The Flying Frisby - money, markets and more

This is a free preview of a paid episode. To hear more, visit www.theflyingfrisby.comWe have a General Election coming up in the UK, and citizens of this once-great nation want to know how to protect what they have worked for from the incoming Labour Government, which, you can be sure, is going to be sniffing around like a spaniel on luggage in an airport. We now have the Labour Manifesto, so we can start to be a bit more specific than we were in part one of this series. (Here, also, is part three).I stress: this is only the manifesto. There is a long history of governments doing things they didn’t mention in their manifestos or failing to honour manifesto commitments. Roosevelt’s confiscation of Americans’ gold is one example that springs to mind, but that might just be because I have just been writing about it. There are plenty of examples in the UK too, even with the current government - increases to National Insurance, the Covid money splurge, failures on renters’ reform, home building, immigration pledges, social care, and so on. Circumstances change and so will pledges, especially with a Prime Minister who has quite a track record when it comes to changing tack. Do not be surprised by the surprises that are inevitably coming.The broad argument of part one is that the pound will continue to be debased. It will buy you a lot less in five years than it does now. Whether we will see the 33% declines in the pound’s purchasing power we have seen since 2020, I’m not sure, but the way to hedge yourself is to own non-government money - gold and bitcoin.Labour has pledged to “keep mortgage rates low” and to “retain the 2% inflation target,” which means it will keep a lid on interest rates, or try to, especially with official inflation now having come down to 2%. That all furthers my argument that the pound will continue to lose purchasing power.Labour has a gazillion things it wants to spend money on, ranging from Great British Energy to new teachers, breakfast clubs, and increased NHS appointments, so it is going to need low rates. It has also said it plans to move the “current budget into balance” and “ensure debt is falling.” All I can say is good luck with that. No chance. Spending is going to increase, and, even with the inevitable currency debasement, it is going to need to find tax revenue too. That means higher taxes.But higher taxes where? Taxes, relative to GDP, are already at their highest levels since World War Two, and Labour has promised no increases in National Insurance, Income Tax rates, or VAT. It has also pledged to cap corporation tax at 25% throughout the Parliament.Some increased revenue, it says, will come from clamping down on tax avoidance and modernising HMRC. A lot easier said than done.The big unmentionables have been Council Tax, Capital Gains Tax, and Inheritance Tax. All three, I expect, will go up. Council Tax valuation bands are based on 1991 property prices. That is an obvious anachronism to “update,” though council tax goes to local coffers and Labour will be more interested in revenue at the national level. Even so, it is an obvious area of tax revenue growth. Not a lot you can do to avoid it, except move.Inheritance Tax, meanwhile, will not come down and will probably go up. It is, of course, morally wrong to want to pass the wealth you have earned and already paid taxes on to your heirs. Changes will be justified on the grounds of unearned wealth and exploit the politics of envy. The rate could rise to 50%, I suppose, while areas of relief - the seven-year gift rule, perhaps, the relief on main homes - could be removed. All I can say is plan early.Capital Gains Tax, meanwhile, is likely to rise. Starmer has avoided saying it won’t. I expect to see it rise to levels concomitant with Income Tax with similar bands (i.e., 40% above £37k and 45% above £125k). The way to avoid this is by not transacting, which is what most will do unless they really have to, and so the effect of CGT rises will be market atrophy.Labour will also come after your pensions too - there is so much capital there - with those in the private sector likely to take a bigger hit than those in the state.There is also a lot of blurb about the launch of Great British Energy to “harness Britain’s sun, wind and wave energy” with a windfall tax on oil and gas giants. That makes British oil and gas companies uninvestable. It says it will “deliver one hundred percent clean power by 2030,” though we know that clean power is neither clean nor green . They clearly haven’t read their Alex Epstein, and it all means that essential fossil fuel will inevitably get more expensive, and the country will function less well as a result. Labour says it is going to reduce energy bills. Not possible without subsidies somewhere else, and these have to be paid for.The Housing MarketFollowers of Fred Harrison and the 18-year property cycle will note that Britain’s housing market is heading towards a cycle high, with collapse starting in 2026. Perhaps that will be triggered by Labour’s plans. It wants to fix planning and build a lot of social housing - that means a bet on builders and builders’ merchants (Travis Perkins and Vistry, for example) might make sense, at least in the short run. There is a long history of governments failing to deliver on this, and I don’t think Labour has any chance of meeting targets. If it comes anywhere close, it means Britain’s housing stock is about to get even uglier.Labour’s Freedom to Buy scheme, like Help to Buy, is just another means to pump more money into the housing market, and the general drift seems to be to subsidize at the bottom and tax at the top. It has ruled out Capital Gains Tax on your main residence, but I wouldn’t be surprised to see it anyway. Meanwhile, Stamp Duty will continue, even if it means atrophy at the top end of the market. The attack on non-doms will also hit homes at the top end. For homes above £1 million, the costs of moving - high stamp duty especially, more if we get CGT too - just points to stagnation.Meanwhile, I expect the introduction of numerous schemes to protect tenants, which will only drive away landlords and end with higher rental costs.You know that I am a free-market guy, and I dislike on instinct market intervention, subsidy, and all the rest of it. All Labour’s grand plans to encourage investment just reek of crony capitalism to me, so I tend to avoid, but I’ve no doubt that industrialists, who position themselves correctly, might make good money out of them. More on this after the election.My theory used to be this: that in the same way a Conservative Party that was so scared of the left-wing press became a social-democrat party, so will this Labour Government, scared of the right-wing press, end up lurching to the centre-right. I no longer see that. Labour is trying to present itself as centre-left, but the instinct is for government intervention and I see a lot more of it coming. The civil service, the Blob, and the government are theologically aligned and that is not good. It means they can progress their agenda. I’d love to be more optimistic, but, despite Starmer’s purges, there is still a lot of socialist instinct in that party.Bottom line. Taxes are going to go up. Freedom is going to be eroded. The pound is going to lose purchasing power.If you are interested in buying gold, check out my recent report. I have a feeling it is going to come in very handy.My recommended bullion dealer is the Pure Gold Company. I also like Goldcore.Don’t forget Life After the State - Why We Don’t Need Government (2013), my first book, and many readers’ favourite, is now back in print - with the audiobook here: Audible UK, Audible US, Apple Books. I recommend the audiobook ;)And if you are in the Edinburgh neck of the woods this August, look out for me at the Edinburgh Fringe. I’ll be performing one of my “lectures with funny bits”. This one is all about the history of mining. As always, I shall be delivering it at Panmure House, where Adam Smith wrote Wealth of Nations. It’s at 2pm most afternoons. You can get tickets here.Thoughts on Condor Gold

At a drinks party in around 2011 or 2012, I had the ear of Andrew Feldman, aka Baron Feldman of Elstree, former Chairman of the Conservative Party—he of “swivel-eyed loons” fame, though he never actually said that. (Andrew is a friend, by the way.)“Tell George Osborne to buy back the gold Gordon Brown sold,” I advised.“At these prices?” smiled Andrew with a mix of incredulity, amusement, and polite condescension.“Yes!” I said. “It might be good publicity, even. Or do it secretly, and announce it afterward. The important thing is getting the gold back. We will need it at some point. Why not just quantitatively ease the money and buy it back? You’re doing that and buying bonds.”Andrew laughed at my joke, which wasn’t a joke, and then wandered off in search of someone more sane to talk to.Given the government has this extraordinary power to create money out of nothing, why don’t they just print money and buy hard assets with it?Park that thought for a moment.A couple of months ago, I was at Liz Truss’s book launch—aren’t you impressed with all this name-dropping?—and I ran into Mark Littlewood, former director of the IEA and now of PopCon. I started bending his ear about the media’s failure to report on the Bank of England and how it had shafted Truss with its advanced notice of gilt sales, Quantitative Tightening, which began the day before Kwasi Kwarteng’s budget and led to a collapse in the gilt market, the blame for which was then left at Kwasi Kwarteng’s doorstep. Mark nodded. “Do you think I don’t know?” said Liz.“I would love to be able to grill Andrew Bailey in public,” I said. “Or just ask him one question with people watching. I know exactly what I’d ask him.”“What?” said Mark.“If the Bank of England can print money, why do we need taxes?”Mark laughed and, thinking I was asking him that question, replied, “Money illusion.”Money illusion is one of those economic terms that is pretty self-explanatory, but here is an example. Most of know a hundred pounds does not buy you today what it bought you ten years ago, but we still think in terms of past prices. (Old people do this more, for obvious reasons). A worker might feel great with a 5% raise, but if inflation is 7%, he is actually earning less than before. This has been an ongoing process for decades with the result that, in real terms, wages are lower.Here’s the Wikipedia definition (edited by me):In economics, money illusion, or price illusion, is a cognitive bias where money is thought of in nominal, rather than real, terms. In other words, the face value (nominal value) of money is mistaken for its purchasing power (real value) at a previous point in time. The term was coined by Irving Fisher in Stabilizing the Dollar, and popularized by John Maynard Keynes in the early twentieth century. Fisher also wrote a book on the subject, The Money Illusion, in 1928.Mark and I both doubted that Bailey would give that as the answer, even if he thought it, which we doubted he would. If governments started printing money and buying assets, many would start questioning money, and faith in fiat might quickly evaporate. If governments worldwide started doing it (eg Britain prints money and starts buying land in France) you are in race-to-the-bottom territory. It would be a race to the bottom for fiat currency.Even if Bailey thought money illusion was the answer, he certainly wouldn’t say it because that in itself undermines fiat.Modern money has nominal value, but not intrinsic value. It relies on illusion (and the law) to function. The more you debase it, the less likely that illusion is to hold. Maybe money delusion is more accurate. Obviously, the backing of the law makes a great difference, as does the fact that taxes must be collected in this money, but, boy, is the system vulnerable. Illusions can last a long time. But when they shatter, they shatter very quickly, and then there is nothing.I don’t say the system will pop. It has been going on for a long time. But I do observe that it very easily could.It’s why I recommend both gold and bitcoin. Both are money in and of themselves: one is the product of nature, the other the product of extraordinary amounts of computer power. Neither relies on anyone else.If you liked this article, please tell a friend.If you are interested in buying gold, check out my recent report. I have a feeling it is going to come in very handy.My recommended bullion dealer is the Pure Gold Company.Life After the State - Why We Don’t Need Government (2013), my first book, is now back in print - with the audiobook here: Audible UK, Audible US, Apple Books. I recommend the audiobook ;)And if you are in the Scottish neck of the woods this August, look out for me at the Edinburgh Fringe. I’ll be performing one of my “lectures with funny bits”. This one is all about the history of mining. As always, I shall be delivering it at Panmure House, where Adam Smith wrote Wealth of Nations. It’s at 2pm most afternoons. You can get tickets here. 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

While Prime Minister Rishi Sunak, like a jilted boyfriend turned desperado, is announcing a new policy every day, future Prime Minister Keir Starmer’s strategy has been to be as vague and non-committal as possible about everything, and get elected on the back of the Tories being so useless. It makes sense: the less he promises now, and the less specific he is, the more scope he will have when he comes to power to do what he wants.Such is the topsy-turvy Orwellian world in which we live. Labour’s five missions—massive cringe—read like something that should be on the Conservative Party website. Labour declares upfront, first and foremost, that its “first duty” is “to protect our country – through economic stability, secure borders, and strong defence.” I’m sure this is all part of Starmer’s strategy to win over the middle and rid himself of the ghosts of Labour incompetence. “I’ve changed the Labour Party so we are back in service of working people,” he boasts. “Together we can change Britain.”So what exactly will this huge change that is coming to Britain entail?One of the few things Labour has been specific about is VAT on school fees. This has generated a lot of negative press, particularly in the mainstream media, which is heavily populated by people who went to public school and send their kids there too. But with only 7% of children actually going to public school, I guess Labour has figured, in these times of envy, that this will be a vote-winner. While it purports to be an attack on the rich, in real terms it is an attack on the middle classes, many of whom will now put their kids into state schools. The extra burden of this on an already overburdened sector does not justify the limited increase in revenues that will come from VAT, never mind the practicalities of imposing this charge and the schools that will go bust as a result. But extra revenue is not what this is about. It’s exploiting the politics of envy.Nevertheless, there is one clear thing we can infer from it: the middle class is going to get shafted. Where it tries to be independent and self-sufficient, it will find itself dragged into state dependency. That is not change, though. This is a process that has been going on for decades—since the imposition of fiat money, in fact. And that, I’m afraid, is the broad brush stroke. The details may be different, but the direction is the same. We are going to see more government, more spending, more technocracy, more bureaucracy, more quangos, more regulation, more taxation, further declines in the purchasing power of money, further erosion of individual liberty, more state solutions to things that would sort themselves out perfectly well if government stayed out of it, and so on. We will also see further steps in the direction of supranational bodies, one-world government, and all the rest of it. Change is not coming. Continuity is.So the absolute first thing you have to do is keep as much wealth as you can outside the system. Do not hold sterling, or any other fiat money for that matter. Yes, sterling is holding up moderately well in the forex markets, which know Labour will win, but that is just comparing it with other fiat currencies. Use gold and bitcoin as your savings vehicles. They will outperform sterling quite comfortably by the time of the next government. Make a note of what £100,000 currently buys you. It will buy you a lot less in five years. If you are interested in buying gold, check out my recent report. I have a feeling it is going to come in very handy.My recommended bullion dealer is the Pure Gold Company.Labour’s Five Missions* Get Britain Building AgainLabour promises to “strengthen public finances” and “reform planning laws, so we build more houses, giga factories (SIC), windfarms, roads, labs, and ports, developing the skills needed to do so.” It will “reduce energy bills and invest in the jobs and industries of the future via our Green Prosperity Plan and Great British Energy, a new publicly owned clean generation company.” And it will build more homes (heard that one before?).This all means more state: more state spending, planning, regulation, subsidy, and action. You don’t need me to tell you where that leads.* Switch on Great British Energy“A new publicly owned, clean energy company that ensures jobs are created here in Britain to cut your energy bills, create 500,000 new, skilled jobs in the industries of the future, and deliver energy security.”What could possibly go wrong? All that green energy stuff has been an unbridled success so far without a whiff of corruption. * Get the NHS Back on Its FeetIt promises to “pay doctors and nurses overtime to work evenings and weekends to cut the backlog, cut waiting times by giving the NHS the staff and technology it needs, end the 8am scramble for GP appointments, improve cancer survival rates, and reduce deaths from heart disease and suicide, with more care in the community so patients aren’t stuck in hospital.”Sounds great. What’s actually going to happen is that further enormous amounts capital disappearing up the backside of the dysfunctional money pit.* Take Back Our StreetsLabour will put “13,000 more neighbourhood police on our streets, halve violence against women and girls, and introduce tougher sentences for rapists and new ‘Respect Orders’.”More spending and, no doubt, more two-tier policing.* Break Down Barriers to OpportunityLabour will “create a modern childcare system with breakfast clubs in every primary school, recruit 6,500 new staff” and further fiddle with a system that doesn’t work. (My edit in the interests of brevity.)More spending, more intervention, more state.I’m reminded of the lyric of a certain Specials song.I’m already at 900 words and I haven’t yet got to taxes and the specifics of which ones are going to go up. I’ll have to do that in a part 2 coming very soon.Despite all the pledges about fiscal rectitude and stability, and there are lots, the next government is not going to run a balanced budget. It might start out with good intentions, but deficit spending will continue and, at the first sign of crisis, it will print. It is always the way.The increase in state and quango, meanwhile, will lead to an increase in crony capitalism and deter genuine free-market, wealth-creating activities.Own gold and bitcoin. Don’t own sterling is the solution.I’ll do a part 2 about the coming tax rises very soon.If you agree with the argument of this piece, you might like Life After the State - Why We Don’t Need Government (2013), my first book, which is now back in print - with the audiobook here: Audible UK, Audible US, Apple Books. I recommend the audiobook ;)And if you are in the Edinburgh neck of the woods this August, look out for me at the Edinburgh Fringe. I’ll be performing one of my “lectures with funny bits”. This one is all about the history of mining. As always, I shall be delivering it at Panmure House, where Adam Smith wrote Wealth of Nations. It’s at 2pm most afternoons. You can get tickets here. 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

I am experimenting again with a video this Sunday morning. (Podcast listeners can still get just the audio). Enjoy :)It was August 2018. Brexit Derangement Syndrome was only just starting to kick in, though the effort to derail it was underway. In comedy circles, I still was not talking very openly about having voted for Brexit—it would be another six months before I wrote 17 Million F Offs.I was doing a show at the Edinburgh Fringe, my financial gameshow.Now something happens to a performer at the Fringe. There are so many shows and so much competition that you will do (almost) anything to get publicity and draw attention to your show. The Fringe is a distillation of the entertainment industry; all the best things about it and the worst, all the highs and lows, seem to get magnified there. My PR man texted me and asked if I wanted to do a short spot about Brexit and comedy for Channel 4 News. I said yes. He said to go to the Pleasance at 5pm. They wanted someone who voted Leave.I met the film crew there, and the presenter— I have no idea what his name was—was a very nice, very charming young Englishman in his early 30s. University-educated, probably public school, made me feel very at ease. We found a little alcove, and our interview began.“In a comedy club, what do you say when heckled about Brexit?” he asked me.Now there are three types of comedy gigs. One is where the audience has come to see you; two is when they have come to see comedy (not necessarily you); and three, the worst type of gig, is when they neither come to see you nor comedy.Comedy clubs mostly come under category two (unless you are doing a solo show).I answered the question truthfully: “I MC a lot of nights. My job is to create a warm and friendly atmosphere. Audiences in comedy clubs are fairly mixed. So, I tend to avoid talking about Brexit, as you risk losing half the room, which is not good for the night.”“Sure, but what would you say if someone heckled you about Brexit?”“Well, I don’t talk about it, so they don’t.”“But if you did?”“But I don’t.”This went round in circles for a bit. Then he changed his approach. “And if someone heckled you about voting Leave?”“Well, they don’t because I don’t talk about it.”“No, but what if they did?”“Well, they don’t. As I say, in a regular comedy club, with a mixed crowd, if you come down very heavily on one side, you risk losing half the room. I’m the host. I don’t like to do that. It might be different if I was doing a show specifically about it, but I’m not.”“Well, what if you were?”“Well, I’m not. And if I was doing a show about voting leave, I doubt many remainers would come.”“But what if they did?”It just kept going round and round in circles. I thought I was being reasonably articulate about the need to be diplomatic in a mixed room if you are the host, and I made the same point several times, each time phrasing it slightly differently, but he just was not having it. He kept coming back to this same question.“But if someone heckled you about voting Leave, what would you say?”Eventually, somewhat exasperated, I said, “Oh, I don’t know. ‘Whatever, loser.’ Something like that.”He smiled and quickly drew the interview to a close. We parted company with, apparently, good will expressed. I had spent probably five minutes explaining the need to be diplomatic and a microsecond with that last line.Later that day, I watched the clip from Channel 4 News. Guess which part of the interview they used?“Leaver comedian calls people who voted Remain losers,” ran the headline of the vid on the Channel 4 site, or some such (I can’t find the vid now to quote it accurately).The only clip from the interview they used was me saying, “Whatever, loser,” even though it was totally misrepresentative of the rest of the interview. Then in the comments beneath, I remember reading a load of remarks along the lines of, “Well, how is that funny?”, “Remind me to never go and see that guy,” “Leavers just aren’t funny,” and so on.I won’t say I was shocked by how disingenuous the process was, but I was shaking my head wearily. I explained it to myself along the lines that he had gone into the interview wanting a certain clip that he could use to illustrate a story he had already formed in his head. He would not stop until he got that clip, and he had no interest in anything else I said. I suppose that’s a kind way of looking at it—a trap I often fall into. On the other hand, he was a lying cheat, and the clip he showed of me was completely misrepresentative. It could have been quite damaging to me reputationally, but fortunately, the clip was so short, and not that many people will have watched it.If nothing else, it showed me just how untruthful the news is.You really cannot trust it. No wonder so many have lost faith.When you have a reporter brimming with ambition (the same ruthless ambition that actors, singers, comedians, and other media stars have), the most important thing is their career. Everything else, including the truth, is subordinate to that. Sometimes there is a happy coincidence: the reporter boosts his career by breaking some amazing truth. But given a choice between the two, career usually wins. Such is the nature of the ambition of many in the media.Even with everything I know now, I still watch a news story and am taken in by it. It’s only when you were actually there that you see just how misrepresentative it can be.Don’t trust the news. It lies.I’ve now just remembered another story. It was during the 1990 World Cup when the English fans got into scuffles with Dutch fans just before the England-Holland game in Cagliari. Evil, terrible hooligans causing trouble, ran all the headlines, alongside lots of footage of Italian police with riot gear, firing off tear gas, and all the rest of it. I was there. I’m bilingual. I saw the whole thing. The Italian police directed tens of thousands of English straight into tens of thousands of Dutch in the narrow lanes of the historical centre—the police messed up badly. They then panicked and started firing off tear gas. The news told a completely different story.I was 20 at the time. I think that was my first taste of the BS.Thank you very much for reading this and for being a subscriber. Don’t forget:* This August I am going to the Edinburgh Fringe to do one of my “lectures with funny bits”. This one is all about the history of mining. As always, I shall be delivering it at Panmure House, where Adam Smith wrote Wealth of Nations. It’s at 2pm most afternoons. Please come. Tickets here.* My first book and many readers’ favourite, 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. I recommend the audiobook ;)* You can catch up on all my latest pieces here.Until next time,DominicP.S. In case you missed them, check out these recent pieces:Argentina and the Accidental Gold Standard both proved very popular. 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.comTwo bullish developments for Bitcoin and cryptocurrencies this week: first, Donald Trump, who is currently the favourite to be the next US President, declared, 'I am very positive and open-minded towards cryptocurrency companies and all things related to this new and burgeoning industry. Our country must be the leader in the field; there is no second place.'Those words will have been written for him, but they nevertheless show that policies, should he win the election, as currently looks likely, will be favourable. That has to be good for the sector.Second the Ethereum ETF got green lit this week in the US, so today we consider the implications of that, and give our outlook on the sector more generally.First up, ether has rallied. It’s risen by about a third from $2,900 a coin to within spitting distance of $4,000.I must confess to being somewhat flummoxed by Ethereum. (If you want to read my guide, it is here). Briefly: its founding principle is to use blockchain technology for purposes beyond an alternative system of digital money. Known as "the world's programmable blockchain," it can be used to “codify, decentralize, secure, and trade just about anything.” Charlie Morris of Byte Tree likens it to a decentralized App Store (you should all read his letter by the way). Developers can use the platform to build and publish smart contracts and distributed applications (dApps), and it is a kind of marketplace for financial services (DeFi), NFTs (non-fungible tokens), games, and apps, all of which can be paid for in ether.The Bitcoin maximalists don’t like it. Ethereum is not properly decentralized. The numerous forks that have taken place in reaction to hacks prove this—they would not be possible with a properly decentralised platform. Too many coins were pre-mined and handed out to founders. Ethereum 2.0 met with delay after delay. Transaction costs, known as gas fees, can get exorbitant. Its blockchain is not that robust. In short, it’s something of a ticking time bomb.Well, maybe. But its founder, Vitalik Buterin, a billionaire many times over by the time he was 28 (just in case you weren’t feeling inadequate enough already this morning), will know all this. He is a genius, and I satisfy myself that by owning Ethereum, I am effectively long Buterin—not unlike being long Elon Musk by owning Tesla.Ethereum also has numerous competitors—not least Solana, but also Binance Smart Chain, Polkadot, Cardano, Terra, and Fantom - which may or may not be a good thing. Many of these are technologically superior, say critics—faster, more robust.Price-wise ethereum been something of a laggard. Its all-time high was $4,800 and it’s about a thousand bucks, or 20%, below that. That said, it does tend to move later in bull markets - and by more.But despite all of this, Ethereum remains by some margin the number two cryptocurrency by market cap—at $465 billion—followed by Tether, which has another purpose altogether ($110 bn), then Binance Coin ($89 bn). By way of comparison, HSBC has a market cap of $165 bn. And you thought crypto was a passing fad.So what can we expect with the launch of this new ETF?

A slightly-longer Sunday morning thought piece than usual today, but one that is well worth the effort I hope you’ll discover.A reminder that:* This August I am going to the Edinburgh Fringe to do one of my “lectures with funny bits”. This one is all about the history of mining. As always, I shall be delivering it at Panmure House, where Adam Smith wrote Wealth of Nations. It’s at 2pm most afternoons. Please come. Tickets here.* My first book and many readers’ favourite, 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. I recommend the audiobook ;)Isaac Newton, who, along with William Shakespeare, Leonardo Da Vinci and Aristotle, must be one of the cleverest individuals to have ever lived, made groundbreaking contributions to physics, mathematics, optics, mechanics, philosophy and astronomy. The laws of motion, the theory of gravitation and the reflecting telescope were among his many contributions. He was also a brilliant alchemist, obsessed with theology and biblical prophecy. As if that isn’t enough, he is credited with the design of the Gold Standard, the primary monetary system of the world for over two hundred years. Today we explore how this brilliant system was accidental.In 1695, counterfeit coins accounted for more than a tenth of all English money in circulation. Massive LOL: the English used the counterfeit coins, in particular, to pay their taxes. The Exchequer that year reported no more than ten good shillings for every hundred pounds of revenue. Coin clipping was also a major problem, especially of old coins, and silver coins were disappearing from circulation altogether. Silver was worth more on the continent as bullion than it was in the UK as tender, so arbitrageurs shipped coins abroad, melted them down, and sold them for gold. Everyone from the Jews to the French was blamed, but by 1695 it was almost impossible to find legal silver in circulation. It had all been melted down and sold.This all led to a scarcity of money, which inhibited trade. More damage was caused to the English nation in just one year by bad money than “by a quarter century of bad kings, bad Ministers, bad Parliaments and bad Judges”, said the historian Thomas Babington Macaulay.King William begged the House of Commons to respond to the crisis and, seeking help, Secretary of the Treasury, William Lowndes wrote letters to England’s wisest men, asking their advice: among them, philosopher John Locke, architect Sir Christopher Wren, banker Sir Josiah Child, and scientist, Sir Isaac Newton.Newton was in his mid 40s and probably not far off the peak of his powers. He had published his most famous work, the Philosophiæ Naturalis Principia Mathematica, just eight years earlier in 1687, and it had established him as the smartest man in the country. He would now put his great mind to money.With the formation of the Bank of England the previous year, Newton had become aware of the possibilities of paper money. “If interest be not yet low enough for the advantage of trade,” he wrote, “the only proper way to lower it is more paper credit till by trading and business we can get more money.” He could see that token value and intrinsic value were not necessarily one and the same.It was also obvious to Newton that the currency criminals were rational actors. They would continue to clip, counterfeit, and sell abroad while there was profit in it. Bullion smuggling carried the death sentence, yet still it went on. Coercion alone would not be enough to stop it from happening. The market itself needed to be changed.He came up with two measures. First, to deal with the clipping, all coins minted prior to 1662 should be called in, melted down, and, using machines, re-made into coins that had a single consistent edge. With no more hand-hammered coins in circulation, clipping coins would become that much more difficult. Re-minting the entire country’s coin, however, at a time of such primitive machinery, was no small undertaking. Second, to deal with the silver issue, the amount of silver in coins should be lowered so that the silver content and the face value of the coin were the same.The thought of such a devaluation went against the psyche. The idea that token value and intrinsic value might be different was alien and Newton’s second proposal was not widely welcomed. There were 20 shillings to a pound, so a shilling should contain a concomitant amount of silver.  Newton may have thought that the token was more important than the silver content, but landowners and the government, which was largely made up of them, would lose 20% of their silver by Newton’s proposal. In 1696 Parliament approved the recoinage, but stipulated the new coins maintain the old weights. Newton warned that the silver outflow would continue.The following year, nudged by John Locke, Charles Montague, the Chancellor of the Exchequer, sent Newton a letter notifying him that the King intended to make him Warden of the Mint. So began his new career. Perhaps the role was only intended as a sinecure, but Newton took it very seriously.Putting his chemical and mathematical knowledge to good use, Newton got the Mint’s machines working and the coins minted at a speed that defied the predictions of even the boldest optimist and, as an industrial operation, Newton’s recoinage was an enormous success. Newton would also have to learn the skills of a policeman—both investigator and interrogator—and he proved masterful. This ruthless enforcer of the law, oversaw numerous investigations, exposing frauds, and then prosecuting perpetrators. Poor counterfeiters had no idea what they were up against, and many were sent to the gallows for their crimes.So good at the job of Warden was Newton that, in 1699, he was promoted and made Master of the Royal Mint, and after the Union between England and Scotland in 1707, Newton directed a Scottish recoinage that would lead to a new currency for the new Kingdom of Great Britain.He had solved the clipping issue, the counterfeiting issue was vastly improved, but silver was still making its way across the Channel, just as Newton had said it would. As long as the silver content exceeded the face value of the coins, the trade would continue. By 1715, almost all of the coins that Newton had struck between 1696 and 1699 had left t he country.Newton’s studies had moved on from tides, planetary motions, and pendulums to the gold markets. He drew up an extensive table of assays of foreign coins and in doing so realised that gold was cheaper in the new markets opening up in Asia than in Europe, and thus that silver was not just being sucked out of England, but out of Europe itself to India and China where it was traded for gold.Meanwhile, the world’s next great gold rush had started.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.World gold output doublesSome time in 1694 Portuguese deserters had found alluvial gold two hundred miles inland from Rio De Janeiro in Minas Gerais in Brazil. Soon everyone was flocking there, “white, coloured, black, Amerindian, men and women; young and old; poor and rich; nobles and commoners; laymen and clergy,” said a Jesuit priest who lived in the area. By 1724, within just three decades of the discovery, world output had doubled. By 1750, 65% of global production was emanating from Brazil. The gold made its way to Lisbon, along with sugar, tobacco and other Brazilian products - similar amounts to that which the Conquistadors had sent back to Spain the previous century - and with it the Portuguese minted their moidores coins.The Portuguese used their gold to buy English cereal crops, beef and fish, woollen goods, manufactured articles, and luxuries. Portugal imported five times as much from England as it exported to it, and it used its gold to settle the difference. The moidores, which weighed slightly more than an English guinea, worth 28 shillings, actually became currency, especially in the west country, where there were more of them than local coins. “We hardly have any money,” wrote an Exeter man in 1713, “but Portugal gold.” In London, the Bank of England began buying vast amounts of gold, “to be coined as it comes in” and the Mint began minting guineas from the moidores. By 1715 the Bank had 800 kg/25,700 t.oz, a nascent central bank reserve, and this figure would rise would to 15.5 tonnes/500,000 t.oz by 1730. So much gold coin had never been minted before and London soon overtook Amsterdam as the foremost precious metals market. Gold was coming and staying. Silver was leaving for Asia. In 1717 Newton was called on to investigate.He came up with a new system and outlined it in a report to the Lords Commissioners of His Majesty's Treasury in September 1717. Less than three months later there was a Royal Proclamation that forbade the exchange of gold guineas for more than 21 silver shillings - even if they were clipped or underweight. Thus was a guinea just over a pound, which was 20 shillings, or 113 grains of gold. The ratio of gold to silver was effectively set at roughly 1:15.5.But silver coin clipping continued, and full-weight silver coins continued to be exported to the continent, where 21 shillings of silver could still get you more than a guinea’s worth of gold (just over 7.6 grams/1/4 t.oz), and to Asia, especially India and China, often via the East India Company, where silver was even more valuable. The result was that silver was used for imports, and so left the country, while exports were traded for gold, which thus came into the country.All in all, some two-thirds of that Brazilian gold is thought to have ended up in England. Hundreds of tonnes in total.Britain had always been on a silver standard. A pound was a pound of sterling silver. “In all men’s minds the only true money of the country was the silver coin,” said Sir John Craig, historian of the Mint. Although that Royal Proclamation suggested a bimetallic standard, in practice, with so much silver going abroad, it moved Britain from silver to its first gold standard. Gold was more dependable than clipped silver. The future would look back on Newton as the father of the gold standard. His system proved the bedrock of Britain’s domestic and international trade through the 18th century, helping it to become such a formidable commercial power. But it was an accidental gold standard. Nobody—not the institutions nor the persons involved—had had the slightest intention of creating a new monetary system on gold. Most people wanted to sustain silver as the prime coinage of the land. Newton had tried to create a functioning bimetallic standard. But market forces had other ideas.In the 1770s there was another recoinage in Britain, which, in terms of sheer scale, was unprecedented. Some 155 tonnes/5 million t.oz of gold in total, perhaps 30 times greater than Newton’s recoinage of 1696-9, greater than anything attempted by Spain or Venice, or even Rome. No attempt was made to recoin silver. It was a formal admission that Britain was now on a gold standard. Newton’s accidental gold standard was formalised.Anno domini for goldThe second half of the 19th century proved the golden age of the gold rush. First California, then Australia, then New Zealand, then South Africa, then Western Australia, and finally the Klondike.Aside from taxation (see Daylight Robbery), it is difficult to think of anything more overlooked that has had a more profound influence on the course of human history than the gold rush. Nations, indeed civilisations, have been formed on the back of them. (The beneficial impact of gold discoveries in Northern Spain to the Roman Empire is dramatically understated, for example). The fifty years from January 24th, 1848, were perhaps the golden era of the gold rush. The date stands as a watershed moment, the dawn of a new golden age. You might say there are two histories of gold, one before and one after 1848, akin to a BC and AD moment in time. On that day a carpenter from New Jersey by the name of James Marshall saw something shiny at the bottom of a ditch while carrying out a routine inspection of a lumbar mill he was helping build on the western slopes of the Sierra Nevada in California. The scale of the gold business changed out of all proportion. The amount of metal available changed beyond all recognition. Annual production rose fivefold in five years. The Paris Mint coined 150 million Napoléons D’Or in eight years from 1850-57, compared to 65 million in the preceding 50 years. The US Mint’s output of gold eagles rose fivefold.The gold price should surely fall with all the new supply, feared bankers and economists. “The price must fall,” said the Economist, wrong about everything even then. The Times agreed. French economist Michel Chevalier wrote an entire book, On the Probable Fall in the Value of Gold. But the gold price did not fall. It stayed constant. What the Times, the Economist and Chevalier had all failed to appreciate was that most of the gold would use as money, and that trade, exchange and economic expansion would be the result.Surprisingly perhaps, the biggest casualty of the gold rush was silver. Silver had been money for thousands of years. Not for much longer. Its price halved. In 1850 only Britain, Portugal, Brazil, and a handful of other nations were on the gold standard. Everyone else was on bi-metallic standards. Come 1900 China was the only major nation not on a pure gold standard. Scarcely had the discoveries in California been made when the US began minting $1 and $20 gold coins, in addition to the $10 eagle. Before the discovery, the US Mint struck $4 million worth; in 1851 it minted over $62 million worth. Gold is “virtually the only currency of the country,” said a Congressman proposing a $3 gold coin in a debate in 1853. 1853 would also prove the last time silver dollars were struck, though they still circulated. In practical terms, if not nominal, the US was moving to a gold standard. Then the Coinage Act of 1873 eliminated the standard silver dollar altogether. The act became known as the Crime of 1873. There was a rearguard action, a “silver crusade” to get silver reinstated, especially as silver supply was now increasing thanks to discoveries in Nevada, Colorado, and Mexico. There was, thought some, a “deep-laid plot” engineered by a foreign conspiracy to increase the national debt, which would have to be paid in gold. Bimetallism became a central issue of the election of 1896, when an ambitious young Democrat by the name of William Jennings Bryan won the nomination that he thought would carry him to the presidency with what is widely regarded as one of the greatest speeches in American political history. “Thou shalt not crucify mankind upon a cross of gold,” he bellowed. But no.Gold rather than silver was now in the pockets of millions of people around the world. The increased gold supply effectively sent both France and the US onto gold standards, even though nominally they remained bimetallic (the US until 1900). The move from silver to gold gathered pace in Europe from the 1870s. In 1872-3 Germany launched its new mark, followed by Denmark, Sweden, Norway, and the Netherlands. France, Belgium, Switzerland, and Italy had signed up to a Latin bimetallic monetary union in 1865, which was undermined by the tumbling silver price, and they largely abandoned the silver part of the equation after 1874. By the end of the century, every major nation bar China was on a gold standard, the classical gold standard which Isaac Newton is credited with having designed.But that classical gold standard, that golden age of sound money for which many hard money advocates of today, including yours truly, pine, was not designed and planned, it was accidental.As a the poet Robert Burns wrote:But Mousie, thou art no thy-lane,In proving foresight may be vain:The best laid schemes o’ Mice an’ MenGang aft agleyThe modern system of fiat money by which we operate today is also accidental, evolving from political expediency, political pressure, technological developments, deficit spending, suppressed interest rates, misguided obsession with GDP, and more. Many, especially the powerful, have exploited it for their own ends, but nobody designed a system in which 99% of money is digital, in which 99% of money is debt, in which loss of purchasing power and Cantillon Effect are built in, which robs the young, the salaried, and the saver, which makes an increase in the wealth gap inevitable and so on. The modern system is clearly in its endgame. Better systems are emerging. But endgames last a long time.Enjoy this article? Please consider becoming a paid subscriber. 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

A few years ago I wrote a script called Four Murders and Some Funerals, about an old lady who is the victim of a terrible miscarriage of justice. Seeking revenge she murders one of the perpetrators (by accident - long story, but it works), discovers she’s a natural at bumping people off, does away with the other three, and ends up becoming a vigilante serial killer - righting wrongs wherever she finds them and usually where the law has failed. I still think it was a pretty good script, though it never got made - a bit like Miss Marple, only more savage and retributionist. Anyway, as a result of writing said script, I had to come up with a number of original ways by which an old lady might kill people: I had one person pushed down a lift shaft, another electrocuted in the bath, another shot and another poisoned. This all involved quite a bit of research, especially the various poisons. Should our heroine use cyanide, polonium, fentanyl or botulinum, for example?For obvious reasons, I wasn’t quite comfortable googling all the questions I had, so I took to Tor, DuckDuckGo and internet anonymity. I’m glad I did because, believe you me, how to murder someone is one heck of an internet rabbit hole to go down. Before long I was reading about hiring Chechen hitmen and lord knows what else. Obviously, in the grand scheme of things, researching a script about a murderer is a fairly trivial use case for internet anonymity. But I don’t think the day is far away when your internet search history - which Google keeps forever, by the way, unless you take steps to delete it - will be taken into account for things like insurance risk, profiling, social credit score, by potential employers and so on. I don’t think several days researching how to kill someone reflects particularly well. Of relevance, one of my followers tells me that Justin Trudeau is trying to impose a law whereby police can retroactively search the Internet for ‘hate speech’ violations and arrest offenders, even if the offence occurred before the law existed.But you don’t have to be asking questions about how to kill someone to want anonymity. You might be living under some extreme theological regime, asking questions like is there a god; or under a totalitarian regime, asking questions about freedom; or under a corrupt and incompetent regime, asking questions about vaccine safety. You get the point. Anonymity protects you. It limits the power that others have over you and the ability they have to control you. It enables you to protect your reputation, and stop things from being used against you, especially out of context. It gives you greater control over your own data and thus your destiny. But let’s say I did actually want to kill someone, and that I even researched how to do it, before deciding not to. The only crime I would be guilty of is thought. But if my search history can be used against me, it doesn’t matter if, ten years later I have moved on from the murder thing, it’s still there, and if the police or some activist decided to uncover it, I would, in the eyes of many, forever be guilty of murder, even if I had committed no such crime, beyond thinking about it - which, I bet, most of us have at some point in our darkest hours.For me the most powerful use case is freedom of thought. Being anonymous is liberating. I’m sure that is why masked balls proved so popular.  If you know you are being watched, you are less likely to explore new ideas outside the mainstream, ideas which family, friends, colleagues or even society may dislike. These might be philosophical, political or theological ideas, scientific or artistic. We might want to express thoughts we otherwise feel unable to express. A lot of things, if judged from a different time or place, by people who lack complete knowledge or understanding, may seem odd or worse intolerable. Anonymity protects against having to worry about how actions are perceived and against  constantly having to justify them. Anonymity is the nemesis of censorship.Get your friends to read this.This happened to a comedian friend of mine the other day. I don’t want to say his name, because I don’t want to draw attention to the doxxing. He was posting anonymously on Telegram. Some ideological opponent spent hours following him, going through his material and then exposed his identity, publishing all the stuff he had been saying in order to try and lose him his job. (Which he nearly did: he got suspended but thankfully re-instated). They did something similar to the tycoon Paul Marshall, who had an anonymous Twitter account.The most compelling real life example of why we need internet anonymity must be Satoshi Nakamoto. We would not have bitcoin without it. For sure, many will say, “bah, bitcoin”, but we are talking here about one of the most revolutionary technologies ever invented, and one that has the potential (I don’t say it will, I say it has the potential) to fix our broken political and economic systems peacefully. How? Because it enables people to opt out. It provides an alternative money system and money is the zero patient: “Fix the money, fix the world,” runs the mantra. Remove the state’s monopoly on money, you reduce its ability to create money at no cost to itself and you limit its ability to do all the terrible things it does. And please don’t say, “But what about the NHS”.Subscribe to The Flying Frisby.So I favour internet anonymity, which is a much harder feat to achieve now than it used to be. But I also get that this is not a black and white issue. I’ve no doubt that many a murderous act has been plotted anonymously by terrorists and others looking to kill innocent civilians. Certain politicians, celebrities and others take an enormous amount of abuse from anonymous accounts: I have heard Ian Wright complain many times about the racist trolling  he gets from anonymous accounts, demanding that X, Facebook et al take the trolls to account. The privilege of anonymity gets abused, and badly. What is they say, “with freedom comes great responsibility”?With anonymity, even more so.Many government ministers will care more about the terrorist plotting and the online abuse (which they probably get more than their fair share of) than they will about the freedom to explore new ideas. And, as I say, the censors hate it because the anonymous are harder to control. So, going forward, we can expect more and more attempts to prevent it. Seven reasons we need internet anonymity:* Freedom of expression.* Protection of privacy.* Safety and security.* Overcoming barriers to access.* Encouraging innovation and creativity.* Protection against online harassment and abuse. * Preserving autonomy and control.Tell your mates. 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 morning,As an experiment, today’s Sunday morning thought piece is in video. If you prefer, you can also read it below. You should also be able to read and listen, as many like to do.Let me know what you think.This week, May 7th, marks the 25th anniversary of one the UK’s greatest ever financial blunders. There is no shortage of them, but this one really stands out: that is Gordon Brown’s decision to sell more than half of Britain’s gold. The decision and then its implementation were both of such cack-handed incompetence that for many the only possible explanation is conspiracy. We will come to that in a moment.Every now and then the government does something that makes your ears prick up and think, “Well what are they doing that for?” This was one of those times. I knew nothing about gold or investing back then, but, even I, could see it was a dumb and needless thing to do. That’s the most amazing thing: Brown was under no pressure to sell. He was under no pressure to do anything. Even non-libertarians will struggle to explain why we need government when they are this incompetent.It wasn’t just me. The tabloids said the decision was, “catastrophic.” Gold traders called it, “appalling”. Parliament was outraged. Foreign central banks were too. What was Gordon Brown thinking?It was two years into Brown’s new job as Chancellor of the Exchequer. At the time, the UK held approximately 715 tonnes of gold, worth around $6.5 billion. The value of the country’s gold amounted to about half of its US$13 billion foreign currency reserves and the Treasury wanted to “achieve a better balance in the portfolio”. There was, it said, too much exposure to a single asset, which paid no interest and its price was volatile. Via a written question in the House of Commons the Government suddenly announced that it would be holding a series of auctions for its gold reserves, starting in six weeks, with an eventual plan to sell 415 tonnes by 2002. Eddie George, the Governor of the Bank of England, raised “strong objections” as he and Gordon Brown clashed, but he was “outgunned by a coalition of the treasury and some of his own senior officials”. "The sale of the gold was not something that we recommended at the Bank,” George later said. “We did not think it was a good idea to sell such a large amount of gold at once. However, the decision was taken by the Chancellor and his advisors, and we respected their right to make that decision."London was still (just) at the epicentre of the gold market and its numerous gold traders thought the decision was nuts. Gold prices move in decades-long cycles, they told Bank of England officials, and the price was likely a lot nearer the bottom than the top.  “The timing of the decision was ludicrous. We told them, ‘You are going to push the gold price down before you sell’,” said Peter Fava, then head of precious metal dealing at HSBC. “We thought it was a disastrous decision; we couldn’t understand it.” Revealing the timings and amounts for sale so far in advance would cause traders to short the asset, and that would drive the gold price lower.Not only did Brown give a six-week advance notice to the market that the UK would be selling, driving away any potential buyers and sending speculators short in advance of the sale, the UK had even lent one fifth of its gold out, which speculators borrowed and sold in order to front run the UK’s sale. Sure enough, the price fell 10% by the time of the first auction in July to lows not seen since shortly after the US abandoned the gold standard in 1971. No wonder so many see this as the worst decision in British financial history.Here is the timing of that first sale illustrated. £150/oz. Today we are at £1,900/oz. What a bunch of clowns. As soon as the commitment was made, a consortium of central banks - including the European Central Bank and the Bank of England - signed the Washington Agreement on Gold in September 1999, limiting gold sales to 400 tonnes per year for 5 years. This triggered a reversal in price, a 25% rally in a week. Such gains have never been seen before or since. 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.In total, the UK eventually sold 395 tonnes over 17 auctions from July 1999 to March 2002, at an average price of US$275 per ounce, raising approximately US$3.5 billion. I have had it said to me many times that China was on the other side of the trade, but that is something we will never know. Never explain as conspiracy that which can be explained by incompetence runs the wisdom, but this was so incompetent even those who favour that line of thinking struggle to explain Brown’s logic.It was done to diversify UK assets, runs the standard explanation. Gold pays no interest, Brown wanted a yield. How was Brown to know interest rates would fall for the next 20 years? Many, especially on the left, supported the decision. But such are the levels of incompetence, and it being gold, many other theories quickly emerged. It was “a political decision”, not a financial one, said the Bank of England. Many argue that the sale was part of Gordon Brown and Tony Blair’s plans to take Britain into the new euro currency without asking voters: either to fund the euro itself, or to fund the UK's entry into the European single currency. This theory is linked to the wider belief that there is an agenda to create a European superstate that will replace national sovereignty. Hence the argument that the sale was part of a broader plan to suppress the price of gold. Brown was acting on behalf of a shadowy cabal of bankers and financiers, the same people that today are thought to be attempting to impose the Great Reset and control the world's financial system.Others argue that he sold the gold at a low price in order to benefit his friends in the City of London. Brown is always suspiciously, in the eyes of some, quick to defend the “transparent” manner in which the sale was carried out. “The National Audit Office said that it was in a transparent and fair manner that the sale had happened while achieving value for money, so that is actually what happened,” Brown declared in 2007.Perhaps, simply, Brown thought the price was going even lower and called the market wrong. Not such an unlikely mistake to make. The 1990s had seen something like 1,600 tonnes sold by Argentina, Australia, Belgium, Canada and the Netherlands. Official sector holdings in 1968 accounted for some 40% of all the gold ever mined in history. By 1999, that figure had fallen below 25%. The new European Central Bank might not even bother keeping any bullion from the 11 founders of the forthcoming single euro currency. Analyst Kamal Naqvi, then at Macquarie Equities, told the FT: “The British are looking to sell before everyone else.”Two months earlier, in April 1999, Switzerland, the fifth-largest holder of gold, narrowly passed a referendum to take the franc off the gold standard - it became the last nation to leave the gold standard. The sale of another 1,300 tonnes was green lit (Switzerland never actually sold). The following week the International Monetary Fund was “practically unanimous” in its plans to follow suit. There had been calls - led by Gordon Brown (who would repeat them in 2005) - to use the money to write off Third World debt for the new Millennium. “100 per cent debt relief on multi-lateral debt, IMF debt, to be written off by revaluing or dealing with IMF gold through sales,” Brown said."The decision to sell gold was taken after extensive consultation with the Bank of England, and based on their advice that the price was likely to fall further. It was the right decision, and it released over £2 billion to invest in other assets".He was never a man to admit when wrong, even with reality staring him in the face. Once the decision had been taken he was too stubborn to go back on it, even with all that advice from the gold markets. The result was that he nailed the bottom of the market.Of everything he did as Chancellor, internationally, this stupidity is what he’ll be most remembered for. The mistake was to swap gold, the money of last resort, an asset that is nobody else’s liability, an asset with a track record as money going back to pre-history, for modern fiat money, beholden to the whims of others. Gold’s day was done, they thought. Professor Niall Ferguson declared the “twilight of gold”., whose only future was “as jewellery or in parts of the world with primitive or unstable monetary and financial systems.” Hello!Thanks very much for reading.Until next time,Dominic.PS Here also in case of interest is my conversation with Tom Clougherty of the IEA from a fortnight ago. Enjoy! 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

I love how easy it is to predict things about you based on what you like or dislike.Did you know, for example, that if you buy fresh fennel, you are likely to be a low insurance risk? If you like traditional architecture and old buildings, you are more likely to have a conservative, right-of-centre worldview. Whereas if you like modern architecture, you will lean to the left.For what it’s worth, there are plenty of 20th-century buildings that I find beautiful. I like Art Deco; I like Bauhaus stuff; I think a lot of modern US residential architecture is great. But I think a lot of more recent Deconstructivist and Parametric stuff has disappeared up its state-funded backside and has no chance of standing the test of time. Post-war social housing the world over is verging on the sinful, it is so ugly, not a patch on the almshouses built a century before for the same purpose, when mankind was far less “advanced”. Meanwhile, the glass-fronted apartment and office blocks that blight cities worldwide may be nice to look out from, but to look at they are horrible.When I look at, for example, what has been built in Lewisham, Elephant and Castle or along the banks of the Thames, you have to wonder what on earth people were thinking. What a wasted opportunity to build something with beauty that endures.I was looking out on the Thames from Canary Wharf the other day. Here is what we built.Here is what was possible.In any case, it is inevitable that most modern architecture will not be beautiful. Inevitable! It is built into the system. Let me explain why.Yes, there is regulation. When final say falls to the regulator, not the creator, and he/she never thinks in terms of beauty, only rules and career risk, and construction is always planned with his or her approval in mind, you immediately clip your wings and more. Imagine Michelangelo, Rembrandt, or Beethoven requiring regulatory approval for their work. Under this banner falls health and safety, bureaucracy, the technocratic mentality, planning, standardisation of materials and their mass production, and more.But there is something even more fundamental, which makes lack of beauty inevitable. That is the system of measurement itself. In the past, before mass-produced tape measures were a thing, we made do with the most immediate tools we had to measure things: the human body. Traditional weights and measures were all based around the human body. A foot is, well, a foot. A hand is a hand. A span is a hand stretched out. An inch is a thumb. There are four thumbs to a hand, six to a span, 12 to a foot, 18 to a cubit, which is the distance from elbow to fingertip. A yard is a pace, which happens to be three feet as well. A fathom is the arms stretched out - two yards, or six feet. It goes on: a pound is roughly what you can hold comfortably in your hand. A furlong is the distance a man of average fitness can sprint for. A stone is what you can carry without strain. A US pint is a pound of water, enough to quench a thirst, and so on. Man is indeed the measure of all things, to paraphrase Protagoras. Spread the truth about weights and measures.Da Vinci noticed it. “Nature has thus arranged the measurements of a man: four fingers make one palm. And four palms make one foot; six palms make one cubit; four cubits make once a man's height," he says in his notes for Vitruvian Man.It turns out the feet are very similar the world over and have been throughout history. The foot, for example, was the principal unit in the design of Stonehenge. Here are some different feet from around the world and from throughout history:The cubit was the principal unit of the Pyramids. The pound is the oldest measure of all and goes all the way back to the Babylonian mina.Here’s the thing: proportion is inherent to traditional weights and measures because they derive from the human body, which is proportionate. We are biologically programmed to find the proportions of the human body attractive. The religious will argue that God made man in his own image. Traditional weights and measures derive, therefore, from God, or his image at least, and so are divine.The metric system, on the other hand, is not based on the human body, but on the earth itself. A metre is supposed to be one 10 millionth of the distance from the North Pole to the Equator (though one of French scientists measuring the distance forged the data, so the measure is flawed). The idea of a system based on the earth itself rather than the human body was to achieve a “universal measure based on the perfection of nature” and “a system for all people for all time” to use the words of those who commissioned the measure in the years after the French Revolution. Metric may have a brilliantly simple and comprehensible design, based around the number 10, but unlike traditional weights and measures, proportion is not intrinsic to it. For the purposes of science and for safety, as I argue in my lecture with funny bits, How Heavy?, a universal system of weights and measures is a very important thing. Thanks to the simplicity of decimals (again which derive from the human body and the ten fingers we use to count), metric can scale up or down for use in nanotech or in macrotech .As proportion is inherent to traditional weights and measures, buildings based on them will inevitably have inherent proportion and thus all the beauty which comes with proportion. But most of the world now uses metric in its building, which has no inherent proportion, so it becomes inevitable that modern buildings will not have the proportion inherent to older buildings, unless, the architects deliberately plan otherwise, which most of the time they don’t. Thus is modern architecture inevitably not beautiful.It’s why even functional old buildings, such as barns or warehouses, have a beauty to them. The proportion is inherent in the foundational weights and measures. It is missing in modern buildings.In the past, weights and measures changed, even if only slightly, from region to region. The result was regional diversity in buildings. Using local materials will have added to this regional individuality. But the world over now using the same system of weights and measures, following similar regulations, using similar mass produced materials, means modern architecture will lack beauty the world over. Bland conformity reigns. Even something as foundational as an old brick is proportionate. A brick is a hand in width. For obvious reasons: so a brickie could handle it.In short, unless an architect or builder takes deliberate steps to remedy this problem of proportion, modern buildings will only ever be beautiful by accident. Here’s a little irony: if you like traditional weights and measures, you’re more likely to be right of centre, favour free markets, individual responsibility - all that kind of stuff. Favour metric, and you’re one of those evil left-wing technocrats who champions government intervention, experts and the BBC.Now go tell your friends about this amazing post.Until next time,DominicPS Here is my lecture with funny bits about weights and measures from the Edinburgh Festival in 2022. I think it’s probably the best of all my lectures so far.PPS And here is an 5-minute extract from Italian TV series Sense of Beauty, which I presented a few years back, about beauty and architecture. 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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?