Show Notes
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Good Sunday to you, I have a lot of charts for you today, and fascinating ones too, but we begin with a little story. John James Cowperthwaite was the financial secretary who oversaw Hong Kong’s extraordinary growth in the 30 or so years after World War Two. It was one of the greatest periods of economic expansion the world had ever seen. I’m not sure it has ever been equalled. In the span of little more than a generation, this tiny territory with no significant natural resources to speak of went from shanty town with a refugee problem and a GDP per capita below $300 to become the world’s busiest port, an international manufacturing and financial powerhouse, among the ten richest nations in the world with a per capita GDP above the US and the UK’s. Its population would grow by over ten times. Cowperthwaite was asked by an African president what poorer countries should do to turn their economies around, as Hong Kong had done. The first thing he said was ‘abolish the office of national statistics’. Cowperthwaite was an acolyte of Adam Smith: it is said he slept with a copy of Wealth of Nations by his bed - presumably because it got him off to sleep. And he despised government statistics, not just because they are so frequently flawed, but because he knew governments would use them to meddle. He was, in the words of his successor, Philip Haddon-Cave, a ‘positive non-interventionist’, who felt that (his words) ‘clumsy bureaucratic fingers’ should be kept out of the ‘sensitive mechanism’ of the economy - far better to rely on the ‘ hidden hand ’. ‘A multiplicity of individual decisions by businessmen and industrialists 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.’ John James Cowperthwaite
When British officials came to find out why unemployment data was not being collected, he sent them back on the first available flight, and when his own Legislative Council demanded GDP figures he filibustered them away year after year. Such figures, ‘do not have a great deal of meaning,’ he said. ‘That other countries make use of them is not, I think, necessarily a good reason to suppose that we need them.’ In 1962, Cowperthwaite came under such pressure to provide GDP numbers and other such statistics that he hired a professor to do the necessary research. He then declared that he had set up study to look at the feasibility of collecting the information. For seven years he sent back the poor professor ’s drafts: either something needed further clarification, or it needed investigation, or it needed development. By 1969, still no data was forthcoming. He explained that the professor was having difficulties coming to closure on how it should be collated. The poor academic had been set up to be a fall guy. I’ve always loved this line of his: ‘ Due to our low tax policy, [government] revenue has increased.’John James Cowperthwaite
Take note Andy Burnham. Take note John Healey. Right. Park that story for a moment as we turn our attention to thread two of this argument. If you want the full story of Cowperthwaite and Hong Kong’s breathtaking economic success, it is one of many you can read or listen to in my grand opus, Daylight Robbery: How Tax Shaped Our Past and Will Change Our Future.
And that brings me to another of my opera, on the subject of gold. Long time readers/sufferers will know that gold is the great constant. “Neither rust nor moth devoureth it,” to use the words of some ancient Greek bloke. (Pindar). Gold been about since before our solar system was formed, never mind Planet Earth, and it’ll be around long after it’s gone, which can’t be too far off if we continue on this current trajectory. And in all that time it never changes, because it is inert. You can’t destroy it either, not by natural means an
More from The Flying Frisby - money, markets and more
Something a little different this week. On Monday I gave a talk for UK Finance called Making Sense of It All, about the multiple contradictions at work int he economy: rising bond yields yet equity markets grinding higher, huge investment in AI despite limited profit, and the growing squeeze on the materials needed to build AI infrastructure. (Many thanks to Duncan and Rhiannon for inviting me to speak). I’ve taken the deck and put together an online version - the first time I’ve ever attempted such a thing - I hope you will find it useful. The transcript is available above. Until next time, Dominic If you live in a third world country such as the UK, I urge you to own gold or silver. The pound will be further devalued, as will the euro and dollar. The bullion dealer I use and recommend is The Pure Gold Company. They deliver to the UK, the US, Canada and Europe. More here.
After an extraordinary run which started in 2022 below US$20/oz and ended in January this year at US$122, silver has been working its way downwards. We have had a correction of almost 50%. Today we’re at $58/oz having been as low as $55 in July. We are almost certainly going to go back and retest that low, I would say, and silver is very much in a downtrend. $50 has been a huge line in the sand that goes all the way back to 1980 and for decades silver could not get above that number. Then, late last year, it cut through it like butter. What was resistance becomes support is one of the technical analysts’ guiding mantras, and there is every chance $50 will do just that. However, if there is one thing I have learnt about silver over the years it is that has an unrivalled propensity to let you down, which is I suppose my way of saying it could quite easily go a lot lower. It’s silver after all. However, the fundamentals favour silver. The market remains in deficit. The Silver Institute’s latest World Silver Survey forecasts a 46.3 million ounce deficit in 2026, which would be the sixth consecutive annual deficit. Never mind jewellery and investment demand, silver finds an enormous amount of industrial demand (~60% of annual demand), especially in electronics, because it is such a good conductor of electricity. The sudden increase from solar panel demand a few years back is thought to have triggered the recent run, although manufacturers are reducing the amount of silver used in each panel. Bear markets are a time to build. As an investor, you research the companies you might want to buy - there is no need necessarily to rush out and buy them - start building positions when nobody else wants them, make the purchases on your own terms. There is no need to rush. With that in mind, I am going to tell you about my largest silver position today. I even have an interview with the boss. It was a big winner for readers in the last cycle going from below 30c north of C$3, rising more than 1,000%. With the falls in the silver price it has now come back more than 50%, and I think it is worth taking a look. Its CEO is both young and competent and he is growing the company in an admirable way so that in 3 to 5 years time you are going to see something much bigger.
It’s my pleasure to sit down with with the man who “gold pilled” me back in the day with his book, The Collapse of the Dollar. James Turk, founder of GoldMoney, has spent five decades working in banking, finance and investments, making the case that gold is not an investment or another commodity, but money in its purest form. We discuss why he believes the US can no longer repeat the Volcker rescue of the 1980s, the relationship between sound money and liberty, and why he expects gold eventually to return to the centre of global commerce as technology changes the way money moves. James’ latest book is Money and Liberty and you can find his IEA paper here. This interview was brought to you by The Pure Gold Company If you live in a third world country such as the UK, I urge you to own gold or silver. The pound will be further devalued, as will the euro and dollar. The bullion dealer I use and recommend is The Pure Gold Company. They deliver to the UK, the US, Canada and Europe. More here.
Good Sunday to you, We have a fantastic interview for you today. I sit down with legendary Canadian investor Frank Giustra to discuss gold, government debt and why he believes the world is entering the most dangerous geopolitical period of our lifetime. You can either watch the video or listen as a podcast via Spotify et al.Frank made his fortune in mining and natural resources, before founding Lionsgate Films, the world’s biggest independent film studio. His track record as a businessman and investor is superlative. We discuss why he believes this is no ordinary metals bull market, the accelerating shift by central banks from government debt into physical gold, the risk that another round of quantitative easing could trigger a dollar crisis, and whether gold may ultimately need to be revalued higher, dramaticically higher. We also touch on China, financial repression, critical minerals and why, of everything Frank owns today, gold remains the asset he is most excited about. Money Markets & More is the interview series from Dominic Frisby, exploring money, markets, gold, economics and the ideas shaping the world.🥇 The programme is brought to you by The Pure Gold Company If you live in a third world country such as the UK, I urge you to own gold or silver. The pound will be further devalued, as will the euro and dollar. The bullion dealer I use and recommend is The Pure Gold Company. They deliver to the UK, the US, Canada and Europe. More here.
This is a free preview of a paid episode. To hear more, visit www.theflyingfrisby.com