The Flying Frisby - money, markets and more

This is a free preview of a paid episode. To hear more, visit www.theflyingfrisby.comI was going to call this article “a tale of national betrayal.” Sterling is a national disgrace. If ever there was something that symbolised the decline of Britain from world leader to tin pot sh*te show, it is our currency. The US dollar has lost at least 93% of its purchasing power since World War Two. The pound, which was a few cents shy of $5 at the onset of war and today sits at $1.24, has lost an additional 75% against the US dollar.It’s shocking. An appalling betrayal by successive leaderships. When you devalue your currency, you devalue your entire country: the people’s labour, their savings, their assets.As long-time readers will know, I have identified a long-term cycle in the pound, and the next capitulation is due this year. If this plays out, then the pound is about to hit the skids.Don’t get wedded to the idea of a cycleLet me start with my usual disclaimer: it’s easy to look back at the past, find some arbitrary pattern, declare it a cycle, write some persuasive copy, and, all of a sudden, you’re a guru. When things don’t pan out as they should, you blame some outside factor, usually the government.Cycles do exist. We have the seasons, the moons, the cycle of life. There are good times and bad times. There are investment cycles too: bull markets and bear markets, the Kondratiev cycle, the 18-year cycle in real estate, commodities super-cycles, the 4-year presidential cycle. Mining is cyclical. New tech goes through a clear cycle as it evolves. I’m a big believer in the hype cycle. Yet actually trading them in real time is hard.Thinking in terms of cycles does help you to frame the bigger picture: it can give you an idea where you are in the grand scheme of things. But you can easily get wedded to the idea of a particular cycle, and then it’s very hard to break the mindset, even if real life right in front of you is telling a very different story.I remember people in the years after the Global Financial Crisis (GFC) being wedded to the idea of Kondratiev Winter and the next Great Depression. The Dow was going to 1,000, they said. It never went close and here we are today above 38,000. The problem was that the Kondratiev Winter argument was persuasive, and once you’ve been hooked by a narrative, it’s hard to break its shackles.If you are interested in buying gold, check out my recent report. I have a feeling it is going to come in very handy in the not-too-distant future. My recommended bullion dealer is the Pure Gold Company.So to Frisby’s FluxWith all that said, I am now going to argue that there is an 8ish-year cycle in the British pound that goes all the way back to 1968, at least. I’ve called it Frisby’s Flux, because I was the first to observe it and I’ve got to get my name on something.We’ll start with a quick skim through recent sterling history, then we’ll look at a chart, and finally, we’ll look at what’s coming next.In November 1967, the British government devalued the pound by 14% from $2.80 to $2.40 in order to “achieve a substantial surplus on the balance of payments consistent with economic growth and full employment”.In the early 1970s, after the Nixon Shock, the pound rallied against the dollar, but fast forward to 1976, eight (ish) years on, and we are in the year of the IMF crisis when Chancellor Dennis Healy is said to have gone “cap in hand” to borrow money from them. $3.9bn was the agreed sum, at the time the largest loan ever requested. Inflation in the UK reached 24%. From high to low, sterling lost around 40%, reaching $1.60.The pound recovered, and by the early 1980s, sterling was back above $2.40.Move forward eight years and we come to 1984 when the pound would drop by more than 55% to reach an all-time low against the dollar – $1.04 - in early 1985. This was during the miners’ strike and shortly after the Falklands War, but the real issue was extraordinary US dollar strength, something which took collusion between the G5 nations of France, Germany, Japan, the US and the UK and the Plaza Accord of 1985 to depreciate it.Again sterling would recover – this time to $2.Eight years later and we come to the notorious cycle low of 1992 and Black Wednesday, the day that sealed George Soros’s reputation with his bet against the pound. Sterling fell to $1.40 – a 30% loss - as the Bank of England took the UK out of the European Exchange Rate Mechanism.Eight years later, in 2000, the Dotcom bubble collapsed, and the pound lost 20% of its value, again falling to $1.40. (The pound is geared to financial markets. When they struggle it usually does too).But again it recovered. By 2007, it was above $2.10. Can you imagine? The pound above two bucks, and not so long ago.Then, in 2008, came the GFC and, yup, the pound lost 35%, hitting a low of $1.36. What did I say about the pound being geared to financial markets?The next low came in 2016 with the infamous Flash Crash , shortly after Theresa May's speech at the Conservative Party Conference. Having been above $1.70 at one point earlier in this cycle, it hit a low of $1.14, according to some measures. The overall drop from high to low was almost 35%. (As that $1.14 number came in the early hours of the morning, it is not showing up on the chart below).Here we are in 2024, eight years on. The next capitulation is due. Are we about to enter the drop zone? Could well be.Here is an illustration of the cycle. You can see how every eight years, the pound hits a low. (The chart starts at 1970, I couldn’t find data going back to 1967-68).Show this chart to your friendsSo what’s next?And how to protect yourself? And possibly even profit?

This is a free preview of a paid episode. To hear more, visit www.theflyingfrisby.comCards on the table: A Western fiat money collapse, along the lines of Zimbabwe, Venezuela, or Weimar hyperinflation, despite unsustainable deficit spending and un-payable government debt, is not something I think we are likely to see. Many more knowledgeable souls than myself deem it inevitable, but more probable in my view is just the continued debasement of currency and the erosion of its value, so that, with the incremental effects of compounding, a generation from now fiat will have lost another 90% or more of its purchasing power. Heck, the pound has already lost a third of its value just this decade. Since the beginning of the century, it has fallen by over 90%.I guess that constitutes collapse. It all hangs on how you define collapse, I suppose, and over what timeframe.Yet, there's one scenario I can envision that could lead to a more rapid collapse, and it's one we might even be careering towards: war. If tensions between East and West escalate into full-blown conflict, you can be sure the East will attack Western currencies, just as the US weaponized banking and the dollar following Russia's invasion of Ukraine.China has lots of gold, as we know, much more than it says it does. Russia has plenty. Shanghai Cooperation Nations are all accumulating. US gold has not been audited for decades, casting doubts over whether it even exists. As for British gold, I wonder what happened to that! In short, Western fiat money is extremely vulnerable should the East decide to attack it. (For the time being at least, I don’t expect it to: China has some $3.25 trillion in reserves, and another $800 billion in US Treasuries. Why collapse their value?)But whether Biden or Trump wins in the US elections this autumn, neither is going to balance the books. Nor will Labour here in the UK. So you know that both the pound and the dollar are going to see their value steadily eroded for the next five years. Deficit spending will continue and debts will increase.Indeed, outside of a full-on deflationary tightening or collapse - I mean Paul Volcker in 1980 scale tightening - it is impossible for fiat money to see its purchasing power grow. Supply is going to increase, and purchasing power will decline. This is built-in, inherent, and inevitable. Hence why I advocate owning alternative, non-government money - gold and bitcoin.Today, I want to explore a scenario in which Western currencies come under attack and are forced to back their currencies with gold. I understand Russia briefly did this in March 2022. In other words, what happens to the gold price if gold gets remonetized?Similarly, we’ll explore potential bitcoin prices in the event of hyperbitcoinisation (where bitcoin becomes the dominant global money). The Remonetisation of Gold

I have a friend from school who is obviously gay. We’ve all known it for a long time, yet, for whatever reason, he has never been able to come out. He has never been able to admit to himself what is so apparent to everyone else. He’s miserable. Has been for years.I’m not sure if I were gay, if I would be able to come out.I have actually tried to be gay. Well, sort of. In the dark years of my late 30s and divorce, I thought a couple of times being gay might save me from having to deal with the alien species that is woman, so I tried watching gay porn. I was just bored by it. Within a few minutes I was looking at second-hand cars on Autotrader. I have never found men remotely attractive, even if I can admire a beautiful male physique. The only time I might possibly waver is if they are all dolled up in drag, with glamorous dresses, heels, breasts, makeup, wigs, and all the rest of it. But take the wig off and any spell is broken. In any case, to come out as gay requires coming to terms with the truth. I think it is a very brave thing to do.I think that’s why so many great social commentators and comedians are gay. Never mind the obvious love of performing and attention; why, for example, a disproportionately large number of actors and dancers are gay. (By disproportionate, I mean the ratio of gay to straight increases in acting and dancing relative to what it is across the broader population). I mean, because of this phenomenon, whereby gay people are able to speak truths; in many cases, truths that straight people are unable or too shy or polite or repressed to express. How often, for example, when watching a gay performer, does the word “outrageous” burst out of the mouths of those watching, often accompanied by a gasp and the hand going over the mouth? Yes, what they are doing or saying may be outrageous, but it is usually outrageous because it is an unspoken truth.The act of coming out is enabling because it requires tremendous honesty. That honesty is then carried into other areas of life. I’m sure that’s why, for example, Douglas Murray, is able to say the things that many of us are thinking, but few of us dare articulate. Coming out teaches you to be truthful, and truth is power.Even an entertainer like Kenny Everett was so baring of his soul, thereby revealing his vulnerability; I’m sure that is one of the reasons he was so loved. Also, because he was so funny; but often being funny is just being truthful where a subject is taboo.In my immediate circle, it is usually my gay friends who are the boldest. I immediately think of comedian Scott Capurro, who has been in the news quite a bit recently for upsetting people. The reason Scott upsets people so regularly is that so much of what he says is so close to the bone. If it were me, I would pull back. But Scott, like so many gay people, is fearless.Many of the greatest warriors in the ongoing culture wars are gay. I’m sure it is for the same reason: in this age of increasing censorship, the importance of speaking truth is ever more needed, and gay people are not scared of the truth. They have learnt to come to terms with it What’s more, a lot of gay people feel like outsiders, even if we live in much more inclusive times compared to say a century ago. So perhaps, by speaking truths, they do not feel there is as much risk to them as to someone on the inside. Or maybe, by being an outsider—whether by sexuality, or by something else (race, political belief, whatever)—you are forced out on a limb, and that in itself is bracing.They say the fool was often the only one who spoke truth to Power. I bet a lot of the time the fool was gay. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.theflyingfrisby.com/subscribe

This is a free preview of a paid episode. To hear more, visit www.theflyingfrisby.comI wanted to take a look at the gold price today. As I'm sure you are aware, it has been extraordinarily strong in recent weeks.$2,100/oz, or just below, was resistance for four long years. Each attempt - and there were at least three - to get through that level stuttered and stalled. Then, last month, after a false break late last year, we broke out. Gold has not looked back, suddenly putting on over $200 and behaving like something out of the spivvier end of the cryptocurrency markets.

All four of my children were born at home. I feel extremely fortunate about this - they should too. Four wonderful experiences. I will forever be in debt to Louisa and Jolie.When, twenty-four years ago, my then wife, Louisa, told me she wanted to give birth to our first child at home, I thought she was off her rocker, but I gave her my word that we would at least talk to a midwife, and we did just that. Within about five minutes of meeting Tina Perridge of South London Independent Midwives, a lady of whom I cannot speak highly enough, I was instantly persuaded. Ever since, when I hear that someone is pregnant, I start urging them to have a homebirth with the persistence of a Jehovah’s Witness or someone pedalling an upgrade to your current mobile phone subscription. I even included a chapter about it in my first book Life After the State - Why We Don’t Need Government (2013), (now, thanks to the invaluable help of my buddy Chris P, back in print - with the audiobook here [Audible UK, Audible US, Apple Books]).I’m publishing that chapter here, something I was previously not able to do (rights issues), because I want as many people as possible to read it. Many people do not even know home-birth is an option. I’m fully aware that, when it comes to giving birth, one of the last people a prospective mum wants to hear advice from is comedian and financial writer, Dominic Frisby. I’m also aware that this is an extremely sensitive subject and that I am treading on eggshells galore. But the word needs to be spread. All I would say is that if you or someone you know is pregnant, have a conversation with an independent midwife, before committing to having your baby in a hospital. It’s so important. Please just talk to an independent midwife first. With that said, here is that chapter. Enjoy it, and if you know anyone who is pregnant, please send this to them.We have to use fiat money, we have to pay taxes, most of us are beholden in some way to the education system. These are all things much bigger than us, over which we have little control. The birth of your child, however, is one of the most important experiences of your (and their) life, one where the state so often makes a mess of things, but one where it really is possible to have some control.The State: Looking After Your First BreathThe knowledge of how to give birth without outside interventions lies deep within each woman. Successful childbirth depends on an acceptance of the process.Suzanne Arms, authorThere is no single experience that puts you more in touch with the meaning of life than birth. A birth should be a happy, healthy, wonderful experience for everyone involved. Too often it isn’t.Broadly speaking, there are three places a mother can give birth: at home, in hospital or – half-way house – at a birthing centre. Over the course of the 20th century we have moved birth from the home to the hospital. In the UK in the 1920s something like 80% of births took place at home. In the 1960s it was one in three. By 1991 it was 1%. In Japan the home-birth rate was 95% in 1950 falling to 1.2% in 1975. In the US home-birth went from 50% in 1938 to 1% in 1955. In the UK now 2.7% of births take place at home. In Scotland, 1.2% of births take place at home, and in Northern Ireland this drops to fewer than 0.4%. Home-birth is now the anomaly. But for several thousand years, it was the norm.The two key words here are ‘happy’ and ‘healthy’. The two tend to come hand in hand. But let’s look, first, at ‘healthy’. Let me stress, I am looking at planned homebirth; not a homebirth where mum didn’t get to the hospital in time.My initial assumption when I looked at this subject was that hospital would be more healthy. A hospital is full of trained personnel, medicine and medical equipment. My first instinct against home-birth, it turned out, echoed the numerous arguments against it, which come from many parts of the medical establishment. They more or less run along the lines of this statement from the American College of Obstetrics and Gynaecology: ‘Unless a woman is in a hospital, an accredited free-standing birthing centre or a birthing centre within a hospital complex, with physicians ready to intervene quickly if necessary, she puts herself and her baby’s health and life at unnecessary risk.’Actually, the risk of death for babies born at home is almost half that of babies born at hospital (0.35 per 1,000 compared to 0.64), according to a 2009 study by the Canadian Medical Association Journal. The National Institute for Health and Clinical Excellence reports that mortality rates are the same in booked home-birth as in hospitals. In November 2011 a study of 65,000 mothers by the National Perinatal Epidemiology Unit (NPEU) was published in the British Medical Journal. The overall rate of negative birth outcomes (death or serious complications) was 4.3 per 1,000 births, with no difference in outcome between non-obstetric and obstetric (hospital) settings. The study did find that the rate of complications rose for first-time mums, 5.3 per 1,000 (0.53%) for hospitals and 9.5 per 1,000 (0.95%) for home-birth. I suspect the number of complications falls with later births because, with experience, the process becomes easier – and because mothers who had problems are less likely to have more children than those who didn’t. The Daily Mail managed to twist this into: ‘First-time mothers who opt for home birth face triple the risk of death or brain damage in child.’ Don’t you just love newspapers? Whether at home or in the hospital there were 250 negative events seen in the study: early neonatal deaths accounted for 13%; brain damage 46%; meconium aspiration syndrome 20%; traumatic nerve damage 4% and fractured bones 4%. Not all of these were treatable.There are so many variables in birth that raw comparative statistics are not always enough. And, without wishing to get into an ethical argument, there are other factors apart from safety. There are things – comfort, happiness, for example – for which people are prepared to sacrifice a little safety. The overriding statistic to take away from that part of the study is that less than 1% of births in the UK, whether at hospital or at home, lead to serious complications.But when you look at rates of satisfaction with their birth experience, the numbers are staggering. According to a 1999 study by Midwifery Today researching women who have experienced both home and hospital birth, over 99% said that they would prefer to have a home-birth in the future!What, then, is so unsatisfying about the hospital birth experience? I’m going to walk through the birthing process now, comparing what goes on at home to hospital. Of course, no two births are the same, no two homes are the same, no two hospitals are the same, but, broadly speaking, it seems women prefer the home-birth experience because: they have more autonomy at home, they suffer less intervention at home and, yes, it appears they actually suffer less pain at home. When mum goes into labour, the journey to the hospital, sometimes rushed, the alien setting when she gets there, the array of doctors and nurses who she may never have met before, but are about to get intimate, can all upset her rhythm and the production of her labour hormones. These aren’t always problems, but they have the potential to be; they add to stress and detract from comfort.At home, mum is in a familiar environment, she can get comfortable and settled, go where she likes and do what she likes. Often getting on with something else can take her mind off the pain of the contractions, while in hospital there is little else to focus on. At home, she can choose where she wants to give birth – and she can change her mind, if she likes. She is in her own domain, without someone she doesn’t know telling her what she can and can’t do. She can change the light, the heating, the music; she can decide exactly who she wants at the birth and who ‘catches’ her baby. She can choose what she wants to eat. She will have interviewed and chosen her midwife many months before, and built up a relationship over that time. But in hospitals she is attended by whoever is on duty, she has to eat hospital food, there might be interruptions, doctors’ pagers, alarms, screams from next door, whirrs of machinery, tube lighting, overworked, resentful staff to deal with, internal hospital politics, people coming in, waking her up, and checking her vitals, sticking in pins or needles, putting on monitor belts, checking her cervix mid-contraction – any number of things over which mum has no control. Mums who move about freely during labour complain less of back pain. Many authorities feel that the motion of walking and changing positions can even enhance the effectiveness of the contractions, but such active birth is not as possible in the confines of many hospitals. Many use intravenous fluids and electronic foetal monitors to ensure she stays hydrated and to record each contraction and beat of the baby’s heart. This all dampens mum’s ability to move about and adds to any feelings of claustrophobia.In hospital the tendency is to give birth on your back, though this is often not the best position – the coccyx cannot bend to help the baby’s head pass through. There are many other positions – on your hands and knees for example – where you don’t have to work against gravity and where the baby’s head is not impeded. On your back, pushing is less effective and metal forceps are sometimes used to pull the baby out of the vagina, but forceps are less commonly used when mum assumes a position of comfort during the bearing-down stage.This brings us to the next issue: intervention. The NPEU study of 2011 found that 58% of women in hospital had a natural birth without any intervention, compared to 88% of women at home and 80% of women at a midwife-led unit. Of course, there are frequent occasions when medical technology saves lives, but the likelihood of medical intervention increases in hospitals. I suggest it can actually cause as many problems as it alleviates because it is interruptive. Even routine technology can interrupt the normal birth process. Once derailed from the birthing tracks, it is hard to get back on. Once intervention starts, it’s hard to stop. The medical industry is built on providing cures, but if you are a mother giving birth, you are not sick, there is nothing wrong with you, what you are going through is natural and normal. As author Sheila Stubbs writes, ‘the midwife considers the miracle of childbirth as normal, and leaves it alone unless there’s trouble. The obstetrician normally sees childbirth as trouble; if he leaves it alone, it’s a miracle.’Here are just some of the other interventions that occur. If a mum arrives at hospital and the production of her labour hormones has been interrupted, as can happen as a result of the journey, she will sometimes be given syntocinon, a synthetic version of the hormone oxytocin, which occurs naturally and causes the muscle of the uterus to contract during labour so baby can be pushed out. The dose of syntocinon is increased until contractions are deemed normal. It’s sometimes given after birth as well to stimulate the contractions that help push out the placenta and prevent bleeding. But there are allegations that syntocinon increases the risk of baby going into distress, and of mum finding labour too painful and needing an epidural. This is one of the reasons why women also find home-birth less painful.Obstetricians sometimes rupture the bag of waters surrounding the baby in order to speed up the birthing process. This places a time limit on the labour, as the likelihood of a uterine infection increases after the water is broken. Indeed in a hospital – no matter how clean – you are exposed to more pathogens than at home. The rate of post-partum infection to women who give birth in hospital is a terrifying 25%, compared to just 4% in home-birth mothers. Once the protective cushion of water surrounding the baby’s head is removed (that is to say, once the waters are broken) there are more possibilities for intervention. A scalp electrode, a tiny probe, might be attached to baby’s scalp, to continue monitoring its heart rate and to gather information about its blood.There are these and a whole host of other ‘just in case’ interventions in hospital that you just don’t meet at home. As childbirth author Margaret Jowitt, says – and here we are back to our theme of Natural Law – ‘Natural childbirth has evolved to suit the species, and if mankind chooses to ignore her advice and interfere with her workings we must not complain about the consequences.’At home, if necessary, in the 1% of cases where serious complications do ensue, you can still be taken to hospital – assuming you live in reasonable distance of one.‘My mother groaned, my father wept,’ wrote William Blake, ‘into the dangerous world I leapt.’ We come now to the afterbirth. Many new mothers say they physically ache for their babies when they are separated. Nature, it seems, gives new mothers a strong attachment desire, a physical yearning that, if allowed to be satisfied, starts a process with results beneficial to both mother and baby. There are all sorts of natural forces at work, many of which we don’t even know about. ‘Incomplete bonding,’ on the other hand, in the words of Judith Goldsmith, author of Childbirth Wisdom from the World’s Oldest Societies, ‘can lead to confusion, depression, incompetence, and even rejection of the child by the mother.’ Yet in hospitals, even today with all we know, the baby is often taken away from the mother for weighing and other tests – or to keep it warm, though there is no warmer place for it that in its mother’s arms (nature has planned for skin-to-skin contact).Separation of mother from baby is more likely if some kind of medical intervention or operation has occurred, or if mum is recovering from drugs taken during labour. (Women who have taken drugs in labour also report decreased maternal feelings towards their babies and increased post-natal depression). At home, after birth, baby is not taken from its mother’s side unless there is an emergency.As child development author, Joseph Chilton Pearce, writes, ‘Bonding is a psychological-biological state, a vital physical link that coordinates and unifies the entire biological system . . . We are never conscious of being bonded; we are conscious only of our acute disease when we are not bonded.’ The breaking of the bond results in higher rates of postpartum depression and child rejection. Nature gives new parents and babies the desire to bond, because bonding is beneficial to our species. Not only does it encourage breastfeeding and speed the recovery of the mother, but the emotional bonding in the magical moments after birth between mother and child, between the entire family, cements the unity of the family. The hospital institution has no such agenda. The cutting of the umbilical cord is another area of contention. Hospitals, say home-birth advocates, cut it too soon. In Birth Without Violence, the classic 1975 text advocating gentle birthing techniques, Frederick Leboyer – also an advocate of bonding and immediate skin-to-skin contact between mother and baby after birth – writes:[Nature] has arranged it so that during the dangerous passage of birth, the child is receiving oxygen from two sources rather than one: from the lungs and from the umbilicus. Two systems functioning simultaneously, one relieving the other: the old one, the umbilicus, continues to supply oxygen to the baby until the new one, the lungs, has fully taken its place. However, once the infant has been born and delivered from the mother, it remains bound to her by this umbilicus, which continues to beat for several long minutes: four, five, sometimes more. Oxygenated by the umbilicus, sheltered from anoxia, the baby can settle into breathing without danger and without shock. In addition, the blood has plenty of time to abandon its old route (which leads to the placenta) and progressively to fill the pulmonary circulatory system. During this time, in parallel fashion, an orifice closes in the heart, which seals off the old route forever. In short, for an average of four or five minutes, the newborn infant straddles two worlds. Drawing oxygen from two sources, it switches gradually from the one to the other, without a brutal transition. One scarcely hears a cry. What is required for this miracle to take place? Only a little patience.Patience is not something you associate with hospital birth. There are simply not the resources, even if, as the sixth US president John Quincy Adams said, ‘patience and perseverance have a magical effect before which difficulties disappear and obstacles vanish’. The arguments to delay the early cutting of the cord (something not as frequent in hospitals as it once was) are that, even though blood going back to the placenta stops flowing – or pulsing – non-pulsing blood going from the placenta into baby is still flowing. After birth, 25–35% of baby’s oxygenated blood remains in the placenta for up to ten minutes. With the cord cut early, baby is less likely to receive this blood, making cold stress, infant jaundice, anaemia, Rh disease and even a delayed maternal placental expulsion more likely. There is also the risk of oxygen deprivation and circulatory shock, as baby gasps for breath before his nasal passages have naturally drained their mucus and amniotic fluid. Scientist W. F. Windle has even argued that, starved of blood and oxygen, brain cells will die, so cutting the cord too early even sets the stage for brain damage.Natural birth advocates say it is vital for the baby’s feeding to be put to the breast as soon as possible after birth, while his sucking instincts are strongest. Bathing, measuring and temperature-taking can wait. Babies are most alert during the first hour after birth, so it’s important to take advantage of this before they settle into that sleepy stage that can last for hours or even days.Colostrum, the yellow fluid that breasts start producing during pregnancy, is nature’s first food. is substance performs many roles we know about and probably many we don’t as well. Known as ‘baby’s first vaccine’, it is full of antibodies and protects against many different viruses and bacteria. It has a laxative effect that clears meconium – baby’s black and tarry first stool – out of the system. If this isn’t done, baby can be vulnerable to jaundice. Colostrum lines baby’s stomach ready for its mother’s milk, which comes two or three days later, and it meets baby’s nutritional needs with a naturally occurring balance of fat, protein and carbohydrate. Again, with the various medical interventions that go on in hospitals, from operations to drug-taking to simply separating mother and baby, this early breast-feeding process can easily be derailed. Once derailed, as I’ve said, it’s often hard to get back on track. I am no scientist and cannot speak with any authority on the science behind it all, but I do know that nature, very often, plans for things that science has yet to discover.Once upon a time, when families lived closer together and people had more children at a younger age, there was an immediate family infrastructure around you. People were experienced with young. If mum was tired, nan or auntie could feed the baby. Many of us are less fortunate in this regard today. With a hospital, you are sent home and, suddenly, you and your partner are on your own with a baby in your life, and very little aftercare. When my first son was born I was 30. I suddenly realized I had only held a baby once before. I was an only child so I had never looked after a younger brother or sister; my cousins, who had had children, lived abroad. Suddenly there was this living thing in my life, and I didn’t know what to do. But, having had a home-birth, the midwife, who you already know, can you give you aftercare. She comes and visits, helps with the early breastfeeding process and generally supports and keeps you on the right tracks.It’s so important to get the birthing process right. There are all sorts of consequences to our health and happiness to not doing so. And in the West, with the process riddled as it is with intervention, we don’t. We need to get birth out of the hospital and into an environment where women experience less pain, lower levels of intervention, greater autonomy and increased satisfaction.A 2011 study by a team from Peking University and the London School of Hygiene found that, of 1.5 million births in China between 1996 and 2008, babies born in hospitals were two to three times less likely to die. China is at a similar stage in its evolutionary cycle to the developed world at the beginning of the 20th century. The move to hospitals there looks inevitable. Something similar is happening in most Developing Nations.In his book A History of Women’s Bodies, Edward Shorter quotes a doctor describing a birth in a working-class home in the 1920s:You find a bed that has been slept on by the husband, wife and one or two children; it has frequently been soaked with urine, the sheets are dirty, and the patient’s garments are soiled, she has not had a bath. Instead of sterile dressings you have a few old rags or the discharges are allowed to soak into a nightdress which is not changed for days.For comparison, he describes a 1920s hospital birth:The mother lies in a well-aired disinfected room, light and sunlight stream unhindered through a high window and you can make it light as day electrically too. She is well bathed and freshly clothed on linen sheets of blinding whiteness . . . You have a staff of assistants who respond to every signal . . . Only those who have to repair a perineum in a cottars’s house in a cottar’s bed with the poor light and help at hand can realize the joy.Most homes in the developed world are no longer as he describes, if they ever were, except in slums. It would seem the evolution in the way we give birth as a country develops passes from the home to the hospital. It is time to take it away from the hospital.Why am I spending so much time on birth in a book about economics? The process of giving birth is yet another manifestation of this culture of pervasive state intervention. (Hospitals, of course, are mostly state run.) It’s another example of something that feels safer, if provided by the state in a hospital, even if the evidence is to the contrary. And it’s another example of the state destroying for so many something that is beautiful and wonderful.What’s more, like so many things that are state-run, hospital birth is needlessly expensive. The November 2011 study of 65,000 mothers by the National Perinatal Epidemiology Unit looked at the average costs of birth in the NHS. They were highest for planned obstetric unit births and lowest for planned home-births. Here they are:* £1,631 (c. $2,600) for a planned birth in an obstetric unit * £1,461 (c. $2,340 for a planned birth in an alongside midwifery unit (AMU)* £1,435 (c. $2,300) for a planned birth in a free-standing midwifery unit (FMU)* £1,067 (c. $1,700) for a planned home-birth.Not only is it as safe; not only are people more satisfied by it; not only do the recipients receive more one-to-one – i.e. better – care; home-birth is also 35% cheaper. Intervention is expensive.So I return to this theme of non-intervention, whether in hospitals or economies. It often looks cruel, callous and hard-hearted; it often looks unsafe, but, counter-intuitively perhaps, in the end it is more human and more humane.When you look at the cost of private birth, the argument for home-birth is even more compelling. Private maternity care is expensive. For example, in summer 2012, a first birth at the Portland Hospital in London costs £2,880 (about $4,400) for a normal delivery and £3,790 (about $5,685) for an elective caesarean and for the first 24 hours of care. Additional nights in a standard room cost around £1,000 (about $1,500). You also have to allow for the fees charged by your private consultant obstetrician, which might be £3,000–£4,000 ($4,500– $6,000). So, in total, a private birth at a hospital such as the Portland could cost £7,500–£10,000 ($10–$15,000). There will be some saving if you opt for a ‘midwife-led delivery service’ or ‘midwife-led care’. In this instance, you will still have a named obstetrician, but he or she will see you less often, and the birth may be ‘supported by an on-call Consultant Obstetrician’. London midwives charge £2,500–£4,000 (c. $4–6,000) for about six months of care from early pregnancy to a month after birth. The comparative value is astounding, I would say.To have a planned home-birth on the NHS is possible, but can be problematic to arrange, depending on where you are based. Most people, after they have paid taxes, do not now have the funds to buy a private home-birth, so they are forced into the arms of government health care, such is the cycle at work.I was first introduced to the idea of home-birth by my ex-wife, Louisa, something for which I will forever be grateful. She hated hospitals due to an earlier experience in her life and only found out about alternatives thanks to the internet. I, as well as my friends and family, thought Louisa was insane. But she insisted. And she was right to.Our first son was actually two weeks and six days late. Because he was so late, we were obliged to go to the hospital, which we did, after two weeks and five days. We were kept waiting so long in there, we decided to go and persuaded an overworked nurse that we were fine to go and we left. The confused nurse was glad to have one less thing to think about. The next day Samuel was born: a beautiful and wonderful experience that I will never forget, one of the happiest days of my life – exactly as nature intended.Simply talking to people that have experienced both home-birth and hospital birth, or reading about their experiences, the anecdotal evidence is compelling. Home-birth may not be for everyone – I’m not suggesting it is. Birthing centres seem a good way forward. But a hospital birth should only be for emergencies. Childbirth is a natural process that no longer requires hospitalization, except in those 1% of situations where something goes seriously wrong. If it does go wrong and there is an emergency, call an ambulance and be taken to hospital – that is what they are for.Returning to the original premise of Natural and Positive Law, it’s pretty clear which category hospital birth falls into. Hospitals do things in the way that they do because of the pressures they are under, not least the threat of legal action should some procedural failure occur. Taking birth back home and away from the state reduces the burden of us on it and of it on us.Life After the State - Why We Don’t Need Government (2013) is now back in print - with the audiobook here: Audible UK, Audible US, Apple Books. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.theflyingfrisby.com/subscribe

As promised, here is my updated guide to buying and investing in gold. I really think it is important that you own some, given what governments are doing to currency. Spool down to the bottom if you want to see this guide in video form.I have also made this available as a PDF, which you can download here:(If that PDF doesn’t work, try this link)We are living in a world of uncertainty. There is inflation, war, political discontent, financial instability and, perhaps most concerning of all, state incompetence everywhere you look. The case for owning gold, for having wealth stored outside the system, where it is nobody else’s liability, is as strong as it has ever been. “Put 10% of your net worth in gold, and hope it doesn’t go up,” is something I am very fond of saying. If gold is going up, it usually means something somewhere isn’t right.That’s very much the case today.How to invest in gold.There are five ways:* You can go old school and buy bullion - coins or bars. * You can buy gold stored in vaults in places like London, Jersey, Zurich or Singapore. This gold is allocated to you. * You can buy ETFs via your stock broker. These are funds that store gold. The price of the fund tracks the gold price, and you own shares in the fund. (See footnote , if you need to understand what an ETF is).* You can buy gold companies - refiners, royalty companies, miners and so on.* You can buy futures, CFDs or spreadbets. I’m not talking today about buying mining companies (if you are interested in mining companies, consider a paid subscription, as gold mining companies are one of my areas of expertise). Nor am I talking about futures, CFDs or spread betting the gold price. Neither safeguards your wealth. They are speculations. In the right market they can make you a lot of money. In the wrong market, they can also lose you a lot.Upgrade your subscription here.Today we are talking about old school, physical goldI’ll put to one side arguments about whether gold is a good investment or not (I think it is), and whether I think it is going up or down. I’ll simply explain what is the easiest, cheapest and, perhaps above all, safest way to buy gold.A note on ETFsETFs are a simple way to get exposure to the gold price. It’s not really the same as owning actual metal, so the purists tend to veer away from ETFs, but institutions like them, as do traders, because they are easy to buy and sell. You buy an ETF just as you would buy any stock or share through your broker. London-listed gold ETFs include RMAU.L and PHAU.L. The world’s biggest is the NYSE-listed GLD. Costs - for example storage - are baked into the price.To buy an ETF, you need an account with a broker, such as Hargreaves Lansdown or Interactive Investor. You deposit money and buy through them.I steer away from ETFs mainly because they are too easy to get shaken out of. When you buy physical gold, to sell can be a bit of an undertaking, so it’s less likely to be done on a whim. Owning physical turns you into a long-term investor. It may be that you never sell at all and end up passing the gold on to your heirs.So where do you buy gold from?I’ve used many bullion dealers over the years. The dealer I like most, and with whom I have an affiliation deal, is the Pure Gold Company. Premiums are low. Quality of service is high. You get to deal with a human being. You can take delivery of your gold or store it online with them in their vaults. They deliver to the UK, US, Canada and Europe. (If you speak to them, tell them I sent you). I also like Goldcore.In theory, there is not a great deal of difference between an ETF and storing your gold online with a bullion dealer. Both are extremely convenient, whether for buying or selling. Both give you exposure to the gold price. But I favour the storing-it-with-a-bullion-dealer route, as, somehow, you are less likely to sell. ETFs make it too easy to sell and so weaken your hands.If you are buying coins, then beware of this scam.Where are you going to put your gold?Once you’ve decided where to buy your gold, the next question is: where to put it? Different people with different circumstances have different solutions.Some people have a safe at home and keep their gold there. Some keep their gold in safety deposit boxes. Others never take delivery at all, and keep it safely stored in a vault with the dealer in sensible places like Zurich, Jersey or Singapore.I’m not convinced homes in our “vibrant” British cities are safe, so these are not options I would take, but … I know one guy that has all his gold stored in a sock in his loft. I know another that has buried it in his garden, and only his close family know the location - he has quite a bit of land. I know another that keeps his gold and silver in plain sight - he uses the bars as doorstops. Nuts you may say, but how about this? He got burgled and the burglars didn’t take the bars. They obviously thought they were just doorstops.If - and only if - you have somewhere safe to store it, I’m a great advocate of taking delivery. You get to handle your metal. There are lots of fantastic different coins from around the world to buy - Chinese Pandas, South African Krugerrands, American Eagles, Austrian Philharmonics, Canadian Maples, Australian Kangaroos. The bars are nice too. It’s good to handle gold. But I refer you to my above comment about cities today.What about tax?But there’s another method of buying gold (and silver), which, quite legally, avoids this cost altogether. There is a slightly higher premium to spot when you buy, but we are talking about a tiny amount, nothing like 20% CGT. Given the potential savings involved, it’s surprising that more UK investors don’t buy their gold and silver in this way. The method I’m describing, if you haven’t already figured it out, is to buy sovereigns and Britannias.The gold sovereign used to be the pound coin. Imagine that - a pound coin made of solid gold. It was the pound coin from 1816, after the Great Recoinage, until 1932, when the UK finally abandoned its gold standard. Until then, the pound really was “as good as gold”. 22 carat gold to be precise – that’s about 92% purity. A sovereign weighs about 7gs, which is around a quarter of an ounce.Such is the devaluation of currency that has taken place over successive generations in the UK, it now takes over 600 pound coins to buy one of these old pound coins.Despite no longer being on the gold standard, the Royal Mint began producing sovereigns again in 1957 and continues to the present day. A large number of them are actually minted in that well known British heartland, Delhi. (That’s because there is a huge market for them in India).Technically these coins are legal tender, so they are exempt from CGT.As sovereigns are so common, the numismatic value is very low. You can pick up 100-plus-year-old Victorian coins at a few percent over spot. You get the history for free. And you can buy them from most dealers, including, of course, the Pure Gold Company and Goldcore.The main exception is the 1937 sovereign struck for Edward VIII. As he abdicated, the coins were never circulated. One sold in 2020 for a million quid. That’s some premium.Gold Britannias – which are an ounce in weight – only began to be issued in 1987. But they too are considered coins of the realm. Despite the fact that an ounce of gold is £2,350, the face value of a Britannia is £100. Don’t ask me how that works. I’m sure there’s a reason. But, as coins of the realm, they too are exempt from CGT.The Royal Mint began producing silver Britannias in 1997. They also weigh an ounce. They have a face value of £2 (an ounce of silver is about £16) and are also exempt from CGT.Sovereigns are not the most beautiful coins in the world - Britannias are nicer - but both make for a considerable saving on CGT (assuming you have made a gain when you come to sell - of course, there is no guarantee of that).Thank you very much for reading this report. Good luck with your investments, and I hope you enjoy reading The Flying Frisby.Once again my recommended bullion dealer is the Pure Gold Company. Premiums are low, quality of service is high. You can deal with a human being. You can take delivery of your gold or store it online with them in their vaults. They deliver to the UK, US, Canada and Europe, or you can store your gold with them in their vaults.Until next time,DominicDisclaimer: This letter is not regulated by the FCA or any other body as a financial advisor, so anything you read above does not constitute regulated financial advice. It is an expression of opinion only. Please do your own due diligence and if in any doubt consult with a financial advisor. Markets go down as well as up. We do not know your personal financial circumstances, only you do. Never speculate with money you can’t afford to lose. This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.theflyingfrisby.com/subscribe

This is a free preview of a paid episode. To hear more, visit www.theflyingfrisby.comWith gold hitting new highs yesterday and the importance of owning some, in my view, as paramount as ever, I am going to send out my report on how to buy gold later today or tomorrow. If it is old hat to you, please just ignore the email.If you prefer, you can also download the PDF version here:(If that PDF doesn’t work, try this link)In the meantime, today I want to take a look at oil. It is having a nice, quiet run.What fossil fuels have made possibleThere were some really interesting comments following this week’s Sunday morning thought piece about declining birth rates. You lot are clever.My argument is that unaffordable housing has been a major cause of declining birth rates: people are having smaller families later in life, for the simple reason that they cannot afford anywhere to live. Dan Shaw replied as follows:For the housing cost argument to be credible, it needs to explain what has changed. Basic necessities, including housing, have consumed the vast majority of people’s incomes until very recently in the developed world. They still do for most people today in the global south (where birth rates are also falling). Fiat inflation is undoubtedly eroding real income in the developed world, but it is only regressing disposable income towards historic norms when people were happy to start families. Why will people not start families when they have roughly the same wealth, in real terms, as their greatest generation (great) grandparents? Why are people in the global south, who have never seen Western wealth, also not having children?Let’s put aside the issue of birth rates - they is not the focus of today’s piece, but Sunday’s. Instead let us ask: what was it that created this unique period in the 20th-century West, when ordinary middle-class people could afford housing and other basic necessities, and still have plenty of income left over for cars and other luxury items? It goes against almost all of history. The answer must surely be fossil fuels. The energy they granted made us incredibly productive. It made 20th-century progress possible.Today a variety of factors are undermining that: fiat money and the debasement of currency; restrictive planning laws and overregulation; and of course, a needless focus on other, more inefficient and wasteful energy sources.The world seems to be slowly coming to its senses regarding fossil fuels, thank goodness, and, like them or not, they are clearly going to have an enormous role to play in powering economies for, at a guess, at least a hundred more years or until a superior form of energy is found. This is why they make up a core 10% of the Dolce Far Niente portfolio.Whether it’s mines, farms, or factories, trucks, cars, boats, trains, or planes, or heating and cooling, we need fossil fuels, and they are going to make life a lot better for a lot of people.Global economies seem to be ticking over reasonably well and finding their feet again. In particular, Chinese manufacturing data seems to be quietly improving. China and India are certainly growing consumption. Attempts to electrify western economies, well-meaning though they may be, seem to be coming apart, meanwhile. In short, oil demand is on the up.This is confirmed by the  latest oil market report from the International Energy Agency, which says: “Global oil demand is forecast to rise by a higher-than-expected 1.7 mb/d in 1Q24 on an improved outlook for the United States and increased bunkering” (refueling of cargo vessels). Meanwhile: “World oil production is projected to fall by 870 kb/d in 1Q24 vs 4Q23 due to heavy weather-related shut-ins and new curbs from the OPEC+ bloc.”The combination of falling production and increased demand is what has led to higher prices.Here’s Brent crude over the last two years, and you can see that nice solid low around $72.50, and the recent run from December to today’s price of $88.The seasonal patterns favour a continuation of this run for at least another few weeks. January to May tends to be the best time of year to be long oil. Things tend to get dicey in the autumn. (Though beware of attaching too much importance to seasonals; they are more an additional rather than core reason for an investment decision).Oil is still relatively cheapI have two very interesting long-term charts to show you next.First, is the long-term ratio between gold and oil. When this chart is high, oil is expensive relative to gold. When low, as is the case now (to an extent), oil is cheap relative to gold.On a long-term basis, of the two, you probably have to say oil is the better bet. It’s not often you will hear me say that! To be clear: I advocate owning both.This next chart is also interesting from a very long-term perspective. It shows energy as a percentage of the S&P500.This has been creeping down for years - ever since $150 oil in 2008, but it has been creeping back up since Covid. You might validly argue that because of the emergence of new tech, new tech companies, and improved productivity, energy as a percentage of the S&P500 will inevitably go lower. That is certainly the evidence of the last 16 years. But you could equally make the case that energy is both essential and undervalued. In my view, it’s a bit of both.So how to play all of this?Simple ways include the likes of Shell (SHEL.L) and BP (BP.L), with Guinness Global Energy (ISIN 0P0000SV1G.L) another, more diversified possibility.If you are looking for something at the spicier end of the market, then I challenge you to find a better report than this one by Dr. John from last autumn, in which he identifies his picks of the North American oil and gas juniors.So to my vehicle of choice, and the one we hold in the Dolce Far’ Niente portfolio:

Back in 2011, a landmark study by the United Nations Population Fund warned that the global population would reach 15 billion by the end of the century, “putting a catastrophic strain on the planet's resources unless urgent action is taken to curb growth rates.”Cue lots of subsidies, initiatives, hand-wringing, wasted money, damaging narratives, damaging policy, and articles in the Guardian.Here we are today, and suddenly the issue is population decline. By 2100, 97% of the world’s countries will have a shrinking population, according to a study published in The Lancet, leading to “staggering social change”. The Telegraph followed with a ludicrously sensationalist headline: "World population to fall for the first time since the Black Death."Cue, no doubt, lots more subsidies, initiatives, hand-wringing, wasted money, damaging narratives, damaging policy, though, perhaps not so many articles in the Guardian. The last thing that publication wants is westerners reproducing. Not white ones, anyway.The problem is economic modelling. It is wrong as often as it is right. Tossing a coin or consulting a psychic is just as reliable. Economic models commonly rely on extrapolating trends, which can work for a bit - trend-following is a highly effective investment strategy, after all - but they are largely based on the assumption that current conditions will persist, when they usually don’t, particularly when projecting decades out. Something unforeseen happens, such as lots of people making decisions an economist didn’t expect, and this changes everything.Yet such flawed models, even though nothing more than projections that only carry more weight than Mystic Meg because they were delivered on a spreadsheet by a bloke with a PhD, become the basis for huge and expensive decisions by policymakers. We have seen it with climate change, with Covid, with economic policy, and with anything the OBR touches. The consequences are sometimes really harmful to people: lockdown policy being the most obvious recent example. It was based on flawed data and it was deeply destructive. Net Zero is the next one. Everyone can see it, yet still policy-makers persist.I was, broadly speaking, persuaded in the early 00s by the arguments that population growth was inevitable. I am less persuaded by the idea that we will now see population decline, though perhaps I shouldn’t be. Fertility rates are coming down: globally, between 1950 and 2021, they fell by more than half: from 4.8 children to 2.2 - and there is not a nation where they haven’t fallen. Annual global births peaked at 142 million in 2016, falling to 129 million by 2021.But whatever. Nobody knows what’s going to happen. There could be a nuclear war and the population might sink below a billion. Global planning laws could be eased, just as the world abandons fiat money for gold and bitcoin, with the result that house prices come down, just as people realize that seed oils, processed food, and tap water have all been making them infertile, and, as a result, we suddenly get a population boom. So much of this is economic. In Developing Countries, people tend to have fewer children as they get richer and live longer. Irony of ironies, in the richer, Developed World, the main reason people have fewer children is that they can’t afford them. Italians, being Catholic, are associated with large families and lots of brothers, sisters and cousins. But when Elon Musk, himself a prolific reproducer, observed yesterday that Italian birth rates hit their lowest level since the country was unified in 1861, he got this reply: The main reason people are not reproducing is expense. What is the biggest expense in your life? Your government. It takes roughly 50% of everything you will ever earn. The next biggest expense is a house, something few can afford. With less government and cheaper housing, westerners would pretty quickly start reproducing again. What government is going to stand for less of itself and cheaper houses? Not one that I can see, except maybe in Argentina.The idea that government is going to fix a problem of its own creation. Please. It will only make it worse. I do know that stuff often happens for reasons we can’t explain, so the last thing we want is the planners meddling, especially with something as significant as this, when their models are so flawed. It doesn’t matter if the global population goes up or down; human beings will find a way of coping. We always do. The last thing we need is more government intervention based on spurious data.So what if growth falls? GDP growth is a bogus measure, anyway. Dimwitted, short-sighted obsession with GDP has been one of the major reasons mass immigration has gone so unchecked, if not encouraged, with such terrible consequences to local culture, history, and tradition, never mind locals’ opportunity and earnings.GDP focuses on quantity not quality. It neglects individual quality of life. It ignores income and wealth distribution. It ignores unaffordable housing and high levels of taxation (if anything high house prices are seen as a good thing). It creates societies based around spending and consumption, rather than making stuff and saving. It incentivises government activity - please, no more intervention - and short-termism. There are other better measures. Or, better still, take the John James Cowperthwaite positive non-intervention route and ban the Office of National Statistics altogether. The Returning Soldier Effect.After World War One - itself a monumental government cock-up - which saw the death of countless young men across Europe, the number of boys born relative to girls increased. It happened after World War Two as well. This phenomenon has been noticed so many times after wars that it now has its own name: the Returning Soldier Effect.All sorts of explanations have been posited, ranging from changing female hormones during wartime to divine intervention to a surprisingly persuasive argument that "taller soldiers are more likely to survive battle and that taller parents are more likely to have sons". On the other hand, it could just be Mother Nature. There is plenty that Mother Nature gets up to that we don’t even notice, let alone find a credible and proven explanation for. Yet she determines much of what we do, without us even realising it.Our instincts come from Mother Nature. Our first instinct is survival: to find water, food, and shelter, for ourselves and then those close to us. Next is the survival of the species: the urge to have sex and reproduce with the best possible mate. These instincts come before nice houses, cars, and clothes. But even the urge for those derives from a need for safety and to make ourselves look more desirable to a potential mate - aka Mother Nature. We are animals.At the birth of my children, I came away with the thought that a woman is nature’s vessel, subservient to the species as a whole.So back to population levels: it really would not surprise me to discover that some kind of Natural Law is at work, in the same way that plants talk to each other, and it will deal with the population issue way better than any government. But even if not, the human population will be what it is as a result of a plethora of individual decisions, many of which will be guided by Mother Nature, and many of which by economic circumstance. As the great man Cowperthwaite set, “A multiplicity of individual decisions will produce a better and wiser result than a single decision by a Government or by a board with its inevitably limited knowledge of the myriad factors involved, and its inflexibility.”So please let’s keep Positive Law and meddlesome planners with flawed models out of this.My first book, and many readers’ favourite, Life After the State - Why We Don’t Need Government (2013), which fell out of print last year, is now, thanks to the invaluable help of my new buddy Chris P, back in print (Amazon, Apple Books), with the audiobook here:Audible UKAudible USApple Books And if you are in the Guildford neck of the woods this Friday, there are still some tickets left to my show, which, among other things, will feature me playing Elon Musk’s new favourite song. Bath on Saturday is sold out.Thank you for being a subscriber to the Flying Frisby! This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.theflyingfrisby.com/subscribe

Good Sunday morning to you,I am putting back my promised piece on gold miners until mid-week, so keep a look out for that. Meanwhile, Life After the State - Why We Don’t Need Government (2013), my first book, and many readers’ favourite, which fell out of print last year, is now, thanks to the invaluable help of my new buddy Chris P, back in print (Amazon, Apple Books), with the audiobook here (Audible, Apple Books). I’m very proud of the some of the reviews it had - “A brilliant book,” Steve Baker; “A must read,” Merryn Somerset Webb; “Something extraordinary,” James Harding; “Incredibly readable", Al Murray and so on.But, as is often the way, my favourite review came from a “random on the internet”, an Amazon reviewer: “The most important book I have read in a long time. I’ve just bought five extra copies, and plan to force it on all I meet, in the manner of a Jehovah’s Witness.” :)Today, for your Sunday morning thought piece, I thought I’d publish a short extract. I hope you enjoy it.(First edition paper backs are now trading hands, by the way, for over £200. No hardbacks for sale - so all those who helped fund it back in the day, if you’ve still got your copy it’s worth something).In the 1990s, when I was in my twenties, I was mad about Latin America. I loved the people, the tropical weather, the forests, the mountains, the beaches, the language, the ancient history – and I was nuts about the music. All I wanted to do was go there and have adventures. Every year I would catch a cheap Boxing Day flight and come back at the beginning of February. I went to all sorts of wonderful places: Colombia, Bolivia, Brazil, Chile, Guatemala, Peru, Honduras and, in 1996, Cuba.This wasn’t at the height of Cuban repression. Fidel Castro was still president and the very worst of the poverty that followed the collapse of the Soviet Union was now behind it. But the country was still desperately poor.Havana was an amazing place, full of contrasts. The only cars were either huge American classics – symbols of booming 1950s USA that looked like something off the set of Back to the Future – or dour and bleak Ladas that had been imported from the Soviet Union in the 1970s and 80s, symbolic of the Cold War and communism. There were magnificent Art Deco or Art Nouveau buildings, yet there’d be a hole in the roof, or part of it had fallen down. There were pro-Castro symbols and slogans everywhere you looked, but the walls on which they were painted would be crumbling. The entire city looked like it needed re-rendering.After one obligatory, over-priced night in a government hotel, I found a room in a Havana apartment belonging to a well-educated Cuban family. Luis was a political economist and a professor, no less; Celia was a doctor. They had three young children: two girls and a boy.I had gone to Cuba with preconceived notions about what an amazing place it was. Any problems it had were entirely due to sanctions and other American punishments, I thought. It had the best health service in the world, the best education in the world and was a shining example to the greedy West on how things could be run. I don’t know where I got those ideas from – conversations at university, probably – but Luis quickly put me right.‘What is the point of a great hospital, if there is no medicine?’ he would whisper to me. ‘What is the point of great schools when you have no paper?’ I didn’t have an answer.I say whisper. Criticism, even indoors, was always whispered. Many Cubans would loudly declare how wonderful the regime was, surreptitiously look about to check no potential informant was in earshot, then come up close and whisper, ‘I hate Castro’ – or something along those lines. So oppressive was the regime that paranoia, secrets, denial and deception permeated every area of life. People didn’t dare to be honest. They were too scared of what the repercussions might be.Some Cuban friends of mine in London had told me before I left, ‘You need dollars. You can’t buy anything with pesos.’ I was a pretty intrepid explorer in those days and dismissed this advice. I thought I’d be able to get off the beaten track into the real Cuba, where I could use pesos like real Cubans. But my friends were right. You couldn’t. There was, simply, nothing available to buy with pesos. There were no shops or businesses that accepted pesos, except the odd street stall that sold ice cream or bits of cooked dough, loosely described as pizza. Cubans got their bread and other essentials with ration books and a lot of queuing.Western goods did exist. Clothing, electrical and hardware goods, and food and drink – Havana Club rum, beer, cheese and cured meats, for example – were sold in grey, colourless supermarkets. The supermarkets were not at all cheap and, despite the fact that they were state-run, would only accept US dollars – one of the many hypocrisies I would encounter.So the only way anyone could buy anything was with US dollars at a state-run store. However, most people were employed by the government in some way or other, and paid in Cuban pesos. So how did they get dollars?The answer was: from tourists.Luis and Celia got their dollars renting out a room to people like me. Most Cubans didn’t have the option of an apartment with three bedrooms. (Luis’s parents had somehow managed to avoid it being expropriated.) Some were lucky enough to have the use of a car and could be taxi drivers. But this was another option that was only available to a tiny few – there was no manufacture of cars and no import trade. You, or more likely your parents, would have somehow had to have acquired a car way back when, and kept hold of it. There were a few restaurants and bars scattered about, and a tiny, well-connected elite could become waiters. Where did that leave everyone else?As an economist and a doctor, you’d expect Luis and Celia to be a fairly wealthy couple. And by Cuban standards they earned good salaries – about 500 pesos a month each. The official exchange rate was one peso to the dollar, thus they earned the equivalent of $500. The unofficial rate, however – the real market rate – was 20:1, so Luis and Celia’s 500 pesos amounted to about $25. A pair of jeans in the supermarket cost twice that. But, remember, you couldn’t actually buy anything with pesos.One night’s rent from me was more money than Luis, with a PhD, would earn in an entire month. A taxi driver might land that figure in two or three fares. On a good night, a waiter might earn that in tips. But the big money was in selling sex. If she found a generous boyfriend, a prostitute – a ‘jinetera’, as they were called – could earn many times that in one night.More than any of the other European nations, it was Italy that seemed to have caught the Cuba bug. My flight out was full of Italians. All over Havana there were Italians. They loved Cuba. I naively thought it might have to do with the historical links between Italy and communism, but wandering around Havana I soon saw another reason. The Italian men loved the black Cuban women – and vice versa, it seemed. Everywhere you looked you’d see stylish Italian men arm in arm with young Cuban black girls, their paid girlfriends for the two weeks they spent there.Cuban men were selling their bodies too. A rather plump Greek- English woman I knew in her late forties married a beautiful (yes, beautiful) man – a ‘jinetero’ – at least 25 years her junior. I had to deliver some money to him for her. I was amazed when I met him. He looked like a young Sidney Poitier. She looked like a chubby, middle- aged Bette Midler. A most unlikely couple.In some cases, I’ve no doubt, couples fell in love. Marriages and families may have resulted. Cuba is a famously sexual country. I expect that many of the jineteras derived some occasional pleasure from their work. But, in most cases, the reality was rather more dark and sinister. Their economic circumstances meant that these people felt they had no other option but prostitution, if they wanted to improve their lot.It’s hard to believe just how widespread ‘jineterismo’ was, and probably still is. There has been no formal study, but anecdotally it appears that more than 50% of Cuban women below 50 have practised prostitution at some stage – if not with a tourist, then with another Cuban.‘Everyone is jinetera,’ said Luis. ‘Look around. Everyone. Jinetero, jinetera. Look what Fidel has done to our country. Look what he has done to our people’.We were sitting on the Malecón – the wall which runs along the Havana sea front – watching good-looking jineteros and jineteras attempting to snare a tourist. Of all the Latin American countries I visited, I found I had the most intense conversations in Cuba. This was one of them. I transcribed it into my diary later that night. ‘I don’t want my children to be a doctor like their mother, or a political economist like me. What is the point? MD, PhD, a month’s work and I cannot buy a pair of shoes.’ Luis continued: ‘Useless life. A much better life for my son is if he is a taxi driver or a waiter. Then he can get dollars. Maybe he can get a tourist to fall in love with him. And my daughters? I tell you a secret. I pray my daughters will be beautiful. Every father does. So they can have tourist boyfriends, have money, maybe marry a tourist, and get out of here. That is why every Cuban father wants his daughter to be a jinetera. Jinetera – that is the best life you can have here, that is how you survive, that is how you escape. Thank you, Fidel!’I don’t know what the motivation behind Castro’s great revolution was or why he and his cohorts made the economic and political choices they did – lust for power, political idealism, or, maybe, just to get rid of Batista. It seems his decision to ally himself with the Soviet Union was, at least initially, more of a reaction to US aggression and sanctions than any deep Marxist sentiment. I very much doubt their intention was the eventual consequence: a society so imbalanced and distorted that taxi drivers and uneducated young people could earn, in one night, many times more than a professor, a doctor, a lawyer or an engineer might earn in a month; where the large majority of young girls in Havana were selling their bodies for dollars, and where every Cuban father wanted his daughter to be a jinetera.Cuba was probably my first lesson in the Law of Unintended Consequences. And my story illustrates many of the themes of this book: the power of the state; how the state interferes in people’s lives; how political decisions, often made out of expediency, even if benevolent, can have such grave and unexpected repercussions; why the freedom to trade and exchange is so important; and how, if you limit that freedom, you limit people’s possibilities.The useless peso, moreover, was my first experience of how essential a properly functioning system of money is to a society, and what can happen when politicians start to use money as a political tool.Life After the State is available at Amazon, Apple Books and all good bookshops, with the audiobook at Audible, Apple Books and all good audiobookshops.Until next time,DominicPS If you missed my report into buying gold, it is here:(Any issues downloading the PDF, please reply to this email or try this link). This is a public episode. 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Good morning to you,I am going to be sending out two pieces in fairly quick succession: first, today’s, some commentary on the latest bitcoin price action, and then another, tomorrow hopefully, about gold mining.It looks like bitcoin (currently $67,000, down from highs of $73,500) is now “enjoying” a correction. Microstrategy (NDX:MSTR) has 5xd, since we covered it in the summer, and some profit-taking is inevitable. My own strategy though is to HODL. I don’t think this is the end of the cycle. Longer term I think bitcoin goes higher, even if it is short-term overbought and over-heated. I know of no strategy that has consistently beaten HODL, so that is what I am going to continue to doThere is an expression you will have heard me use from time to time: “from false moves come fast moves in the opposite direction”. Sometimes you will see a move above an old high, a “false breakout”, before a market reverses. At the moment the breakout above the old high to $73,500 then the reversal looks like it could be one of those. It may do that. It may not. You never know. But the risk with bitcoin is not having a position. My preferred interpretation is: “ongoing correction in a bull market”. But these are the kind of doubts that haunt you when climbing the wall of worry. There is nothing a bull market likes to do more than throw you off. Hence HODL.It has been said before, but I say it again: were you to sell your bitcoins for pounds dollars or euros, you would effectively be swapping a technologically superior form of money for one that is technologically inferior. When looked at in these terms, selling bitcoin for fiat makes little sense. When bull markets come along you always kick yourself for not owning enough bitcoin, so, again, HODL.I met a city friend of mine at a drinks party last night and he was telling me how many institutions are buying $200,000 btc September call options: that means some traders in institutions are, in effect, making leveraged bets that bitcoin will be $200,000 in 6 months time. Buying such high risk, out-of-the-money calls could be seen as symptomatic of excess bullish sentiment. It signals irrational exuberance. It signals catch-up trade - trying to make up the money you missed out by not being positioned sooner. But that institutional money, with all the information it has about order-flows and all the rest of it, is making such bets is also a bullish sign. I, for one, hope those call options come good.Altcoin Season is Upon Us - or It WasFinally, another anecdote from earlier in the week, which shows just how hot things were getting, this one about altcoin season. Fortunes, sometimes life-changing fortunes, get made and lost, though mostly lost, in altcoin season. It was upon us. My son’s mate from uni, age 23, is now a trader. On Tuesday he was bragging on their Snapchat about a win he just had. LocalAI - I have no idea what that is - began trading on Monday. On Tuesday it was up over 17,000%. You read that right. On a Tuesday.I took a look at it on Wednesday. It had just fallen over 60%.The following day it nearly tripled, before falling 50% again. Nuts!How to navigate it all? It’s a full-time job keeping up with what’s going on in the altcoin world and they are not something I know a great deal about, I’m relieved to say. I’m familiar with about ten. Fortunately, I know a man who does. So let me take this opportunity to recommend Charlie Morris’s Bytefolio. Charlie is a former fund manager from HSBC, who ran the billion-dollar Absolute Return fund for 20 years. He also wrote the extremely popular Fleet Street Letter for many years, before handing it over to Nigel Farage and his team. Charlie now runs a suite of letters at Bytetree. He was early to the bitcoin story, back in 2014. He has almost unrivalled knowledge of portfolio management and asset allocation, of technical analysis and trend following, and he applies it to the world of crypto and altcoins. So take a look and see what you think - you get the first month free. The crypto letter is ace, but I also like his more mainstream Multi-Asset Investor and his speculative Venture too.Right, I’ll be back very soon, tomorrow hopefully, talking gold mines. Will I ever learn?Until then, This is a public episode. If you'd like to discuss this with other subscribers or get access to bonus episodes, visit www.theflyingfrisby.com/subscribe