Afleveringen
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It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair, we had everything before us, we had nothing before us âŠ
Charles Dickens, A Tale of Two Cities, 1859
Here is the world I think we are heading into over the next couple of years.
On one side of the Atlantic, we have Argentina and its new president, Javier Milei, taking a chainsaw to the state in every conceivable way. I was there last month and I fell head over heels in love with the place. Every day it seems another state body is having its budget cut.
Itâs like everything I argued for all those years ago in Life After the State - Why We Donât Need Government is suddenly happening in the real world, and it is wonderful.
The result of all this is an economic boom that is starting to take everyoneâs breath away â even free market acolytes are surprised.
You must invest in Argentina. You must have a position. What is happening there is equivalent to Eastern Europe after the fall of Communism, China at the turn of the 21st century, or the UK and US at the beginning of the Reagan-Thatcher era.
With libertarianism being the dominant belief system of the Internet, and Milei, the poster boy for anarcho-capitalism, an internet sensation, you can rest assured that Argentinaâs success story is not going to be kept a secret. The Internet is going to let everyone know about it.
Then to the north, we have the USA. Who was the first foreign leader to be invited to meet President-elect Donald Trump? You betcha. It was Javier Milei. That tells us where things are going.
We have passionate libertarians Elon Musk and Vivek Ramaswamy taking the knife to government and the deep state â I cannot emphasise enough how gripping a belief system libertarianism is once it takes hold - look what itâs done to me - and it has clearly taken hold of these two.
We also have a Trump administration that is much more organised and wiser than the previous incarnation, as well as more state shrinking. It knows who its enemies are and it seems ready for them.
The US may be âminarchist-lightâ compared to Argentina, but even so, an economic boom is coming to this most entrepreneurial of countries. A lot of people are going make a lot of money.
So you must also have a position in the US. It is already the worldâs biggest economy. How much is it going to grow with so many bureaucratic barriers of state removed?
The Stagnant Side of the Street
Then we turn to the other side of the Atlantic. âThe stagnant side of the streetâ to misquote the song.
Here in the UK, we have gone the other way. We are increasing taxes. We are increasing state spending. We are growing government, and, in doing so, creating more barriers to innovation, invention, and entrepreneurship. Most of Western Europe is the same. These are countries run by blobs, by regulators and planners for regulators and planners, by technocrats who know better than you.
Hereâs an example of the government helping. On 6 October 2020, when the FCA announced it was clamping down, bitcoin was $10,000. Today it's $97,500. I make that $87,500 per coin of gain that the UK citizen has been protected from. Great job guys. The UK was once at the vanguard of this breakthrough technology. Satoshi used English spelling, he quoted the Times. He may well have been British. Now we are bringing up the rear.
It is just so much harder and more expensive to do anything entrepreneurial in the UK, whether itâs setting up a business in the first place, hiring, the taxes you have to pay, the cost of regulation and compliance, or the exorbitant cost of housing and property, which drains capital that could be better invested elsewhere.
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Prime Minister Keir Starmer is currently in the Gulf trying, as he says, to secure investment for the UK. âThis government will build on partnerships that drive our mission to kickstart economic growth and put money back in working people's pockets,â he said yesterday. Itâs obvious that he thinks economic growth comes from government rather than the private sector. He actually thinks government spending is going to help. He does not realize because spending inevitably leads to higher taxes, and taxes stifle growth.
I bet if you listed ten businesses and said which of these are wealth-creating and which are just wealth-extracting, he would not know the difference: it is not a thought process his mind would ever entertain. Yet the difference between the two is everything. Subsidised green energy is wealth extracting, compliance is wealth extracting, manufacturing (as long as itâs not wind farms) and tech are mostly wealth creating. One builds wealth that did not previously exist - everybody wins - making stuff, growing stuff - the other is zero sum: it extracts wealth that already exists and sends it somewhere else - only the extractor and the recipient win. The guy who built the wealth in the first place loses.
The most basic rule of taxation â you really should read Daylight Robbery â is that higher taxes and higher tax rates do not lead to greater government revenue. This administration does not get that most basic concept, which has existed for as long as there have been taxes (ie all of civilization). How can they be so stupid Iâve no idea, but they lead us.
To invest in the UK is to invest in stagnation and regulation. That is not proper investment or wealth creation.
The rest of Western Europe is no better.
In addition, we are experiencing colossal levels of discontent, unprecedented migration, two-tiered justice, two-tiered welfare, rising crime, the disappearance of previously high-trust societies, and rising social tension.
But thanks to the Internet, the stupidities of UK and European policies will continue to be laid bare to all. No amount of censorship is going to hide it. In any case, X has already killed censorship. Other platforms must now stop censoring, if they want to stay relevant. On the Internet people gravitate where speech is free-est.
Meanwhile, such is the nature of memes, people are going to relentlessly take the piss, especially from the other side of the pond. Comedy is a powerful tool. Day after day, the meme-makers, led by Elon Musk himself, are going to expose Keir Starmer and his deluded team, never mind the EU and other technocrats, for the fools they are.
The exposure the Internet brings will cause this technocratic left to backpedal a little â Starmer, as we saw from his 19th relaunch speech last week, has already started â though it will not be anywhere near enough. We need our own Javier Milei.
But it is all is only going to exacerbate the current trend: long America, short the UK and Europe.
So What To Do Now?
I ran into one of the UKâs most successful investors at a party last week. He told me he has moved everything he can out of sterling and out of the UK.
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Something positive for you this Sunday morning - and why we should be grateful for government incompetence
The idea of Central Bank Digital Currencies (CBDCs), money that governments and their planners will be able to programme, rightly fills many of us with an Orwellian sense of dread.
âDid you not have the vaccine? Oh, well then you donât qualify for the next payment.â
âHave you been saying wrong things on social media? Then you donât get the good loan rates.â
âWe suspect that you might not have paid the right rate of tax, therefore we are deducting what we think you owe and itâs up to you to prove otherwise. You want the money back? Please hold âŠ. Your call is important to us.â
CBDCs allow for almost unimaginable interference in our lives, intrusions on our privacy and liberty, never mind meddling in the economy. Chinese social credit scores would be just the start of it.
When you combine the instincts of, say, the current Labour administration to intervene, together with its incompetence, the ramifications are truly horrifying.
Some say CBDCs are inevitable. Technology is destiny and all that. Iâm a bit more optimistic.
Heteâs why.
CBDCs have been piloted in numerous countries and fully implemented in:
* The Bahamas - the "Sand Dollar"
* Nigeria - the "eNaira"
* Jamaica - "JAM-DEX"
* The Eastern Caribbean Currency Union
Nowhere has got them to work. The Bahamas is generally touted as the CBDC success story. My buddy, Dave Skarica, who lives there says, âLOL. I have never seen one person use it.â
Why have they failed? People donât use them. When they do use them, they donât work. People prefer the legacy systems they know.
CBDCs are yet another government IT project that is doomed to fail.
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You might say the internet was a government IT project. It was . The U.S. government - via ARPA and later DARPA - provided crucial funding that led to the development of key protocols like TCP/IP. But the Internet succeeded because of the immense infrastructure that millions of people, mostly working in their own self-interest, since built over many decades on top of it.
Our modern system of debt-based fiat money should long since have imploded under the weight of all the abuse and debasement successive governments have heaped upon it. But it has survived, indeed thrived as a medium of exchange, albeit a terrible store of wealth, because of the incredible fintech architecture that has been built on top of it, again by millions of people over many decades mostly acting in their own self-interest. That architecture is probably what has saved the system.
Fiat money is just promissory - worse than that it is a promise of something that isnât even there - but the incredible advances in communication technology that we have seen in the last 150 years - telecommunications, digital technology and all the rest of it - have all enabled the sending and recording of those promises. The fortunes that have been invested have all helped the system evolve and indeed preserved it.
Fiat money worked as countries gradually abandoned gold standards over the course of the 20th century because they were the only currencies citizens knew. The payment and saving infrastructure was already built and normalised. The coins and notes and cheques and bank accounts all functioned perfectly well, and there were no alternatives. The removal of the gold backing did not really impact the overall architecture.
Government currencies worked in the first place because they were based on gold and silver, which everybody already used and instinctively knew had value. When they werenât debasing their money, rulers, or those working for them, often actually improved the system: coinage, for example, certified the amount of precious metal in a coin and the rulerâs stamp legitimised it. Money was based on something people already knew and used and understood.
Not so CBDCs. They have no existing infrastructure around them, nor is their use normal.
Governments will not be able to design anything decent. They will need the private sector to do that, and this will take many years, perhaps decades before it gets as good as the infrastructure around existing payment systems. It would also take many years and lots of nudges for people to change habits
The private sector is not going to invest the required amount of money in payment systems if people are not going to use it, so you will end up with a situation, a bit like green energy, where governments will have to spend billions subsidising it in order to make it work, but the actual energy you get is not as good as that provided by fossil fuels: unreliable, more expensive and more damaging to the environment. There will not be the same green arguments - 10 years to save the planet and all that - to justify the spending. The scope for corruption and crony capitalism will be enormous. Again.
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None of this will stop governments trying it, of course. Citizens might slowly start to use the system, particularly if they get free handouts, but it will be a long time before CBDCs reach a level where they compete with existing payment systems. At this point fiat money as we now know it probably wonât exist anyway. We tend to forget, but most nations as we currently know them are only about 200 years old. Many wonât exist in 50 or 100 years time. Theyâll go bankrupt and break apart. What will happen to their money?
There is the possibility of demanding that taxes are paid in CBDCs, I suppose, but again this opens up so much scope for outcry, waste and inefficiency, I just canât see it working.
People within the blob look at bitcoin and admire it and think they can copy it, but even bitcoin is what it is, not so much because of Satoshi Nakamotoâs genius invention, but because of the way hundreds of thousands of people in the free market embraced it and built on top of it. The reason they did was, again, self-interest: the value of bitcoin kept going up. Every bit of bitcoin fintech, every podcast, every tweet - every transaction. They all help the bitcoin price. Itâs a colossal open-source contribution and movement. There is not the same incentive with CBDCs. Their value is never going to go up. Quite the opposite. Their value will fall as governments issue more and more of them. There is not the same incentive.
To have any chance of working, CBDCs will require billions and billions of subsidy. Most governments do not have the resources. They are already bankrupt. They will struggle to justify the expense. Health or welfare or pensions or something will be deemed more important.
Plus they will meet with huge resistance from the freedom-fighters and possibly even the media .
None of this will stop them trying of course. But on this issue at least you can sleep soundly. CBDCs are one Orwellian nightmare that is not going to work.
They will end up yet another failed government IT project.
All ye from the future look back on this âere prescient article and marvel at my foresight.
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Zijn er afleveringen die ontbreken?
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âIf once you have paid him the Dane-geld, You never get rid of the Dane.âRudyard Kipling
The winter of 406-407 was bitterly cold across Europe. The Rhine froze over, enabling hordes of Vandals, Alans - I love the fact that there was a tribe of Alans - and Suebi to make their way across the river, and into the Roman empire. They were violent with hunger, from the cold and greedy for what they had admired for so long on the other side.
The response from Rome was slow, weak and inadequate.
In Britain, Rome had already lost the north and west to warlords. The Roman armies in Britain, who, at best, had been paid with debased money, feared these Germanic tribes would cross into Britain next, so, led by Constantine III, who declared himself âWestern Roman Emperorâ, they made their way across the Channel and into Gaul, leaving âBritanniaâ to fend for itself. We do not really know if it was Rome that gave up Britain, or Britain that gave up Rome, but, either way, the Dark Ages had well and truly begun.
Gold , silver and bronze coins had been widespread under the Romans. They were used to pay taxes, and often re-minted to pay the army and the civil service. But after Constantine IIIâs departure, few coins were either minted or imported. Judging by the numerous hoards found from the period, many people buried their money - presumably to keep it safe in this unruly new environment of no military protection and merciless invasion from Angles, Saxons and other tribes from the continent. With the lack of new supply, existing coins were re-used. Clipping - cutting off the edges to steal metal - became widespread. The previously vigorous late Roman monetary system crumbled. It was not for another 200 years that minting properly started up again.
The Anglo-Saxon invaders initially used gold more for adornment rather than as currency. Though there are examples of earlier Anglo-Saxon coins, King Eadbald of Kent was the first Anglo-Saxon whose name we actually know to mint coins. This was around 625AD - small, gold coins called scillingas (shillings), modelled on coins from France. Numismatists now call them thrymsas.
As the century progressed, these coins grew increasingly pale, until there was very little gold in them at all. From about 675, small, thick, silver coins known as sceattas came into use in all the countries around the North Sea, and the gold shilling was superseded by the silver penning, or penny. As money, gold fell out of use almost altogether, though silver had something of a boom.
It is thought the word âpennyâ, like the German âpfennigâ derives from the pans into which the molten metal for making them was poured. âPfanneâ is the German for âpanâ. Another theory is that it derives somehow from the denarius, as the symbol for the penny used to be the d. Likely a bit of both.
The Mercian King Offa, he of dyke fame, who reigned for almost 40 years from 757 to 796, must be one of the greatest Anglo-Saxon kings, certainly the greatest of the 8th century. As well as his dyke, which protected his kingdom from Welsh invaders, and provided a barrier by which he could collect duties, he is credited for the widespread adoption of the silver penny and pound as a unit of account (though the pound was in use before his reign, he still gets the credit). His coins, with portraits and intricate designs, were as accomplished as anywhere in Europe at the time. His system, though probably imported from Charlemagne and the Franks, for reasons which will become clear, almost certainly dates back to the Romans. 12 silver pence equalled a scilling. 20 scillingas, or 240 pennies (12 x 20), equalled a pound weight of silver. Thus did the pound we still use today get its name - it was, simply, a pound weight of sterling silver.
The Latin word for a "pound" is libra and the pound sign, ÂŁ, is a stylized writing of the letter L. The d meanwhile used for pence comes from the Latin denarius. The roots of the British system of money are Roman.
Offaâs system remained standard until at least the 16th century and, in many ways, until decimalization in 1971. You had to add up each unit of currency separately in this format: ÂŁ3.9.4, which would be spoken "three pounds, nine shillings and four pence," or "three-pounds, nine and four." To add, you would calculate each unit separately, then convert pence to shillings, leaving leftover pence in the right column. Then convert the shillings to pounds (with leftover shillings in the middle column). And then add up the total pounds. It sounds complicated when you explain it, especially to those oriented in metric, but, like all traditional measures, it is quite intuitive in practice.
On this note, have you seen my lecture about weights and measures? Itâs superb!
Offaâs systems were gradually consolidated over the subsequent centuries, especially as the kingdoms of Anglo-Saxon Britain began to merge. In the 860s, for example, the kingdoms of Mercia and Wessex formed an alliance by which coinage of a common design could circulate through both of their lands.
The Viking invaders found coinage systems far more sophisticated than their own, and the Danegeld, the protection money with which they were bought off, was paid in silver pennies. I had always thought the âgeldâ in Danegeld meant âgoldâ but in fact it means yield, and the Viking invaders demanded this tribute wherever in Europe they ravaged.
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The Danegeld system was quite efficient - on both sides. For the invaders, they were often paid more than they could raise by looting, without having to fight. For the locals, the ravaging was avoided, although, as Rudyard Kipling noted in his poem on the subject, âif once you have paid him the Dane-geld, You never get rid of the Dane.â
The Danegeld probably also motivated improvements to Anglo-Saxon coinage. To pay his own soldiers, to build forts and ships, and to pay Danegeld, Alfred the Great increased the number of mints in his realm to at least 8. His successor Athelstan had 30 and, to keep order, passed a law in 928 stating that England should have just one currency. Ever since, there has been just one. This was many centuries before standardisation in France, Germany, or Italy.
When William, Duke of Normandy, invaded England in 1066, he succeeded where his Viking ancestors had failed for over 270 years, in that he managed to conquer all of England. It meant he took control of English coinage, which was far superior to that of his homeland. Williamâs coins, struck back in Normandy, are remarkable for how poor they are, compared to their English counterparts.
He had at least seven types of English pennies struck with his name on, enabling him to achieve the rebrand that was so important to him. No longer was he William the B*****d, as he was then known. Now he was William the Conqueror. He let the world know through his coins. It worked: that is how we still know him today.
It is a little ironic that the pound should be so named for its silver. Because, from the time of Isaac Newton and the founding of the Bank of England, silver had very little to do with the pound. Only gold.
That story is told here:
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Itâs difficult to look beyond bitcoin and MicroStrategy (NASDAQ:MSTR) at the moment, the later in particular. Nobody expected this, not even Chairman Michael Saylor. The returns have been astonishing. A couple of readers have reported to me that the gains have been life-changing. Wow! What an email to receive.
Itâs easy to get hubristic when you have a big win. Instead, let us express gratitude for the good fortune that has smiled upon us.
But look beyond we must, and so today I want to look at what I can only describe as a stealth bull market - natural gas. The price is creeping up, and few are talking about it.
Natural gas is a bit like silver: if it can disappoint, it will. So we begin this piece with that reminder. Natural gas has broken the soul of many a wiser man than me.
On the other hand, the next five years look pretty positive.
Itâs obvious that the world is going to go nuclear now, and that Small Modular Reactors (SMRs) are going to provide the power AI so badly needs. However, it will be a good five years before they on stream, so what is going to provide the power in the interim?
The answer is natural gas.
There is a problem, however: Supply.
America's Gas Wells Are Drying Up
The North American Shale Gas Revolution dramatically changed the outlook for fossil fuels. Peak Oil was a huge theme leading up to the Global Financial Crisis, and then it disappeared, almost overnight.
Between 2005 and 2020, US natural gas production grew by 90%, with shale accounting for the bulk of it. In 2005, shale gas made up about 5% of US natural gas production; by 2020, it was over 75%. By 2017, the US had become a net exporter, especially of more transportable liquefied natural gas (LNG).
The price, meanwhile, plummeted. Good for consumers!
Hereâs the long-term chart so you can see those price declines since 2005. From almost $16 to $3.50 today (as low as $1.50 earlier this year, where it has formed an attractive double bottom - you know how I like those).
Obviously, we in the UK and Europe pay way more for our natural gas than they do in North America. Itâs so dumb; we have enough to supply ourselves in the UK. But we donât because fracking is deemed environmentally damaging. So we import gas from abroad, which is produced by, you guessed it, fracking. I guess if it is fracked somewhere else, itâs less harmful. Not
Then there are the transport costs and the environmental costs that come with that.
Anyway âŠ
Spanning Ohio, New York, West Virginia, and Pennsylvania, Marcellus is the largest natural gas-producing field in the United States, contributing over 25% of production. In 2010, output was 2 billion cubic feet per day (bcf/d). By 2023, it exceeded 35 bcf/d, but production has been falling for almost a year now. We are currently at 26.7 bcf/d
The next largest is Haynesville, in Louisiana, Texas, and parts of Arkansas. Extraction costs here are higher, and production stands at 16 bcf/d, but it is slowing here too, according to analysts Goehring & Rozencwajg.
One of the few areas of growth is the Permian Basin, in Texas and New Mexico, currently around 23 bcf/d, but even there, growth is modest.
Now, it might be that the reason for stagnating growth is low prices - they often are - and higher prices will result in increased production. They usually do. That is the way with commodities.
But natural gas prices have already doubled this year, and they keep on creeping up.
The other interpretation is that the North American Shale Gas Revolution has passed its peak.
With Americaâs new president, you can expect plenty more investment in production than under the Democrats, and that should bring the price down, but the gas price has actually risen - from $2.70 to $3.50 - since the election.
It might also be that Russian gas taps come back online to the EU sometime next year, which means America will lose its new market.
But all of this conjecture is factored into the price. And that is rising.
How to invest all this
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Letâs start with some headline stats which emerged this week.
* The number of migrants to Britain has doubled since Covid.
* 747,000 âpermanent-typeâ migrants moved to the UK last year, the OECD said, up from 488,400 in 2022.
* This marks a 53% year-on-year rise.
* The four countries seeing the biggest surge in migration are the UK, South Korea, Australia, and the United States.
* Note: Three of those four countries are English-speaking. This is something I have long argued: the UK will inevitably see higher than average migration levels because people prefer to go where they can speak the language, and more people have some English than other languages.
Meanwhile, our birth rate has dropped to 1.4 children per woman, the lowest on record.
The net result is that the demographics of this country are changing dramatically and rapidly. Different people means a different culture.
The demographics of primary schools
Migration measures, particularly illegal migration, are not entirely accurate. If someone has entered the country covertly, for example, there's often no record. Nor are censuses entirely accurate. Some donât fill the census in, many donât fill it in accurately, especially if here illegally, if they don't understand what it is, or if someone is claiming the single person council tax discount. There is a lot of scope for double counting for people with multiple addresses - students and so on.
However, pretty much everyone who has kids sends them to school. There is no hiding, no double counting and so on, so the numbers you get from the schoolsâ census are pretty accurate.
White British now make up 61% of UK primary school kids. 37% are of minority ethnic background. The remaining 2% are unclassified. (In secondary schools, minority ethnic accounts for 36.6%).
Minority ethnic includes Asian (13.4% of primary school kids), White non-British (8%), Black (6.5%), and Mixed (7.8%).
Bear in mind that these figures are for the whole UK. This includes primary school kids in remote rural areas, where British ethnicity will likely comprise over 90%.
White British was at 64.9% in 2020-21 and minority ethnic at 33.7%. The numbers are changing fast. From 65 to 61% in three years.
Ten years ago it was 70%.
This 61/37 ratio compares with 85/15 in 2002.
Previously, I extrapolated that White British would be a minority in primary schools by 2035. But with the current trends, especially considering that migrants tend to have larger families than locals, white British could become a minority in primary schools as soon as 2030, or just after.
The demography of primary schools will, within a generation, reflect the demography of the country.
I doubt this is what the majority of British people want.
But it's not a topic that's being discussed, let alone addressed, in the echelons of power. Instead, it's being brushed under the carpet.
Well, it will soon be too late. This is an urgent and pressing issue. Without wishing to sensationalise, the future of the British people and their homeland really is at stake.
Demography is destiny after all.
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If you are thinking of buying gold to protect yourself in these uncertain times, I recommend The Pure Gold Company. Pricing is competitive, quality of service is high. They deliver to the UK, US, Canada and Europe or you can store your gold with them. More here.
More on this:
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Today, we are going to look at gold, bitcoin, and our way of playing it, MicroStrategy (NASDAQ:MSTR), which has now 10xd (!) since we first covered it last year. Amazing.
Finally, there'll be a short update on gold miners. Remember them?
Letâs start with gold.
Gold - and most other metals - has been hit since the U.S. election last week. Itâs down $200, or about 7%, with U.S. dollar strength being a big factor (the dollar has been storming higher since October).
While I think this bull market might be punctured, as I put it last week, and that gold probably has a bit further to fall, I am not unduly worried. 2024 has hitherto been a great year for gold, and it remains an essential long-term core holding.
It is an even more essential holding for UK investors. I think sterling has big problems ahead of it, and gold serves as your hedge against crap governments.
If you are thinking of buying gold to protect yourself in these uncertain times, I recommend The Pure Gold Company. Pricing is competitive, quality of service is high. They deliver to the UK, US, Canada and Europe or you can store your gold with them. More here.
Labour or Tory - Iâm no fan of either.
Theyâre both as bad as each other, in my view. The less government there is, the better things run. But that's irrelevant idealism. Of greater concern here is reality: there has never been a Labour Government that did not devalue sterling.
* Blair and Brown crashed sterling in 2007-8 (though until then their record was okay);
* Under Wilson, Callaghan, and Healey, we ended up going to the IMF in 1976. Callaghan and Wilson also devalued in 1967.
* Cripps and Attlee devalued in 1949.
* Ramsay MacDonaldâs National Government, which followed Labour from 1929-31, took us off the gold standard in 1931.
Why should this Labour Government be any different? If anything, it is even less competent. Sterling devaluation is coming. How exactly might not yet be clear. I rather suspect itâll be an attempt to make us competitive against an ultra-streamlined US, but thatâs just a guess. You must own some gold (and some bitcoin) in such an environment: non-government money.
Gold under Trump - What Gives? Whatâs coming?
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Iâm sending out todayâs missive a day later than usual because I wanted to see the market reaction to the US election results and leave a little time to digest it all.
Broadly speaking, I am happy with the result, and I believe the world will be a better place for it than the alternative. Weâll see less technocracy, less deep state , and less overseas intervention; more pro-energy, pro-Bitcoin, and pro-business policy; and a stance thatâs anti-seed oil (go RFK!), anti-subsidised, environmentally harmful green quackery, and anti two-tiered, inequitable woke ideology.
Any administration that puts perhaps the most competent person alive, Elon Musk, in a prominent role, has got to be net positive.
But be careful what you wish for and of that. Donald Trump is not, as his most ardent supporters seem to think, going to save the world, nor any such. You need to fix money and tax to do that, and while he might tweak the latter, there will not be wholesale reform. And he is going to print lots of the former. Trump will run deficits, US debt will grow as a result and the nefarious consequences of fiat will take other forms.
If there are financial problems looming for the US, I suspect their roots lie in the bond markets, where yields are rising.
In short, the better alternative won. There will be more opportunity in the US than there otherwise might have been, but Trump is no Javier Milei. America isnât yet ready for that.
The initial market reaction give us some insight into where things are headed in the next few months.
If you are thinking of buying gold to protect yourself in these uncertain times, I recommend The Pure Gold Company. Pricing is competitive, quality of service is high. They deliver to the UK, US, Canada and Europe or you can store your gold with them. More here.
How did markets react?
First up, and something Iâm particularly pleased about: bitcoin has broken to new highs, hitting $75,000 yesterday. Iâm particularly pleased because new highs in bitcoin usually bring a lot of noise. This time, the noise got drowned in the election frenzy, which means thereâs plenty more hype in the tank.
Our chosen vehicle for bitcoin exposure, MicroStrategy (NASDAQ: MSTR), is now north of $250. This has been an incredible win for readers, as we first covered it last year at an adjusted $35. Itâs risen 8x, compared to bitcoinâs 150%âthatâs some outperformance.
I wrote back in September that Q4 is usually bitcoinâs best season, and that is bearing out.
Stock markets also rose, as you would expect with someone as pro-business as Trump. The Dow rose 3.5%, the S&P 500 climbed 2.5%, and the Nasdaq about 2.6%.
During Trumpâs last presidency, stock markets more than doubled, though with two major wobbles along the way, one due to Covid. Something similar this time around is not an unreasonable expectationâunless you subscribe to this view. If so, that would take the S&P 500 to around 12,000. Quite the number.
What I found especially encouraging was the outperformance of small caps. The Russell 2000 was up 6%. Small caps have underperformed for years and are due for a run. Trumponomics clearly suits them.
An interesting tidbit: Trilogy Metals (TSX: TMQ), a mining company I follow with two promising copper assets in Alaska, the development of which were blocked by the Biden administration on environmental grounds, saw its price rise 108% yesterday . Investors seem confident it will now get the green light.
I expect similar stories across the mining, oil, and gas sectors. This is a time to be investing in the USA.
On the other hand, commodities, especially metals, sold off. Copper fell 3%, with zinc and iron ore dropping by similar amounts. Crude couldnât make up its mind: it came down a bit, then rallied, then ended the day flat. Natural gas was similarly indecisive
Gold, silver and platinum all sold off, as the US dollar itself rallied quite sharply, rising 1%. Gold was off almost 3%, silver by almost 5%. Not good, though mostly a reaction to the dollar. Looks like those particular bull markets are, for the time being, punctured. Thatâs not me telling you to sell your gold by the way. Donât. You are going to need it. Particularly if you are British.
Which brings me to the UK and last weekâs budget.
I promised you my thoughts on it.
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I am travelling this weekend so todayâs thought piece is a conversation, which Mining Network recorded last week week between veteran gold guru, Alasdair Macleod, and myself.
Itâs heavyweight goldbug stuff. I hope you enjoy it.
You can watch it below, but I have also ripped the audio so you have the option to listen to that if you prefer to escape the clutch of your screens.
If you are thinking of buying gold to protect yourself in these uncertain times, I recommend The Pure Gold Company. Pricing is competitive, quality of service is high. They deliver to the UK, US, Canada and Europe or you can store your gold with them. More here.
Iâll be MCing this yearâs Moneyweek Summit this coming Friday November 8th. Readers of the Flying Frisby can get a 20% discount by entering the code FRISBY20
And if you are interested in hearing more from Alasdair, he has a Substack too.
This is a public episode. If youâd like to discuss this with other subscribers or get access to bonus episodes, visit www.theflyingfrisby.com/subscribe -
Iâm in Buenos Aires this week, so I might be a little slow reporting on todayâs budget, but Iâll come to it, donât you worry.
Shortly before Covid hit, I became CEO of a Canadian company by the name of Cypherpunk Holdings (HODL.CN). I was very pleased with that ticker symbolâHODL. My idea. But I did not have a clue what would happen as a result âŠ
Iâm writing about the company today because, even though I stood down four years ago, I know a number of readers bought shares because I was the CEO. Itâs quite a story.
Mining entrepreneur Marc Henderson controlled a shell company that had just received a large payout from the Mongolian government for some uranium assets it had seized illegally, as you do, and he wanted to use the opportunity to start a crypto business. We knew each other from way back, and he approached me because of my book.
He also brought in Canadian bitcoin entrepreneur Moe Adham, and Moe and I put together a proposal to become a privacy tech investment company.
We were both quite ideological about it. We had grave concerns about the increasing imposition on our privacy from both Big Brother and Big Tech. We felt it was only going to increase, and that therefore there would a need for privacy techâanything from VPNs to private messaging apps such as Signal, to bitcoin and privacy coins. How right we were. Look at some of the stuff that went on during Covid.
Perhaps where we misjudged was that we thought there would be a large appetite for privacy tech amongst the general public as a result. It turns out most of the general public care more about convenience than they do about their privacy, at least online. In many cases, they donât even realise what they are sacrificing.
Buying gold to protect yourself in these uncertain times? I recommend The Pure Gold Company. Pricing is competitive, quality of service is high. They deliver to the UK, US, Canada and Europe or you can store your gold with them. More here.
Once we were up and runningâand, believe me, there was a lot of complianceâI brought in my mate, bitcoin OG Jon Matonis, and we began the process of acquiring bitcoin. We would hold large amounts of bitcoin. (This was before Michael Saylorâs Microstrategy, which has been a big winner for the portfolio since we tipped it last summer it around $30 - now $220 - especially as bitcoin closes in on all-time highs).
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One of our key investors was poker champion Tony Guoga, who bought an enormous stake in the company and eventually joined the board to become Chairman.
I stood down shortly after my dad died in April 2020. (From a financial point of view, that was a mistake, as I would have several million options now with the stock itrading at two bucks).
But, despite the good work that the company was doing on the ground, the great investments it was making, and the phenomenal board, it just kept trundling along sideways, largely ignored by the investment community and trading at around half its NAV. Like a champ, Tony Guoga kept on buying stock, especially on dips, building up an enormous position. He owns about 35% of the company. Talk about management being aligned with the interests of the shareholders.
Recently, however, the company had a rebrand. With all the bitcoin ETFs, it was pointless holding bitcoin, they thought, and the company decided to focus instead on SOL, which lacks a mainstream investment vehicle. Sol Strategies Ltd became the new name, and, a few months earlier, they brought in a new CEO, Leah Wald, as well.
In the last fortnight, the shares have gone absolutely nutsâgoing from around twelve cents to above C$2. There have been several catalysts. First, Leah has made a number of well-received appearances in the media that have generated some interest in the stock. Second, it has become the easiest way to get exposure to SOL. Third, "HODL" is also the US ticker symbol for one of the bitcoin ETFs, and many Canadians, typing in HODL, accidentally bought this company instead. LOL.
Veteran traders will know the chart pattern the stock has played out. I believe itâs known as the hockey stick.
Just incredible. And look at the volumes that have come in.
The market cap of the company went from about C$17m to C$335 at the top of the market yesterday. Guogaâs stake alone went from about C$6m to north of C$115m.
For years, the company was trading at half its NAV of C$30. Suddenly itâs trading at ten times.
From a technical point of view, it shows just what can happen to a company after it builds all that cause trading sideways for many years. When it spikes, it can really spike.
I gather that itâs become something of a meme stock, so who knows when this will end? The algorithms have taken charge, especially on the US OTC markets where it also has a listing (CYFRF) and it is having daily swings of something like 30%.
It even makes Lightbridge (LTBR) look calm. Have you seen that, by the way? $14 yesterday. It was $3 a fortnight ago, when I wrote it up.
Another hockey stick:
My broker commented that itâs good to see some animal spirit has returned to the markets.
Iâm just amazed at what algos can do to small-cap North American stocks. Talk about speculation.
Casino!
Letâs hope one day they discover AIM.
I donât know if this kind of speculation signals a top. Itâs pretty obvious to me Trump is going to win next week, so maybe thatâs all priced in and markets pull back after the election.
Crash ahead?
On which note, I leave you with this crazy interview. It was recorded in March of this year, several months before the Trump assassination attempt in July, and yet predicts it with incredibly accuracy. He also predicts the weird weather, a Trump win, followed by a 1929 stock market crash. Watch a minute or two from around the 11-minute mark (it should start there). Nuts.
I bet there are a gazillion things heâs predicted which havenât happened. But I still thought it was pretty amazing.
I probably shouldnât even be sharing this stuff, but I remembered it last night it from a few months back and, with the election coming next week, I went back and re-watched it.
What do you make of it?
Let me know in the comments.
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(NB: At the end of this piece there is a short note on Lightbridge Corp (NASDAQ:LTBR), which has tripled since I covered it a fortnight ago).
I have suffered from asthma for as long as I can remember.
Others have it worse than me. I had always been able to manage it with drugs â salbutamol mostly â but, all the same, there was always that lurking thought that if I forget my inhaler and have an attack, I could be in trouble.
Then, suddenly, in my early 50s, it disappeared.
It is not uncommon to grow out of your asthma. It happens to a lot of people. But my asthma was not getting better; it was getting worse as I grew older. I canât prove it, but I think I got rid of it. Here is what I did.
How Bad Was My Asthma?
As is quite common for people my age, I was not breastfed as a baby â science thought it knew better than Mother Nature â and the allergies I suffer from â the main ones being to animal hair and pollen, which result in hay fever and asthma â are a result of that, Iâm sure. Itâs part genetic too: my dad had asthma but grew out of it in his adolescence. None of my four kids, who Iâm delighted to say were all breastfed, have it.
There were two main triggers: animal hair, cats especially, and exercise. Sometimes going from warm to cold (e.g., going outside in winter) would bring it on, and it was worse during the hay fever season.
As a child, we had cats â Persian ones too â and we didnât get rid of them until I was nine. I canât believe it took that long to figure out I was allergic to them; whenever I left the house, my asthma noticeably improved. But I took drug after drug every day, morning, noon, and night â Intal and Ventolin.
We moved and got rid of the cats, fortunately. As a teenager, I got quite strong and fit: I played a lot of rugby and football. I found I could get through matches without needing the inhaler at all. But cats would always destroy me. Within ten minutes of being in a house with cats, I would be wheezing. I was just so sensitive to them. Prolonged exposure would take a day or two to recover from.
It was so frustrating going to peopleâs houses and having to leave because of my asthma, or having to sit there and wheeze, while the owners scrabbled about putting the cat outside or hoovering. Made no difference. Every year on Christmas Eve, I would have the annual asthma attack when visiting my uncle and aunt.
As I got into my late 20s and 30s and the fitness of my youth waned â not helped by smoking too much weed at university â I found myself needing my blue inhaler (salbutamol) more frequently again to play sport.
By the time I got to my 40s, I often found myself getting wheezy for no apparent reason, and I was using the blue inhaler almost every day.
Doctors advised me to use the brown inhaler â QVAR (beclomethasone) â every day, rather than salbutamol, and the brown did indeed clear it up so that I didnât have to use the blue. But I donât like taking drugs every day, and every time I tried to wean myself off the brown, I found my asthma had got even worse. I was too dependent.
By my late 40s, I was quite overweight, and even though I did a lot of aerobic sport â running and football â I was heavily dependent on puffers.
We had a dog too, and even though it was a hypoallergenic poodle, I was still sensitive to its hair.
Alcohol made my asthma worse, especially red wine. Also, if I drank, there was always the risk I would then smoke, which of course made it bad the next day.
Here I am today, and I have not used a puffer in maybe two years. I play football most weeks, tennis sometimes, I run, and do sprint training and cycling, including hill training.
But this week came the acid test. I went for a drink at a some friends house, and they have a cat. I spent a very long evening there and did not leave until 3 AM. No puffer required. I went back the following day and spent several hours there. No puffer. Then again two days later (I really like these friends!). Still no puffer. My nose didnât even run.
I could still feel the allergy. But I was not remotely wheezy.
For me, this is quite extraordinary. Fifty years of asthma have gone.
How Did I Do It? (Plus a Note on Lightbridge)
Iâm going to spell out all the things I did. It might be that it was a combination of all of them.
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This is a free preview of a paid episode. To hear more, visit www.theflyingfrisby.com
NB If you missed Sundayâs piece about what next to do with Lightbridge after its incredible rally - 3x in a week - it is here.
This week has the potential to be one of the most significant weeks in the history of money.
36 world leaders, including Chinaâs Xi Jinping, Indiaâs Narendra Modi, and UN Secretary-General AntĂłnio Guterres, are meeting in Kazan, Russia for the BRICS summit. The main agenda of the summit is de-dollarization.
Even The Guardian has noticed. âOne of the main aims of the summit,â it says, âwill be to speed up ways to reduce the number of dollar transactions, and so mitigate the US ability to use the threat of sanctions to seek to impose its political will.â
Iâm not convinced the 36 nations in attendance are quite ready to abandon the dollar, or even make overt declarations of war against it, but for sure we will gain insights as to where we are in the grand scheme of this inevitable move away. We will learn where we are with the alternative payment systems being developed, be it BRICS Pay or mBridge.
The most powerful weapon these nations have against the dollar is goldâfar stronger than Chinaâs yuan, or Russiaâs rouble, or any other currency basket or crypto amalgam they come up with. Gold is universal money, and its value is understood by all. There has never been a global reserve currency that did not start out backed by gold. How ready these nations are to re-adopt it, we shall soon discover.
In any case, gold has been rallying relentlessly into the de-dollarisation story. We are at $2,740/oz now. Amazing. Perhaps this is a case of âbuy the rumour, sell the news.â Whatever. Could be in the short or even medium term. But thatâs not the attitude. Owning physical gold is an urgent necessity at the moment. Things are just too precarious. You donât want to be letting go of long-term core holdings on the basis of potential short-term movements.
I am watching developments closely.
If you are buying gold to protect yourself in these uncertain times, I recommend The Pure Gold Company. Pricing is competitive, quality of service is high. They deliver to the UK, US, Canada and Europe or you can store your gold with them. More here.
The Silver Surge: Is $50 the Next Stop?
In the meantime, ever unreliable silver has been playing catch-up. Itâs gone through all that resistance around $30-33 and has, having done a near-perfect inverted head and shoulders, now broken up to $35. I think itâs going back to $50.
There is some resistance at $35, $37.50, and $44.
You know my views on silver. Itâs the metal with the most potential yet, if it can find a way, it will always let you down.
Its natural price is 1/15th of the gold price, because there is only 15 times as much silver in the earthâs crust as there is gold. With gold at $2,700, silver âshouldâ therefore be $180.
In fact, there is a case for silver to be higher than that because, while all the gold that has ever been mined remains, the silver does notâit has been consumed. So above-ground silver stocks do not reflect gold stocks.
The problem is that silver has long since been demonetised. It lost its monetary status when the world adopted gold standards after the various gold rushes in the second half of the 19th century. Without this official backing, silver is only going to be an industrial metal, albeit a precious one.
Gold may no longer be an official medium of exchange, but central banks still buy and hoard it, as do corporations and private investors. The Bank of International Settlements recognises it as a Tier 1 Capital Asset. The same does not apply to silver.
Silver, as we know, also has a multitude of industrial uses, which are only going to increase as the world gets more computerised and electric.
There is also some evidence of silver shortagesâover 200 million ounces this year, a similar amount to annual jewellery demand.
Total annual silver demand is around 1.2 billion ouncesâthe second highest on record. 836 million ounces of that come from new mine supply, 180 million ounces from recycling, and the rest from sales of existing supply.
Demand looks something like this:
* 61% industrial (electrical, electronics, photovoltaics, photography & other)
* 17% Jewellery
* 5% Silverware
* 17% Investment
When silver moves, it moves fast, and it can turn on a sixpence, so itâs important not to get wedded to the silver story. The thing to remember about silver is, like errant girlfriends with personality disorders, if it can let you down, it will. The lovemaking will be unforgettable, you will have the time of your life, but, as sure as eggs are eggs, it will break your heart. Manage your risk.
As I say, there is not a lot standing in the way of silver and $50. In that scenario, the miners will go to the moon.
If it goes to $50, that will only be the third time in silverâs history it made it hereâ1980 and 2011 being the other two occasions. Third time lucky and all that. If it breaks above $50, there is nothing but blue sky above. Maybe itâll go to $100 or even $180. Itâs a maniacal metal.
Hereâs that amazing long-term chart.
How am I playing it?
I may be cynical, but I also think you should always have a position in silver. Its potential is too huge.
I own a silver miner that is just coming into commercial production and therefore due a re-rating. It will make a fortune at $50 silver, but it doesnât need $50 silver to work.
That company is âŠ
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This is a free preview of a paid episode. To hear more, visit www.theflyingfrisby.com
Hereâs something a little different as your Sunday thought piece today - my Edinburgh âlecture with funny bitsâ. I hope you enjoy it.
It lasts 50 minutes, so next time you fancy a bit of âedutainmentâ give it watch.
The first part is available to all, and you can unlock the full experience by becoming a paid subscriber.
I was super-pleased with this one, as I think I might have mentioned ;)
Meanwhile, I wanted to share my thoughts about the amazing share price action we have seen in Lightbridge Corp (NASDAQ:LTBR). The stock really has exploded, more than doubling since I wrote about it last week. What was a $3 stock is now trading at $7.
Hereâs the original piece, in case of interest - I covered it in in last Sundayâs thought piece on SMRs too.
The volumes are insane.
What to make of it all? And what to do next?
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Something a little different for you today.
I am speaking at the Battle of Ideas this weekend on three rather different matters:
* Immigration and Demographics
* Who Is the Worldâs Greatest Comic?
* Why Cash Keeps Us Free
Do come. You can get tickets here.
With this years Battle in mind, the Academy of Ideas asked me to write one of its Letters on Liberty. Here it is for your reading or listening pleasure. (There is a PDF version here).
It begins with this note from the Academy.
What are Letters on Liberty?
Itâs not always easy to defend freedom. Public life may have been locked down recently, but it has been in bad health for some time.
Open debate has been suffocated by todayâs censorious climate and there is little cultural support for freedom as a foundational value. What we need is rowdy, good-natured disagreement and people prepared to experiment with what freedom might mean today.
We stand on the shoulders of giants, but we shouldnât be complacent. We canât simply rely on the thinkers of the past to work out what liberty means today, and how to argue for it.
Drawing on the tradition of radical pamphlets from the seventeenth century onwards - designed to be argued over in the pub as much as parliament - Letters on Liberty promises to make you think twice. Each letter stakes a claim for how to forge a freer society in the here and now.
We hope that, armed with these Letters, you take on the challenge of fighting for liberty.
Academy of Ideas team
Why Cash Keeps Us Free by Dominic Frisby
Give most people the choice of living and working anywhere in the world, I bet the large majority would choose the US. For all its many shortcomings, itâs still the land of opportunity. Itâs exciting, itâs dynamic. Wonderful things can happen there. In terms of tech, with Silicon Valley and all the ensuing social media and ecommerce, it is very much the world leader. And yet, Americans still use cheques.
When was the last time you used a cheque in Europe? Donkeyâs years ago. As much as 5 per cent of all financial transactions in the US last year were by cheque. For all its modernity, the US is - in terms of fintech - a good 10 years behind Europe or Australia. Not only do they use cheques, but people in the US still go out with cash in their pockets. Bunch of luddites.
However, things are slowly changing, and the US is following the rest of the developed word to cashlessness. It is inevitable, Iâm afraid. Technology is destiny.
Itâs also a great shame.
Cash empowers its users
When I pay you in cash, nobody else gets in on the transaction - itâs a direct transfer from me to you. No grubby middlemen can cream off their percentage. No prying eyes of the state can monitor what we do. Big Tech canât glean information from the exchange, to be used at some later stage to sell you stuff or, worse, report back to Big Brother, Big Insurance or whichever Big wants in on your data. Nobody can stop you making the transaction.
With cash, you can buy and sell and store your wealth outside of the financial system, if you so choose. There are plenty of reasons, both practical and moral, to do this.
Cash means control. Just take the recent de-banking scandals from Canada to the UK, where truckers had their fundraised money withheld because of their views on lockdown, and a UK politician was kicked out of Coutts for holding the wrong opinions. Both the Canadian truckers and their families, and Nigel Farage, had one thing in common â they held views outside of the liberal mainstream. And because their money wasnât under their mattresses but in banks and websites, they lost control of their own cash.
Indeed, instability is nothing new. We are repeatedly told how, in 2008, we were âon the brinkâ, how close the system was to imploding. Surely, then, it makes practical sense to keep money outside of the system? When Cyprusâ banks teetered on the cliff of financial disaster in 2011, there were bail-ins. Ordinary peopleâs money, sitting in deposit accounts, was sequestered to save the system. If your life savings were threatened with confiscation to bail out an organisation you considered profligate, I imagine you too would want little part of it.
What you do with your money says more about you than what you say - no wonder so many want access to this information.
Indeed, the former governor of the Bank of England, Mervyn King, has admitted that banking is not fixed - and we will see financial panic again. It makes sense to hoard some cash, if only as emergency money.
In 2016, the Japanese central bank imposed negative rates to try to goad people into spending rather than saving, as the ageing Japanese are prone to do. The spectre of being charged a fee to keep your money in the bank loomed, and so much cash was then withdrawn that the country sold out of safes. Who can blame the Japanese? In Germany, Denmark and Switzerland, some high-net-worth individuals with more than 100,000 euros were charged for being wealthy. There was plenty of talk of confiscation and bail-ins during the financial panic that came with Covid, though fortunately it proved to only be talk. Nevertheless, when in the bank, your money can become a tool of government. How often do you support what your government is doing? Not that often, I imagine.
People donât seem to realise this, but when you deposit money in the bank, you are actually lending it to the bank. The bank, under government orders, can then decide who you can and canât send money to (anyone tried sending money from a UK bank to a bitcoin exchange recently? Most banks wonât allow you to). The bank can certainly monitor and then disclose what you do with your money. In times of financial panic, it is within the bankâs power to confiscate money, again, on government orders. Cash protects you against all of this. It enables you not to play the game - if you donât want to.
What you do with your money says so much about you - no wonder so many want access to this information. From the apparently benign (we can see what books you have bought, and so can suggest other books you might like) to the sinister (we can see what books you have bought, and therefore now have you marked down as a problem). When I was at university, a rumour circulated that various organisations monitored who took which books out of the library. Anyone who borrowed Mein Kampf went on a list as potential spy material - Iâm not sure on whoâs side.
These are all, in my view, quite legitimate reasons to want to keep money outside of the system. Iâm not saying we should take all of our money out of the bank, but that we should all have the option to do so. Itâs our money, not the banksâ. We need cash because it is private.
Privacy - and why it matters
âWho are you? Why do you hide in the darkness and listen to my private thoughts?â - William Shakespeare
Itâs so obvious why we all need some privacy in the real world that it almost doesnât need explaining. Yet, in the digital world, so many of us donât realise just how much of our privacy we are giving away. On a daily basis, we sacrifice privacy for convenience.
Different people know different things about you. You might supply your doctor with information you wouldnât give your taxi driver, but your taxi driver knows where you are going - and your doctor might not. You might supply your lover with information you wouldnât give your lawyer. Then again, you might tell your lawyer something you wouldnât tell your lover. The difference is, information you supply online - what you say, read, watch, share, buy or sell - can be used for purposes beyond those for which it was supplied.
Information is taken, without you realising that you are granting permission, and is used to shape your behaviour.
How often has this happened to you? I was talking to my daughter on the landing outside my bedroom about a trip I was planning. I said, âshould I bring my Timberlands or my hiking boots?â She said âyour Timberlandsâ. I said that they were a bit old. I got into bed, looked at my phone, and Amazon was flogging me Timberlands. Your phone is listening - accumulating information with which you did not deliberately supply it.
Itâs not all bad - often that information might be used advantageously. Iâm a huge Game of Thrones fan but I only discovered the books all those years ago because Amazon recommended them. YouTube frequently suggests videos to me that Iâm interested in, which I might not otherwise have found. Nevertheless, information is taken, without you realising that you are granting permission, and is used to shape your behaviour and influence the decisions you make. The same data mining is taking place every time you use your credit card, or Apple Pay. It is used to determine the content you receive, to sell things to you, to make decisions about you - the loan, insurance, job or the opportunities you are offered. It is used to influence the political decisions you make. And all this information could be stolen. In the wrong hands, it could be used against you in some way. It can and is being used to spy on you.
With financial transactions in the online world, you have little idea what information about you is being used, how it is being used or by whom. You have little say in its use - no ability to object nor power to amend that information. You have no control.
There are no such concerns when using cash.
You have nothing to hide
âIf youâve done nothing wrong, youâve got nothing to hideâ is the common argument against worrying about privacy. But if you are exploring new ideas - dangerous ideas, ideas that go against the orthodoxy, perhaps investigating the concept that the world might not be flat and is in fact round - do you really want some hidden power knowing what you are up to? The effect of this threat of intrusion is to censor free thought - to censor your inquisitiveness.
One solution is to become a drone, to not do anything experimental or anything wrong. Perhaps thatâs what they - whoever they are - want. Gmail reads the emails you draft but decide not to send. Effectively it knows what you thought, but decided not to say. How dark is that?
A better solution is to protect privacy - to limit the scope that others have to use our information beyond the purpose for which it was supplied. It allows us to have greater control over our online reputation and enables us to grow and mature without being shackled by foolish things we might have said or done in the past. It enables us to explore new ideas outside the mainstream, without fear of being watched. Those that know about us have power over us. Protecting privacy limits that power. Cash is key to this.
But, of course, protecting privacy costs money. The internet is, mostly, free. Protecting your privacy takes effort. If you protect your privacy, you lose all the benefits that your phone and computer knowing a bit about you brings, from saved passwords to helpful book recommendations.
This is the dilemma we all face, and most choose convenience without even realising it. This, above all, is why the world is going cashless. Itâs more convenient to pay with your phone, or with a card, than it is to carry cash. In the marketplace, convenience always wins.
Mobile phones and the naysayers
Hereâs a little story for you. By 2023, some 85 per cent of the global population - 6.8 billion people - had a smart phone. Thatâs more people than have a toilet. Yet, at its peak in 2008, there were 1.3 billion landlines for a global population near 7 billion. Why did the mobile, and then the smartphone, succeed where the landline failed?
Yes, superior wireless technology made widespread coverage more possible. But there is another, simpler reason: to get a landline, you need a bank account. When more than half of the worldâs population is âunbankedâ, as it was in 2008, without access to basic financial services, telecoms companies saw no potential custom. Those companies would have built lines in the Arctic circle if there was profit to be made by it, but there wasnât. Too many people were financially excluded. The infrastructure was never built, and people were left with fewer possibilities to communicate.
A mobile, on the other hand, you can buy with cash. You donât need to be banked. The financial system was a barrier to progress for the worldâs poor. Cash is a facilitator for them - it means total financial inclusion, a luxury the better off take for granted. Without financial inclusion - and there will always be some that, for whatever reason, often some bureaucratic quirk, wonât have it - you are trapped in poverty. Beware the war on cash.
The irony is that the smartphone now facilitates financial inclusion, whether via traditional finance (banking etc) or modern alternatives - the likes of the African mPesa (a widely used currency based on airtime) or bitcoin and other crypto currencies.
Handy cash
Cash still has its uses for small transactions - a chocolate bar, a newspaper or a pint of milk. It will always be the fastest form of payment there is - think of the change you might put in a buskerâs hat or the bucket of someone collecting money for charity. It is also the most direct payment there is.
For many people not at the top end of the economic scale, cash is still king. For example, I like to tip waiters in cash, knowing they will receive that money without it being syphoned off by some unscrupulous employer. I like to shop in markets, where new businesses often start out. Cash is widespread - itâs fast, itâs cheap. I can buy directly from the producer knowing they will receive all the money, without middlemen shaving off their percentages. Goodness knows itâs hard enough for new, small businesses as it is.
A quick look at a recent British Retail Consortium report shows that, surprisingly, cash remains the least costly payment method to process. I want to maximise new businesses profits where I can. Many new businesses starting out need the cash economy. Small businesses need it. The financially excluded need the cash economy. The war on cash is a war on them. Cash also has its uses for private transactions, for which there are many - and by no means are all of them illegal. But if you listen to the scaremongering, youâd start to think that all cash users are either criminals, tax-evaders or terrorists. Sure, some use cash to evade tax, but itâs paltry compared to the tax avoidance schemes multi-national corporations employ. Starbucks doesnât use cash to avoid tax, itâs all done via legislative means.
I have a confession to make - even I, with my highfalutin principles, no longer carry cash, guilty though it may make me feel.
A quick poll of my Twitter followers showed that 36 per cent no longer carry any cash when they go out. This is also a generational thing. The number of no-cash-users is much higher among the under-30s. I have four kids between the ages of 18 and 23, none of them carry cash. Nor do their friends. Itâs the older (wiser?) generation who still carry cash, even if only as emergency money. The problem is, cash is like playing records, when the rest of the world is on Spotify.
Use of cash fell quite dramatically with Covid, but it still accounts for 14% of all retail payments in the UK, according to a 2023 House of Commons paper. Projections are that, by 2031, this number will fall to 6%. (Obviously, if you include other payments the proportion is much lower.)
In mainland Europe, the use of cash is higher at around 20% of all retail transactions. Germany, Italy and Spain are still at 35-50% cash, while the Nordic countries are below 10 per cent. In the US, the number is in the 20-25% region. But the trend is very much down.
But here I have a confession to make - even I, with my highfalutin principles, no longer carry cash, guilty though it may make me feel. The truth is, cash is dying. The convenience of fintech is killing it. Money is now almost entirely digital.
Bitcoin and digital cash
Tech might have doomed cash, but it is also coming to the rescue in the form of bitcoin and other crypto currencies. Bitcoin itself was invented to be a digital replication of the cash process. A can send money directly to B without there having to be any middleman to process the transaction. Bitcoin is cash for the internet.
Among the many breakthroughs which got people so excited about this new technology was that Satoshi Nakamotoâs blockchain solved the problem of âdouble spendingâ - making sure you canât spend the same money twice - without having to use third parties such as banks to process the transaction. There is now a plethora of copycat currencies, with many of them focused on privacy in order to make their usage anonymous.
At the other end of the scale, we have central bank digital currencies - CBDCs. These have been piloted in various countries around the world and, fortunately, nowhere has really got them to work. They have been met with neither trust nor understanding, and in many cases the tech has fallen short. In Nigeria and the Eastern Caribbean, they went beyond the pilot phase and have been out and out failures. Even in the Bahamas, the one place where a CBDC is said to have worked, adoption has been much lower than hoped. I asked my friend who lives there how successful it had been. He gave me this reply: âLOL. I have never seen one person use it.â
Fortunately, government incompetence is on our side.
Money has always been a bottom-up technology. Users prefer what is convenient. The fiat currency we use in the West today has evolved over many hundreds of years, especially as communication technology has developed. All you are doing when you make a payment is, effectively, sending a promise - the money itself does not exist. There is no gold or anything tangible backing it.
Cash is slightly different, because you are handing over something physical. But read whatâs on that piece of paper - itâs just another promise. Once upon a time, you might have been able to swap a 10-pound note for 10 pounds of sterling silver (not quite true as silver was abandoned before paper money became widespread) or 10 gold sovereigns (true). But today, all it says is âI promise to pay the bearer the sum of 10 poundsâ - it is a promise of nothing. How the whole house of cards doesnât come tumbling down is beyond me, but there you go.
Many central banks want to make the transition to CBDCs, despite zero democratic mandate. The planners want it because it then allows for money to become even more of a tool of government policy: whether it be monetary policy, taxation, welfare, surveillance or control. Fortunately, government incompetence is on our side. The history of government IT is so bad, itâs unlikely any will succeed, thank goodness, especially not in countries with large populations. Heck, they canât even fix the potholes! But thatâs not to say they wonât try.
Always end on a song
Thatâs an old show-business maxim. Why donât we do just that?
âProgrammable Moneyâ, a song I wrote last year about CBDCs, summarises everything there is to be worried about. Enjoy!
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Lyrics
C - B - D - C. C - B - D - CProgrammable money. Programmable money.
Weâll monitor every purchase you make,Every transaction or decision you take.If youâre not doing wrong, what is there to hide?How you spend money is for us to decide.
Your social-credit rating, how do you score?If youâre compliant you will get your reward.You may only own what we deem you can own.If you donât register, weâll block your phone.
Wait! Youâll be late for the expiry date.The state has mandated your money terminatesSo spend, speculate before itâs confiscatedThis is what weâre going to orchestrate
No more saving
Programmable money. Programmable money.C - B - D - CC - B - D - C
Your moneyâs now a tool of policy.You will be living in a smart city.You may only travel in a limited range.Energy and meat rations cos, climate change.
Weâll take your dough if we think itâs owed.No matter if you do not think itâs so.Taxes and fines, fares, fees of all kinds.All embedded in the lines of code.Hail Big Brother
Programmable money. Programmable money.C - B - D - CC - B - D - C
Tears of the sun, fallen from heaven.Empires fall. Radiant droplets everlasting.
We will implant you with a microchip,AI and other forms of censorship.We will decide what is good for you.Total control thereâs nothing you can do.
Bitcoin fixes this!
From here.
Hereâs a PDF of todayâs piece.
Finally, here are some videos I made of recent articles, for your viewing pleasure.
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Quick heads up. I have made some video versions of recent articles. Here they are, in case you are a watcher rather than a reader:
I donât know about you, but I use artificial intelligence (AI) all the time. ChatGPT has become my right-hand man. It gives me advice (really â and good advice too), it helps me make decisions, it gives me exercise workouts, recipes, it proofreads what I write, it helps me write titles, it even helps me write song lyrics. Midjourney does all the imaging for this newsletter. Even a simple Google search now involves lots of AI.
I know Iâm not alone. Almost everyone is using AI, consciously or not.
Guess what? AI requires bucket loads of power. Thatâs why Microsoft recently agreed to pay Constellation Energy, the new owner of Americaâs infamous nuclear power station, Three Mile Island, a sizeable premium for its energy. There is cheaper wind and solar power to be had in Pennsylvania, but it isnât as reliable as nuclear, 24 hours a day.
Itâs not just AI. The widespread political desire to rid ourselves of fossil fuels means the world needs electricity, and fast.
Nuclear is the solution, of course. But nuclear takes a lot of time, even with AI now âre-routingâ the anti-nuclear narrative. It takes especially long in the UK where any kind of infrastructure project requires billions to be spent on planners, lawyers and consultants before a brick is even lifted.
Itâs so stupid of course. Nuclear power stations have been operating commercially for 70 years, providing reliable, affordable, and almost infinitely renewable âcleanâ electricity. Nuclear has the best safety record of any energy technology. Almost all environmental concerns, such as waste disposal, have been solved. But if you want to know the name of the point at which stupidity, hypocrisy, waste and weakness meet, itâs called British Energy Policy.
Layer upon layer of safety is demanded in nuclear plant design. The regulatory process is slow, cumbersome, and complex. There is a long lead time between planning, building, and operation, which adds to expense. Political uncertainty meant many proposals for nuclear power stations in the UK were shelved. It all drives away investment.
But governments around the world are waking up to the fact that the silver bullet is nuclear-powered. Thus, the narrative is changing. The dawn of the new age of nuclear power is upon us, and it canât come quickly enough.
Thatâs why the focus has shifted to small modular reactors (SMRs). These have been operational for almost 70 years now in submarines, aircraft carriers, and ice-breakers, but in the last few years, land-based SMRs have been developed to generate electricity.
They use simple, proven technology, and are safer than current nuclear power stations. They can be manufactured in factories and then rapidly erected on-site. Modular refers to the design principle of breaking down a system into small, independent, and interchangeable components, or âmodulesâ, that can easily be combined, modified, or replaced without affecting the rest of the system. This flexibility means they are scalable. It aids manufacture, transportation, and installation while reducing construction time and costs.
SMRs donât occupy much land, so they have little impact on the landscape. Some can even be constructed underground â surely preferable to wind turbines and solar farms. In the UK, they could be erected on the redundant sites of closed nuclear and coal-fired power stations, where grid connections are readily available.
A 440 megawatt (MW) SMR would produce about 3.5 terawatt hours (TWh) of electricity per year, enough for 1.2 million homes â or to provide power to Wales, the Northeast of England, or two Devons. It would require about 25 acres of land. A solar farm would need 13,000 acres for the same output; a wind farm, 32,000 acres. Three 440MW SMRs would be enough for London, which has around 3.6 million homes.
Whatâs more, their output is not dependent on the weather. Reliability is why Microsoft paid a premium of more than 85% for Three Mile Islandâs power. SMRs produce electricity that can easily be adjusted to meet the constant, everyday needs of the grid (baseload), and they can also ramp up or down to follow changes in demand throughout the day. They spin in sync with the grid, so they help keep everything stable. When theyâre running, they act like a steady hand, providing momentum that makes it easier to manage sudden changes in electricity supply or demand.
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How To Invest
There are all sorts of ways to invest in nuclear power. The simplest and least risky is to buy the metal itself. Current demand for uranium stands at around 200 million pounds per year, while mining output totals only 140 million pounds. Another 25 million pounds comes from secondary sources, such as scrap and recycling. So there is a uranium supply deficit. Iâm surprised the price isnât higher. London-listed Yellowcake (LSE:YCA) has been set up with this purpose in mind. It is, essentially, a uranium holding company. You buy the shares, and thus own a share of the uranium it holds. It makes up part of the Dolce Far Niente portfolio.
You could also buy uranium miners, though I have to say I do not like the miners at all. There are the large producers, such as Cameco (Toronto: CCO) and Paladin Energy (Sydney: PDN). You can also gain exposure via large caps, such as Rio Tinto (LSE: RIO), but they are not pure plays. There are mine developers too, such as NexGen Energy (Toronto: NXE), whose Rook 1 project should be producing a whopping 30 million pounds a year by 2030, almost enough to solve the uranium supply deficit single-handedly.
If you donât fancy your stock-picking skills, go for a fund instead. The London-listed Sprott Uranium Miners ETF (LSE: URNP) is an exchange-traded fund that gives you exposure to a basket of mining companies, as does closed-end fund Geiger Counter (LSE: GCL). Another popular ETF is the Global X Uranium UCITS ETF (LSE: URNU).
Why donât I like uranium miners? About 90% of those listed in the funds do not have any production coming in the near future and are, therefore, huge vortexes into which capital will disappear. At present, they are fully valued. Thatâs not saying they wonât go up. But when the time comes for them to fall, they will bomb.
When I last looked at SMRs in 2021, the companies I tipped were Rolls-Royce (LSE: RR) and Fluor Corp (NYSE: FLR). Both have been real winners. Rolls-Royce has built seven generations of SMRs for use in nuclear submarines and, with its modern designs for SMRs, has been winning contracts all over. Rolls-Royce is not a pure SMR play. But it has put its SMR business into a separate entity (Rolls-Royce SMR) and I presume this will be spun out and listed at some later stage.
The stock has been going great guns under its new CEO, Tufan Erginbilgiç. I tipped it around the 100p mark and itâs now at 530p and thereâs no stopping it. It was 1,350p in 2013, so thereâs plenty of upside left, and that was before there was any urgency about SMRs. Iâve taken my original stake off the table, and the rest Iâm holding.
I also mentioned NuScale, a US outfit, which in 2021 was unfortunately still private. There was a way to get exposure to NuScale, however: via majority shareholder and engineering company Fluor Corp. It has been a real winner too. We tipped it at $18. Itâs now $50. The stock remains a hold, although it is not a pure play. Worth $8.6bn, Fluor has $200m of free cash flow and trades at 42 times earnings.
But the company we were looking at, NuScale Power Corporation (NYSE: SMR), has now listed â good ticker â and you can buy the stock at not far off the flotation price. Be warned, however: this is a volatile company. Since its initial public offering (IPO) at $10, the stock has been as high as $15 and as low as $2. It is now at $13.
NuScale designs, develops, and commercialises SMR reactors for nuclear-power generation, aiming to provide a âsafe, flexible, and scalable nuclear-energy solutionâ. Its flagship product is the NuScale Power Module, a self-contained pressurised water reactor (PWR) that is far smaller than traditional nuclear reactors. Each module has an electric capacity of about 60 megawatts, but they can combine to scale up.
NuScale has partnered with various organisations, including the US Department of Energy (DOE) and global energy firms, but it does not yet have a solid sales pipeline, so it is hard to value. Instead, itâs a bit of a meme stock that rises and falls when it gets tipped. NuScale has a market capitalisation of $1.2bn and revenues of $23m; it lost $273m last year. It now has $180m in negative free cash flow, $130m in cash and a burn rate of about $35m per quarter. (So itâs got enough money for another year.) Caveat emptor.
Another option is BWX Technologies (NYSE: BWXT), but again itâs not a pure SMR play, more of a picks-and-shovels play. The company manufactures nuclear-reactor components, systems fuel, and other critical parts for the nuclear-power industry. It really is wide-ranging (think anything from naval nuclear propulsion to nuclear defence) and its history goes all the way back to the Manhattan Project.
SMR developers will often rely on BWXâs expertise and manufacturing capabilities to ensure the safety and functionality of their designs. As demand for SMRs grows, so will the appetite for BWXâs products and services. BWX has a market value of $10bn and $1.2bn in debt. Earnings per share are just shy of $3, and the price/earnings (p/e) ratio is close to 40. But it is profitable and pays a yield just below 1%.
If you want to go really small and speculative, there is always the mining exploration option (not recommended), or uranium enrichment firms. If this technology of enriching uranium to make it more powerful comes good, then the efficiencies of the industry will improve even further, and the problem of uranium supply deficits will quickly vanish, along with the high prices of many uranium miners. Silex Systems (Sydney: SLX) â market cap A$1.1bn (ÂŁ565m), 50% owned by Cameco â is the market leader here, although Centrus Energy (NYSE: LEU), worth $1bn, is not far behind.
We are still some years from successful enrichment, but it is coming. I doubt we will see it before the uranium price itself breaks to new highs above $140/lb, which it hit in 2006, and probably not until $200 uranium. High prices have a habit of accelerating everything. Uranium is now at $70/lb.
Thatâs when tiny-cap nuclear-fuel tech firms such as Lightbridge (Nasdaq: LTBR), worth $46m, could rocket. Lightbridge, looking to improve the safety, economics, and proliferation resistance of nuclear power, is developing a fuel that operates about 1,000 degrees cooler than standard fuel. Itâs got $27m in the bank, is losing $10m a year and, like NuScale, seems to rely on memes and tipsters. The stock costs $3 so there is plenty of upside. But be warned: this is an illiquid Nasdaq stock. Donât chase it.
Amazing chart. From $4,000 - to $2. Talk about wealth destruction. Itâs like an NHS IT project. Looks like it might, finally, have bottomed though.
This article first appeared in Moneyweek Magazine.
Iâll be MCing this yearâs Moneyweek Summit on Friday November 8th. Readers of the Flying Frisby can get a 20% discount by entering the code FRISBY20
If youâre interested in nuclear, Wednesdayâs piece might be of interest:
I had an email from Nick Lawson, CEO of investment house, Ocean Finance, which has put together some research on Lightbridge. I share it here, in case of interest.
And here once again are those vids:
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Final call for my âlecture with funny bitsâ about mining this Thursday. Hope to see you there.
But here it is, finally, the follow-up to How to Sleep Well, in which we address the bane of many who would sleep well: peeing in the night.
Did you know one in three adults over 30 and more that half of adults over 50 wake up to pee at least once a night? The interruption damages the precious rhythm of sleep, especially later in the night when getting back to sleep again is harder.
The problem plagued my dad for decades, and it was bladder issues that eventually took him. His peeing was a major source of misery, especially in his later years, and my eyes still well up now when I think how much pain and discomfort he was in.
Unfortunately, like father like son and all that, I have my fatherâs bladder.
Iâm only 55. Iâve been having to get up in the night for at least 25 years now. It is not uncommon for me to have to get up as many as five times. On a really bad night, it can get to ten.
For years, I accepted this as my genetic destiny. But with this sudden turnaround in my health and fitnessâin which I have rid myself of many things I thought I was stuck withâand not wanting to follow in Dadâs footsteps, Iâve put some considerable effort to this issue in the last few months.
Iâm delighted to report that I have made real progress.
Twice this week, I have got through the night without having to pee at all. Itâs been 25 years since that happened for me, and the exhilaration I felt the following morning was quite something. I even got 100% sleep scores on my Whoop.
If buying gold to protect yourself in these uncertain times, let me recommend The Pure Gold Company. Pricing is competitive, quality of service is high. They deliver to the UK, US, Canada and Europe or you can store your gold with them.
Five things I did which made a difference
The condition of having to pee in the night is called nocturia.
I started by going to the doctor, where I had all sorts of tests: blood tests, urine tests, and the infamous finger up the bum. Everything came back fine. No prostate or bladder issues. The only thing they found was that my kidney function was sub-optimal.
There are five stages of kidney function, with stage 1 being optimal and stage 5 being failure. Iâm stage 2, âmildly reduced function,â which is not ideal, but itâs also not abnormal for someone my age. In any case, itâs often asymptomatic.
So if everything is mostly working down there, why all the peeing?
I have a theory which Iâll come back to in a moment.
By the way, while I remember: fasting does not help. When fasting, if youâre like me, you will consume loads of liquidâsoup, herbal teaâto fool your body into thinking youâre full. All that liquid means a lot of peeing.
Also, fasting puts your body into a state of ketosis, which makes your kidneys work harder. Ergo more peeing.
However, the health benefits of fasting, especially weight loss, are so great that, in my view, they outweigh the increased peeing.
1. Supplements
I tried a million different supplements:
* Pumpkin seeds
* Linseed / Flaxseed
* Walnuts (also good for Omega 3)
* Zinc
* Selenium
* Pygeum Africanum
* Magnesium
* Vitamin D (though I also read that it makes you pee moreâyou canât win)
* Quercetin
Iâm not convinced any of them made a significant difference, but I mention them because they were part of the process.
2. Booze
Sorry, but itâs a killer. Especially, beer. Lots of liquid plus the diuretic effects of alcohol. Try not drink as much, try and drink your booze earlier in the day, away from bedtime. Best of all, donât drink at all.
If you need help cutting down on booze, get a Whoop. I explain how they help here.
3. Fluid Management
Consume your fluids earlier in the day. Avoid drinking anything for at least three hours before bed, even if it means going to bed a bit thirsty (though that might not be great for your kidneys).
This makes a huge difference - it will reduce your peeing by as much as 40% Iâd say.
At the same time as making sure I didnât drink three hours before bed, I started doing two other things. I think it these three things in tandem that made the difference.
4. Getting your body out of the habit
Often Iâd wake up in the night with the feeling that I needed to pee, when I didnât even need to.
I began to suspect that my body had simply got into the habit of waking up. I needed to break the cycle. How to do that?
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You can watch a video of this article here:
For the first time in history, gold went above ÂŁ2,000/oz yesterday.
This is a huge landmark in the decline of sterling.
Of course, nobody in the UK echelons of power is talking about it.
We are, however, because it matters. Who is buying so much gold that price keeps going up? Why are they buying? There are hugely significant developments taking place in Asia that have the potential to reshape the global financial order.
This bull market is not like previous bull markets. Itâs not driven by retail buying. Whatâs driving it is far more significant than that.
Clowns to the left, cretins to the right
Here is gold in pounds since Gordon Brown sold ours in 1999. Itâs quite somethingâover ten times higher! What a clown.
Meanwhile, in other currencies, gold continues its march. Here it is in dollars, the preferred benchmark, over the past three years. This is proper bull market stuff.
I know I have said this a million times, but I really urge you, if you havenât already, to diversify out of sterlingâindeed any form of fiat moneyâand use gold as your savings vehicle.
The gold price action is telling us something.
The way this government is goingâitâs proving almost as rudderless as the Tories were, and in record timeâsterling could have real problems, and soon.
To my knowledge, not one influencer in the Labour Party, over the course of its conference this week, mentioned stewarding the currency, protecting its value, or any of that stuff. Just as every government before it has, they will use sterling devaluation to compensate for their deficit spending.
The pound is only holding up in the forex markets because the Bank of England did not cut rates last week, when the Federal Reserve and the ECB have gone into a rate-cutting cycle.
Perhaps, more significantly, no one in the Labour Party is discussing what is happening in Asia. Central banks are buying gold in huge quantities. They are no longer waiting for the price to pull back before making their purchases.
Perhaps most significantly of allâthey are not reporting all their gold purchases. It is happening on the quiet.
If you want to buy gold to protect yourself in these uncertain times, let me recommend The Pure Gold Company. Pricing is competitive, quality of service is high. They deliver to the UK, US, Canada and Europe or you can store your gold with them.
De-dollarisation is happening in front of our very eyes
The implications for the West are huge. But, despite the geopolitical significance, this issue is nowhere close to the Labour radar.
This goes back to early 2022 and the Russian invasion of Ukraine when the US confiscated Russiaâs US$300 billion. Most of the rest of Asia looked at that and thought, âwe need to de-dollarize.â
China, as we know, has quietly been reducing its holdings of US Treasuries. It now holds $777 billion in US Treasuries, which is about 10% of the US national debt held by foreign entities. This compares to 22% in November 2013. That is quite the reduction.
China has also, as we know, been accumulating vast amounts of gold.
Analyst Jan Nieuwenhuijs calculates that China has bought 1,600 tonnes of gold since Covid. I think the number is higher. That is on top of the 370 tonnes it mines annuallyâand most of that mining is state-owned.
I was having dinner with a VIP Chinese investment banker last night. I asked him about the Chinese mentality and de-dollarisation. âIt is a matter of pride,â he said. China does not want to be beholden to the US. Global reserve currency status is a goal. There has never been a global reserve currency that did not start out backed by gold.
For now, it continues operating by its doctrine, âwe must not shine too brightly,â but all the while it is accumulating gold and reducing its dollar dependency.
But it is by no means the only country doing this.
Saudi Arabia was âcaughtâ a fortnight ago secretly buying 160 tonnes of gold in Switzerlandâkudos to Jan Nieuwenhuijs for the scoop.
âOne thing is for certain,â says Jan. âSaudi Arabia owns much more gold than it wants the world to believe.â
This is significant because Saudi Arabia was such a key player in establishing the petrodollar in the early 1970s after the US came off the gold standard, enabling the dollar to retain its status as the global reserve currency.
Saudi Arabia could be quietly repositioning itself as an ally of the next global superpower. It could also, as we shall see, be at the heart of a new global payments system.
The new international payments system which bypasses the US dollar
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Iâm delaying the follow up to last weekâs piece on sleep for another week because I am still experimenting ;). In the meantime, I hope todayâs little story will put a smile on your face.
And a reminder there are just a handful of tickets left for my âlecture with funny bitsâ at the Museum of Comedy on October 10th - October 9th was cancelled - sorry. This is a super interesting show, even though I say so myself. If you are free, I really recommend it.
In 1914, a young German named Heinz Kurschildgen started his first job as an apprentice in a dye factory in his hometown of Hilden. He became fascinated by the chemicals he was working with, and built a small laboratory at home to conduct experiments.
Before long, he thought he had found a way to make gold, and even persuaded several investors to give him money. However, it soon became clear that he couldnât make gold and found himself prosecuted for fraud. The courts let him off on the grounds that mentally he was not all there, but only on condition that he solicited no further investments with schemes to make gold.
He was soon claiming he could make other transmutations, and became something of a joke figure in his hometown, where a bust was even erected in his honour, albeit ironically, inscribed with the words: âFor the genius gold-maker, from his grateful hometown.â
But in 1929, he returned to his first calling, which was kidding people he could make gold. He approached German President Paul von Hindenburg and Head of the Reichsbank, Hjalmar Schacht, with a proposal to make the gold they needed to pay off Germanyâs WWI reparations.
These had been set at 132 billion gold marks, which translates to 47,300 tonnes. To give you an idea how unrealistic a figure this was: it was an amount not far off all the gold that had ever been mined in history by that time. That would take quite some alchemy.
But Kurschildgen was not a man to be deterred. He raised a load more money, defrauded his clients, and ended up with another 18 months in jail.
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After his release, he was soon at it again. This time, he approached the newly elected Nazi government with a plan to make petrol from water.
Chief Scientific Advisor, Wilhelm Keppler, paid him a visit and Kurschildgen agreed to reveal his methods and surrender the rights to the government. Meanwhile, his claims about being able to make gold piqued the interest of SS leader Heinrich Himmler, who had a notoriously superstitious streak and a fascination with alchemy. Himmler started generously funding Kurschildgen to conduct his experiments.
But Reichsanstalt physicists soon declared his contraptions useless, and Kurschildgen ended up in a concentration camp.
âHimmler has fallen for a gold and petrol maker,â said Joseph Goebbels in his dairy. âHe wanted to defraud me, too. I knew what he was about straight awayâ.
After two years Kurschildgen was released for good behaviour. Himmler had him put straight back in the camp. On no account did he want this embarrassing story becoming public.
After the war, Kurschildgen tried to get recognized as a victim of Nazi persecution, so he could claim compensation. âThe Gestapo would stop at nothing to get my invention," he told the courts.
As with most of his ventures, his petition was unsuccessful.
Even so, you canât fault the manâs ambition.
Until next time,
PS Donât forget Shaping the Earth on October 10th.
If you are interested in buying actual gold in these uncertain times, then look no further than my recommended bullion dealer, the Pure Gold Company. Premiums are low, quality of service is high, and you get to deal with a human being who does not moonlight as an alchemist!
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There are just a handful of tickets left for my âlecture with funny bitsâ at the Museum of Comedy on October 10th - October 9th got cancelled - events beyond our control, sorry. This is a super interesting show, even though I say so myself. If you are free, I really recommend it.
Some charts have been doing the rounds this week, and I wanted to take a look at them today, as a couple of you have been asking about them.
The first is this one, which shows that, relative to stocks, commodities are as cheap as they have ever been.
I have little doubt that there will be another bull market in commodities, that it will come when people are least expecting it, and that, when it does come, it will blow everyoneâs minds, just as previous commodity supercycles have done.
But hereâs the thing: we have got better at producing commodities. Modern farming methods mean we can produce more grains and softs at cheaper prices than ever before. Yes, sometimes there are events beyond human control that get in the wayâbad weather being the most obvious exampleâbut the broader trend will always be towards lower prices (especially if you use ratios and thereby strip out the fiat factor).
But these are the commodities that we grow. What about fossil fuels and metals, which are finite resources? Weâve long since taken the easy stuff.
Well, yes. But the same logic still applies. Modern mining means we can now explore far-flung corners of the earth and economically produce from much lower-grade rock. The same applies to fossil fuels. Fracking is an example. This new technology meant that previously uneconomic deposits became economic. The result was a glut of supply and lower prices.
So, while I do not doubt that commodities will have their day, I also look at the chart above and see no reason why they canât get cheaper still. The trend of the last two or three years is lower. That ratio could quite easily go back and retest its 2020 lows. It could go even lower.
There is a lot of value to be had from ratio charts, but you also have to factor in basic stuff like improved productivity. However, there are other factors too. Many think we are heading towards some huge international conflict. If so, international trade will suffer, countries will start stockpiling, and commodity prices will quickly revert to 1973-4/1999/2008 levels.
Are you buying gold to protect yourself in these uncertain times? 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.
Hereâs another ratio that is doing the rounds: gold miners versus gold
Now this one is pretty compelling. Time to pile in to gold miners? Letâs see. and letâs also check in on the miners we own.
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Innocent sleep ⊠sore laborâs bath,Balm of hurt minds, great natureâs second course,Chief nourisher in lifeâs feast.William Shakespeare
Sleep is so important to your well-being. Your mind works better when you sleep well. Your moods improve. Your outlook improves. Your physical condition improves. Your health improves.
Life is better when you sleep well.
We spendâget thisâa full third of our lives asleep. Yet how much do we treasure sleep? How much do we guard our sleep time? How much effort do we put toward improving our sleep?
Like so many things in this modern, fiat world of declining standards, the value of sleep has been overlooked.
Science may only just be starting to acknowledge the benefits of good sleep, but itâs something weâve intuitively known since forever. From time immemorial, art and literature have been filled with references to the value of a good nightâs sleep. The Ancient Greeks, Hippocrates among them, knew it was a prerequisite for good health. Many cultures considered dreams to be a form of contact with the divine.
I used to think I had mastered the art of sleeping. In the last couple of years, Iâve learned this is far from the case.
However, Iâve put in a lot of work and now, in my newfound role as health guru, I feel Iâm in a position to dish out some advice on how to improve your sleep.
England cycling coach David Brailsford used to talk about the incremental effects of marginal gains. Sleep improvement is very much the same. There are lots of little things you can do, and, with the accumulation of these, you will see vast improvements.
Here are ten ways to improve your sleep, including how to deal with waking up in the night, bedtime habits, alcoholâs impact, melatonin, peeing in the night and more âŠ
1. How to get to sleep
I always struggled to get to sleep, even as a youngster. I can remember lying in bed for endless hours, really trying to get to sleep and not being able to.
When youâre lying in bed trying to sleep, and you canât, that is when the demons come: unwelcome thoughts creep into your mind and then start looping over and over. Itâs good to be able to fall asleep quickly.
I now realise one of the reasons I got into the habit of drinking too much was that, after a few drinks, whenever I lay down, I would go straight to sleep. Drinking was a way of avoiding that difficult period of trying to get to sleep.
My other method was doing loads and loads of physical activity and then going to bed absolutely shattered. Not always possible.
So, hereâs the first lesson Iâve learned, and this is the best hack ever.
First thing in the morning, go outside and get 15 or 20 minutes of sunshine. Do this as soon as you wake up. Make your morning cup of tea or coffee, then take it outside and get some sun. Even if itâs cloudy and cold in the middle of winter, go outside and stand where the sun would be. Open your eyes towards it. Youâll still get some rays.
This has been shown to regulate your circadian rhythms. In my view, itâs the single best thing you can do to help you fall asleep at night.
Youâll find, like magic - or is it clockwork? - that as soon as the sun goes down that evening, youâll start feeling tired.
2. Darkness.
Darkness aids sleep. Blackout curtains in the bedroom are a good idea, but if thatâs too much hassle, thereâs a simpler, cheaper solution: sleep masks.
Iâve only lately taken to wearing sleep masks in bed (Iâve always used them when travelling) and Iâve come to love them. Go for a silk oneâtheyâre very comforting. I use this silk one by Alaska Bear.
3. Breathe Better
There is a simple product for this too. Mouth tape.
Stick a little bit of this tape across your mouth and it forces you to breathe through your nose. Youâll be amazed. You sleep so much better if you only breathe though your nose.
Iâm currently using this light weight one and I like it. My son prefers this heavy duty stuff, which might be better as a stating point to change your breathing habits.
If you sleep on your back and then snore, mouth tape can really help out.
4. Get a sleep tracker
I use the Whoop fitness tracker, which you wear on your wrist.
When I compare my data with friends using other devices like Garmin, Apple, Fitbit, Whoop, and Aura, thereâs quite a bit of divergence between the brands, particularly on calories burnt. I donât think it really matters: itâs the act of monitoring and tracking that leads to improvements.
Whoop seems to generally regarded as the best for tracking sleep though.
An unintended but incredibly beneficial side effect of getting a Whoop is that it will massively cut down your drinking. More on this in a moment.
5. Room temperature
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Donât forget Shaping The Earth, âmy lecture with funny bitsâ in London this October 9th and 10th at the Museum of Comedy. Please come if you fancy a bit of âlearning and laughterâ.
Three subjects I want to briefly look at today, starting with everyoneâs favourite non-government money.
There were rich promises of huge gains in bitcoin with the launch of the bitcoin ETFs and the halving cycle. Neither has quite materialised.
Bitcoin is âonlyâ up by 30% this year, though to read some of the commentary, youâd think this is another Bitcoin winter.
The problem is that most of those gains came in February. For the other eight months of 2024, weâve been generally stagnant. In fact, since March, weâve been making a series of lower lows and lower highs and are clearly in a downtrendâhence the despondency.
However, despondency is often the ally of the contrarian investor, and with that in mind, I want to share a table with you (borrowed from Coinglass).
It shows Bitcoinâs quarterly performance. Iâm sharing this now because weâre heading into Q4, which has historically been Bitcoinâs best quarter, with average returns close to 90%.
Seasonal patterns arenât always the most reliable indicator, but the odds are favourable: seven positive Q4s against just four negative ones.
Better than Q1, which is 50:50; Q2 with seven positive and five negative; and Q3, which shows five positive and seven negative years (including this one, which isnât over yet).
Letâs hope those averages hold.
I argue that Bitcoin should be a core holding. Many donât like bitcoin, but the potential is so huge that, in my view, the greater risk is not owning it rather than owning it.
My guide to buying Bitcoin is here. And here, I detail the easiest way for UK investors to gain exposure via a traditional broker.
How Japan finances the world - and why we should be worried
About a month ago we explained the summer turmoil and the unwinding of the yen carry trade. The big question we all want to know the answer to is: was that it? Are we done now, or is there more to come?
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