Show Notes
Good Sunday to you, It seems Iran is planning to turn the Strait of Hormuz into the marine equivalent a toll road, or so at least the Financial Times among others is reporting. Ships wishing to pass through the strait must pay a fee of $1 per barrel of oil. Here’s the clincher: the fee must be paid in bitcoin. Why bitcoin? It’s the best money for the job. As it is “permissionless”, no government can order the funds to be frozen or seized. No bank can block the transaction. There is no intermediary. It is outside geopolitical control. Transactions can be made remotely and digitally. Settlement is within minutes. Ownership is clear. The network is sufficiently liquid. No other widely used currency or payment system in existence has these qualities. Not the dollar, not the euro, not gold or silver, not stablecoins. Suddenly bitcoin has become “a tool to navigate a global conflict’, in the words of bitcoiner Jesse Tevelow. A particular company might not like Iran. Iran might not like the company. Neither might trust the other. The two can still transact. Trade can happen between parties that don’t like or trust each other. Trade can also happen outside of politics. Every bitcoiner has known for some time such a moment was coming. It was just a matter of when. If this is enforced, it would mark the first real-world use of bitcoin as neutral settlement infrastructure in a live geopolitical conflict, where traditional systems cannot operate. Obviously this only works if Iran can enforce it, and the Strait is not only Iran’s. This is currently only a contingency situation and, if this conflict ends, habits may quickly revert. There is the other possibility that it does work. Indeed it works so well other nations start copying. The BRICS nations, for example, might find bitcoin an extremely useful non-US-dollar currency in which to transact. In which case, this sets a precedent. My view: the world just changed. At the other end of the scale, we have my little life And the same problem - fiat inadequacy - presents itself though rather more mundane circumstances. I’ve been travelling through Namibia this past fortnight, on my way to give a speech at the Cirrus Investment Conference. When I arrived at the airport, I couldn’t get my card to work in the ATM machine, but I had £200 in cash which I changed - no doubt at some over-priced rate - for local dollars. This was the only cash I had. I’ve been staying at various lodges across the country, all in the middle of nowhere, and I have had a terrific time, but I’ve needed money to tip my various guides, lodge staff, drivers and so on, but with no access to cash. The banking system didn’t work. The card failed. Cash was finite. The people I wanted to tip couldn’t take card payments. We still wanted to transact. So I’ve been using the opportunity to orange pill the locals. Instead of local dollars (which by the way is pegged to the South African rand), I’ve got every member of staff to download a wallet onto their phone, and I’ve tipped them in bitcoin. Everyone so far has been delighted at the arrangement, and the locals now have some money that might appreciate in purchasing power. I’ve told them to HODL their coins for at least 5 years and then perhaps this little tip might be worth something. In the meantime I’ve told them to read up on bitcoin - watch vids, listen to podcasts and so on. As I argue in the book the first step on the bitcoin journey is to download a wallet and practice sending and receiving small amounts of money. So you have the same function at two extremes: bitcoin works where other forms of money fall short. Once again I urge you to have some exposure to this extraordinary tech. ETFs are the simplest way - but they are far from permissionless, as anyone dealing with the FCA will tell you. Charlie Morris’s BOLD is another option and one I some in my own portfolio. On which note, I heartily endorse Charlie’s various newsletters, which you can read here.
But the best way
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.
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