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Dominic Frisby
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Readings of brilliant articles from the Flying Frisby. Occasional super-fascinating interviews. Market commentary, investment ideas, alternative health, some social commentary and more, all with a massive libertarian bias. www.theflyingfrisby.com

  1. 2D AGO

    Namibia: Africa’s Empty Frontier

    Namibia sits on the south-west coast of Africa. Below Angola, above South Africa, with Botswana to the east. Portuguese explorers first reached the coast here in the 1480s. No natural harbour, brutal surf, cold Atlantic fog, the Namib Desert running straight into the sea, little access to fresh water. They planted crosses to mark their claims, turned around and went home again, never to return. Today that coast is known as the Skeleton Coast because of shipwrecks and whale bones. Three hundred years later, having decided there was too much tropical disease in Gambia, the British looked at Namibia as a possible penal colony. They decided it was too inhumane. It was Germans and Finns who eventually settled on the coast another hundred years on. Namibia is about three and a half times the size of the UK, and yet its population is only 3 million. It is big and empty. Most of it is desert. I’ve got more endless expanse shots than I know what to do with. Here is just one of them. Plus a short vid shot from a hot air balloon which gives you an idea of the sheer endlessness of the place. Even in the capital city, Windhoek, there is just so much space. The only two places in the world that are less densely populated are Greenland and Mongolia. Namibia beats even Australia and Mauritania, which is mostly Sahara desert. Demographically, the country is roughly 87% black, 6% white and 5% mixed race, with the Ovambo people to the north making up about half the population. I saw a few Asians while I was there too. A country of extremes There are still bushmen and other ancient hunter-gatherer people living as they have lived for centuries, yet other parts of the country are extremely modern. There are shopping centres to rival our own, good roads (the best in Africa, I was told), great restaurants, commercial farms and more. About half the population is urban. The national language is English, adopted after the country gained independence from South Africa in 1990, but I found that people, black and white, would as often speak amongst themselves in Afrikaans and, up north, Ovambo. On the coast German is widely spoken. (The country was a German colony from the 1880s until World War I, when South Africa, then British, invaded. Hence it has great beer.) The controlling political force is the South West Africa People’s Organisation (SWAPO), which has governed since independence in 1990. SWAPO is nominally social democratic, but there are still strong liberation-era left-wing instincts, as evidenced by streets in the capital renamed after independence: Fidel Castro Street, Robert Mugabe Avenue and so on. All being said, Namibia functions well. It is a stable democracy with rule of law, an independent judiciary (the government sometimes loses cases), relatively free markets and low crime by African (and European) standards. Immigration law is tight too. Having seen the problems stemming from mass immigration into South Africa, Namibia has taken a more controlled approach. Indeed I heard repeated frustrations from mining companies trying to obtain visas for geologists and mining engineers where the local expertise either does not exist or is employed elsewhere. Official unemployment is 37%, but I heard from several different sources that the real number is above 50%. 50%! Very sad. Nominal GDP per capita sits around US$5,000, roughly double that adjusted for purchasing power, which puts it above most of sub-Saharan Africa. The World Bank classifies Namibia as a lower-middle-income country, alongside countries such as Albania, Argentina and Belize. But these numbers are misleading. The country has vast wealth through its natural resources and related industries: uranium, copper, diamonds, fishing and tourism. Spread that revenue across just 3 million people and the averages look impressive. There is also serious rural poverty. Namibia combines first-world infrastructure with third-world unemployment. The currency is pegged to the South African rand, not one I would have chosen. Official inflation sits in the 2-3% range. About 88% of the country’s sovereign debt is held domestically, and there appears to be healthy demand for its bonds. The country has also recently begun a sovereign wealth fund, which is reportedly growing at an impressive 16% since 2022. The central bank has recently also implemented a gold acquisition programme. Kudos. The country has high institutional savings and one the larger stock exchanges in sub-Saharan Africa. Food is cheap, protein in particular. The country has an enormous cattle herd, almost as large as its population. Recent outbreaks of foot-and-mouth disease in neighbouring countries are therefore a cause for concern, as you can imagine. (Not my bag, but I reckon there is an opportunity exporting Namibian biltong to the UK, where it is expensive. I brought back loads). Other goods, however, can be expensive because the country relies heavily on imports. 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. The main industries - tourism and natural resources Ports are expanding. The railways are not great, though I hear they will be improved. The roads, however, are excellent, as I said. Namibia is also the world’s third-largest uranium producer after Kazakhstan and Canada. Chinese interests hold majority stakes in the country’s three largest uranium mines, not to mention other metals. Oil and gas have recently been discovered offshore. Shell plc is one of the pioneers. As for gold, Namibia only really became a meaningful gold player after independence, since when roughly 15 million ounces have been discovered, much of it alongside copper. Among the larger players is B2 Gold (BTO.TO), which is well known in the country. Large parts of the country remain un- or under-explored. And I think that is where a lot of the big opportuities lie. There also appear to be rare earth deposits in some abundance. Kendrik Resources (KEN.L) recently made some progress here. Solar, wind and hydrogen projects are also attracting investment too Chinese money helped build the SWAPO headquarters, and they are investing significantly in mines in the country. Of note is that the USA recently spent heavily developing their embassy. It is big. Former Trump attorney John Giordano is now ambassador, a surprisingly high -profile appointment for such a low-profile country. One theory I heard repeatedly was that, given deteriorating US relations with South Africa, Washington increasingly sees Namibia as strategically important in terms of Atlantic access, energy routes and influence in the south Atlantic. Not quite the Panama Canal or Strait of Hormuz, but it could be something of a chokepoint. Namibia feels like a country at the cusp of something. It has space, resources, energy, political stability and strategic importance. Next week I want to look in more detail at Namibia as an investment destination, particularly its mining sector, where some very interesting things may be developing. My thanks go to to Rowland Brown and Chanel Marais of Cirrus Capital for bringing me to Namibia and for organizing what was a brilliant and instructuve conference. Thank you for reading the Flying Frisby. Until next time, Dominic 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

    9 min

  2. 5D AGO

    Gold and Humanity

    As I’m sure you know, it is all but impossible to destroy gold. Yes, yes, nuclear explosions, blah blah, mercury, aqua regia, but to all intents and purposes gold is permanent. It’s been here since before the earth itself, and it’ll be about long after it’s gone, shining away. That also means that all the gold that has ever been mined still exists. Some of it has been lost, of course, but it’s still there somewhere, even if it’s sitting in sunken Spanish galleon off the coast of Tobago. There are just under 7 billion ounces of gold in the world, and just over 8 billion people, so about 4/5 of an ounce per person. Until the gold rushes of the 19th century, there were roughly 2/5 of an ounce per person.As you can see by the chart below there is now more gold per capita than ever before. What’s really interesting, however, is how closely cumulative gold supply tracks global population growth. The two rise at remarkably similar rates over centuries. Gold supply expands slowly, organically and roughly in line with humanity itself. No central bank planned it that way. Right there is why gold is nature’s money. But there are some changes afoot. Population growth is slowing rapidly. It is actually going backwards in some parts of the world. The Matt Ridley argument is that this is a result of prosperity. Merryn Somerset Webb thinks it’s even more specific than that. She blames smart phones. She may have a point. South Korea is perhaps the most advanced smart phone nation. When I went there in 2015 I remember thinking that, technologically, it was a good 10 years ahead of Western Europe. Recently we learn it has the slowest population growth of the lot. Annual gold mining supply is at record levels, however: 3,600 tonnes last year. Does this mean gold per capita is set to increase? Probably but there is a big but and it looks like this. How about that for a table? No new major discoveries - 2 million ounces or more - in 2023 or 2024. As far as I know there were three in 2025 - in China, in Saudi Arabia and in Iran. But look at the trend. We have been below the 10-discovery threshold since 2009. Discoveries peaked in 1995. The long-term implications of this are enormous. 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. Gold is not like other commodities, copper, oil or wheat, say, where annual production dramatically affects price because so much of what was produced previously has already been consumed. Almost all the gold ever mined still exists somewhere, as i say. But mining supply still matters at the margin. The collapse in discoveries has not yet translated into falling production because it takes such a long time to bring a deposit into production. The average time from discovery to production is now around 17 years. But we are now roughly 17 years on from the late 2000s, when the discovery rate began to fall off a cliff. In other words, we may not be far away from the point where the collapse in discoveries finally starts feeding through into stagnating or declining mine supply. And unlike previous cycles, there do not appear to be dozens of giant new deposits waiting quietly in the wings. (Obviously, a higher gold price offsets some of this because lower-grade ore becomes economic to mine.) Here is the long-term production chart. You can see how supply has largely plateaued over the last ten years . Perhaps that also helps explain why, after 50,000 years of use (yes, that figure is correct), demand for gold from individuals, institutions and central banks remains so strong. Lots of interviews to share with you this week I’ve been promoting the release of The Secret History of Gold in the US. First up with my US BFF, Tom Woods On Financial Sense with Jim Puplava (audio only) On Kitco News with Jeremy Szafron And, finally, Clem Chambers Last, but not least, here is this week’s commentary, in case you missed it, looking at the precarious state of the UK’s finances. Thank you for being a subscriber to the Flying Frisby. Until next time Dominic 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

    6 min

  3. MAY 7

    Gold Waits While Britain Cracks

    This is a free preview of a paid episode. To hear more, visit www.theflyingfrisby.com It is always nice to be a national of a country that is leading the pack. It makes one proud to be a world leader. When it comes to cracking sovereign debt markets, however, you do not want to be leading the pack. But that is where we are in the UK. Even Mohamed El-Erian is tweeting about it. Yields on 30-year gilts, ie UK long-term government borrowing costs, hit 5.75% this week, the highest level since 1998, and the highest in the G7. It’s local election day in the UK today, one of those events when we are kidded into thinking that a cross on a piece of paper is going to make the slightest iota of difference. This has barely been discussed as an issue, when it should be front and centre. The cost of servicing UK debt is now north of £100 billion, roughly 7% of annual expenditure. All you young folks grinding away at your desks to pay Income Tax, that’s what much your effort is being expended on: servicing debt. It’s not like you are contributing to anything new. As I say in Daylight Robbery, debt is a tax on the future. UK public spending is now £48,000 per household. That’s how out of control things now are. This is only going to get worse. You have to own gold. One reason sterling has held together better than many expected is that UK interest rates remain high. Whether the Bank of England formally raises rates further or not, the market itself is already tightening financial conditions. Happy mortgage day, everyone. The post-2008 era of low rates is well and truly over. So-called yield curve control will have to come, to stop the government admitting they are insolvent. And that means further currency debasement. All the political turmoil that’s coming as Labour tries to get rid of Keir Starmer after today’s rout is not going to help. The next General Election is still three years away. Labour will put that off for as long as possible as half of them are going to lose their seats. 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. When the next General Election does come, the result is going to be, as they say in women’s circles, “well hung”. No party has more than 25% of the vote. Reform is currently polling highest on 25% (next are the Tories and Labour on 19%), but thanks to our electoral system Reform’s 25% will not necessarily translate into 25% of seats, unless deals are done. The most likely victor will be a coalition, probably RefCon, but don’t discount the possibility of GreenLab. I should perhaps say this. 5.75% is not “instant crisis” serious, and the yield has come off a little amidst the latest potential for peace in Iran. Today it’s 5.63%. We are now at the “the market is starting to ask questions” stage. For context, in 1992 long-dated yields went to 9% even while the base rate hit 15% on Black Wednesday itself. We can survive 5.75% for a little bit, but as you can see from the chart below: this is a upwards trend and it is going higher. The UK is uniquely vulnerable: large fiscal deficits, persistent current account deficits, high debt-to-GDP, high taxes, high energy costs, heavy state-spending commitments, no political appetite for belt-tightening, low growth, low productivity, a service-sector-led economy much of which can be replaced by AI, financial services suffocated by regulation, short average debt maturity rolling constantly into new rates, the Bank of England now selling gilts not buying. Then there are the demographic issues: an ageing population, the most productive leaving, and a reliance on foreign capital which, at present, is not coming but going. What does this all translate to? Higher mortgage rates, increased government refinancing costs, higher taxes as a result, forced spending cuts, pension funds and leveraged financial institutions coming under pressure, weaker growth and sterling vulnerability. If you are a reader from outside the UK, you can look at the UK and know what is likely coming to you soon after. The government itself will get into a terminal loop: higher yields → higher debt servicing → larger deficits → more issuance → higher yields.

    6 min

  4. MAY 6

    The Problem with Mining Bull Markets

    Something of a thought experiment today, motivated by the fact that I don’t want to go through another bear market in mining. I’m done with them. The false dawns, the endless grinding declines, the frustration. You might remember me saying, mid bear market a few years ago, “One more bull market and I’m done.” So the question I’m asking today is, “when can we expect this bull market to end?” It might already be over, for all I know. Or there might be another five years in the tank. I’m asking this question because I’m finding myself more and more tempted by high-risk mining exploration plays. I’m seeing value in companies that today have a market cap of C$50 million that a year ago I would have been more reluctant to invest in when their market caps were under C$10 million. Last week I bought one. I like it. But the way I bought it ignored all the risk-aversion built up over ten years of bear market. If we are in a secular bull trend for metals, then companies like this will do very well. But come a bear market, they will grind lower and lower, eventually reaching a point where they trade for little more than their cash value. My broad thesis for gold and silver, as you know, is that we trade sideways for a year, while the market works through the excesses of 2025. A mid-cycle pause, so to speak, before we eventually go to the $7 to $10,000 by the end of the decade. At present I feel more bullish about base metals such as copper and zinc. Rising prices here will preserve the bull market in mining more generally. But this is just one writers’ thesis. The mining cycle So today we are going to study two long-term charts. I have got a fantastic chart of the copper price, adjusted for inflation, going all the way back to 1900. Copper is a good proxy for industrial metals and to some extent gold and silver as well. There is a lot to learn from this chart, some of it quite unexpected. Yes, mining and mining methods have changed over the years. Grades used to be a lot higher (there were higher amounts of metal in the rock) but this is offset by improved extraction methods meaning lower grade rock is now economic. Bottom line the world is consuming more copper than ever before. The mining cycle however still exists. Today, if anything it takes longer than ever before. If there is a shortage of supply of metal resulting in a price rise, it still takes many years and a lot of investment to increase supply from existing mines. Companies, which tend to be risk-averse, have to be persuaded for example that the higher price warrants the extra investment - that the higher price is here to stay. Once the investment is made it can take a long time to build out the mine. Then there are regulators to get past. This can take years too. As for new mines it can take over a decade or more to take a mine from discovery to production. Making the discovery in the first place can take years too. All the while there is a shortage of metal and prices keep on creeping up. Eventually there will be an excess of metal and prices start falling again. Then all the mines need to be shut down. That takes time. Once they’re shut and everyone has lost their shirt, there is considerable reluctance to ever do anything again (see my opening comment) Then the metal price starts going up again. The world may be unrecognisable from the first half of the 20th century. The mining cycle is unchanged however. So what do these cycles actually look like over the long term? And more importantly, where are we now? To answer that, we need to look at two charts. One, as I say, goes back to 1900. The other is the oldest mining index there is. One thing to keep in mind as you look at these charts: the biggest gains in mining don’t come at the end of a bull market. They come early. 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

    8 min

  5. APR 26

    Constable Country, the Cracks Beneath and Opportunity

    This is a free preview of a paid episode. To hear more, visit www.theflyingfrisby.com This weekend, on the advice of ChatGPT, I visited Constable country. That is Essex, the villages of Dedham and East Bergholt, by the River Stour, which John Constable so famously painted. Having just spent a fortnight in Namibia, I’ve become attuned to stunning landscapes. Even so, I was blown away by the beauty of the place. Here are some snaps to get you in the zone. I went with a French friend who wanted to see the “real England”, but not too far from Stansted Airport. As we drove into East Bergholt, I began, as I always do as soon as I see them, to despair at the ugliness of modern buildings. No wonder we have so many NIMBYs, when what gets built around beautiful villages is so bland and ugly. Objection is both rational and natural. But then we turned a corner and everything was suddenly stunning. It’s not a part of the world I knew. I had lazily assumed all of Essex looked like Basildon. It doesn’t. It was glorious. You could really see the Dutch and Flemish influence in the architecture and the colours they were painted - so different to the equally beautiful Cotswolds, where I was last weekend doing gigs. We were only sixty miles from London, but it still felt like an England of old, unblighted. My French companion could not understand what I had been moaning about when I complain about decline. This was the England she knew growing up, and she got excited by everything. Scones. Tea. Churches. Beautiful landscapes. Polite conversation. Phone boxes. Properly kept gardens. Even the beer. “It’s not cold,” she said, before promptly downing it. My oft-cited complaint that the England she knew is disappearing seemed nonsense. There was no evidence of it here. As we walked into Manningtree, the buildings got ugly again. Warehouses and industrial buildings, in particular. Nineteenth century warehouses were often things of beauty. Why can 21st century warehouses not be? (The answer lies in our system of measurement, but that’s for another day). Then we learnt about Matthew Hopkins, the Witchfinder General, who operated here, exploiting the social upheaval of the English Civil War to have hundreds of women executed as witches. Among his methods of getting to the “truth” he used sleep deprivation to extract confessions; he tied victims to chairs and dropped them into the estuary. If they floated, they were witches. If they sank, they weren’t. I guess the victims lost either way. He strip-searched women looking for signs of the mark of the devil. If he couldn’t find any he pricked them with knives until he found the signs he was looking for. Just horrible. Maybe the English past isn’t quite so idyllic after all. Here’s what makes it worse. For every witch he successfully hunted down, the government gave him fee. He got very rich. Show me the incentive and I will show you the outcome. A lot of innocent dead women. An early gruesome example of the law of unintended consequences. Remind me why I’m a libertarian again. Today, if we are heading into the civil war many think we are, who knows what kind of witch hunts we are going to see in the name of some nuts ideology? We caught a train from Mistley back to Manningtree. More grim modern housing. Lots of it too. More walking then a short river boat tour. We mentioned we were staying at a village up the road, East Bergholt, and one of the locals declared this was the last chance to enjoy it before more new-build goes up. “We need 1.5 million homes,” he said. “The question is, do we have 1.5 million people who are going to buy them?” Articulated right there is the property crisis coming to a town near you. I have long argued that beautiful property will keep its value. Ugly new build won’t. Beautiful is pretty much synonymous with period. It was built using traditional measures, where proportion is intrinsic. No such proportion is inherent to metric. We are already seeing the unravelling of the new-build market in London. That unravelling is coming to everywhere there is ugly new build, whether blocks of flats or houses. We did find one modern close in East Bergholt that was actually beautiful by the way. So it’s possible. But it’s the exception, not the rule. This is one of the reasons I invest so much of my capital outside the UK. I don’t like sterling, so I hold gold and bitcoin, and I don’t like gilts. A weakening property market, which is happening right on cue, will create problems for both. 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. Idyllic corners of England do still exist. Many of them. UK shares already offer value. There is a lot to like in the UK, as my French companion kept pointing out. But there are also big problems ahead, with a leadership class that, shall we say, falls short. Opportunities abroad, however I sit regularly on a roundtable with Doug Casey and a number of other mining newsletter writers. A company presents. The experts grill them. The company logs off, and then we discuss it. I liked this week’s so much I bought shares while the presentation was still happening. The company is …

    6 min

  6. APR 23

    What I’m Doing With My Money Right Now (Mostly Nothing)

    Happy St George’s Day to you. My apologies for the late arrival of this week’s missive but I found myself without electricity this morning due to, and I quote, “a fault with the electricity”Never mind. Here we are.Everything seems so headline driven and yet contradictory at the moment. With every change in circumstance, especially at the Strait of Hormuz, a different narrative seems to emerge only for it to peter away almost as quickly. You’ve got to be long oil and gas. Buy. There’s no point. The strait is open. Sell. With so much geopolitical tension you have to be long gold and silver. Debt, deficits, debasement, de-dollarisation, conflict, central bank buying. But gold and silver aren’t moving. They had their move last year. Equities make even less sense. You don’t want to be long equities. You need to reduce risk. World War Three is coming. And the S&P 500 has just broken out to record highs. So you end up with this strange situation where the stories are compelling, but the price action is inconsistent. Narrative is not confirming price. Price is not confirming narrative. That’s usually where mistakes get made. You feel like you should be doing something. You look for reasons to act. You react to headlines. You convince yourself you’ve spotted an opportunity. And then the move reverses, or fades or never quite follows through. These are the environments that chop people up. False breakouts. False breakdowns. Strong opinions built on weak signals. That’s why I am such a big advocate of the Dolce Far Niente portfolio. Sometimes doing nothing is the best policy. In fact, often. We had a position in oil and gas so we didn’t need to panic when the bombing of Iran began. We had a position in equities, so even though I was arguing this would be a typical second year of a presidential term, with no meaningful movement until the final quarter, we had exposure to this latest (probably stimulus driven)rally in the S&P 500 to new highs. You can also be wrong, as is often the case when you are a commentator - and it doesn’t matter. 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. What am I doing with my own money? Not that much to be honest. I’m looking around and I can’t see any obvious mispricings. There are areas that look interesting. Software looks attractive. Bitcoin, which has increasingly behaved like a proxy for that part of the market, is quietly ticking higher again. Chemicals look cheap. Copper too is looking attractive. The long-term story is obvious: electrification, underinvestment, constrained supply. What is notable is that the miners are starting to behave better than the underlying metal. That is often where these moves begin. Our new copper play is already up 20% in barely a fortnight. There is a Namibian copper story I am looking at too. More on that soon. Nor am I trimming anything. There is no euphoria to sell into. No obvious excess. And equally no panic to buy. So positions are left alone. There is one area where I do have a clear opinion, and that is oil and gas. But my decision is to hold existing positions rather than add new ones. The market seems to be treating the Middle East situation as temporary. I’m not convinced that’s right - at least not the effects on oil and gas, and I’m staying long, despite the temptation to take profits. I think we are in a new bull market. Positioning in the sector still doesn’t look extreme. Sentiment is not euphoric. Oil could drift lower if tensions ease and the market continues to treat events as passing rather than structural. But this feels more like the beginning of a bull market rather than the end. The same goes for gold and silver - mid-cycle pause is my prognosis there. I think bitcoin probably outperforms them over the next 12 months, but If I’m wrong, it doesn’t matter because I own both. Doing nothing feels like inaction. It isn’t. It is a decision not to play a game where the signals are unclear and the odds are not obviously in your favour. Right now, that is where I am. If you’re interested in my three largest oil positions, you can find them here.Until next time,Dominic The latest edition of Atlas Pulse is out now. In my view it’s the best gold newsletter out there and it’s free. Read it 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

    5 min

  7. APR 19

    Namibia and the Resource Curse

    Good Sunday to youI’m still finding my feet having just got back from Namibia. I’ve got a full country report coming, as well as a portfolio piece. But I’ve been thinking further about the country’s potential since Wednesday’s note. Namibia has almost everything. Resources. Location. Roads. A small population. On paper, it should work. And yet. Driving through Windhoek, the capital, my guide pointed out a hospital: the Katutura State Hospital. “You don’t want to get sick here,” he said. It didn’t look too bad from the outside. A bit craggy. But I’ve seen worse. The place is infamous apparently. Rats. Endless waits. People lying untreated in corridors. People deliberately go at 3 in the morning, because it betters your chances of being seen the next day. My guide described his own time there when he broke his arm last year. Oof. It makes NHS Accident and Emergency waiting times look slick. Across the road, stood a gleaming monstrosity - the SWAPO (ruling party) headquarters. Brand new. Vulgar. Expensive. Impossible to miss. It wasn’t discreetly tucked away. It was right there, bearing down on the hospital. My first reaction was simply how ugly it is. A few years and that will look truly horrible, I explained to my guide, who seemed baffled by my prediction. His point, however, that I hadn’t yet thought of, was simply how the building had attracted controversy: all that money being spent on what is essentially a vanity project, with the hospital over the road. It was built by the Chinese, funded through a grant from the Chinese government, rather than a commercial loan, at a cost of $50–60 million (figures vary). Because it’s a grant, it doesn’t sit as formal public debt. What could the Chinese possibly want in Namibia. (Clue Namibia, among other things, is the world’s 3rd largest uranium producer and the Chinese pretty much control the 3 largest uranium mining companies operating there. Then there are all those other resources too) There, in a single snapshot, lies the problem. A classic of the resource curse genre. Easy money distorts behaviour. In theory, natural resources should make a country rich. In practice, they often do the opposite. Incentives determine the outcome. If a government can fund itself from its natural resources, from its oil or metal, what does it care about tax payers? If it doesn’t rely on its citizens, it doesn’t feel accountable to them. Instead of serving the public, the state begins to serve itself. Money flows in. It gets spent badly, siphoned off, used to entrench power. At the same time, the rest of the economy suffers. Why build a broad industrial base when the ground is already doing the work for you? You end up with a narrow, fragile system built around extraction. Two countries with similar resources can end up in completely different places. Norway built institutions, saved its oil wealth, invested for the long term. Venezuela (which has greater oil resources than even Saudi Arabia), spent it, politicised it and hollowed out everything else. Don’t get me started on what the UK did with its oil. (First thing the government should do Monday morning by the way is renegotiate North Sea division with Norway). Same starting point. Opposite outcomes. One has one of the lowest GDP per capitas in the world, the other has one of the highest. The difference is governance. Incentives. Culture. Namibia now has some choices to make. It is somewhere near the beginning of that path. It has oil discoveries offshore. It is already a major uranium producer. It has copper, gold, rare earths, diamonds, zinc, lithium and tin. Fish. The opportunity is obvious. But so is the risk. The easy choice is to follow the same path as most of the rest of Africa. The harder choice now, but one that will result in better outcomes, is one of good governance. The debate around that SWAPO headquarters touches on exactly this point. Despite what I’ve said, there is no single scandal you can point to and say “there it is”. It’s all a bit more murky. But the criticism you hear, quietly and repeatedly, is about priorities. Why spend heavily on political infrastructure when basic services are under strain? Why is the party so well housed while public systems struggle? There are major questions too, as with much infrastructure in Africa, about foreign financing and influence, especially from China. You don’t need a formal corruption charge to expose everything. You can see it in how capital is allocated. Oddly, the countries that often do best are those with very little as far as natural resources are concerned. Hong Kong, Singapore, even Venice a millennium earlier. There was no safety net. They were forced to trade, to manufacture, to compete. They had to create value because there was none sitting in the ground. Namibia doesn’t have that pressure. So it has to choose discipline, and that is the hard part. When you see a failing hospital on one side of the road and a gleaming party headquarters on the other, it tells you something about priorities. Never mind what politicians say, look at what they do. I’ll be back with more later this week. Thank you for being a subscriber to the Flying Frisby. 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. PS Here is this week’s piece. 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

    6 min

  8. APR 16

    Namibia: Everything on a Plate

    I’m travelling, so this week’s note will be brief. What a country Namibia is. I don’t think I’ve ever been anywhere with so much potential. But also what a mess. Official unemployment is 37%. Real unemployment is likely over 50%. Can you imagine? Per capita GDP is about $4,200. That puts it at 119th the global rankings. The countries that top the list include the likes of Luxembourg, Switzerland, Singapore, Norway, Qatar. Small populations. Either financial centres with low tax, strong rule of law and minimal corruption, or oil-rich. Strip out the statistical quirks like Ireland, where corporate domiciles distort the numbers, and the pattern becomes even clearer. With the exception of the US, they are all small, with populations under 5 million. Namibia has just 3 million people. Oil has just been discovered offshore. It is the world’s third largest uranium producer, and has an abundance of other natural resources. It’s safe. There is rule of law. It ports are good. Its roads are even better. And its location towards the south of Africa means it can easily sell into Asia, the Americas or Europe. It fits the template, in other words. I spoke at a conference here this week. There were senior figures in the room, including the governor of the central bank. I made the case that Namibia could make the top ten within a generation, just as Hong Kong did after World War Two when its per capita GDP was on par with most of Africa. Follow the Hong Kong model - low taxes (they never exceed 14% of GDP), simple taxes and positive non-intervention. (You can read about that story in Daylight Robbery) It is not such a nuts idea. Namibia’s people are entrepreneurial. Everywhere I went, someone was trying to sell me something. Everything is there. So what’s missing? “You need minimal corruption,” I said. That got a laugh. And there it is. I’ll have more on how to invest in this extraordinary country soon. 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 recommend is The Pure Gold Company. They deliver to the UK, the US, Canada and Europe. More 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

    3 min
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Readings of brilliant articles from the Flying Frisby. Occasional super-fascinating interviews. Market commentary, investment ideas, alternative health, some social commentary and more, all with a massive libertarian bias. www.theflyingfrisby.com

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