.

But our systems of state charity - aka welfare - have too frequently had the opposite effect: they have actually created dependency. It is time to re-think the way we help people.

I suggest something that may be heinous to some, but it’s this: welfare would be more effective, more varied, more widespread and affordable if there were no state involvement.

People instinctively think that without a welfare state, the poor and needy would not be looked after. At such an unacceptable prospect, people then become fervent in their defence of state welfare systems. You can see the passion people feel about this erupting all over the Twitter and the blogosphere.

Before we start, I want you to get your head around one thought - suggesting that the welfare system is not working and that we should do away with it is not the same as suggesting the poor and needy should not be looked after. Not at all - in fact, quite the opposite.

The provision of care is a delicate, complicated and unpredictable process. Sometimes money might help the recipient towards self-sufficiency, but sometimes not. Giving money might lead to a temporary lessening of suffering, but often it can lead to greater dependency and less self-reliance. Sometimes something local is required, sometimes something practical, sometimes something psychological or emotional, sometimes something specific to the individual's circumstances - sometimes what's needed is a proverbial kick up the backside. Different circumstances require different forms of care.

The dignity of the recipient also needs to be considered. It can be demeaning to receive charity. On occasion anonymity might be required - but on other occasions it might not be.

How on earth can anyone hope to design a top-down, one-size-fits-all, system of state welfare that can meet all these varying needs consistently over time?

Then there is the matter of the giver. He or she must also be considered.

Compassion, care and the giving of charity and care are essential human functions - they are a part of human nature. People need to give as much as they need to receive. You just need to see the pleasure children get from giving as evidence of this. Even perhaps the most ruthless, murderous drug-trafficker that ever drew breath, Pablo Escobar, was a prolific giver. He built houses, churches and schools in his native city of Medellin on a scale unmatched by the Colombian government.

In the charitable process, the giver has needs too. Sometimes the giver wants to be anonymous - sometimes they want recognition. Sometimes he or she likes to be involved with the recipient in some way, sometimes not.

But, in the process of state care, the giver's needs are not even considered. Taxes are taken and that is it. We are given no real say in how the money we have earned is spent, bar a vote of dubious effect every five years. Often the giver is morally opposed to what his taxes are being spent on!

The forced giving that is taxation actually destroys the altruistic satisfaction that people get from giving voluntarily. To help others and to share with them is part of humanity. But, in a world in which government is responsible for the care of the poor and needy, that compassion is removed from life. As a result, the state now has a near monopoly on compassion!

if you find this interesting, please share .

In fact it is even more bizarrely specific than that: the pro-large-welfare-state left wing has the monopoly on compassion. Anyone who doesn't agree with the concept of a large, generous welfare state is deemed heartless and selfish.

While you have to pay the government through tax to provide welfare (or heathcare or education) your ability to provide any of these things for yourself or your family is reduced, because you have less money. After taxes are taken from you, you often you can't then afford to pay for your children's school, your doctor, your hospital, your home, or your charity to others - so you find yourself depending on the state help in some way. And so more and more people, in some way or other, are caught in the ever-growing dependency net.

What's more, if the state is providing care to the needy, you are then absolved of the responsibility to do so.

Meanwhile, government welfare, as well as being inflexible, is expensive . The large organizations, such as the NHS or the DWP, through which care is administered can be inefficient and wasteful. Worse yet, they are be prone to corruption and rent-seeking (people gaming the system in some way).

If you look at food, clothing or technology - essential human needs that, largely, are not supplied by the state - we have, over the last thirty of forty years, seen dramatic falls in price and dramatic improvement in quality. Competition has driven costs lower. Yet welfare has not experienced the same improvements. Why not? Because, thanks to the state's near monopoly, there is no competition.

The idea of competition in welfare is offensive to many. But we need it if we are to improve quality and lower costs.

The greatest expense in our lives is not, as many believe, your house or your children's education, it is in fact government. But imagine a world with minimal state. Suddenly that expense is removed. Without the cost of the state, we have more capital to spend and invest. People are empowered. Our ability to help others is increased.

In a world with no state, what's more, suddenly our responsibility to help others is also increased. If the state is not helping people, you must. Simultaneously, thanks to competition, the help we want to offer is cheaper and better in quality - organizations are competing with each other to offer better help at a lower price.

The result will be more affordable welfare, more widespread and diverse welfare, more flexible welfare that can provide for specific needs, more effective welfare, more onus to provide welfare - ultimately, better welfare.

Without a welfare state the poor and needy won't be looked after, you say? I suggest they will be - to a much higher standard than they are today.

The Flying Frisby is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

If you are in or around London on November 24, wearing my comedy hat, I’m doing a gig with the Gilets Jaunes - that’s my band - at Crazy Coqs in Piccadilly Circus underneath Brasserie Zedel. It’s a fantastic venue for this kind of thing. It’s going to be a great night. Please come on down.

Thank you for reading The Flying Frisby. This post is public so feel free to share it.

Money evolves constantly. 

Every day there is some tiny new fintech development, but it’s only when you take a step back and look at the ten-, twenty- or thirty-year  picture that you realise just how much things have changed. 

What is money today is a far cry from what was money when I was a child. Digital technology barely existed back then. We used cash and these things called cheques. You’ve probably heard of them.

It’s not just what we use as money that evolves. How money is created - that changes too. And just this decade there has been a major evolution. That’s what I am going to talk about today.

Thank you for reading The Flying Frisby. This post is public so feel free to share it.

The creation of money and debt

Once upon a time you would create money by mining gold and silver. But debt-based money systems have also existed since the dawn of civilization, when clay tokens representing valuable items such as barley or sheep would be baked inside clay balls. When the debt was settled the clay balls would be smashed open.

Humans, being the ingenious folk they are, especially when it comes to money, soon found that it was quicker to simply inscribe the clay with pictures of said items and so did the first systems of writing develop - hieroglyphics. 

Coins came along, and then the printing press, both remarkably long-lived technologies, but behind it all there was always metal.

Western Europe abandoned gold in 1914 so it could print the money to pay for the First World War, and the United States did the same in 1971 amidst spiralling welfare costs and the conflict in Vietnam. Both years were landmarks in the evolution of money creation.

This became the fiat era, when money became debt. Some physical cash was printed or minted, but money for the most part was created when loans were made. You borrow a thousand pounds to buy a house, the bank created that thousand pounds using the house as collateral and suddenly there was a thousand pounds in the housing market that wasn’t previously there. That’s why houses kept on rising in value - the constant introduction of newly created money through mortgages. Introduce debt into a market and prices rise. If houses were cash based, they’d be a lot cheaper. 

Something similar happened in the bond markets and the financial markets with the use of leverage. Leverage is just a fancy term for debt.

There were occasional moments of credit tightening, but the broader trend, especially as economists and governments became obsessed with what they call growth, was for ever expanding credit.

Human beings, being the greedy folk they are, especially when it comes to money, took the whole thing too far, 2008 came along and the bubble went pop.

Then a whole way new to create money was invented: Quantitative Easing. Central Banks now started creating money, and they bailed out the financial system with it. 

Then they started using the money to buy government bonds - so they effectively printed money to pay for government spending. They also bought other financial assets. And so lots of newly created money went into the financial system and from there to the expensive houses in which many of those who work in finance live, and we got another decade or more of rising prices.

But because all this newly created money went into financial assets and housing, it didn’t show up on the inflation numbers. Central bank inflation measures don’t include houses or financial assets. So they said there was no inflation. 

Then Covid came along.

Central banks could now print money and it doesn’t create inflation, they thought. They forgot about the sleight of hand that was their inflation measures. So they printed more money and the government handed it out to people. That money made its way into the real economy and now we have inflation. And they are all scratching their heads and blaming Vladimir Putin.

But the nature of money creation has changed. Now money is not just debt. Governments are creating it to fund their activities. And when central bank digital currencies come along, they are going to do that even more. As a result governments, are going to play far greater role in where capital gets allocated. 

We turn to the wise old owl that is financial historian Russell Napier. “By issuing state guarantees on bank credit during the Covid crisis, governments have effectively taken over the levers to control the creation of money”. 

They said it was temporary, but, to quote the great Milton Friedman, “nothing is so permanent as a temporary government programme”.

We now have the War in Ukraine and with it spiralling energy costs - another emergency. How to deal with it? Keep with the programme. Lend money and guarantee loans. 

Russell Napier again: “By telling banks how and where to grant guaranteed loans, governments can direct investment where they want it to, be it energy, projects aimed at reducing inequality, or general investments to combat climate change. By guiding the growth of credit and therefore the growth of money, they can control the nominal growth of the economy.”

It’s a huge win for the unelected technocrat. 

Nobody designed this, nobody planned it, they have just discovered they can do it. And who was at the heart of it all in the UK? Our new Prime Minister. 

Perhaps, among other things, it means that the age of the all-powerful central bank is coming to an end.

“This is a shift of power that cannot be underestimated,” says Napier. “Our whole economic system of the past 40 years was built on the assumption that the growth of credit and therefore broad money in the economy was controlled through the level of interest rates – and that central banks controlled interest rates. But now, when governments take control of private credit creation through the banking system by guaranteeing loans, central banks are pushed out of their role. We are moving from a mechanism where bank credit is controlled by interest rates to a quantitative mechanism that is politicised. This is the politicisation of credit.”

Inflation is often accompanied by high unemployment. It was in the 1970s. But we are in an era of low unemployment. Many are struggling to get the staff (at the price they are prepared to pay) - this isn’t a Brexit thing. It’s happening across Europe and the US.

Many government spending programmes will be popular. They’ll create a lot more employment. We’ll probably get a load more “growth”, which means higher levels of inflation will be more acceptable (and long-lasting).

Government is about to get a whole lot more involved in the economy - and in our lives. It ain’t getting smaller.

How to navigate it all?

We turn to our man Russell once more. “First of all: avoid government bonds. Investors in government debt are the ones who will be robbed slowly. Within equities, there are sectors that will do very well. The great problems we have – energy, climate change, defence, inequality, our dependence on production from China – will all be solved by massive investment. This capex boom could last for a long time. Companies that are geared to this renaissance of capital spending will do well. Gold will do well once people realise that inflation won’t come down to pre-2020 levels but will settle between 4 and 6%.”

Gold is in a downtrend. But we like it. It’s even more permanent than a temporary government programme. 

But the nature of money creation has evolved once more.

The Flying Frisby is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Interested in buying gold? Check out the Pure Gold Company.

If you are in or around London on November 24, wearing my comedy hat, I’m doing a gig with the Gilets Jaunes - that’s my band - at Crazy Coqs in Piccadilly Circus underneath Brasserie Zedel. It’s a fantastic venue for this kind of thing. It’s going to be a great night. Please come on down.

This article first appeared at Moneyweek.

Over the last decade, the Turkish lira has seen declines of more than 95% against the US dollar. It took just ₺1.50 to buy it dollar ten years ago. Now it takes ₺33. The lira has been one of the world’s worst-performing currencies - and in a fiat world, that is saying something - rivalled only by the Venezuelan bolivar and the Argentinian peso.

While in Istanbul last week, I spoke to two young professionals, Emre, 25, and İlker, 27, about life under the lira. Both are bright, articulate, and empathetic young men who speak three languages fluently - English, German, and Turkish - as well as competent French.

Given that the currency has been so bad, I was expecting to see more widespread use of foreign money, but in fact, lira are changing hands everywhere - you see people all over the place with wads of them. “You have to use lira,” they explained. “It is the national currency.” Even with such dire inflation, there is still trade. The economy still functions, albeit badly. (That said everything in the airports was denominated in euros).

Food, energy, travel, housing, consumer goods - everything has gone up in price, but, surprise, surprise, wages have not gone up by nearly as much. The result is that ordinary people have been impoverished.

“The average wage in Istanbul is about £650 per month,” they told me. (One thing that impressed me was how immediately they could translate the lira into pounds, dollars, or euros).

“What about the receptionist in my hotel or a waiter?”

“Maybe £500. A taxi driver working all hours, maybe £800.”

With those kinds of earnings, it is hard to make ends meet.

“That’s why everybody wants to meet a tourist,” they smiled in reply.

“What do you do?” I asked. “Do you spend money as soon as you have it? Before it loses purchasing power?”

“Yes,” they said. “There is no point saving. When we were students a few years ago, you could save for maybe three years and buy a car. Now it would take you 20 years. There is no point saving in lira. We spend the money as soon as we have it.”

“Even on stupid things,” added Emre, pointing to his Casio watch. “You may as well.”

Everyone is the same, apparently. They spend as soon as they earn. There is no point saving a currency that will soon be worth less. The rates of interest paid do not compensate, especially given that you usually have to tie your money up for one, two, or three years to obtain decent rates, and the inflation risk of doing that is too great.

Interest rates have been quite the issue in Turkey, by the way. Mainstream Islamic finance prohibits interest, something they claimed Turkish President Recep Tayyip Erdoğan exploited. Until 2023 Erdoğan kept a lid on rates (they are now 50%), arguing that high rates cause inflation. He repeatedly replaced central bank governors who resisted low rates.

“How do people save?” I asked.

“Gold,” came the answer straight away. Everyone who can buys gold, even tiny amounts below a gram.

“Silver?” I asked.

“Not so much.”

I asked them if they use Revolut or similar to hold foreign currencies. They had no idea what Revolut was (probably a good thing, given what can happen), but it seems most banks also offer the ability to hold euros, pounds, and dollars, and so citizens tend to convert their lira as quickly as they can.

“What about bitcoin?”

“Not really,” they said. “Some young people.”

I was surprised by that. I saw a few adverts for bitcoin-related products out there. But apparently gold is more common.

“What about saving up to buy a house?”

They both laughed at the impossibility. And there isn’t even a lot of debt in the Turkish housing market. Mortgages, as we know them in the West, don’t really exist, though there are ways to borrow money. Housing is still unaffordable

“So people aren’t starting families then?”

“No, we can’t. Our population growth is starting to turn negative.”

“So you two are not close to starting a family.”

They shook their heads sadly. “What do we have to offer?”

I felt so sorry for these two young men. Both would be good husbands and fathers.

“When people do start families, they rent small flats. Mum works, dad works, grandparents work.”

This is something I saw directly. The taxi that met me at the airport had mum and dad in the front and their two kids asleep in the back, while dad continued working into the night.

A typical one-bed flat might be about £500 per month. There is not really the same culture of flat-sharing among young professionals that we have in the UK, except maybe for students, and most young people stay with their parents until they marry.

I struggled to understand how anyone could make any money in such a situation. All asset owners are doing is protecting their wealth against the currency debasement; they are not actually growing it. “Who’s the richest person in the country?” I wondered.

“Erdoğan,” they both said immediately. “Officially, probably the Koç family. They own Fenerbahçe, the football club. But really it is almost certainly Erdoğan.”

The state of the currency and the political leadership is no doubt a huge deterrent to foreign investment.

What about leaving?, I asked.

That is hard too. The routes into Europe are not as easy as they once were. Far fewer Turks now go to Germany, for example. Even just getting a tourist visa can take two years, and the money they earn lasts barely a few days in Europe. Some illegals travel across the Mediterranean and up through Spain, but the US, via Mexico, is now the most common escape. Very expensive. Most are trapped in their own country.

What a sad state of affairs. Isn’t fiat money a terrible thing? What it can do to a country and its people, how it can make things so hopeless.

The bizarre thing: there is economic activity everywhere. Everyone is hustling. Everyone is working. They all want to better themselves and their lot. People want to trade. That is the natural human way of things.

Imagine if it were all underpinned by sound money.

If you are interested in buying gold, check out my recent report. I have a feeling it is going to come in very handy.

My recommended bullion dealer is the Pure Gold Company. I also like Goldcore.

And one other thing:

Charlie Morris is one of my closest mates and he writes what I think is one of the best investment newsletters out there, in fact a suite of them. I urge you to sign up for a free trial.

Back in the 90s, when we were in our 20s, all my university buddies and I wanted to do was travel. We wanted to go everywhere and see the world. 

The problem was how to pay for it.

My solution was to work all year, save up, then, having spent Christmas with my folks, get a flight somewhere on Boxing Day or the day after (flights were always cheap then) and come back at the end of January. The business I was in at the time – voiceovers – never really got going until mid January, so I would end up with almost six weeks of backpacking and only miss a couple of weeks of work, if that.

My best buddy, who is now a big cheese at Channel 4 so I won’t mention his name, went several stages further. He got a job compiling guide books for many years. As a result, he has been to more places than anyone I’ve ever met – across Asia, Africa, Europe, the Americas, you name it. And, of all of them, he says he reckons New Orleans was the best.

So, imagine my delight when I got an invitation to come and speak at the New Orleans Investment Conference this year. Do I want to come? You betcha!

The conference took place last week and I thought it might be of some use or interest to you if I shared some of my observations.

Will the Fed keep raising interest rates?

First up, I had a great time. The conference, organised by Brian Lundin of the Gold Newsletter and his supremely competent team, lasted four days. There were workshops and events galore, plus a host of great speakers – from celebrated resource investors such as Rick Rule, Brent Cook and Sean Broderick to macro strategists such as Danielle DiMartino Booth, Peter Boockvar, James Grant and Jim Iuorio to the unorthodox with the likes of Jim Rickards, George Gammon, Dave Collum and Robert Prechter. 

Over 600 people came and there were 100 exhibitors. I would say the bulk of the attendees were American, over 50 and male. There were a lot of gold bugs in the room. I felt well at home. Plus there was plenty of fun to be had in this most musical of cities by night – and great food too.

I would say the overriding theme of the conference – the subject that would not go away – was the Federal Reserve Bank. How long does it continue to raise rates for? When does it pivot? At what point do debt levels become unsustainable? 

The US has interest to pay on $31trn of debt – that surely caps how much further it can raise interest rates? But then it has made it clear that fighting inflation is its number one priority. Round and round the subject went. Some argued that it pivots, others that it keeps on raising.

There was also plenty of talk about falling real estate prices; commodities – especially base and battery metals, not to mention energy; the strong dollar and the Ukraine war. I found myself on a panel with George Gammon and Jim Rickards about the threat of imminent nuclear war that got very tin-foil hat. 

When I suggested that, to everyone’s surprise, Russia was losing the war in Ukraine, Rickards declared that I had fallen for the propaganda and had become a mouthpiece for the globalist agenda and the New World Order. Each to their own, I guess.

Opportunities for investors in the UK

Another theme that cropped up a couple of times was investing in the UK and the opportunities there – or here, I should say. The yields on real estate investment trusts (Reits) are incredible, said Peter Boockvar, and, unlike New York where a lot of commercial property is sitting vacant, while many continue to work from home, in the UK it’s mostly being used again. 

Perhaps most importantly, UK property is looking very cheap to our transatlantic friends thanks to the strong dollar. 

I warned about the potential for rising rates here in the UK and the damage it could potentially do to real estate, whether commercial or residential, but Boockvar still felt the UK is looking like an attractive proposition at the moment. We have a tendency to denigrate ourselves here in the UK, which is why it’s so good to go abroad and meet people who see the UK in a much more favourable light.

A lot of North American money is going to make its way to Europe and the UK, not to mention Japan, in the not too distant future, I would venture.

I focused my talk on subjects that I have been covering quite extensively on these pages in recent weeks – energy; gold and its relevance (or lack thereof) in today’s world and China’s monumental gold holdings; and the strong dollar superseding all.

There were plenty of mining companies there too exhibiting their wares. I think my favourite was probably a silver mining company by the name of Sierra Madre Gold and Silver (TSX-V.SM), which has a dynamic young management, good broker backing, some promising exploration properties and has just acquired a silver mine from First Majestic Silver (Toronto: FR, NYSE: AG) that it is now putting back into production. Pending the closing of this transaction, the stock is currently halted, which is what all silver companies should be – it removes the temptation to buy them!

The Flying Frisby is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

If you’re in London on November 24, wearing my comedy hat, I’ll be doing a gig with the Gilets Jaunes at Crazy Coqs (underneath Brasserie Zedel), which is one of the best venues in the West End for musical comedy. It’s going to be a great night. Please come on down.

This article first appeared at Moneyweek.

I was listening to an interview the other day with entrepreneur Balaji Srinivasan, in which he argued that there are two ways by which you can raise capital: one is through investment, the other is through charity.

If you are raising capital through investment, the incentive is to demonstrate strength, competence, ability, prowess, honesty and many such other qualities. The more competence you demonstrate, the more likely people will invest in you and the more they will invest. Broadly speaking, this applies to gaining employment too.

On the other hand, if you are looking to appeal to people’s charity, then the opposite applies. You must demonstrate that you need and deserve this charity, and so the incentive is to demonstrate weakness, affliction, victimhood and so on. 

Many of these messages of affliction have made for some of the most powerful ad campaigns ever conducted. Young children and animals are probably the most evocative - from the starving Ethiopian children that inspired Live Aid to the battered seals of anti-fur campaigns.

Welfare and, to an extent, healthcare can be seen as forms of charity, even education in a way. In the 19th century responsibility for the provision of welfare, healthcare and education mostly lay with the church, the friendly societies and other private bodies, but in the 20th they, for the most part, became the domain of the state.

Today there are countless institutions that rely on government subsidy for their existence - from those fighting climate change or promoting green energy to those fighting perceived inequalities such as Stonewall to many in the arts. All rely on demonstrating affliction to fund themselves and exist.

Meanwhile, charity has become an enormous business in the developed world, and all sorts of scandals are starting to emerge of corruption, of the huge salaries many of those who work in it enjoy (get paid lots and be virtuous) and the fact that so little of money donated actually reaches the intended recipients - less than 50% is the key stat from the David Craig book, The Great Charity Scandal: What Really Happens to the Billions We Give to Good Causes? Some charities rely on donations and subscriptions, many rely on the state and its subsidies, many on both. And the industry is heavily regulated by state (with questionable results if the above is to be believed). Regulation also costs a lot of money to adhere to.

As those who read my stuff, especially Life After the State, will know, I constantly argue the state is not the best means to provide these things to the highest possible standard at the lowest possible cost, that in fact, for all its good intentions (let’s assume they’re good) the state often causes more harm than good and its role in exacerbating the health, wealth and opportunity gaps is demonstrable and large. Thus we should shrink the state as much as is possible.

But because the state has grown so bloated in the West, and because it is the main provider of this second form of capital - charity - whether by subsidy or through its other systems, and because the solution to pretty much any social problem that arises is that the government “must do something”, I suggest we are getting caught up in an extremely unhealthy psychological loop. Rather than incentivising strength, competence, excellence and so on, our systems are incentivising behaviours by which that second form of capital be raised - weakness, victimhood and so on. That’s why there is so much of it about.

New afflictions are being found all the time, as “entrepreneurial” spirits try and find new means to secure special favour, protection and subsidy.

Thus, by shrinking the state do we shrink victimhood.

We want people to be the best they can be, surely? Not the opposite.

Thank you for reading The Flying Frisby. This post is public so feel free to share it.

Here at the New Orleans Investment Conference, I met up with veteran geologist and mining newsletter writer Brent Cook of Exploration Insights together with not-so-veteran, but equally on-it investor Kai Hoffmann of SF Capital.

What followed is a 20-minute chat about the state of the mining markets.

Those of you that are interested in the state of mining - enjoy!

Today we turn our attention to the physical gold markets.

There is, as veteran dealer Ross Norman of Metals Daily puts it, a “disconnect between the gold price and what is happening in the physical markets.”

“Our biggest challenge,” says Joshua Saul of the Pure Gold Company, “is finding enough stock on a daily basis to sell. There is a long line of demand, but very little supply. There’s more demand than at the height of Covid.”

These situations don’t occur very often, but they do occur. 

The gold price is falling, but demand for physical gold is high

I remember 2008 like it was yesterday. Gold cratered along with everything else in the second half of that year. It lost around 30% – falling from north of $1,000/oz to $720/oz. The mining companies fell by a lot more.

Yet there was a scramble in the physical gold markets. Bullion dealers had never been so busy. The general public were rushing to get their money “outside the system” into an asset that was nobody else’s liability. 

Gold would later turn up long before most other assets. November was the low, while the S&P500 carried on lower until the following March. But the fact was there was a scramble to buy physical gold even as the price was falling.

It happens. “Coins and bars,” says Norman, “are just a subset of a much bigger industry.” That industry includes the futures markets, exchange traded funds, institutional buying and selling, central bank buying and selling and, of course, jewellery. 

Ordinary investors may look at the state of the world and think, “I need to buy some gold”. They may be doing that at unprecedented levels. But that is not enough to balance out institutional investors who are, says Norman, “selling three to ten tonnes a day.”

As I say, these disconnects do happen, but they don’t necessarily last.

The US dollar has stolen the show

It’s all about the US dollar, as we have been saying on these pages for many months. In the year to date, gold is up around 13% in sterling. That’s an almost stellar return compared to stock and bond markets. But against the dollar it’s down some 8%. 

How long does the dollar stay so strong? That’s the question we must ask ourselves. On current form, a while longer it would seem.

Norman, who has an extraordinarily good forecasting record, agrees. “The rampant dollar looks like it might be here for a while,” he says.

You don’t need to look further than US interest rates relative to European interest rates and US energy dependency relative to Europe’s, to understand why we are where we are.

“Never in my career did I think we’d see the circumstances we are now in and gold behaving like it is,” says Norman. “It’s extraordinary. The dollar has stolen the show. But nuclear war is a real possibility!”

Gold, by the way, will survive a nuclear explosion, and none of the three types of radiation that follow – alpha, beta and gamma – will affect it.

Smart investors are still buying gold bullion

But one of the few bright spots in this market is what Norman calls “the literate investor” who continues to support it.

Saul of Pure Gold makes a similar observation. His company makes a point of talking to clients as they buy and sell, to understand their motivations. As a result, they build up a lot of qualitative data.

“Everyone’s looking to protect their wealth in a time when things are really uncertain”. 

But there have been two notable trends he has observed.

First, there has been a notable increase in buyers from the financial world. 

“Traders, investment bankers, financial services, accountants, lawyers – they’ve been buying large sums. 

I find this notable: “Their trade sizes are bigger. The median trade size is probably three times bigger than it was a year ago – and during Covid.”

Saul says many of them are worried about what is going on behind the scenes at the banks. “These are considered investments, where there is a lack of alternatives.”

The Flying Frisby is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Money is moving out of property and in to gold

The second notable trend is the exodus of money from real estate – whether commercial or residential.

“Property investors normally like to remain liquid, so they have cash on hand ready for the next deal. Buy-to-let landlords, commercial landlords, people who buy big buildings and let out floor by floor, developers. Companies and individuals. A lot of them have a lot of cash. They have an appetite for debt, but the increased cost of debt, plus the possibility that the underlying asset will fall in value means there is too much risk for them. They’re now parking that cash in physical gold.”

“We are also seeing a growing amount of people with properties on the market, who when their property sells will move their capital into gold. Many are removing their exposure to debt that they might have taken two or three years ago.”

What we are seeing then is capital flowing from finance and from real estate into gold. I find that telling. 

Thank you for reading The Flying Frisby. This post is public so feel free to share it.

China is driving demand for gold bullion

There’s a shortage of physical metal. Premiums are higher than normal, as a result. But that is not deterring buyers. Guess where premiums are highest? Yup, China.

That’s where the demand for gold bullion is highest.

“As much as $50 over spot in some places,” says Norman. “Normally arbitrage irons this out, but that’s not happening.”

The trend of gold making its way from West to East continues.

Here in the West, on the ground, there is a scramble for physical gold that you would not know to look at the gold price. It won’t last. It never does.

The technicals for gold do not look great at all; it’s in a downtrend. That cup-and-handle formation that had us so excited earlier in the year looks like it may have been invalidated. As in 2008, gold looks like it might need to go lower before it goes higher. 

But at grass roots level there is a lot of smart money buying physical gold. 

Somebody has got this wrong. The question is, “who?”

If you are looking to buy physical gold – coins or bars – let me recommend The Pure Gold Company in London, with whom I have an affiliation deal. You can take delivery or store it safely allocated to you in vaults in safe jurisdictions.

The Flying Frisby is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

This article first appeared at Moneyweek.

I stumbled across this 2013 blog earlier today. I’m posting it because I thought you might enjoy it, and partly because it’s relevant to a thought piece I’ve been working on that I’ll be posting later in the week

Ooh, what fun There's nothing surer The rich get rich and the poor get poorer

Peggy Lee

Most of us now enjoy luxuries that would have been unheard of a hundred years ago - running water, electricity, computers, phones, cheap food and clothing. Yet, despite all this, there is discontent. Huge amounts.

The problem is inequality. Inequality is everywhere, it is increasing and it comes in many different forms.

There is the wealth gap.

The wealthiest 400 people in the world are worth more than the poorest 140 million.

70% of the land in the UK is owned by less than 1% of the population.

When once CEOs of major corporations earned 20 times more than their employees, now they can earn a thousand times more. A Burberry sales assistant (according to Glassdoor) earns £16-17,000 including commission. The Burberry CEO, Angela Ahrendts, received £16.9 million last year. I shudder to think what the Burberry factory worker is getting.

Over fifty per cent of young people believe they will never own a house, while the average age of the first-time buyer in London is now over 40. He or she'll be a pensioner before they can start a family.

We can build a decent house for less than a hundred grand, and only 2.5% of the UK is actually built on, so how can we have a society in which houses have got so expensive that most young people think they will never own one?

There is the health gap.

Unbelievably - and despite best intentions - health inequality, as measured by

life expectancy, has actually increased since the founding of the NHS in 1948. There is also huge discrepancy in the quality of care received between the top and bottom of society.

And we have the opportunity gap.

Despite billions being spent on education, despite more and more taxation, subsidy, legislation and regulation all with the intention to spread wealth and bring equality of opportunity, the top positions in just about every area of the economy you can think of - politics, law, media, finance, medicine, even manufacturing - are dominated by the 7% of the population who went to public school.

Even in the Olympics you were five times more likely to win a medal if you went to public school.

Something is wrong. People are, rightly, angry about it.

Tax the rich more. Stop companies like Google evading their tax. Clamp down on immigrants. Stop benefit cheats. Spend more on education, on health care, or is it infrastructure? Increase regulation of banks. Build more houses. Subsidize wind farms or environmental initiatives. More austerity. Everyone has their own idea about what needs to be done and over the last decade a huge ideological battle has been unfolding as people argue about it.

But all these ideas and many more besides, some of which come from the left and others from the right, all involve the same thing: that the government does more, that it takes action.

I suggest the opposite - that the ONE thing government should do is LESS. I suggest that, counter-intuitive though it may seem, the huge rise in inequality is BECAUSE of government and the unintended consequences of its actions.

For a hundred years the state has got more and more involved in our lives. It now look after our birth, our education, our health, often our employment, our old age, even our burial. Through its money and interest rates, through its taxes and subsidies, its rules and regulations, it looks after our economy. The more it does, the greater these gaps have all grown.

It's time to try something else - Life After The State.

Life After The State by Dominic Frisby is available on Amazon. The audiobook is available at Audible.

And if you happen to be in the Louisiana neck of the woods next week, or fancy a trip, I’ll be speaking at the New Orleans Investment Conference, which runs from October 12-15, at the Hilton New Orleans Riverside. There are lots of big names on - Rick Rule, James Grant, George Gammon, Jim Rickards, Doug Casey and many more besides. Come and say hi!

The Flying Frisby is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

We’ve seen incredible rallies across the board this week.

After a worrying sell-off late in the day and into the close on Friday, the Dow and S&P500 all both took off on Monday, rallying by over 3%. They then followed through with gains of another 3% on Tuesday.

The Nasdaq was up by even more.

Given that tech was so totally beaten up, I guess the bigger rally is no surprise. 

You could apply the same logic to precious metals. Silver, sold down into the abyss, rose by eight and a half percent on Monday. The call for a multi-week rally in silver is looking good.

Even the once internationally sought-after currency that is sterling has seen a barnstormer. 

A week ago everyone was talking about parity with the US dollar. It was all over the headlines (which usually means it’s time to take the other side of the trade). Even Turkey’s President Erdogan, with a display of hypocritical chutzpah that would capture the admiration of even the most duplicitous of tyrants, was deriding it. It has “blown up”, he said. He’s not been looking in the forex mirror lately at his own lira, it seems.

Sterling went from $1.03 almost to $1.15.

What we’re looking at is a typical short squeeze

I want this bear market over as much as you probably do, and I hate to go all prophet of doom on you, but these kinds of rip roaring rebounds are just that: rebounds. They are not so typical of bull markets.

Let me give you some depressing stats. 1929, 1931, 1932 and 1933 were among the worst years of in US stockmarket history. Famously so. Yet, on a percentage basis, the ten biggest rallies in the Dow Jones Industrial Average i n the first half of the 20th century all took place in those years.

Prior to this decade, the best days in the stockmarket since 1950 were, says JC Parets of All Star Charts, in 1987, 2002, 2008 & 2009. Again, 2009 aside, not a great time to buy stocks.

These kinds of spikes are not typical of bull markets. That’s not to say they don’t happen in bull markets, but they are more typical of bear markets. Bull markets tend to grind higher. Increased volatility, heightened fear and risk, big up days and big down days, short squeezes: these are all things you see in bear markets.

Indeed, it’s a typical short squeeze. There have been lots of sellers. There are lots of people with big bets that prices will continue falling – a lot of shorts – and suddenly there are no more sellers in this crowded market. As the price turns, the shorts quickly cover their positions – which means there are suddenly lots of buyers – and the market rockets higher. It’s the sudden and rapid covering of positions that causes the spike up.

Of course, sometimes you get these spikes at the final low. March 2009 was one example. March 2020, at the height of the Corona panic, was another. The problem is that on the way to that final low there have been many such up days and down days, so, in real time, you don’t actually know which this is the final one.

“From false moves come fast moves in the opposite direction” is a phrase you may have heard me utter on these pages several times. Friday’s move down was one such example. A break down to new lows, below the June lows, everyone thinks we are going lower. Rumours are flying about. There’s an emergency meeting of the Federal Reserve Bank on Monday. Credit Suisse is going under. The implications of this are bigger than Lehman in 2008. 

Then the market turns around and rips everybody’s faces off.

Rip-roaring up-days are are normal for bear markets

As I write now, most markets have turned down again – though at present it looks more like consolidation action after the gains of the last couple of days.

Here’s the S&P500 over the past year. Just look how many rip roaring up-days there have been in 2022, and yet it has been a horrible year for longs.

An obvious magnet for this move is that falling blue trend line just around 4,010. Another potential target would be the 3,850-3,900 area.

I’ve also shown that false move from which this fast move has come: the break below that dashed blue line which marks the June lows. 

What do you think? Is the final low or have got more bear market action to come?

Price action tends to set the narrative, and the stockmarket tends to lead the broader economy, so even if you are of the mind that this economic downturn is not over, the stockmarket can still quite easily go higher. 

We are going into a good seasonal period for stocks. There’s probably too much pessimism about. We have the US mid-term elections in a month, which will give us a better idea of where things are going politically. 

I’ll change my opinions as events develop. I always do. We all do. But for now I think the likelihood is that this is a bear market rally.

And, as for silver, I don’t think this is the beginning of the big kahuna to $50. Low- to mid-20s is my target.

And if you happen to be in the Louisiana neck of the woods next week, or fancy a trip, I’ll be speaking at the New Orleans Investment Conference, which runs from October 12-15, at the Hilton New Orleans Riverside. There are lots of big names on - Rick Rule, James Grant, George Gammon, Jim Rickards, Doug Casey and many more besides. Come and say hi!

The Flying Frisby is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

This article first appeared at Moneyweek.

Back in 2007 comedian Susan Murray phoned me up with a question.

She was just arranging a new mortgage and she wanted to know where I thought interest rates were going. Should she get a fixed or a variable rate mortgage?

I couldn’t make that decision for her, of course. But I could see there were underlying problems with the economy – quite serious ones – so the safest option, if there was affordable, seemed to be a fixed-rate mortgage. In the event something goes seriously wrong in the broader economy, at least she was protected against spiralling interest rates.

Susan went and fixed her mortgage at 6%. Turns out it was pretty much the top of the market for mortgage rates. They duly plunged as central banks slashed rates and then printed money following the financial crisis. She’s never forgiven me.

“Cost me a ruddy fortune that bloke” she always complains whenever my name comes up.

Cheaper mortgages mean more expensive houses

I may have seen 2008 coming – I was such a gold bug at the time – but I did not  foresee quantitative easing nor the extent to which interest rates would fall. Money got so cheap.

By September 2021, barely a year ago, you could get a five-year fixed rate deal for 1.3%. It seems inconceivable today that money could be so cheap. To be fair, it seemed almost inconceivable at the time. No wonder everyone levered themselves up the eyeballs.

I have long argued that, more than anything, it is cheap money that has driven up house prices. 

Everywhere you look the standard solution to unaffordable housing is that we need to build more, especially in and around London. But London has been a building site for a decade or more. Goodness knows how many new build flats there now are, but all that new build hasn’t brought prices down. 

As I’m forever quoting: between 1997 and 2007 the housing stock grew by 10%, but the population only grew by 5%. If house prices were a function of supply and demand, they should have fallen slightly over this period. They didn’t. They rose by more than 300%.

Then you see that mortgage lending over the same period went up by 370% and you quickly realise it was newly created money that pushed up prices in a decade of loose lending, which gave birth to the national obsession that is house prices. Houses were no longer places to live, but financial assets.

If you introduce new debt into a market, the higher prices will go. Look at student loans.

Mortgage lending doubled again in the ten years from 2009 to 2019 and house prices rose by over 50%.

Cut off the tap that is cheap money, and house prices will quickly come to levels concomitant with earnings. The two have long since been distant friends.

In 1995 the house price to income ratio was below three – even in London it was only just above. Now it’s seven. The average house is seven times average income. In London it’s 11. And we wonder why families have got so small.

Are interest rates only going one way from here?

With inflation spiralling, bond rates rising and the US dollar spiking, money is suddenly not so cheap any more. And it’s getting more and more expensive. The UK is not alone in this, by any means, but the problem is more acute here because our economy is so geared to house prices.

The Bank of England has made an absolute mess of protecting the currency, declaring it will not hesitate, while hesitating. Rather like the way it broadcast its gold sales to the market between 1999 and 2002, thereby sending the gold price to all time lows around $250/oz, so it is now broadcasting its gilt sales and quantitative tightening – and it has sent that particular market plunging too. 

The announcement sparked the sharp sell-off in gilts that began the day before Chancellor Kwasi Kwarteng’s mini-Budget. It’s as though the two departments – the Treasury and the Bank of England – don’t coordinate.

The trigger may have been the Bank of England’s announcement, or Kwarteng’s budget. Whatever. The cause is over ten years of QE, zero interest policies and all the rest of it.

It’s interesting through. At the first signs of panic, they started printing again. That tells us where they will go.

Yesterday morning I would have said that interest rates can only going to go one way, and that means the cheap money taps that drive house prices to such unaffordable levels are now being turned off. Lenders clearly felt the same way. I gather over 900 mortgage products were removed from the market in under 24 hours. Smashing the record around 400 set during the Covid panic.

But then the Bank of England started printing again.

The UK housing market, particularly in and around London, has been an irrational, insatiable monster for decades. Anyone who calls the top has ended up with egg on their face. But we are levered up to the eyeballs. 

It’s not just a matter of no more cheap money coming in. There is also the other side of the coin, something I remember from 1989-1993. People can’t make their interest payments, so they start to sell. If house prices come down 10% or 15%, it’s often the case that the house becomes less valuable than the debt – negative equity strikes. 

I really like Kwarteng’s Budget. I think he has made the right choices. Cutting taxes is good. But a falling housing market, no matter how much growth there is elsewhere, will see the Tories kicked out at the next election. How do they prop up the housing market without cheap money?

I’m sure they’ll find a way. They always do. Or will they?

If you are worried about what is going on and want to buy physical gold or silver, my recommended bullion dealer is the Pure Gold Company with whom I have an affiliation deal. More here. My guide to buying bitcoin is here:

Thank you to all those who came to my lecture with funny bits, How Heavy?, last night. What a great evening. Next West End show is November 23 at Crazy Coqs - that’s not a lecture, but me and the band with lots of unacceptable songs. Tickets here.

The Flying Frisby is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

This article first appeared at Moneyweek.

Bitcoin was built in reaction to all the money printing that went on in the wake of the financial crisis. 

The Times’ headline “Chancellor on Brink of Second Bailout for Banks” was even embedded into the very first block in the blockchain – the genesis block. 

Here was a money system that nobody, whether government or hacker, could print or debase. The rules were set in code. The inflation rate was clearly laid out. And the system, rather than rely on trust – whether in banks, central banks, payment providers or governments – was based on mathematical proof and computer power.

So here is an apolitical, censorship-resistant, trust-less, hard money.

And we saw a very good use case for it this week.

PayPal plays the cancel game

Journalist Toby Young, who is associate editor of The Spectator, has, for as long as I’ve known him, been setting up organisations to try and improve people’s lives. 

Disappointed with the lowering of standards in schools, he was one of the founders of the first Free School in West London. In 2020 he set up the Free Speech Union to help defend people threatened with cancellation. And his news and commentary website the Daily Sceptic was born in reaction to all the misinformation and censorship, especially by big tech, that emerged during Covid. 

Young’s views are actually pretty moderate. He’s a centre right, old school Conservative. But his ideological enemies do not like him at all and they work tirelessly to bring him down. He has lost something like five jobs because of what he calls the “offence archaeologists” digging up things he said decades ago, quoting them out of context and then being offended.

Last week, PayPal, out of the blue, closed down his personal account for “breaching its Acceptable Use Policy”. Then, barely a few minutes later, it shut down the account for his news and commentary website the Daily Sceptic. Then a few minutes after that it closed down the accounts for the Free Speech Union.

This is no small disruption, and it undoes the many hours, days, months and years of hard work his team have put in building up their subscriber bases. About a quarter of the Daily Sceptic’s donor revenue arrives via PayPal and a third of the Free Speech Union’s 9,500 members pay their dues via PayPal, Young says.

Young says, “I did some Googling and discovered that numerous organisations and individuals with dissident political views have had their accounts closed by PayPal recently, particularly on the three issues you’re not allowed to be sceptical about: the lockdown policy and other Covid restrictions, the mRNA vaccines, and the ‘climate emergency.

The Daily Sceptic frequently publishes articles on those subjects and the Free Speech Union may have fallen foul of another taboo – defending people who’ve got into trouble with HR departments for expressing their gender critical views.” 

How is PayPal able to do this without warning? Because it can.

Young is by no means the first. It did the same thing to Wikileaks in 2010, probably under pressure from the US government about whom Wikileaks was disclosing unwanted information. (Unfortunately, this backfired as donors began using bitcoin and the bitcoin Wikileaks received rocketed in value to make Wikileaks a potentially very rich organisation (assuming it managed to hold on to some of them).

It did the same to Alex Jones. Earlier in the year it cancelled academic and biologist Colin Wright for articulating his criticisms of the view that sex is a social construct. Just yesterday Us For Them, the parent group which campaigned to keep schools open during Covid lost their account, and so did another group Gays Against Groomers.

PayPal founder Peter Thiel is an outspoken libertarian and probably on the same philosophical side of the argument as Young, but he is also a businessman. 

Paypal will do whatever is asked of it in order to survive. You can be sure that, in order to survive as a business and effectively become a challenger bank, especially early in its evolution, it will have had to demonstrate that it could not be used as a vehicle for any kind of illicit activity, especially money-laundering, and this is why it can be so stringent. It will toe the line wherever necessary.

But Thiel is no longer Paypal’s CEO and, like so much of big tech, what started out one way is now not on board with the free speech ideals of its founders, as evidenced by all the censorship that goes on. Indeed more and more evidence is growing that big tech, especially Twitter, is censoring content according to the instructions of the US government.

A number of prominent individuals have spoken up in favour of Young - from Lord Frost to Joanna Clery to Luke Johnson - and a number of others have closed their PayPal accounts, so it may be that the Young accounts get re-instated under pressure.

But the moral of the tale remains. You are using trusted third parties that can no longer be trusted.

If you use non-government money - ie bitcoin - the taps cannot be turned off quite so easily.

The Flying Frisby is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

Separating money and state

More than anything else, in every book or every column I’ve ever written , I have argued for one thing: the separation of money and state.

When one body in a society has the ability to create money at little or no cost to itself, it is inevitable that body will have disproportionate power and influence within that society. 

If you are looking to understand how it is the state in western societies has grown to be so enormous - something like 50% of GDP compared to the 10% area it occupied at the turn of the 20th century - then look no further than our system of fiat money.

If you want to understand the inequality gap, why young people can’t afford a house, all that - look no further than our system of money

If you are looking to understand why western families so small, look no further than our system of money, in which government now owns more than 50% of your labour.  The primary reason given when asked why people have small families is that they can’t afford bigger ones. Both parents are having to work. The government - at over 50% - is their biggest cost. 

Only the very bottom on large welfare and the very rich can afford big families The 90% in the middle can’t. So we import our youth from abroad instead and then wonder why British culture is being eroded away. It’s the same across the west.

Of course some states are more benign than others and our 21st century social democracies, for all their woeful waste, are preferable to many of the governing systems found in other, more tyrannical corners of the earth, but the damage has still been enormous and now we seem to be careering towards a far more nefarious destination.

Money should just be money - a means of exchange, a store of value and a unit of account. Instead it has become a tool of government. A weapon of government.

Whether it is suppressing interest rates to boost the housing market, printing money to bail out banks or the entire economy during Covid or freezing the accounts of political enemies (the truckers in Canada, or the entire country that is Russia), finance is being weaponised. 

Governments weaponise money because it is an easy tool for them to get the results they want quickly. It’s a lot easier to sanction Russia and freeze it out of the banking system than it is to go to war. It’s easier to cut off the truckers’ funding than it is to confront them. It’s a lot easier - and quicker - to print the money you need to bail out the banking system than it is to collect it in taxes – which is what rulers from another age would have had to do. It’s a lot easier to suppress interest rates and collect the inflation tax than it is to impose direct taxes or rein in spending.

But the net result of all of this is that money gets debased, the state grows and is empowered, the inequality gap gets bigger, freedom is eroded, families get smaller, nobody can afford a house and yet more government becomes the answer to everything. We get top down diktats instead of bottom up growth. One decision up top counts for way more than the aggregation of millions of individual decisions from the bottom. And so on.

The weaponisation have money has already begun. 

The irony of such actions is that, as with Wikileaks, they will accelerate the adoption of censor-free, non-state alternatives, of which bitcoin is the most prominent example. The US, by confiscating Russian dollars and freezing it of the banking system, will accelerate the creation of a non-US international system of money to be used by nations, especially Russia and China, that do not want to be beholden to the dollar. 

In the long term it may backfire, but in the short term it works: it shuts off the funding taps and creates considerable hardship and inconvenience.

What to do? I use Paypal all the time, as buyer and seller. It’s convenient. But I really should switch to another payment processor. The others may not be as censorious as PayPal, but they will be if pressured, you can be sure of that. Do not leave large amounts of money with these companies.

As we head into a cashless society we are even more vulnerable. This is why the prospect of central bank digital currencies, which, by the way, are almost inevitable - technology is destiny - fills me with such dread. Programmable money will give the state even more control and influence. 

Your every transaction can be monitored, putting us in the world of Orwellian surveillance states. Certain transactions could simply be outlawed. You might not, for example, be able to buy from or sell to bodies that are not government approved. Taxes and fines can be deducted without your approval. 

Central bank digital currencies give huge scope to behavioural economists and the ministries of nudges. You can be goaded into all sorts of decisions you might not otherwise have made. Social credits systems can be imposed. Are you a good citizen? Then you get the favourable rate of interest, good loan deals and other incentives. Do you articulate wrong-thought on the internet? Did you not have the vaccine, like we asked you to? Are you suggesting the climate emergency is not real? Then you will be given less favourable rates. If you are a really naughty boy, your account might be frozen altogether.

I gather that the European Central Bank and perhaps even the Bank of England already have the tech ready to go for CBDCs. They are just waiting for the crisis to implement them.

In such a world, and that does seem to be where we are heading, there is a very strong use case for bitcoin. I urge you to own some.

If you are in London or nearby on September 28 or 29, please come to my lecture with funny bits, How Heavy?, about the history of weights and measures. It’s in the West End at the Museum of Comedy and it’s a 7-8pm show so you can come along and go out for dinner after. You can buy tickets here. This is a very interesting subject - effectively how you perceive the world. Hope to see you there.

If you want to buy physical gold silver, my recommended bullion dealer is the Pure Gold Company with whom I have an affiliation deal.

If you want to buy bitcoin, my guide is here:

The Flying Frisby is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

A shorter version of this article first appeared at Moneyweek.

About 25 years ago, I was giving a speech at my father’s 65th birthday party. There were seventy or eighty people at the dinner and, as Dad was a playwright, most of them were theatricals.

I’m a comedian, it was a fun occasion, so I wanted the speech to be funny. There were a few entertainment VIPs in the room, so there were professional as well as personal reasons to make sure my speech was as good as possible. 

But it was also a very personal occasion - a landmark in my dad’s life - so there was no way I was going to crowbar in bits from my act. I wanted the speech to be special: I love my Dad very much and I wanted to say so publicly. But I also didn't want the speech to descend into an embarrassing, gushing, sentimental affair. It was by no means the hardest speech I've ever had to give, but there was still a balance that I had to get right, and I felt a bit of pressure because there were so many professional performers in the room who were way more experienced than me.

As I was speaking, and I guess I was feeling a little nervous, I noticed someone looking at me. Of course, the whole room was looking at me, but this was the only person I noticed. He had friendly blue eyes, narrowed in a frown of intense concentration, and he seemed deeply interested in what I had to say, and very sympathetic to the difficulties I was having making such a speech. I don't know if I was projecting my own imagination, but there was a wise, kindly look to him. I’d never noticed anybody listen like that before.

It was a few moments before I realised it was the actor, Timothy West. 

Thinking about it later, it made sense to me why Timothy West had been such a popular actor with his peers. He listened so well. In a room of eighty people all doing the same thing– his was the listening I noticed.

(Any aspiring actors reading this: work on your listening. It’s a crucial, yet underrated skill and one that is rarely taught. Teaching is concentrated around the bits when you are doing the talking. Watch what wonderful listeners many great actors are.)

Fast forward a couple of years and I was doing a set on the Radio 4 show, Loose Ends.

This was around 1999 and, in those days, the show was recorded live, but the only audience you would have were the four or five other guests on the show who would be sitting in the studio with you, along with the host, Ned Sherrin.

You got some real VIPs on that show - I used to do it quite a bit. Off the top of my head, I remember appearing with Jackie Collins, Danni Minogue, Divine Comedy, Mariella Frostrup, Sir Humphrey Burton, The Proclaimers, and many more besides. But most of them would be thinking about their own bits, so doing comedy in that little studio to four or five people who weren’t that interested could be a bit like doing comedy into the void. Comedy is hard without an audience - even if by the time it made it out of the radio, it seemed to work.

I think it was the first time I had done the show, so I was nervous. There I was, doing my Ludwig The Bavarian act, all dressed up in my lederhosen costume, with all sorts of nerves rushing through my head as I did my act to no audience, when there it was again. The look. The kindly, listening, I-know-what-you’re-going-through-and-I’m-on-your-side look.

This time it was Michael Parkinson, one of the guests on the show. While all the other guests, and, to an extent, Ned, were wrapped up in their own stuff, Parkinson took time out to listen to me. Straight away I understood why he had been such a successful chat show host.

Thank you for reading The Flying Frisby. This post is public so feel free to share it.

The Today Programme

We move on over ten years to 2012 and my first book, Life After the State, which, as the title suggests, makes the case for a lot less government in our lives. On the day it was published I was invited onto Radio 4's Today programme to talk about the role of the state. My publisher, Dan Kieran of Unbound, told me 'getting on the Today programme is the Holy Grail for an author. You’re very lucky. You’re on at the best time, peak listening time, just before 9. Everybody will be listening. The prime minister will be listening.”

To say I was nervous is an understatement. 'This is the Today programme,' I told myself. 'For really clever people. It’s not for comedians who’ve decided they want to write about economics. It’s the BBC, the Ministry of Media. The last thing they’ll suffer is some non-economist comedian calling for a smaller state. You are so going to be found out.’

In the Green Room beforehand, I could barely speak. 

'Would you like a cup of coffee?' 

'Oh, no thanks. Actually, yes please. Er no, no. Actually, yes. Erm, not sure.' 

‘I’m sorry?’

I was to be interviewed by James Naughtie and there was a nice chap by the name of Neal Lawson from left-wing think tank, Compass, who would take the opposing side of the debate. 

There were various other people in the studio, all deep in notes and preparation for their next slot. None of them looked up as we came in.

If I had my life again I’d answer one key question about collectivism differently - and I still get cross with myself about it - but overall I guess I did ok. However, mid-interview, while I was talking, I could feel somebody looking at me. I looked to my left, away from the people I was talking to, Naughtie and Lawson, and there, staring at me intently, was John Humphrys. He’d looked up from me his notes and, with his eyes narrowed slightly, now seemed to be deeply interested in what I was saying, even though he was nothing to do with this segment. His listening carried that same mixture of interest, intense focus, kindness and understanding that Timothy West’s did all those years ago.

Just as with West, I felt I gained some understanding as to why John Humphrys has been so successful in his extremely competitive profession.

Afterwards I went and gave him a copy of the book.

“Have a read and see what you think,” I said. “But I doubt you’ll be on board with all this anti-state stuff.”

“You’d be surprised,” he replied.

Keynote Farage

Just a few months later I was speaking about gold at an investor’s show. Tom Winnifrith, the organizer, had managed to get Nigel Farage as his keynote speaker. This was years before the Brexit vote, but, thanks to the internet, his speeches at the EU Parliament were already starting to go viral.

Afterwards, he and I sat down and started talking. All sorts of people were bombarding him for photos and signatures, and he was very gracious to everybody who pestered him, but at the same time he managed to convey the impression that he was really interested in talking to me. And, as I talked, there was that same look again – eyes narrowed slightly, kind, wise, interested, focused on you and you alone.

If you say the names John Humphrys or Nigel Farage, kindness is not the first word that springs to mind with either. But that was what I saw. Nor is Farage known as great listener, but my experience was that he is. I’m sure it’s his listening to people as he travelled up and down the country that made him so popular at grass roots level and helped him build such a following.

Farage in person, as his GB News show, especially Talking Pints, is proving, is a far cry from the monster many of his opponents, especially the Centrist Trots who write for the Guardian, have made him out to be.

My dinner with Jordan Peterson

A few days ago I was lucky enough to be invited to dinner with Jordan Peterson.

It’s funny. Peterson is one of the biggest stars on the internet. He is adored by so many yet there are still quite a few people who have no idea who he is. My manager thought I was going to dinner with Jordan Henderson.

Andrews Doyle and Shaw, the organisers of Comedy Unleashed, comedian Simon Evans and author Jeremy Hildreth were there as well as Peterson’s minder (who took the photo below).

It was amazing how quickly we got through the niceties and moved on to the interesting stuff. Within a few minutes of sitting down, we were talking about lucid dreams - these are dreams that you know are dreams while you dream them.

I had a lucid dream last year, in which I met my father (who died in 2020) at a house party and, in the kitchen, started updating him on the progress I had made with Kisses on a Postcard, the new songs I’d written, the edits and so on.

After a while I said, “This is a dream, isn’t it?” Dad smiled and nodded.

So I mentioned at the table that I had had this lucid dream last year in which I had had this conversation with my dead father. Peterson’s head flashed round and he looked at me as I spoke. And there was that look again. That same Timothy West, Michael Parkinson, John Humphrys, Nigel Farage, slightly squinting, focused look of kindness, sympathy, empathy and genuine interest.

Never mind how articulate he is, I’ll bet one reason Peterson is so popular is because he listens. In fact, one reason he is so articulate is because he listens. He replies to what people actually say, rather than what he thinks they’ve said, and that centres him in the moment and thus in the truth.

So there we are: people who have the look. What’s the moral of all this? Listen, I guess. Don’t talk. Listen.

ADDENDUM

I saw just how popular and loved Jordan Peterson was only an hour or two later. Over dinner somebody suggested that he do a set at Comedy Unleashed later that evening, and he agreed to read a comic poem he’d written.

I was MCing, and I introduced him as the open spot, saying something like “we like to bring on new talent at Comedy Unleashed, so we give people short spots and if they’re any good, they can progress to a full spot, please welcome Jordan Peterson”. The audience at first couldn’t believe what they had heard. Then, as he came to the stage, they rose to their feet and gave him a standing ovation.

I might have ended up compering what may be Jordan Peterson’s only ever comedy spot.

Thank you for reading The Flying Frisby. This post is public so feel free to share it.

If you are in London on September 28 or 29, my lecture with funny bits, How Heavy?, about the history of weights and measures is coming to the Museum of Comedy. It’s a 7-8pm show so you can come along and go out for dinner after. The lecture will give your evening a strong intellectual foundation. You can buy tickets here. This is a very interesting subject - effectively how you perceive the world. Hope to see you there.

The Flying Frisby is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

US inflation numbers came in on Tuesday at 8.3%. 

The markets were expecting something lower – after all, the oil price had fallen back, not to mention most commodities.

8.3% was above expectations and the markets did not like it one bit. Down they went like liquid through an open sluice. Hopes and dreams of a sustained recovery since the June carnage went with them.

Actually, not totally.

While the S&P 500, which I use as a barometer for global markets, has been making a sequence of lower highs since the beginning of the year – ie, the broader trend is down – it has also been making a series of higher lows since June, meaning the intermediate trend is up.

Yesterday’s lows are still higher than last week’s lows, which were higher than the July lows, which were higher than the June lows. So there is something of an intermediate term up-trend in place.

If you draw a trendline off both the lows and the highs, they are both still intact and you end up with something of a wedge pattern, as the chart below shows.

If you dabble in such dark arts as day trading, or short-term flips, I would wager that the odds – in the short term – favour going long with a stop just below that rising trend line, with a target  somewhere near the falling blue line around 4,200. That said, as we have just seen, rallies could fail at any time, so if the market moves in your favour, you would want to keep moving your stops up to protect any gains.

Unlike some patterns – double tops, head and shoulders highs and lows, for example, which I find quite useful – I have over the years found wedges to be utterly useless as predictive tools. So I am not going to forecast off the back of it.

A long-term downtrend will, in a month or two, assuming both those trend lines hold, which is some assumption itself, shortly butt up against a jittery, shorter-term uptrend and one of them will prevail. 

Seasonally, we are in a bad time of year for markets. The last four Septembers have all seen sell-offs of between 5% and 20%, so stockmarket-wise, I do not  see this as a time to be taking huge risks or making large bets. It’s a time for prudence and capital conservation.

Silver – huge potential that’s never realised

I was, however, encouraged by the action in precious metals, in particular the dogs of recent months silver and platinum. Yes, they sold off, but on a relative basis they help up well.

This comes on the back of an extraordinary day on Monday when silver rose some 5%. 

My ambivalence towards silver is long since documented. There is no other metal with as much potential. It is both a monetary metal and an industrial metal, used in virtually every computer related application you can think of – every phone, every computer contains silver –  not to mention all the bio and other tech.

It “should” be a play on both currency debasement and technological progress. Yet in practice it proves to be neither and, at $19, is trading at the same price it was in 1980. 

There is about 15 times as much silver in the earth’s crust as there is gold, hence there is an argument that silver should be 1/15th the gold price, which is what it was historically – over $100, in other words. But I have been listening to such arguments for 20 years and the metal never delivers.

Silver aficionados scream manipulation, but they have been screaming that since the 1970s. Why would you want to own something whose price is deliberately suppressed by powers far greater than you? Surely you would want to own something whose price is artificially boosted. There’s more profit in it.

I own silver, quite a bit in fact, and I own some silver miners. Because one day, you never know, it might actually go to the moon. That’s its planet after all. I want to make sure I’ve got a seat on the rocket if it does. I don’t think I could live with myself if it went there and I didn’t have exposure, having written about it so much over the years. But I’ve long since stopped holding my breath.

Thank you for reading The Flying Frisby. This post is public so feel free to share it.

Silver could be about to go on a multi-week bull run 

That said, I do think silver could enjoy a multi-week rally from here and I’ll explain why. 

The COMEX is the world's largest futures and options trading exchange for metals. There are three groups of traders: the commercials, the large speculators and the small speculators. The commercials tend to be seen as the smart money, and, as they are often acting on behalf of miners, they tend to be sellers and so they tend to be short.

Every Friday evening, the positions of the various traders the previous Tuesday, three days before – the open interest, as it is known – is announced. On Friday we discovered something extraordinary. That the commercials are net long – ie buyers – for only the third time in 40 years. 

That suggests a genuine shortage of metal. 

Meanwhile the speculators, who for the most part do not have metal to deliver, are net short. This opens up the possibility for a short squeeze. 

Anecdotally, I’m also hearing of silver shortages. It’s hard to acquire bullion anywhere close to spot prices.

Now this is silver, so don’t get your hopes up and don’t take on too much risk. If it can go wrong it will. But there is every reason to think a multi-week rally is on the cards. If the broader markets correct, then silver will come tumbling down with them. But if they can remain flat or rising slightly, then silver could enjoy a good run.

Buying silver is justifiable on a value basis – silver is cheap below $20. It has displayed lots of relative strength over the past two days. My moving average crossover system is also on a buy signal. Go silver!

But, remember folks, it’s silver …

If you want to buy physical silver, my recommended bullion dealer is the Pure Gold Company with whom I have an affiliation deal. My guide to buying silver is here:

If you are in London or nearby on September 28 or 29, please come to my lecture with funny bits, How Heavy?, about the history of weights and measures. It’s in the West End at the Museum of Comedy and it’s a 7-8pm show so you can come along and go out for dinner after. You can buy tickets here. This is a very interesting subject - effectively how you perceive the world. Hope to see you there.

This article first appeared at Moneyweek.

I started out with the intention of writing just one article on this subject, but it has become three. It’s a big subject … (Here is part one and here is part two, if you are not already up to speed)

The latest polls show Labour comfortably in excess of 400 seats, maybe even 500.

They are going to have such a thumping majority (with less than 50% of the vote - how crap is first past the post), together with a Blob which, broadly speaking, is theologically aligned, that they are going to be able to do pretty much what they like. There is scope for a lot of invasive government. The socialist mindset does not respect private property. It feels entitled to it. So today I wanted to further explore wealth taxes and what Labour might do, should the socialist-leaning instincts in the party come to the fore during those first 100 days and beyond.

Wealth taxes are hard to collect

Let us start with the golden rule of taxation, something with which readers of Daylight Robbery, the definitive book on taxation, will be familiar, as articulated by Louis XIV’s minister of finance, Jean-Baptiste Colbert.

The art of taxation consists of so plucking the goose as to obtain the most possible feathers with the least possible hissing

(If you haven’t read Daylight Robbery - How Tax Shaped Our Past and Will Change Our Future, by the way, I urge you too. I think it’s the best of my books and one of the things I will go to my grave feeling proud of).

With that Colbert quote in mind, let us turn to wealth taxes. I’ve often argued that one reason we don’t see as many wealth taxes as you might expect is that, in practical terms, they are not as simple as they might seem. Income Tax works well because it is easy to collect. The employer collects it for the government - and faces harsh penalties if they don’t, so the onus is on them. Ditto VAT: only it is the seller on whom the responsibility to collect falls.

Wealth taxes, however, rely on declarations. There is much more scope for non-compliance, whether deliberate or accidental. Say the government wanted to impose a 5% net worth tax. It would have to find out about your real estate, both at home and abroad, and reach a fair valuation for that. It would have to find out about your stocks and bonds, your possessions, your vehicles, your savings, your ISAs, your pensions, your cryptocurrencies, your art, your antiques. Anyone who has ever had to value an estate for Inheritance Tax purposes knows what a headache this is. It can take many months.

The government can force banks to collect a lot of this information, and the bank can then get heavy with you, if you don’t comply (this is a route I think we will go), but there is still an awful lot of scope for non-compliance, avoidance, and evasion. Most will be truthful about what they own; but many will not - and hope that HMRC does not have the resources to investigate them properly, which it doesn’t. Many people have valuable things - from antiques to lost bitcoin wallets - that they don’t even know have value or can’t access. Note: I’m not saying a “net worth tax” won’t happen - I’d give it a 50:50 chance - just that they are not quite as easy as they sound. The goose will hiss a lot.

That said, I do think that, for sure, we will see changes to wealth reporting requirements, which is a first step in that direction.

You really should subscribe to this letter.

But if not a net-worth tax, here are some wealth taxes that could quite easily be imposed:

* A savings tax. Savings are relatively easy to prove and then tax. Banks are the ally of government here. There is some  £1.5 trillion held in savings accounts in the UK, so there is plenty there to be tapped (though a lot of this is in ISAs, which are supposed to be tax free). Starmer has made noises about ordinary working people not having savings, so I doubt he will have too many qualms about sticking his snout in that particular trough. The complaint is that people have already paid tax on their savings when they earned the money in the first place, plus they pay taxes on the interest.

* An equity and bonds holdings tax. Again, relatively easy to prove - banks and brokers to report and collect. I doubt, however, Starmer will tax gilt holdings or remove the CGT exemption on gilts: he will want that particular income tap to remain free-flowing.

* Taxes on ISAs. The tax-free goalposts on ISAs can quite easily be changed, and there are a lot of people who have built up large pots, which no doubt Labour will be eying. The £20 grand annual allowance might be reduced or, more likely, there will be a maximum tax-free cap of, say, £100 grand. As to whether they can tax existing holdings, difficult but not impossible.

* Tax relief on pension contributions. The sixty grand limit will probably come down and the tax-free lump sum will probably not be quite so tax-free.

* An off-shore wealth tax. You have to declare any holdings you have overseas and then pay tax on them. Lots of scope for dispute and non-compliance, of course. Doesn’t mean it won’t happen.

* A luxury goods tax. It’s not right that you should be able to afford luxury goods and that others can’t, so we are going to tax them, just as we do alcohol, fuel, and cigarettes.

* Exit taxes. A lot of rich people are already leaving, others will follow. Labour will know this. I would not rule out some kind of exit tax, as reader AK pointed out to me. The USA, Canada, Australia, Germany, France, Spain, and Denmark all have exit taxes - in many cases, taxes on unrealised capital gains. (Imagine paying a tax on the gain, not realising it, and that gain turns to a loss. Horrible).

If you are interested in buying gold to protect yourself in these frightening times, check out my recent report. I have a feeling it is going to come in very handy.

My recommended bullion dealer is the Pure Gold Company. I also like Goldcore.

The equalisation of Capital Gains Tax and Income Tax, as mentioned in part two, looks more likely than ever. Wrong, of course. Capital gains are not something most people experience year in year out. For many, they are one-off events on the sale of a major asset or company. But such morals do not enter into it.

Similarly, Inheritance Tax is likely to go to 50%, also as mentioned in part two.

Angela Rayner has said that Labour is not planning rises to Council Tax “at the moment,” presumably with the permission of the party strategists, though Keir Starmer conspicuously did not rule rises out earlier in the week. As previously outlined, Council Tax is an obvious target because the banding - the prices at which homes are valued - is so out of date (based on 1991 valuations), but the money does not go to central government, which is what Labour would want. Local taxes also tend to create a lot of agro - Colbert’s hissing - which governments prefer to avoid. There is, in addition, the fact that Council Tax rises target the “wrong” people (council taxes tend to be higher in Labour-voting boroughs, which are often less well off, and Labour will not want to tax these people as much as they will the “capitalist classes”). One solution is to levy much higher Council Taxes on the most expensive properties. As with wealth taxes, I’m not saying Council Tax rises are not coming. They probably are, but they are not the prime target.

One final thought: thanks to VAT on school fees, there is going to be even more pressure for places at good state schools, which will mean homes in catchment areas will command an even higher premium than they do already. (Labour says it’s going to modernise the curriculum. Oh, God. Is it not modern enough already?)

Right, I think that’s your lot on Labour’s tax rises. Look out for pieces in the near future on Turkey’s inflation and the damage it has done to its people (I am actually writing today’s piece from Istanbul); on my picks from the Weird S**t Investment Conference; and I’ve got a great piece coming on wages and gold).

If you are in the Edinburgh neck of the woods this August, look out for me at the Edinburgh Fringe. I’ll be performing one of my “lectures with funny bits”. This one is all about the history of mining. As always, I shall be delivering it at Panmure House, where Adam Smith wrote Wealth of Nations. It’s at 2pm most afternoons. You can get tickets here.

Condor Gold (CNR.L/COG.TSX)

I’m as guilty of this as anyone, but many of us make life more difficult than it needs to be. Achieving basic happiness, or at least avoiding what depresses us, might actually be quite simple.

Is happiness, simply, when reality exceeds expectation?

When I was a young man I was chronically ambitious. I would lie in bed as a student, dreaming about my future, making Faustian pacts, yet nothing would satisfy me. You could have offered me fame, glory, wealth, the keys to the city and more, and it would not have been enough. I wanted everything.

When we discussed our futures, my friend, Gideon, gifted and hugely competent, but not remotely ambitious, used to say: “I just want to be happy.” I thought that was loser talk. Looking back, he was probably right.

How often do you watch a film or a show because somebody was raving about it for it to turn out nothing like as good as you were hoping? You end up disappointed. But if you saw the same film with no or low expectations, and it’s pretty good, you might walk away feeling quite elated.

Life is the similar. If reality comes in below expectation then we end up disappointed. If it comes in above expectation then we end up happy. Hence this useful formula:

Reality > expectation = happiness

Expectation > reality = unhappiness

By this formula, then, to achieve happiness you should simply lower your expectations.

There is a lot to be said for that. But then there is also a lot to be said for ambition and optimism, which the mindset of low expectation negates.

Ultimately, this way of thinking boils down to perception. Your life is no different - it’s the same film - it’s just a matter of how you look at it. Thus should we practice gratitude.

Nevertheless, I’m not sure perennially low expectation is a way to live.

We are all animals

Despite what we may think of ourselves, no matter how cultured, we are, when all is said and done, animals.

If you keep a dog, you will know that, to be happy, a dog needs plenty of outdoor exercise and fresh air, regular and proper food, sleep, love and company. Absent any of these and the animal quickly becomes depressed. Human beings are the same. We have certain basic needs without which we end up depressed. The cause of depression is often (not always) the continued absence of one of these basics.

With that in mind, here are seven animal essentials we all need to be happy. If you are depressed, it’s not unlikely one of these is missing in your life. Get it back and you might find other things fall into place. (The problem with depression is that you lose the motivation to do so).

I’m not saying that you can’t be depressed or unhappy, if you have all of these things. You can. But a lot of the time, the cause is that one of these is absent. Get it back in your life, and you will find your depression sorts itself out.

1 Sun

The sun is the giver of all life on Earth, the source of all energy, of light, heat and gravity. Most of us do not get enough of it. We spend too much time indoors under artificial lights.

The darker your skin, the more sun you need - and sun can hard to come by in colder northern European climes - but you need sun, whether you’re light or dark. Our ancestors spent most of the day outdoors. When the opportunity presents itself, get plenty of sun, all over your body. We need sun.

Only use enough sun block to prevent burning. As soon as you can, wean yourself off.

A close family member got herself into the most terrible depressed state last winter. I’m convinced it’s because she did not see sunlight for months, instead lying in bed all day watching crap on her phone.

It’s no accident the sun is often depicted with a smile on his face. Get more sun.

2 Water

It’s as obvious a basic requirement as the sun, yet most of us don’t drink enough.

Got a bit of a headache? Constipated? Feeling stiff? Allergic? Lethargic? Hungry when you know you’re not? Drink a large glass of water.

Just under a pint should do it. That would be pound of water, roughly half a litre. You’ll be amazed how many niggles it clears up.

A large glass of water should be the first thing you drink every morning, when you wake up. And don’t drink it cold. Drink it at room temperature or just below.

3 Food

Two meals a day is plenty. Avoid snacks. Don’t eat crappy, processed food. Avoid seed oils and ingredients the names of which you don’t understand. Use simple foods - meat, fish, veg, fruit - close to their naturally occurring state (ie unprocessed). Spend time preparing food. Ideally, eat with other people - eating should be a shared communal activity. Regular eating times - routines - are good.

And say grace before you eat - it focuses the table, it unifies the group, it expresses gratitude, helps mark where you are and grounds you. Doesn’t matter if you don’t believe in god, saying grace is still a good ritual.

Also, rather than eat crap on the run, skip meals. Fasting is good.

If you are overweight and want to lose weight, fast. The 5:2 diet works and, most importantly, it is sustainable.

But the basic rule is eat regular, healthy meals and don’t eat crap.

4 Exercise

Get plenty of it. I’m convinced exerting yourself and getting your heart pumping cures depression.

Walk, swim, run, cycle, go the gym, play football, play tennis, lift weights, do HIT, ski, do yoga - it’s all good. Do as much as possible outside, so you get sun and fresh air. And drink plenty of water afterwards.

5 Air

As basic as water, food and sun, get plenty of fresh air. Sea and countryside air is better than city. Park air is better than busy street air.

Plenty of exercise will get you breathing properly. Breathe deep.

Breathing exercises are good, though must of us can’t be bothered.

6 Sleep

Get plenty of sleep too. Don’t deprive yourself. We need sleep. The body and mind replenish during sleep. I have many of my best ideas when I’m asleep. I often solve problems in my sleep. It’s because the mind carries on working at stuff you have been thinking about in the day.

Alcohol and drugs affect sleep badly. I drink too much. Most of us do. Try to avoid drinking at home. Fasting is good as, if nothing else, it stops you drinking. Thus fasting improves the quality of your sleep. There’s nothing wrong with going to bed early.

Sometimes I struggle to get to sleep - and that is when the demons come to visit. The best cure for that is plenty of exercise earlier in the day, so you go to sleep tired. Don’t drink caffeine or orange juice after 6pm. Don’t eat too heavily late at night. Don’t shower or bathe just before bed - it will wake you up.

Reading helps get you to sleep quickly too. Don’t look at your phone, computer, TV or iPad for at least an hour before bed. The blue light wakes you up.

7 Companionship

Animals, for the most part, are social. Humans certainly are.

I am an only child and quite a solitary person. But I still need the company of others, be they friend or family. We all do.

Nature designed humans to live in families, large ones. Unfortunately, the modern world - in particular the big state - is destroying that: the state destroys family by eroding its responsibility. For me that is a major factor in the decline of the west. But that is another issue for another day.

Not always possible, but try to live in as big a family unit as possible. The Asians have it right. Your family knows you better than anyone. They know what is good for you and what is not. They monitor you. Humans are happier in family units. Their roles are more clearly defined.

Find a partner to share your life with, someone with plenty of shared loves and interests. Don’t burden them with unreasonable expectations. The waitress test is good: if you have a really bad experience in a restaurant, watch how they treat the waiter or waitress. Because that is how they will treat you when things get bad. Do you want that?

We need friends almost as much as family - they are the next best thing, and they make for a good substitute in the absence of family.

Surround yourself with good people, and people you think are good for you. Hang out with bums and low lives, and you will become a bum and a low life.

What you can control and what you can’t

Most of the above you have some control over, but so much of what happens in your life is beyond your control. You can’t control who your parents are, at what point in history you were born or where, what is going on geo-politically around you.

One example of this, as Malcolm Gladwell observes in Outliers - the Story of Success: neither Bill Gates nor Steve Jobs would have been the men they were if they were born a couple of years earlier or later. There was a cluster of computer geniuses who were all within a one year timeframe that meant they were coming of age at just the point computers were taking off.

Your health is not always within your control. (But you can affect it by eating, sleeping, drinking and exercising well - and getting plenty of sun).

If you are at school or university or work in a large establishment, you cannot control what is happening above you there. Similarly, if you are freelancer, you cannot control what is happening in the broader work place or the economy. You can only position yourself for it. Any stock trader will tell you, you cannot control markets, only react to them.

The loss of a loved one, natural disasters, unforeseen catastrophic events, the talents bestowed on you - there is so much you have no control over.

With that in mind my daughter and I put this ‘graph of life’ together yesterday. The black line is your life. Beneath the black line is stuff you can control, above it stuff you can’t.

I’m minded of the great line from JRR Tolkien’s Fellowship Of The Ring.

“I wish it need not have happened in my time,” said Frodo.

“So do I,” said Gandalf, “and so do all who live to see such times. But that is not for them to decide. All we have to decide is what to do with the time that is given us.”

You can work hard, position yourself, play your hand well, make good decisions, but so much of what happens in life you have no control over. I gather a standard sports psychology, something Sven-Göran Eriksson used to bang on about, is to only worry about what you can effect.

The animal habits outlined above you can, for the most part (companionship is harder), effect.

This is obviously a huge subject, and one I will return to, but I think I’ve banged on enough for one day. When I was in my 20s trying to figure out what I wanted to do with, my father always used to say “There are only two that matter: who you love and what you love” - by which he meant your work. Work, tradition, prayer and spirituality, and their relationship with happiness, are things I would like to explore in another post. But we have enough for now.

The Flying Frisby is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

“Pound crashes to weakest level since 1985 in blow to Truss” ran the headline on the Telegraph website yesterday.

“The Bank of England had one job today”, as economist Shaun Richards put it, “which was to talk up the pound and instead their waffling sees it at US $1.14.” Theresa May Flash Crash aside, that’s a 37-year low.

And that’s measuring it against the dollar. If you measure the pound’s purchasing power against essential basics such as energy or houses, its performance has been way more woeful.

It’s not just the pound, even if it is one of the worst offenders. It’s all fiat money. I’ve been banging on about it for 20 years but I may as well bang on some more: fiat money and its devaluation is the greatest and most pernicious intergenerational theft in history. 

Devaluing your currency boosts assets but devalues labour 

When you devalue money, among numerous other things, you devalue salaries, which is to devalue labour. All the young have is their labour. You boost the value of assets meanwhile, which is what the old have acquired over the course of their lives. The net result is to transfer wealth from young to old. Compounded over decades, 5% one year, 8% another, this process has been devastating. Don’t get me started on the knock-on effects: smaller families started later in life and all the rest of it. 

So many people of my generation and above think they are business geniuses because they paid the market rate for a house 30 or 40 years ago. You are not. Systematic and incremental devaluation by successive administrations was “what did it”.

The Bank of England, the Federal Reserve Bank, the European and Japanese Central Banks – central banking has a lot to answer for. 

It feels like we might finally be in some kind of endgame for fiat money now. Mind you, I thought we were in the endgame in 2008, so I’m probably wrong this time around as well. I’ve no doubt some new magic words even more unintelligible than “quantitative easing” are being conjured up as I write.

Right rant over. I had to get that off my chest. Let us move on. 

Does a new PM mean you should go long the pound?

We have a new government. Money is the issuance of government. The weak pound is all over the headlines. So I thought it would be an interesting exercise today to look, first, at the performance of the pound by successive governments over the past generation. And then to consider whether one should be buyer or seller here.

“Buy on silence, sell on headlines,” is a good little investment motto that I’ve just invented. When something makes the headlines, there is often not a lot of narrative left in the tank,  the story is mature and the next stage is exhaustion. It’s standard contrarian market psychology. Does the fact that the weak pound has made the headlines mean it’s time to take the other side of the trade and go long? Could be.

We’ll start with a chart of the pound against the dollar – aka cable – since 1970. And by the way, the dollar has a much larger market cap than the pound, so what is going on on the other side of the pond tends to have a greater effect on cable than what is happening here. That is the case at present. The pound is weak, but so is the euro, the yen and any other number of currencies you care to mention – except the Russian rouble. Current pound weakness is as much a function of US dollar strength as anything. The chart of the pound against the euro over the last three years is much flatter.

In any case, cable is the benchmark, so here is the pound against the dollar since 1970, when it was $2.40 (!).

The broader trend is down, but there are periods of relative strength – 1976-1981, 1985-1991, 2000-2007. We’ve basically been in a downtrend since 2007, shortly after Tony Blair stood down and Gordon Brown became PM. It is what is known in the game as a secular bear market. 

Now we consider the same chart, but this time I have overlaid the government. Even though several prime ministers have led successive governments – Wilson, Thatcher, Major and Blair for example – for the sake of clarity and simplicity I have marked the chart by PM. Needless to say the dates of the red and blue lines are approximate. 

The first observation I make is that, despite their reputation for fiscal competence, the Tories have not been good stewards of the currency. In the case of Edward Heath and David Cameron, the pound was marginally stronger when they stood down than it was when they took office. Despite his presiding over Black Wednesday and the ERM fiasco, for John Major the pound was only a few per cent lower than it was when he started.

But in the case of – and this surprised me – Margaret Thatcher, plus Theresa May and Boris Johson it was lower. 

Labour’s record is mixed. Harold Wilson saw it lower, Jim Callaghan higher (that surprised me too). Tony Blair has the best record of all – it went from roughly $1.60 to $2.10 – and Gordon Brown the worst.

That said Blair was one of the few PMs – perhaps the only one – to stand down from a position of strength. Normally PMs are stood down because there is something voters or MPs or both are not happy with, which will be reflected in a weak currency.

Lower taxes and higher spending should encourage growth

Back to today. This latest move in the dollar has been extraordinary. I’ve long been suggesting the US dollar index could go as high as 120 (another 10% from here – though exhaustion indicators are starting to appear), but at a certain point purchasing power parity will kick in and currencies will reflect relative valuations. On a purchasing power parity basis the pound is very cheap at $1.14. 

The other observation I make about the above chart is that new administrations have often marked turning points in the currency. This, one could argue, was the case for Wilson, Callaghan, Major, Brown, Cameron, May and Johnson.

Despite the Tories’ record for incompetence, Liz Truss has put together a cabinet that is, broadly speaking, actually conservative. Unlike previous administrations, it is not full of wets and social democrats, who happen to be in the Conservative Party. Lower taxes and less spending (I’ll believe that when I see it) should lead to economic growth, which should help the currency. The big kahuna though is where the Bank of England base rate goes – and indeed the Fed Funds Rate.

I’d say there is a not unreasonable chance that, with a new government, we could mark a turning point for the pound. We’re at a point of extremity where such a turn could happen. But let’s see what government does first, before we get too excited. As I say, another not totally unreasonable possibility is that we are in the endgame for fiat. In that case the pound slides below parity. 

If you want to buy gold to hedge yourself against all of this, my recommended bullion dealer is the Pure Gold Company with whom I have an affiliation deal.

If you are in London on September 28 or 29, my lecture with funny bits, How Heavy?, about the history of weights and measures is coming to the Museum of Comedy. It’s a 7-8pm show so you can come along and go out for dinner after. You can buy tickets here. This is a very interesting subject - effectively how you perceive the world. Hope to see you there.

The Flying Frisby is a reader-supported publication. To receive new posts and support my work, consider becoming a free or paid subscriber.

This article first appeared at Moneyweek.

Morning All,

A slightly admin-y email today.

First up: How Heavy? - the surprisingly popular "lecture with funny bits" I did at the Edinburgh Fringe this year- is coming to London’s West End for a short run later this month at the Museum of Comedy on September 28th and 29th.

It's a show about the history of weights and measures, and is, I promise you, a VERY interesting subject. Weights and measures effectively determine how you perceive the world. It's a nice, early 7pm start. You'll be done by 8pm - free to go and have dinner or whatever you fancy - and will give your evening a strong intellectual foundation.

Please come along. You can get tickets here.

Second up: there have been some significant announcements by two of the companies in my portfolio - major holdings - in the last 24 hours. I will be updating paid subscribers on these asap, hopefully later today.

Third up: this article was supposed to all subscribers last week, but due to a cock-up at HQ it only went out to paid subscribers. The YouTube version has been very popular - it’s obviously caught a nerve - so in case you want to read it, here is a link:

Until next time.

Dominic