The Flying Frisby - money, markets and more

Dominic Frisby
  • 4.4 (10)
  • Investing
  • Updated Biweekly

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

    Why Hasn't the Pound Crashed?

    Imagine you are in the circus, watching a tightrope walker who’s been on the sauce. He sways, the crowd gasps, he sways again, more gasps, and yet somehow he doesn’t fall. This goes on and on and eventually you get bored watching. That, it seems to me, is Britain. Public debt is now knocking on £3 trillion. (Remember you could have spent a million pounds every day since Jesus was born and still not have spent a trillion - that’s how incomprehensible a sum a trillion is). Interest payments now run at over £110 billion a year - more than we spend on education. Debt-to-GDP hovers around 100%. Growth is wilted. Productivity is like blancmange. Taxes are everywhere and record-breaking. Waste and bloat and bureaucracy are rampant. But the political response to every problem is the same: spend more. Despite all of this, like our inebriated tight rope walker, sterling refuses to drop. The pound trades around $1.35. The gilt market continues to function. The bond vigilantes, whoever these mystical people are, appear to be away at lunch with Lord Lucan.. Why? The answer begins with a simple but often overlooked fact that currencies are not valued absolutely, but relatively. You look at Britain’s fiscal position and conclude the pound must fall, but against what? It’s not like the US isn’t running unthinkable deficits. Interest payments are exploding there too. The eurozone is if anything more trapped in low growth than we are. Japan’s debt burden is legendary. Never mind the oil, Canada is a basket case. Australian regulation is doing its best to revive the traditions of the penal colony and China has its own economic and demographic headaches. All currencies are crap Then there are interest rates. Britain still offers relatively attractive yields. Ten-year gilts yield around 5%. That may be painful for the Chancellor, whatever her name is, but it is attractive to those looking for income. Japan, the US and most of Europe offer less. Higher interest rates support the pound. They attract computerised capital from around the world, which buys sterling to get the yield. London remains a financial centre, albeit it one in over-regulated decline. There is still some rule of law and some respect for property rights. The UK is not yet Zimbabwe, Turkey or Venezuela, even if it may feel that way. A country can be badly governed for a surprisingly long time before capital completely loses confidence. However, none of the underlying problems have actually been fixed, nor are they going to be fixed. We are still spending £48,000 per household through the state. You’ll get greater productivity out of a plate of blancmange. Taxes are not coming down. We are locked in promise, spend, borrow, tax, repeat. Here’s another possibility. The tightrope walker may never fall off. But with each step, the tightrope itself gets closer to the ground. The pound has lost over 40% of its purchasing power just since 2020. In 2007 a pound cost $2.10, so we are down a third against another unit which in itself is hopeless. Measured against the constant that is gold, the pound has fallen over 95% since the Gordon Brown sales of 1999. Here are those declines visualised. The framing is all wrong. The collapse is not sudden but ongoing. Maybe we don’t get a dramatic crisis. No Black Wednesday, no run on the pound, no emergency press conference outside the Bank of England or wheelbarrows full of digital bank notes. Just more of this relentless decline. Every year a bit more debt, a bit more printing, a bit more inflation, another 7% loss of purchasing power, a bit more government spending, a bit more taxation, year after year, decade after decade. The tightrope gets lower and lower but nobody notices because we are all looking at the walker. Alf Ramsay was on £4,500 a year. Thomas Tuchel gets £5 million. That didn’t happen over night. It was cumulative, incremental and compounded. The endgame remains debasement Not just in the UK but everywhere. In a democracy where politicians need votes they will ALWAYS choose inflation over austerity, spending over restraint and dilution over default. This is built in. The incentives are too powerful. They will sacrifice the currency to preserve the system. Nothing changes until the system itself changes. Perhaps the tightrope walker never falls. But the rope keeps inching lower and lower until one day it is running along the ground. The crowd applauds because there was no crash. Meanwhile the currency has lost another 98% of its value. That is where this is going, gradually but relentlessly. Not with a bang, but with a long, slow debasement. Sterling has been “collapsing” for decades, and it will “collapse’ for many decades more, likewise dollars and euros and yen. The debasement of currency is not a new thing, though we have never seen it globally in the way it exists today. Gold has seen it happen many times before and it has survived every time. It will survive tsunamis, earthquakes and explosions. National currencies will not. Tell someone about this great post Thanks for reading 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. A quick housekeeping note I’ve decided to withdraw Lifetime Membership to The Flying Frisby at the end of June. The current price is £550 until 15 June. It then rises to £650 before being withdrawn permanently on 30 June. If you’ve been considering Lifetime Membership, this is your last chance NB despite what the sign-up process says, this is a genuine ONE-OFF payment for lifetime access. I manually convert memberships myself. Any problems, please message me on Substack or reply to this email. The book The Secret History of Gold is getting rave reviews and is available around the world at all good bookshops, with the audiobook read by me is especially 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

    8 min

  2. 4d ago

    Lifetime Membership Is Ending

    Hello, A quick note about The Flying Frisby. For several years I’ve offered a Lifetime Membership. The idea was simple: make a one-off payment and never have to think about subscription renewals again. A surprising number of readers have taken me up on it. However, I’ve decided to withdraw that offer permanently at the end of June. The timetable is as follows: • Lifetime Membership remains available at £550 until midnight on 15 June. • From 16 June, the price rises to £650. • At midnight on 30 June, Lifetime Membership will be withdrawn permanently. Until then, it remains available for a one-off payment. To be absolutely clear, this is a genuine ONE-OFF payment for lifetime access. Substack displays it as an annual subscription when you sign up. Once you have subscribed, I manually convert your account to Lifetime Membership myself. If you encounter any problems at all, simply reply to this email, or message me on the Substack app, and I’ll sort it out personally. If you've been considering it, this is the final opportunity. Once the deadline passes, the only subscription options will be monthly and annual membership. If you’re already a Lifetime Member, congratulations. You’ve locked in access for life and nothing changes. The Flying Frisby has been going for many years now. Thousands of articles, podcasts, a few videos, some bad jokes and more than a few good investment ideas. All the best, 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

    2 min

  3. 5d ago

    A Brutal Friday

    Let’s start with a quick market update after Friday’s brutal action The last few days have not been pleasant for owners of gold, silver, miners or indeed bitcoin. Friday saw on 8% fall in silver. How January’s euphoria has reversed. That’s silver for you. My ongoing thesis that gold, silver et al go nowhere for a year remains in place. The structural backdrop for gold’s bull market also remains: growing government debt, huge fiscal deficits, ongoing central bank accumulation, de-dollarisation. But the heat needed to come out of the market, and now it is doing just that. Silver I’m less certain about, as per usual. Its monetary role is largely gone, but if/when gold gets going again, silver will get pulled higher. Industrial demand remains robust. A year ago if you’d said silver will be $68 yet silver investors will be despairing, you’d have been laughed at. That said, I think it probably needs to go back and retest $50 before this correction is done. Miners will follow the metal. But it’s important to remember they are effectively leveraged financing vehicles. When risk appetite disappears, they get destroyed almost regardless of geology, though the good ones will come back. In commodity bull markets, investors usually lose money by selling the bottom, sometimes through despair, sometimes because too much leverage forces them to. I still lean toward “structural bull market, cyclical correction”. Though correction is perhaps to light a term when 50-80% of junior mining market caps get wiped out. The sector is not for the faint hearted, though we all love it when it goes up. Remember the great Shelby Davis quote, “You make most of your money in a bear market, you just don’t realize it at the time”. I need to conduct a proper bear market portfolio review, which I shall do very soon. As for bitcoin, its correction looks dramatic, but in percentage terms it remains fairly normal by bitcoin standards. I covered it in this week’s commentary: A quick housekeeping note I’ve decided to withdraw Lifetime Membership to The Flying Frisby at the end of June. The current price is £550 until 15 June. It then rises to £650 before being withdrawn permanently on 30 June. To be clear, despite what the sign-up process says, this is a genuine ONE-OFF payment for lifetime access. I manually convert memberships myself. If you’ve been considering Lifetime Membership, this is the final opportunity. Any problems, please message me on Substack or reply to this email. Finally, this week I appeared on the Grant Williams podcast, talking about the book. Feedback has been really good. Grant is one of the best interviewers out there and I really enjoyed it. 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

    3 min

  4. Jun 4

    Wise Up: Why I’m Still Buying Bitcoin

    This is a free preview of a paid episode. To hear more, visit www.theflyingfrisby.com I was going to write about money transfer company Wise (WISE.L/WSE.US) this week. The company recently listed on the Nasdaq, demoting its London listing to secondary, and the prospects looked rosy. UK-listed companies trade at lower valuations because they are listed in the UK. America not only has greater depths of capital, it values tech, growth and success. In the UK they get ignored, taxed or regulated - or all three. And there is another thing. Have you ever tried being an American and sending money abroad? Boy, is it tiresome. And slow, and bureaucratic, and expensive. Wise solves a genuine problem of cross-border payments and solves it well. Its user base was therefore growing. Meanwhile, its infrastructure is increasingly becoming embedded throughout the banking system itself, the plumbing behind international payments. But then on Monday Belgium announced it was investigating Wise, as it suspected the company is “used by criminals to launder the proceeds of fraud, corruption and drug trafficking”, and the stock promptly sank 15%. I have little doubt that Wise, like Revolut and every other payments platform, is used for money laundering, just as Facebook is used for hate speech, and WhatsApp to deal drugs. Money itself is used for money-laundering. Banks are used for money laundering. The stock market is used for money laundering. Cash is used for money laundering too. I guess, the question is whether the company is guilty of “non-compliance with anti-money laundering legislation”. Maybe it turns out to be procedural and manageable - the rebound in the stock suggests that is the case. Maybe it becomes something more serious. We shall see - and I shall probably wait before committing my precious capital. How long will I wait? Not sure. These kinds of investigations have a tendency to drag on. But the episode brings me to why bitcoin was invented int he first place, and this week I have had several worried messages about it. Do I still like it? And, more importantly. WTF is going on? As I’m sure you know, the price has fallen quite sharply. On one of my investor WhatsApp groups, which has some smart people, many are asking if it really is game over for bitcoin. “Does ANYONE have a good document about the actual use cases of bitcoin?” asked one. “I simply don’t see the point. I see a 15-year track record of promises that it will change the world but with zero actual use cases in my life.” Somebody else chimed in, “The world is changing meaningfully with AI, chips, oil, geopolitics, rare earths, gold, silver etc. I’m just not sure bitcoin fits” These observations are quite valid. What’s it for? You just need to look at the price to see it isn’t a hedge against inflation. Nobody uses it for micropayments. It hasn’t solved financial exclusion in the Third World. It’s not private. It’s not used as a day-to-day medium of exchange. It hasn’t replaced fiat. It hasn’t fixed any of things it was supposed to fix. Quantum computing’s going to take it out. What’s the point? Remember: narrative follows price. Not the other way round. Bear markets are vicious. They grind you down psychologically. They make you doubt the underlying asset itself. So let’s address that question. W hat is the point of bitcoin?

    4 min

  5. May 31

    How AI Became My Production Company

    Following on from last week’s piece about the extent to which I use AI, I’ve had a surprising number of messages asking which AI I actually use and what for. I should immediately stress that I am not some sort of AI guru. I know people use Claude to write code, automate businesses and build entire internal operating systems. That is beyond me. I can’t code. I’m a one-man band, who occasionally hires freelancers. I’m self-taught. But here’s what I actually use and what for. I stress the best method of all is trial and error. You get results quickly. If you don’t get what you’re looking for, adjust the prompt, or try a different app. Let’s start with the visual stuff. Pretty much every image accompanying my articles, such as the one above, is generated on Midjourney. I’ve experimented with ChatGPT, Grok and other image generators, but I like Midjourney’s images the most. My prompt is often just the article title plus the aspect ratio. Four options appear. I pick the best one. That alone would have seemed miraculous ten years ago. I also use Midjourney extensively for music videos. For example, in this video about the lighter side of hyperinflationary collapse, almost every visual was AI-generated from the lyrics. My editor, Goat, then used Runway to animate the images. We filmed my face against a green screen and plonked it on top afterwards. If Midjourney didn’t produce what I had in mind, I simply kept adjusting the prompt until it did, or I tried another image generator as a last resort Even as recently as five years ago, let alone twenty, to make a video like this would have cost hundreds of thousands, millions even, and taken many months. We would have needed teams of animators, post production specialists, Soho studio space and lord knows what else. That, to my mind, is the genuinely revolutionary part of AI. Democratisation of media and all of that. But on top of it all you still need someone - in this case my editor Goat - who knows what they’re doing. People often argue that AI ia replacing creativity. What it is actually doing, at least in my case, is dramatically lowering the cost of production and making creativity available to all. The possibilities for creative littlemen like me are enormous. I made this video using Grok and Neural Frames And this one was generated entirely in Neural Frames Ironically, we used no AI in the music itself. We edited the videos either in Capcut or FinalCut. By the way, if you enjoy these videos, the first place I upload them is at my comedy Substack, so sign up to that. It’s free. Writing, research, advice and more This next video, about the most prolific slaving civilisations in history, generated millions of views across social media, and became the most viewed page on this Substack. It is an interesting case. Not because of the images themselves, which were generated with Midjourney, but because of the research. AI couldn’t and in some cases wouldn’t do it. Claude flat out refused because of the subject matter. It would not engage. (IN other words it is biased). ChatGPT couldn’t get its head round what I was trying to do. Grok came closest but in the end I worked with a human researcher, Sam, who I knew from my book, who turned out to be much better. I have paid subscriptions to Claude, ChatGPT, Grok and Venice. I cooled somewhat on Claude after the slavery episode. Around the same time I was in a nasty dispute with three former business colleagues and needed some help. Claude kept getting hysterical and calling on me to speak to a lawyer, which I didn’t have the time or budget to do, whereas ChatGPT gave the me the help I was looking for. So between the two episodes Claude has been rather demoted in my office, though I still use it as a sounding board for anything to do with writing - where it is strong - if I want a second or third opinion. I get that the experts think Claude is the boss, but for me it is too captured. ChatGPT has replaced it as my primary all-rounder. In general terms, ChatGPT is the most user-friendly though you have to go into the settings and tell it to stop being sycophantic, as that just gets annoying. (They are all as bad as each other for sycophancy). I’ll use them all for brainstorming, proofreading, titles, summarising transcripts, challenging arguments, evaluating, drafting legal docs and agreements, advice, helping with negotiating. But I tend to go to ChatGPT ahead of the others, especially for anything to do with diet, health, personal development, mentoring, problem solving, advice and so on. It is basically having an extremely fast, but not always reliable assistant. You cannot blindly delegate to it, you have to oversee, because it is not always right, even if it behaves like it is. Grok is the best for anything current. If I am writing a satirical song, for example, and I need an overview of a politician or a news story, Grok is best by far. I think it’s because Grok has X to mine from. Regarding investments, Grok beats most hedge fund managers, apparently. I use it to gauge sentiment around companies and themes: it can quickly tell me whether people are already talking about it or whether almost nobody is. That is very useful. If thousands of people are discussing a company, the hype cycle is probably already fairly advanced. If nobody is discussing it, that is more interesting. For ongoing projects, however, I still prefer ChatGPT and Claude. I find their their folder systems are more user-friendly and easier to organise, particularly for themes I want to keep coming back to. Grok - or is it me - seems to lose conversations between the app and when I use it via X. Grok could quickly become my go-to allrounder, though I have some shares in SpaceX, so I am probably biased. Broadly speaking I have greater faith in Elon Musk’s integrity than I do Sam Altman’s, even if for now I have voted with my usage for Sam Altman. Claude may be the most capable technically, particularly for coding and analysis, but I also found it the most censorious. Venice, by contrast, is the least filtered. And it gives you access to Seedance 2.0 (which is the best of the video generators), but it has other technological shortcomings. None of them are neutral, and you still need to judge what they tell you - which requires a functioning brain. I find AI really suits a one-man band like me, who has some experience, knowledge and who still retains a modicum of cognitive ability. It makes me so much more productive. But you still need a functioning brain. At the same time, I would argue that people who refuse to engage with AI at all - while I admire them - are putting themselves at a disadvantage. The productivity gains are simply too large. AI has not made me less creative. If anything, it has made me more productive creatively. Ideas that were once stuck in my head can now be realised. This Friday I am speaking at the New Culture Forum Literary Festival along with Alison Pearson, David Frost, Bill Cash and many more. It looks to be superb event. Flying Frisby readers can get a discount using the code LITFEST15. If you are a Lifetime Subscriber and fancy it, drop me a line and you can come as my guest without having to pay a single penny. How about that! (By the way I will shortly be ending lifetime subscriptions on June 7, if a Lifetime Subscription is of interest, sign up now) Here is this week’s commentary in case you missed it Finally, this week I appeared on Blue Dot radio in the US talking to Dave Schlom about the book. Was a good interview. 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

    9 min

  6. May 27

    How To Invest In Namibia

    Following my recent pieces on Namibia, several readers got in touch asking pretty much the same question: Fine. But how do you actually invest there? Frontier markets are notoriously difficult to access. Interesting companies are privately owned, illiquid, unlisted or buried on obscure exchanges your broker has never heard of, or they carry their own small company risk that does not reflect the broader themes of the country. To try and answer the question properly, I spoke to economist Rowland Brown, founder of Cirrus Capital, the country’s largest stockbroker, to discuss the best ways to invest in Namibia and where he sees the biggest opportunities. The full interview follows, but here are 7 things that stood out to me. 1. Namibia’s growth could accelerate dramatically Namibia has averaged around 4.5% annual growth since independence in 1990. But Brown thinks the next decade could look very different. The reason is oil. Offshore discoveries by majors such as Shell plc and TotalEnergies could transform the country’s fiscal position. Brown estimates that production of 450,000 barrels per day by 2030 could increase government revenues by roughly 60%, which is quite frankly an astonishing number. Namibia today has a population of roughly 3 million people. It is rich in uranium, diamonds, copper, gold and fisheries. Add large-scale oil production and the country starts to look strategically very important. 2. The banks are surprisingly attractive One thing I had not appreciated before speaking to Brown was how profitable Namibian banks are. According to him, the major listed banks are producing returns on equity of roughly 20-30%, while trading on earnings multiples of only four to five times. The problem is that these banks are listed only on the Namibian Stock Exchange, meaning overseas investors generally need a local broker to access them. The main players include Standard Bank Namibia, First National Bank Namibia and Capricorn Group Brown is particularly positive on Standard Bank Namibia because of its positioning for both the uranium and oil industries. Chinese involvement in Namibian uranium mining has also strengthened relationships and financing channels there. 3. But there is also a way to buy Namibian government debt This was another thing I did not know. There is an exchange traded Namibian government bond index called STXNAM, tradable in Johannesburg. Namibian government debt currently yields around 12%, while inflation is around 3%, according to Brown. That obviously comes with frontier-market risk, but Namibia’s debt position is arguably stronger than many developed countries. Roughly 80% of the debt is domestically owned, largely by pension funds and banks. Unlike other countries I could mention, Namibia has not yet completely financialised itself into oblivion. Ahem. 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. 4. Uranium remains one of the biggest long-term themes Namibia is already the world’s third-largest uranium producer - a lot of that uranium is at the margin. China has a role to play in this. Chinese investors came into Namibian uranium aggressively after Fukushima , when uranium prices were deeply depressed and western capital had largely disappeared. With uranium prices having recovered, those investments are working. We discussed various companies operating in Namibia including Paladin and Deep Yellow, the problem is that many of them are multi-jurisdictional, so you don’t get the pure country play. ASX-listed Bannerman Energy (ASX:BMN) is the closest to being a near-pure Namibia uranium play. 5. Oil exposure is harder than you think As with uranium, the oil frustration is that the obvious opportunities are often buried inside giant conglomerates. Brown mentioned Sintana Energy (SEI.V), Hosken Consolidated Investments (HCI), which holds a near-50% stake in London-based, privately owned Impact Oil & Gas, which owns significant exploration rights in the Venus discovery offshore Namibia, and Reconnaissance Energy Africa (RECO.V). ReconAfrica is a speculative onshore exploration story and Brown was careful to stress that it remains high risk. 6. Copper may ultimately become the biggest story One company we discussed at length was Koryx Copper (KRY.V), which is now a development story rather than a speculative discovery punt. The project benefits from simple geology and open-pit potential, good access to roads and ports, nearby power and water infrastructure and significant associated gold Brown repeatedly emphasised on management quality, and I actually met the boss too while I was out there - Heye Dawn - an impressive man. Junior mining is littered with “lifestyle companies”. This is not one of those situations, though it remains speculative mining investment and is vulnerable to falling copper prices, being quite low grade. But I am quite bullish about copper, as you know. 7. The currency question is fascinating Namibia’s currency is pegged to the South African rand. The rand is not exactly the Swiss franc. But Brown made an interesting point: without the peg, Namibia’s currency would probably be wildly volatile because of the country’s dependence on commodity exports. So the peg may actually make Namibia more investable, not less. Longer term, if oil revenues become large enough, Namibia could gain greater flexibility, perhaps moving towards some form of trade-weighted currency basket more heavily linked to the US dollar. That is speculative for now, albeit interesting. Anyway, enough from me. The full interview with Rowland Brown follows. For those who want to go deeper into the weeds on Namibia, uranium, copper, oil, banks and frontier-market investing, I recommend you listen. Brown knows his onions. And you can contact Rowland via Cirrus Capital. One thing becomes very clear very quickly. Namibia may still be a small frontier market, but it no longer feels peripheral. 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

    57 min

  7. May 24

    I've Outsourced My Judgement to AI. So Has Everyone Else.

    My youngest daughter, who is supremely intelligent, refuses to use AI. She doesn’t want it plagiarising her, she says, and she doesn’t want her mind to get lazy. She’s currently taking her finals at Cambridge, where, she tells me, almost everybody is using it for everything. But she won’t. And good for her. Another friend won’t touch it either, because she is so fiercely protective of her privacy and doesn’t like AI and social media having so much access to our inner lives. But these people are exceptions. Almost everyone I know is now using AI constantly. I am a prime offender. I use it to make trivial decisions. I get it to draft emails and messages that are too sapping to write myself. I’ve used it to draft contracts that would otherwise have cost me thousands in legal fees. I use it to summarise research papers and articles, evaluate investments, plan trips and organise logistics. It’s a great sounding board. It helps me proof read these articles, does the pics and writes all the SEO stuff I can’t pretend to understand. It is my personal trainer, and tells me what exercises to do. Yesterday I got it to analyse my body fat from a photograph. I’ve even had it analyse my stools. Last year (and the year before, and the year before that), I was stuck in a toxic relationship I couldn’t seem to break out of, even after we separated. At one point I thought I was going mad. I eventually uploaded our entire WhatsApp exchanges into AI and asked it to tell me WTF was going on. I discovered I have “fixer bias” she was an “anxious attachment avoidant”, or something like that, and the combination of the two types is highly toxic and addictive. Finally, I understood why I couldn’t break out of the loop, and what I now had to do to move on. My mother uses it non-stop as well, and it has become a brilliant companion to her. My son and daughter-in-law, both of whom I live with, constantly take the mickey out of me because I’ve become so dependent on it. One of my faults, and there are many, has always been that I give my power away too easily, especially in negotiation. I worry too much about upsetting people or creating friction. Using AI has helped me phrase things, removed my stupid ego from the conversation, helped establish boundaries, not made me look needy or arrogant, stopped me saying the wrong thing to the wrong person at the wrong moment. As a result I have closed several deals and opportunities over the past year that I simply wouldn't have managed previously. I wouldn't have known what to say. I would have held back, worried about rubbing someone up the wrong way. Instead, everyone walked away happy. But it’s not just me. I’ve noticed many others doing it too. When I travelled to Namibia recently, the trip was logistically complex. I spoke to the travel agent almost every other day. Being lazy, I got AI to write my messages to her, but I saw she was doing it back to me. I knew what she was doing and she probably knew what I was doing. It didn’t matter, the important thing was the trip. Neither of our egos got in the way, and the trip went without a hitch. Which got me thinking. Never mind the looming political and financial crises, or the various civilisational catastrophes currently unfolding, at grassroots level, something quietly significant is happening: more and more people are using AI to advise, negotiate, communicate and make decisions. Outcomes are improving as a result. If more and more people consistently make better decisions, the cumulative effect of all these better outcomes will be enormous. Better decisions, better communication, fewer conflicts, fewer bad deals, fewer toxic relationships dragged out past their natural end. The incremental gains, multiplied across enough people, look genuinely civilisational. Subscribe to this amazing publication. The really profound shift is not that AI writes emails, and makes you generally more productive. We have always “outsourced” cognition. Writing outsourced memory. Calculators outsourced maths. SatNavs outsourced navigation. AI is outsourcing judgement itself. I was actually considering reaching out to somebody recently. AI advised me not to, and when it explained why, I realised it was right. Contacting them would have been selfish and unfair. Now, obviously, there are downsides. By relying on AI, parts of the brain undoubtedly atrophy. I used to remember phone numbers effortlessly. Now I barely know anybody’s number because my phone remembers for me. The same thing happened with memory generally. Human beings once had extraordinary recall because they had to memorise stories, events and oral histories. Writing killed that. I had a good sense of direction, which I barely tap now I have Google Maps et al. AI will also increase manipulation, cowardice and passivity. As individuals we become weaker and dependent. Eyesight was probably better before we invented glasses. There is also something deeply unsettling about a computer programmed by someone anonymous who isn’t you helping make your decisions for you. Part of living is making wrong decisions, suffering the consequences and learning not to repeat them. But frankly, I'm done with bad decisions. I've made enough wrong decisions for one life. I’m 56 now. I just want to make optimum choices and have a really good next three or four decades, or however long I’ve got left. There are also obvious dystopian implications. AI companies now potentially have access to thoughts, fears, fantasies and private conversations that once existed only inside your own head. What happens when AI records become admissible evidence? What happens when the things you've confided to a chatbot are subpoenaed? These are not hypothetical worries. They are coming. Stupid conversations with a chatbot that you thought were just in your head could be used as evidence against you. There are all sorts of dark possibilities. But on balance, and with eyes wide open, I think the impact is going to be enormously beneficial. Not just for individuals but for mankind as a whole. In case you missed it, this week's commentary is on copper. Not the sexiest subject, I grant you, but an important one, and I think it's one of the better pieces I've written in a while. I also have an interview with Goldfinger Capital about The Secret History of Gold, which continues to get extremely encouraging feedback.. Thank you, as always, for subscribing 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

    8 min

  8. May 20

    Copper: The Metal AI Actually Runs On

    This is a free preview of a paid episode. To hear more, visit www.theflyingfrisby.com There’s a lot more to AI than software. AI requires electricity, transformers, substations, cooling systems, data centres and more. That all means copper. Lots and lots of copper. Right on cue, the copper price hit fresh highs last week at $6.68/lb, before pulling back. So today I am going to take a long overdue look at copper. Was last week’s action just a spike that will soon fade away? Or was it part of something much bigger? TLDR - the second one. Let’s start with a 50-year chart to give you some historical context. Copper peaked in the great inflationary blow-off of 1980, before spending the next twenty years doing essentially nothing. The 1980s and 1990s were an age of globalisation, disinflation and cheap commodities. Who cared about hard assets or mining? Then came the rise of China and the supercycle of the 2000s. China urbanised, industrialised and turned itself into a superpower. Copper exploded higher, peaking in 2011. That boom then gave way to a long hangover. The 2010s were dominated by tech stocks. Mining died a death. To survive mining companies cut capex, reduced exploration and focused on balance sheet repair rather than growth. That decade of underinvestment laid the foundations of the shortages being revealed today. Meanwhile, while investors were busy buying software companies and meme stocks, the world quietly decided it wanted to electrify everything. The really striking thing about the chart is the speed of the rallies when they come. Then the amount of time copper spends going nowhere. Now here’s the ten-year chart, with the one-year moving average in red and the 55-day moving average in blue. To my eye, copper appears to have formed a major bottom in 2020 during the Covid panic. The violent correction in 2022 increasingly looks like an early-cycle shakeout. Technically, the chart is undeniably bullish. Copper is trading above both moving averages, both of which are rising strongly. Momentum remains positive. That said, in the short term, the metal does look extended. Sentiment has become hyper bullish. Every investment bank now seems to have a copper supercycle note. Type “copper” into X and see what comes up: we are going to the moon on a copper superjet (powered by electricity natch). Now here’s the three-year chart, to which I’ve added the 50- and 200-day moving averages and the RSI. The trend is your friend, and it is up. Historically, copper tends to be seasonally weaker over the summer months, and this is a spiky chart within its uptrend. I think we see some range-trading and consolidation over the summer months, which will provide something of a buying opportunity. But the charts are only half the story. The more interesting question is why copper may be entering an entirely new structural era.

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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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