The Secret History of Gold comes out this week. Here for your viewing pleasure is a fim about gold based on the first chapter.

“Gold will be slave or master”Horace

In 2021, a metal detectorist with the eyebrow-raising name of Ole Ginnerup Schytz dug up a hoard of Viking gold in a field in Denmark. The gold was just as it was when it was buried 1,500 years before, if a little dirtier. The same goes for the jewellery unearthed at the Varna Necropolis in Bulgaria in 1972. The beads, bracelets, rings and necklaces are as good as when they were buried 6,700 years ago.

In the Egyptian Museum in Cairo, there is a golden tooth bridge — a gold wire used to bind teeth and dental implants — made over 4,000 years ago. It could go in your mouth today.

No other substance is as long-lasting as gold — not diamonds, not tungsten carbide, not boron nitride. Gold does not corrode; it does not tarnish or decay; it does not break down over time. This sets it apart from every other substance. Iron rusts, wood rots, silver tarnishes. Gold never changes. Left alone, it stays itself. And it never loses its shine — how about that?

Despite its permanence, you can shape this enormously ductile metal into pretty much anything. An ounce of gold can be stretched into a wire 50 miles long or plate a copper wire 1,000 miles long. It can be beaten into a leaf just one atom thick. Yet there is one thing you cannot do and that is destroy it. Life may be temporary, but gold is permanent. It really is forever.

This means that all the gold that has ever been mined, estimated to be 216,000 tonnes, still exists somewhere. Put together it would fit into a cube with 22-metre sides. Visualise a square building seven storeys high — and that would be all the gold ever.

With some effort, you can dissolve gold in certain chemical solutions, alloy it with other metals, or even vaporise it. But the gold will always be there. It is theoretically possible to destroy gold through nuclear reactions and other such extreme methods, but in practical terms, gold is indestructible. It is the closest thing we have on earth to immortality.

Perhaps that is why almost every ancient culture we know of associated gold with the eternal. The Egyptians believed the flesh of gods was made of gold, and that it gave you safe passage into the afterlife. In Greek myth, the Golden Apples of the Hesperides, which Hercules was sent to retrieve, conferred immortality on whoever ate them. The South Americans saw gold as the link between humanity and the cosmos. They were not far wrong.

Gold was present in the dust that formed the solar system. It sits in the earth’s crust today, just as it did when our planet was formed some 4.6 billion years ago. That little bit of gold you may be wearing on your finger or around your neck is actually older than the earth itself. In fact, it is older than the solar system. To touch gold is as close as you will ever come to touching eternity.

And yet the world’s most famous investor is not impressed.

‘It gets dug out of the ground in Africa, or some place,’ said Warren Buffett. ‘Then we melt it down, dig another hole, bury it again and pay people to stand around guarding it. It has no utility. Anyone watching from Mars would be scratching their head.’

He’s right. Gold does nothing. It does not even pay a yield. It just sits there inert. We use other metals to construct things, cut things or conduct things, but gold’s industrial uses are minimal. It is a good conductor of electricity, but copper and silver are better and cheaper. It has some use in dentistry, medical applications and nanotechnology. It is finding more and more use in outer space — back whence it came — where it is used to coat spacecraft, astronauts’ visors and heat shields. But, in the grand scheme of things, these uses are paltry.

Gold’s only purpose is to store and display prosperity. It is dense and tangible wealth: pure money.

Though you may not realise it, we still use gold as money today. Not so much as a medium to exchange value but store it.

In 1970, about 27 per cent of all the gold in the world was in the form of gold coinage and central bank or government reserves. Today, even with the gold standard long since dead, the percentage is about the same.

The most powerful nation on earth, the United States, keeps 70 per cent of its foreign exchange holdings in gold. Its great rival, China, is both the world’s largest producer and the world’s largest importer. It has built up reserves that, as we shall discover, are likely as great as the USA’s.

If you buying gold or silver coins to protect yourself in these “interesting times” - and I urge you to - as always I recommend The Pure Gold Company. Pricing is competitive, quality of service is high. They deliver to the UK, the US, Canada and Europe or you can store your gold with them. More here.

Ordinary people and institutions the world over use gold to store wealth. Across myriad cultures gold is gifted at landmark life events — births and weddings — because of its intrinsic value.

In fact, gold’s purchasing power has increased over the millennia, as human beings have grown more productive. The same ounce of gold said by economic historians to have bought King Nebuchadnezzar of Babylon 350 loaves of bread could buy you more than 1,000 loaves today. The same gold dinar (roughly 1/7 oz) that, in the time of the Koran in the seventh century, bought you a lamb would buy you three lambs today. Those same four or five aurei (1 oz) which bought you a fine linen tunic in ancient Rome would buy you considerably more clothing today.

In 1972, 0.07 ounces of gold would buy you a barrel of oil. Here we are in 2024 and a barrel of oil costs 0.02 ounces of gold — it’s significantly cheaper than it was fifty years ago.

House prices, too, if you measure them in gold, have stayed constant. It is only when they are measured in fiat currency that they have appreciated so relentlessly (and destructively).

In other words, an ounce of gold buys you as much, and sometimes more, food, clothing, energy and shelter as it did ten years ago, a hundred years ago or even thousands of years ago. As gold lasts, so does its purchasing power. You cannot say the same about modern national currencies.

Rare and expensive to mine, the supply of gold is constrained. This is in stark contrast to modern money — electronic, debt-based fiat money to give it its full name — the supply of which multiplies every year as governments spend and borrowing balloons.

As if by Natural Law, gold supply has increased at the same rate as the global population — roughly 2 per cent per annum. The population of the world has slightly more than doubled since 1850. So has gold supply. The correlation has held for centuries, except for one fifty-year period during the gold rushes of the late nineteenth century, when gold supply per capita increased.

Gold has the added attraction of being beautiful. It shines and glistens and sparkles. It captivates and allures. The word ‘gold’ derives from the Sanskrit ‘jval’, meaning ‘to shine’. That’s why we use it as jewellery — to show off our wealth and success, as well as to store it. Indeed, in nomadic prehistory, and still in parts of the world today, carrying your wealth on your person as jewellery was the safest way to keep it.

The universe has given us this captivatingly beautiful, dense, inert, malleable, scarce, useless and permanent substance whose only use is to be money. To quote historian Peter Bernstein, ‘nothing is as useless and useful all at the same time’.

But after thousands of years of gold being official money, in the early twentieth century there was a seismic shift. Neither the British, German nor French government had enough gold to pay for the First World War. They abandoned gold backing to print the money they needed. In the inter-war years, nations briefly attempted a return to gold standards, but they failed. The two prevailing monetary theories clashed: gold-backed versus state-issued currency. Gold standard advocates, such as Montagu Norman, Governor of the Bank of England, considered gold to be one of the key pillars of a free society along with property rights and habeas corpus. ‘We have gold because we cannot trust governments,’ said President Herbert Hoover in 1933. This was a sentiment echoed by one of the founders of the London School of Economics, George Bernard Shaw — to whom I am grateful for demonstrating that it is possible to have a career as both a comedian and a financial writer. ‘You have to choose (as a voter),’ he said, ‘between trusting to the natural stability of gold and the natural stability of the honesty and intelligence of the members of the Government… I advise you, as long as the Capitalist system lasts, to vote for gold.’

On the other hand, many, such as economist John Maynard Keynes, advocated the idea of fiat currency to give government greater control over the economy and the ability to manipulate the money supply. Keynes put fixation with gold in the Freudian realms of sex and religion. The gold standard, he famously said after the First World War — and rightly, as it turned out — was ‘already a barbarous relic’. Freud himself related fascination with gold to the erotic fantasies and interests of early childhood.

Needless to say, Keynes and fiat money prevailed. By the end of the 1930s, most of Europe had left the gold standard. The US followed, but not completely until 1971, in order to meet the ballooning costs of its welfare system and its war in Vietnam.

But compare both gold’s universality (everyone everywhere knows gold has value) and its purchasing power to national currencies and you have to wonder why we don’t use it officially today. There is a very good reason: power.

Sticking to the discipline of the gold standard means governments can’t just create money or run deficits to the same extent. Instead, they have to rein in their spending, which they are not prepared to do, especially in the twenty-first century, when they make so many promises to win elections. Balanced books, let alone independent money, have become an impossibility. If you seek an answer as to why the state has grown so large in the West, look no further than our system of money. When one body in a society has the power to create money at no cost to itself, it is inevitable that that body will grow disproportionately large. So it is in the twenty-first century, where state spending in many social democracies is now not far off 50 per cent of GDP, sometimes higher.

Many arguments about gold will quickly slide into a political argument about the role of government. It is a deeply political metal. Those who favour gold tend to favour small government, free markets and individual responsibility. I count myself in that camp. Those who dismiss it tend to favour large government and state planning.

I have argued many times that money is the blood of a society. It must be healthy. So much starts with money: values, morals, behaviour, ambitions, manners, even family size. Money must be sound and true. At the moment it is neither. Gold, however, is both. ‘Because gold is honest money it is disliked by dishonest men,’ said former Republican Congressman Ron Paul. As Dorothy is advised in The Wizard of Oz (which was, as we shall discover, part allegory), maybe the time has come to once again ‘follow the yellow brick road’.

On the other hand, maybe the twilight of gold has arrived, as Niall Ferguson argued in his history of debt and money, The Cash Nexus. Gold’s future, he said, is ‘mainly as jewellery’ or ‘in parts of the world with primitive or unstable monetary and financial systems’. Gold may have been money for 5,000 years, or even 10,000 years, but so was the horse a means of transport, and then along came the motor car.

A history of gold is inevitably a history of money, but it is also a history of greed, obsession and ambition. Gold is beautiful. Gold is compelling. It is wealth in its purest, most distilled form. ‘Gold is a child of Zeus,’ runs the ancient Greek lyric. ‘Neither moth nor rust devoureth it; but the mind of man is devoured by this supreme possession.’ Perhaps that’s why Thomas Edison said gold was ‘an invention of Satan’. Wealth, and all the emotions that come with it, can do strange things to people.

Gold has led people to do the most brilliant, the most brave, the most inventive, the most innovative and the most terrible things. ‘More men have been knocked off balance by gold than by love,’ runs the saying, usually attributed to Benjamin Disraeli. Where gold is concerned, emotion, not logic, prevails. Even in today’s markets it is a speculative asset whose price is driven by greed and fear, not by fundamental production numbers.

Its gleam has drawn man across oceans, across continents and into the unknown. It lured Jason and the Argonauts, Alexander the Great, numerous Caesars, da Gama, Cortés, Pizarro and Raleigh. Brilliant new civilisations have emerged as a result of the quest for gold, yet so have slavery, war, deceit, death and devastation. Describing the gold mines of ancient Egypt, the historian Diodorus Siculus wrote, ‘there is absolutely no consideration nor relaxation for sick or maimed, for aged man or weak woman. All are forced to labour at their tasks until they die, worn out by misery amid their toil.’ His description could apply to many an illegal mine in Africa today.

The English critic John Ruskin told a story of a man who boarded a ship with all his money: a bag of gold coins. Several days into the voyage a terrible storm blew up. ‘Abandon ship!’ came the cry. The man strapped his bag around his waist and jumped overboard, only to sink to the bottom of the sea. ‘Now,’ asked Ruskin, ‘as he was sinking — had he the gold? Or had the gold him?’

As the Chinese proverb goes, ‘The miser does not own the gold; the gold owns the miser.’

Gold may be a dead metal. Inert, unchanging and lifeless. But its hold over humanity never relents. It has adorned us since before the dawn of civilisation and, as money, underpinned economies ever since. Desire for it has driven mankind forwards, the prime impulse for quest and conquest, for exploration and discovery. From its origins in the hearts of dying stars to its quiet presence today beneath the machinery of modern finance, gold has seen it all. How many secrets does this silent witness keep? This book tells the story of gold. It unveils the schemes, intrigues and forces that have shaped our world in the relentless pursuit of this ancient asset, which, even in this digital age, still wields immense power.

That was Chapter One of The Secret History of Gold

The Secret History of Gold is available to pre-order at Amazon, Waterstones and all good bookshops. I hear the audiobook, read by me, is excellent. The book comes out on August 28.

Hurry! Amazon is currently offering 20% off.

Until next time,

Dominic

Your mid-week commentary is a day early this week because I am putting out a special film tomorrow all about everyone’s favourite metal. Watch your inboxes.

There is a shift of enormously significant proportions taking place. In magnitude it will prove as significant as Bretton Woods in 1944, when the dollar became the de facto global reserve currency, and the Nixon Shock of 1971, when the US abandoned the last vestiges of its gold standard.

This shift is going to shape the global financial landscape over the next few years. You need to understand what is happening, so that you can position yourself and your family.

You may even be able to profit handsomely from the transition.

Today we explain US dollar policy: what is going on and, more importantly, where it is all going.

Ready? Here goes.

The Manufacturing Imperative and The Curse of the Reserve Currency

America wants to bring manufacturing back on shore. We all know this. US President Donald Trump has said it repeatedly, his VP JD Vance has said it, and so has his Treasury Secretary Scott Bessent, who keeps reminding us that it is now time to prioritise Main Street over Wall Street.

Part of the reshoring of US manufacturing involves tariffs, as we know all too well. Part of it involves weakening the US dollar to make US exports more competitive. Again Trump, Vance and Bessent have all said it.

However, there is a problem, and that problem has a name: Triffin's Dilemma.

You might think it's an advantage to issue the global reserve currency. You can issue dollars. Everyone else has to work for them. The French called it "America's exorbitant privilege." But this was a status the US engineered for itself during the Bretton Woods Agreement that determined the monetary order at the end of World War Two.

What has happened, however, is that it has made the US fat and lazy, especially since 1971 when the US abandoned the ties of the dollar to gold.

To supply the world with dollars, the US must run trade deficits. That is to say it must buy more than it sells. Persistent trade deficits have, over time, eroded its industrial base. Factories and jobs have gone offshore. Foreign nations have used their profits to invest in US capital markets and its debt. Meanwhile financial markets - aka Wall Street - have grown and grown, as America financialized.

The Trump administration gets it in a way its predecessors did not. Vance has actually called the dollar's reserve status a "tax" on American producers.

What's more, as this process has continued, the credibility of the dollar itself is being called further into doubt.

Trump wants to revitalise America's Rust Belt. But there is more to it than that. As the curtains pulled back with Covid, the extent to which the US has been operating with its trousers down was exposed: an excessive dependence on China and its supply chains for too many strategically essential products, especially related to health, tech and the military.

Then, during the Ukraine conflict, NATO found itself unable to match Russian production. The US, in short, is struggling to produce critical goods. It's why Trump keeps harping on about rare earth metals. It is vulnerable.

The answer is to engineer a "managed decline" of the dollar as global reserve asset.

The Golden Exit Strategy

This was already happening organically. China, for example, has been reducing its holdings of US treasuries for ten years now - quite gradually - although its US dollar holdings remain above $3 trillion.

Meanwhile, China - and many other countries along the Silk Road besides - have been increasing their gold holdings, and quite dramatically. (In my view China has at least four times as much gold as it says it does. You can read more on this in my book). The process is known as de-dollarisation. Just a few months ago gold overtook the euro to become the second most held asset by central banks, while the dollar itself fell beneath 50% for the first time this century.

We are not seeing a move towards any other national currency as global reserve, but towards the neutral but universal asset that is gold, as analyst Luke Groman points out. That suits all the main players. Gold is neutral, and both the US (supposedly) and China have lots of it.

Indeed, a gold revaluation would be a "win-win" for both. A higher gold price would strengthen US fiscal flexibility while boosting Chinese consumers' wealth, encouraging domestic consumption and reducing trade imbalances.

There is the potential to leverage the US's 261 million ounces (8,133 tonnes) of gold reserves, currently marked to market at just $42/oz. There are two ways this might be done. Economist Judy Shelton has proposed issuing Treasuries that are in part backed by gold to offset the inflation/debasement risk to make them more attractive to buyers. The other possibility (which has gone from, as Bessent put it, "we are not doing this" to "we are not doing this yet") is to revalue the gold from $42 to the current price of $3,300/oz, which would create over $850 billion of reserves without having to incur any extra debt. That would help with the US's current fiscal challenges: true interest expenses (including entitlements and veterans' affairs) currently exceed 100% of Treasury receipts.

If you buying gold or silver coins to protect yourself in these “interesting times” - and I urge you to - as always I recommend The Pure Gold Company. Pricing is competitive, quality of service is high. They deliver to the UK, the US, Canada and Europe or you can store your gold with them. More here.

In short, the US administration is leaning into a weaker dollar and neutral reserve assets like gold to rebalance trade and rebuild domestic industry, even at the cost of short-term economic pain.

Your really should subscribe.

Bitcoin's Digital Advantage and The Stablecoin Bridge

Bitcoin, as the world's best neutral digital currency, is going to have a role to play in all of this as well.

The US is quite happy with that, as evidenced by its pro-bitcoin rhetoric. At the national, corporate and individual levels the US has a lot of bitcoin. The US itself has 198,000 coins, the most of any nation, Strategy (NYSE:MSTR) has 630,000 and many other companies besides also hold, and at least 15% of US citizens own bitcoin. Of the eventual 21 million supply, of which probably 15% has been lost and another 1.3 million are locked up by Satoshi Nakamoto and will likely never appear (he is almost certainly dead), the US has a hefty chunk.

Which brings us to the recent Genius Act. This effectively nixed CBDCs just as the EU's Christine Lagarde was planning to phase them in (LOL). However, it supported stablecoins (that is coins backed by dollars). The more bitcoin grows the more the stablecoin market will grow. As the stable coin market grows so will its demand for treasuries. Today, roughly half the entire US dollar stablecoin market, estimated at $250 billion, is invested in US treasuries (maybe 2% of the overall treasuries market). Tether is the world's 7th largest buyer.

The market is small, but growing rapidly. 2035 projections include $500 billion (J.P.Morgan's projection) to $2 trillion (Standard Chartered) and $4 trillion (Bernstein) by 2035.

"If the stablecoin market meets these growth projections," says the Kansas City Fed, "it could lead to a substantial redistribution of funds within the financial system."

In other words the stablecoin market is going to help the US fund its debt, just as other nations move away from treasuries to gold and bitcoin.

Gold might suit the US, but bitcoin suits it better, especially if there are complications surrounding the Fort Knox gold, which it seems there are. Why no audit yet?

Tell people about this.

Gold vs Bitcoin, Analogue vs Digital: The Coming Showdown

It's likely a few years from now there is going to be some sort of showdown between gold and bitcoin in the battle for primary reserve asset status. It's unlikely to be both. Governments will favour gold, as they have lots of it. Tradition is on their side. Eternal gold has a track record that is unrivalled. But it is an analogue asset in a digital world. Bitcoin is much more practical. Which will win out? Practical digital or impractical analogue?

This is a contest that is still a way off. For now all roads lead to gold and bitcoin as the world de-dollarizes.

Own both is what I say.

Needless to say the UK is absolutely clueless in all of this, having sold two-thirds of its gold in 1999, made it near impossible for UK citizens to buy bitcoin, now planning to sell its bitcoin holdings, now the largest holder of US treasuries in the world after Japan and making no attempt to buy any gold.

With the threat of AI and automation to America's jobs - especially in driving where millions work - there is the risk of mass unemployment coming quite quickly, and with it plentiful defaults on mortgages and loans. This could force the U.S. to print money, driving inflation and providing yet another reason to own gold and bitcoin, which cannot be debased.

From October 8th, UK citizens will finally be able to buy bitcoin ETNs.

I was lucky enough over the weekend to find myself as a house guest under the same roof as Interactive Investor CEO Richard Wilson. We talked a lot. He knows how landmark the date October 8th is for UK investors and has made sure II are well positioned in a way that other brokerages are not. You might not be able to buy the US ETFs due to FCA nonsense, but anything listed in the UK will be available. So if you don't already have an account at II you might do well to open an account now. Click this link and the first year is free.

In short, the dollar will weaken significantly over the next three years. The pound is a basket case. National currencies are not stores of wealth. Gold and bitcoin are. Own both as the Trump administration addresses Triffin's Dilemma through a managed dollar decline. They will use gold and potentially bitcoin to restore US industrial and military strength.

You have been warned.

Tell people about this post.

Watch your inboxes. Tomorrow I’ll be putting out a 15-minute film all about gold called The Eternal Metal. On which note, The Secret History of Gold is out now. Got yours yet?

The Secret History of Gold is available at Amazon, Waterstones and all good bookshops.

Amazon is currently offering 20% off.

NB Sundays, as ever, are for thought pieces, lately all about gold as my book on that subject is about to come out. Midweek remains for markets

We are now into launch week, so lots to promote: Secret History of Gold Fever

This week I’ve been in interview mode

* Above we have me telling Ian Collins on Talk TV how rubbish the government is.

* Here is me talking to Tom Winnifrith

* Here James Delingpole.

I have been working on a short film as well, which I hope to have ready for tomorrow.

The book also had its first review - in the Telegraph.

Here is what people have said so far

“A fabulous, fascinating, fantastical tale” Matt Ridley, author of How Innovation Works

”It doesn’t just tell you about gold – it makes you feel its weight through history. It’s just so interesting," Toby Young, Spectator

”Written with both insight and Dominic’s signature humour, this is essential reading for anyone who wants to understand the lengths human beings will go to for the promise of riches,” Rory Sutherland, author of Alchemy.

“This delightful book is a most insightful and enjoyable romp through history and a well-researched, educational tour de force,” James Turk, author of The Money Bubble

”Dominic Frisby’s writings about economics and finance are, like his comedy, intelligent, beautifully crafted and always ahead of the curve. The Secret History of Gold is well-informed, utterly coherent and very, VERY timely.” Liam Halligan, Telegraph

“Dominic Frisby is most trusted source of information for anything to do with gold,” Konstantin Kisin, Triggernometry

”Well-researched and razor-sharp. Written with passion, principle - and the occasional punchline,” Al Murray, comedian and historian

”Possibly the best-timed book ever,” Merryn Somerset Webb, Bloomberg

“A brilliant, highly readable guide to the most alluring material of all,” Luke Johnson, investor and entrepreneur.

"Understand the history of gold, and you start to see what politicians and central banks would rather you didn’t. Dominic reveals all with clarity and force,” Rob Dix , author of The Price of Money.

“Frisby entertains impressively and convincingly … his tales of German and Japanese gold-hunting during the Second World War are eye-popping … a colourful and sly adversary to contemporary financial and political pieties,” Simon Ings, the Telegraph

The Secret History of Gold is available at Amazon, Waterstones and all good bookshops. The book comes out on August 28.

Amazon is currently offering 20% off.

Until next time,

Dominic

NB I will put out my thoughts on the Comstock Inc (LODE.NYSE) earnings call in my mid-week commentary. A reminder: Sundays are for thought pieces, currently around gold as my book on that subject is about to come out. Midweek is for market stuff.

“I'm Henry the Eighth, I am!Henry the Eighth, I am, I am!”Fred Murray and R. P. Weston

History has given Henry VIII mixed reviews.

Never mind the wife-killing, he was the king who boldly stood up to papal supremacy, paving the way for freedom, Reformation and the buccaneering spirit which marked the Tudor age. That said, I doubt Henry knew at the time what the long-term consequences of his papal stand-off would be.

His Great Debasement, however, must be one of the greatest inflationary thefts by a ruler on their people in British history. Even William Pitt pales in comparison. Never speak ill of the dead and all that, but extravagant (and not in a good way), power-mad, and hypocritical are all adjectives that spring to mind about Henry VIII.

Historian Simon Sebag Montefiore goes further, declaring him egotistical, paranoid and tyrannical, and listing him as one of History's 101 Monsters, alongside Vlad the Impaler and Adolf Hitler.

How prosperity ended serfdom

When Henry VIII was crowned king in 1509, the national finances were in rare good shape. His predecessor Henry VII had broken the mould of mediaeval English monarchs. Rather than wage war, he avoided it. His reign saw just one overseas conflict. He pursued marriages and alliances overseas instead. He had a formidable business brain: rather than resist economic change and new technology, he encouraged it - and then taxed it. In doing so, he built up extraordinary wealth for the Crown. He became the first English king for centuries to run a surplus. Imagine! His taxation and legislation of the nobility ended the power of the barons and, effectively, feudalism itself, while establishing the freedom of the mercantile classes to trade. England got its first blast furnace, and so began its iron industry. The wool trade blossomed, and the farming of sheep accelerated the decline of serfdom (land no longer needed working in the same way), and the country was changing to a money- rather than land-based economy.

Henry VII also had new coins issued to ensure a standard currency. Weights and measures were also standardised (though not for the first nor the last time).

Things however changed with his son, Henry VIII - and rapidly. One of Henry VIII’s first acts, two days after his coronation, was to arrest the two men responsible for collecting his father’s taxes, Sir Richard Empson and Edmund Dudley. He charged them with high treason and they were duly executed. Today’s HMRC officers don’t know how lucky they are.

War is an expensive business, when you lose.

Not a man known for his humility, he was happy to usher in the idea that kings had Divine Right, an issue that, 100 years later, would cause a civil war and the death of 200,000 people. Never mind his Great Debasement, which we will come to in a moment, the idea that a king was appointed by God and had Divine Right must be another of the greatest frauds perpetrated on a nation by its rulers. Anyone who dissented was treasonous or heretical, often executed without formal trial - or simply banished.

He got involved in numerous costly and largely unsuccessful wars both on the continent and up north in Scotland. War is an expensive business when you lose. These, coupled with a personal extravagance that people are still talking about, meant he was constantly on the verge of financial ruin.

To pay for it all he introduced numerous new taxes, including a tax on beards, which, given his own facial hair, has to go down as one of the ruling classes’ great do-as-I-say-not-as-I-do moments. In 1523 he demanded 20% of people’s income. (20% seems like a pipe dream today). He sold crown land, dissolved monasteries, and seized the assets of over 800 religious houses—land, gold, silver, everything—under the guise of reforming the church and rooting out corruption. Any money paid to Rome and the Pope was “redirected” to the royal coffers. In doing so he robbed local communities of their support systems - almshouses and so on.

But still he couldn’t get enough money - and so he ordered what became known as the Great Debasement. The amount of gold and silver in coins was reduced and, in some cases, replaced entirely with copper.

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Bad money drives out good - Gresham’s observation which became law

It began in 1542 with a secret indenture. Production of current coins would continue, but new coins would also be secretly minted, including the previously unsuccessful testoon, with significantly less gold and silver. The coins would be stockpiled in Westminster Palace.

But in 1544, a lack of bullion arriving at the mint prompted the government into phase two of the scam and the debased coins were allowed to enter general circulation. Merchants soon discovered the new silver groats had been debased, and they began fetching a lower price. Coins of a similar value but with a higher precious metal content were hoarded and so disappeared from circulation - a classic case of bad money driving out good, as Gresham’s Law goes. Not only a classic case - the actual case which made Thomas Gresham articulate his law in the first place.

The king's testoons were copper coins with a thin layer of silver on top, not unlike Diocletian’s denarii. Over time the silver would wear off, especially around the nose on Henry’s face on the coin, which protruded a little and so wore away quicker, exposing the copper underneath. So did Henry VIII get the nickname Old Coppernose.

If you are interested in buying gold and silver coins which haven’t been debased, as always I recommend The Pure Gold Company. Pricing is competitive, quality of service is high. They deliver to the UK, the US, Canada and Europe or you can store your gold with them. More here.

The debasement continued after Henry VIII’s death in 1547, and was eventually revoked by his successor Edward VI in 1551. Over the course of the seven year debasement, the purity of gold coins slipped from 23 carat (96%) to 20 carat (83%), while silver coins steadily fell from 92.5% (sterling silver) as low as 25%. That’s a theft of 83% of the silver.

When Elizabeth I came to power in 1558, the debasement had affected both trading relationships (foreign merchants often refused to accept English coins) and confidence in the monarchy. Elizabeth’s advisors William Cecil and Thomas Gresham persuaded her that these problems could be solved with sound money. Following Gresham’s advice, the government passed a law which ended the legal tender status of debased coins but also banned “good” coins from entering foreign markets. Then in 1560 Elizabeth I had all debased coinage removed from circulation, melted down and replaced with higher fineness, newly minted coins - soon to be harder-to-clip milled rather than hammer-struck coins.

The crown made a tidy £50,000 from the recoinage. That’s seignourage for you.

if you enjoyed this article, please like, share etc - it helps a lot.

Stories like this fill the pages of The Secret History of Gold (although this one didn’t actually make the cut).

The Secret History of Gold is available to pre-order at Amazon, Waterstones and all good bookshops. I hear the audiobook, read by me, is excellent. The book comes out on August 28.

Hurry! Amazon is currently offering 20% off.

Until next time,

Dominic

Bitcoin, Gold and Hidden Taxes

I recorded this interview when I was in Prague earlier in the summer. I actually forgot I did it, but Archie has just released it now, so if you fancy a fireside chat, here it is:

NB To help you visualise: a tonne of gold would be about the size of a beachball, albeit one you couldn’t lift, or a medium-sized suitcase. If it were a cube, it would have sides just under 15 inches/37.5 centimetres.

"The only thing that really frightened me during the war was the U-boat peril."Winston Churchill

Now that France had fallen, it was time for Operation Sea Lion: Germany's invasion of Britain. It would start with air and naval attacks to soften British defences before an amphibious assault. The Battle of Britain was about to begin.

Britain had 501 tonnes of gold stored overseas, more than half of which was in Canada—over 10,000 bars. (Head of the Bank of England, Montagu Norman, had been buying Canadian mine production steadily through the 1930s.) But in the vaults of the Bank of England, it had some 1,100 tonnes of gold stored, along with another 800 tonnes stored for other nations. They could not let Adolf Hitler have it.

Safety lay on the other side of the Atlantic Ocean, but German U-boats were hunting. Over the course of the war, they would sink over 3,000 Allied ships. History was not reassuring either, given the sinking of SS Laurentic in 1917, when some 39 tonnes were lost to the bottom of the ocean just off the coast of Ireland.

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But beyond keeping the gold from Hitler, Britain needed weapons, food and other war essentials. America's strictly enforced Neutrality Act meant Britain had to pay in gold or US dollars.

In 1940, the British people were forced to register any securities — bonds and stock certificates — they owned. The Churchill government, with its newfound wartime powers, then confiscated them and, wishing to ship British wealth to safety in Canada, secretly moved them, along with several hundred tonnes of gold, to the Scottish port of Greenock. (Take note: your wealth is not safe if your country goes to war).

From there, in June 1940, they were shipped to Halifax aboard the light cruiser HMS Emerald. HMS Emerald made it. The British treasure was put on trains, with the gold sent to Ottawa, and the securities shipped to Montreal, with the Bank of Canada now acting as a sort of surrogate Bank of England.

Buying gold or silver to protect yourself in these ‘interesting’ times? I urge you to. The bullion dealer I use and recommend is the Pure Gold Company. Pricing is competitive, quality of service is high. They deliver to the UK, the US, Canada and Europe or you can store your gold with them. More here.

But the following month, July 1940, saw the big gamble. 1,500 tonnes of gold were loaded onto five ships. $163 billion worth in today’s money.

Offshore, they met the battleship HMS Revenge, a cruiser, and three destroyers, which served as their escort across the Atlantic: a flotilla of nine under the command of Admiral Ernest Archer. En route, two ships encountered fog and came to a halt for fear of icebergs. Another had engine trouble and had to drop out of the convoy, to be escorted by HMS Bonaventure. But somehow the mission was a success. Not a single bar went missing. It was the largest treasure shipment in history, either by land or sea.

At one point, it was thought three cases were missing, but a mess steward who overheard a conversation between two officers said he had been tripping over something in the kitchen: three boxes had been stored among the whisky.

Most of the gold was spent buying weapons and other essentials from the US, and never made it back to the UK.

Perhaps they needn't have bothered. Over the next months, to the surprise of many, the Royal Air Force successfully defended British airspace against the German Luftwaffe. Victory in the Battle of Britain would be a turning point in the war. In September 1940, Hitler shelved Operation Sea Lion and his plans to invade Britain. He had other battles to fight.

Stories like this fill the pages of The Secret History of Gold (although this one didn’t actually make the cut).

The Secret History of Gold is available to pre-order at Amazon, Waterstones and all good bookshops. I hear the audiobook, read by me, is excellent. The book comes out on August 28.

Hurry! Amazon is currently offering 20% off.

Until next time,

Dominic

The UK Financial Conduct Authority has announced that it is loosening its anti-bitcoin stance. From October 8th retail UK investors will now be able to buy bitcoin ETFs.

Finally.

The ban came in with bitcoin at $5,000. Today it's $115,000. That’s $110,000/coin UK investors have been protected from. Great job guys.

Where will it be on October 8th? Who knows.

Does this announcement mark the top of the market for bitcoin? There would be a poetic irony if it did, but it won't. Bitcoin is so much bigger than the FCA.

At present, it does not even look like a case of buy the rumour, sell the news. Bitcoin has actually sold off a few percent since the announcement.

But this change in tack is going to have a huge impact. It's about a lot more than British retail investors. It's global.

It's going to have an impact on the bitcoin treasury companies around the world, and it's going to have an impact on the bitcoin price itself.

Here’s why.

We’ll start with the announcement itself from David Geale, executive director of payments and digital finance at the FCA:

'Since we restricted retail access to cETNs, the market has evolved, and products have become more mainstream and better understood. In light of this, we're providing consumers with more choice, while ensuring there are protections in place. This should mean people get the information they need to assess whether the level of risk is right for them.'

Blah blah, waffle waffle.

Absolutely no ownership of the FCA's calamitous regulation whatsoever.

Fortunes have been lost to British investors because of the FCA. How is it these bodies are so totally unaccountable? Perhaps everyone who was involved in that decision should be made to compensate British investors for their loss of earnings.

"We're providing consumers with more choice,". Please. There's gaslighting for you right there.

Moving on.

NB Don’t forget my brilliant book about bitcoin, if you want to learn more about the space.

There is also my new book The Secret History of Gold, which comes out later this month. Amazon is currently offering a discount, so order yours now.

Obviously, UK investors are now going to be able to buy bitcoin ETFs through their brokers, which means we can hold them in our SIPPs and ISAs. I gather there is roughly £3 trillion in UK pensions, £750 billion in ISAs, £500 billion in SIPPs and quite a bit more in other brokerage accounts. So that is a lot of capital that can now come into bitcoin which previously could not.

But there is a lot more to it than that.

The institutional floodgates are about to open.

Former HSBC fund manager and ByteTree CEO, Charlie Morris, who knows this world as well as anyone, has this to say.

The lifting of the ban by the UK regulator of bitcoin exchange traded products will have a far greater impact on the market than many believe. It's not just retail but institutions too. Many funds around the world are connected to London whether it be custodians, administrators, distribution, or trade execution. The ban meant that a single touchpoint with the UK would prevent allocation to bitcoin. From 8 October, this will no longer apply. Not only will U.K. retail investors boost demand for bitcoin ETPs, but a far bigger deal will be the opening up to institutions and funds around the world. It's a monumental moment for bitcoin which will become a global institutional asset over the next decade.

(By the way you should subscribe to Charlie's newsletters. They're excellent. There are free and paid options. Here's the link).

You saw my piece a few weeks ago about the global shadowbanning of bitcoin. London and the FCA had a huge role to play in that. One example: a banker I know in Zurich could not buy bitcoin products for one of his high net worth clients because of the ban. He was by no means alone. We have taken a step forward to the lifting of the shadowban, though not the final step by any means. As we noted, the funds buying bitcoin are still the 'pirates' rather than the big players, but this is still a move towards the legitimisation and normalisation of bitcoin.

If bitcoin can get to something like 2% of portfolios worldwide, which it eventually will, well woof is all I can say.

What about the treasury companies? What next for them?

“They will never see their gold again, just as they do not see their own ears.”Josef Stalin

Gold’s strength is that its value exists in and of itself. It’s nobody else’s liability. Unlike money in the bank or a bond, it carries no promise from a third party, and its value is not dependent on the creditworthiness of any issuer or guarantor. Hand it to someone else and its value is transferred. It is a “bearer” asset, effectively owned by whoever has possession of it. For this reason gold has been the target of many a heist. Quickly resmelt it, and its provenance is very hard to prove.

So there is one obvious problem with gold: that is keeping it safe. It’s all very well having a pot of gold, but if somebody comes along and takes it from you, as Alexander did from the Persians, or the Conquistadors from the Incas, then you’re left with nothing at all.

When the Spanish Civil War broke out in 1936, the Soviet Union, under Joseph Stalin, supported the Spanish Republican government. The Nazis supported their opponents, the revolutionary fascist forces led by General Franco. At the time Spanish gold reserves, some 635 tonnes, were the fourth largest in the world.

Much of that treasure had been accumulated during WWI, when Spain had stayed neutral. Selling stuff to the British seems to have been the really big earner: 70% of Spanish gold holdings were British sovereigns.

With Franco just 20 miles from the capital, the Republicans were on the verge of defeat. Never mind the fascists, there were also rumours that Catalan separatists had hatched plans to take the gold from Madrid to Barcelona. All that gold was at risk.

Finance minister, Juan Negrín, and Prime Minister, Francisco Largo Caballero, leant on President Azaña to sign a secret decree to move the gold - some 10,000 cases - to a place “which in his [Negrín’s] opinion offers the best security”. Azaña signed and the gold was moved, starting the next day, to Cartajena on the south coast, as far from Franco’s armies as possible. The Spanish soldiers who transported the cases thought they were lifting munitions. A fifth of it was then shipped to Marseille where it was traded for French francs, which the Republicans used to fund their side of the war. The rest, 510 tonnes, would be sent to Joseph Stalin in Moscow for safekeeping.

Even if Bolshevik sympathisers, what were Negrín and Caballero thinking? The Russians had already demonstrated that they had no qualms about seizing other people’s gold. In 1916, the Romanian government sent its treasury of 91 tonnes of gold to Tsarist Russia for safekeeping, worried that it was vulnerable to the Central powers when Romania had just joined WWI on the side of the Entente. Shortly afterwards, during the Great October Revolution, communists, led by Lenin, seized power, sequestered the gold and refused to give it back. Though small amounts were returned in 1935, 1956, and 2008, “as a gesture of goodwill”, the large majority was retained. As you can imagine, it has been something of a sore spot in diplomatic relations between the two nations ever since.

It seems Negrín and Caballero did not know the story. In any case, Caballero actually wrote to Stalin asking if he would “agree to the deposit of approximately 500 tonnes of gold.” Two days later, he got a reply from the Soviet leader, not previously known for his prompt responses. No surprise: Stalin would be “glad” to take the gold.

Buying gold or silver to protect yourself in these ‘interesting’ times? The bullion dealer I use and recommend is the Pure Gold Company. Pricing is competitive, quality of service is high. They deliver to the UK, the US, Canada and Europe or you can store your gold with them. More here.

Alexander Orlov was the Russian agent in charge of transporting the booty. Negrín gave him fake documents to show he was an US official from the Bank of America, in case he should be stopped. Negrín, who, remember, was finance minister, had thought Bank of America was the US central bank. That would be the Federal Reserve. Russian agent Orlov didn’t realise either. It’s extraordinary.

Four Russian ships came to Cartagena to collect the bounty, and the gold was loaded on. There was a discrepancy of 100 cases between Orlov and Spanish treasurer Mendez Aspe’s number: Aspe said 7,800 cases, Orlov 7,900. Orlov said nothing. He reported the discrepancy to his superiors, who told him, “Do not worry about figures. Everything will be counted anew in Moscow. Do not mention your figure to anybody.” Aspe didn’t even get a receipt off Orlov (who had been instructed not to give him one). “Don’t worry, my friend,” said Orlov, “it will be issued by the State Bank of the Soviet Union, when everything is checked and weighed.” We will never know whether Orlov miscounted or whether those 100 boxes went missing.

It took them three nights to load the four ships. The Russians then left Cartagena for Odessa in the Black Sea, escorted by the Spanish as far as Italy. From Odessa it was loaded onto a freight train bound for Moscow. "If all the boxes of gold that we piled up on the wharfs of Odessa were to be placed here side by side,” said one of the officials. “They would completely cover up the Red Square".

When the gold arrived in Moscow, Stalin celebrated with a banquet at the Kremlin. “They will never see their gold again”, he laughed. “Just as they do not see their own ears.”

The Spanish eventually got their receipt: for 5,619 standard cases and 126 damaged. Some distance below both Aspe and Orlov’s figure. But three months later the Russians completed the audit, calculating that the shipments totalled 510 tonnes of gold coins and ingots, 90% pure, thus around 460 tonnes of pure gold. There were gold coins from across Europe and Latin America, especially those British sovereigns and Portuguese escudos, but also Spanish pesetas, French, Swiss and Belgian francs, German marks,, Russian rubles, Austrian schillings, Dutch guilders, and Mexican, Argentine and Chilean pesos. The numismatic value of the coins was higher than their gold content.

The following year Spain met with a currency crisis. With exceptional chutzpah, even by the standards of politicians, Republicans blamed the inflation on the free market. Nothing to do with the absence of all that gold!

Later, the Franco regime was happy to let the story of the "Moscow gold" stolen by Russia spread, as part of its anti-communist propaganda. And yet it appears sell orders from Negrín were actually carried out in 1937 and 1938, for which Spain received pounds, dollars and francs. Spain also received planes, tanks, machine guns, artillery, rifles, cartridges, food and fuel from Russia. The Soviets demanded some compensation for what they had sent during the war, but it’s believed that aside from various expenses, the Soviets did not abuse their position and defraud the Spanish. Ultimately then, most of the gold went, one way or another, on the cost of the civil war. Such is the way with war. It is expensive.

And just a couple or three years later, as Nazi forces advanced through Europe, the farce of transporting gold would be repeated many times over, and across the continent.

Stories like this fill the pages of The Secret History of Gold (although this one didn’t actually make the cut).

The Secret History of Gold is available to pre-order at Amazon, Waterstones and all good bookshops. I hear the audiobook, read by me, is excellent. The book comes out on August 28.

The idea behind Dolce Far Niente was to create a portfolio of low-risk investments for today’s market conditions, that you can buy and, pretty much, forget about.

You don’t have to keep checking prices every day.

Hence “Dolce Far Niente” - “the sweetness of doing nothing.” No worries would be the Australian translation.

Asset allocation is WAY more important than individual stock-picking. I could pick the best biotech company in the world, but if biotech is in a bear market, I almost needn’t bother. I’m better off out of the sector. But similarly, if a sector is in a full-on bull market, even pigs fly.

The starting point for the portfolio, which we began on October 1, 2023, was as follows.

* Gold: 15%

* Bitcoin: 5%

* Special situations: 10% (the ”fun” part of the portfolio, for example some of the smallcaps I write about on here)

* Uranium: 5% (reduced to 2.5% as things got frothy)

* Oil and Gas: 10%

* Bonds and Wealth Preservation: 20%

* Equities (35%)

* UK & Europe (20%)

* US (25%)

* Smaller cos and private equity (30%)

* Asia (15%)

* Japan (5%)

* EMs (5%)

No allocation to real estate.

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Since that October 2023 starting point, certain assets - gold, bitcoin and US equities - now account for far greater percentages, with energy, bonds and wealth preservation not having done so well.

If you are starting this portfolio now, I would still recommend sticking to the original allocation and letting things grow.

Really, I should re-allocate, but I don’t want to sell any bitcoin and I don’t want to sell any gold.

In fact, to be honest, there is a very strong case for just owning bitcoin and being done with everything else. But that wouldn’t be balanced and that’s not what this portfolio is about.

The only change we have made since October 2023 was to reduce uranium from 5% to 2.5% in February 2024. Uranium felt a bit frothy was the reason. More a gut- than evidence-based decision, and it proved the right one.

I’m going to make one, quite major change to the portfolio today - in the equities department. More on this in a moment.

Lastly, do as I say, not as I do. In my own portfolio, my allocation to bonds and wealth preservation is tiny: maybe 2%. I am overweight gold, bitcoin and special situations (smallcaps mostly).

At some stage, I will get my comeuppance as a result, and it won’t be the first time. Then I’ll swear to change my habits, and then I will - for a bit - and then I won’t.

But a more sensible investor would keep their portfolio to the above allocation.

Let’s examine things in a bit more detail

1. Gold (15%)

It’s done very well. Up about 80% since we started the portfolio.

My firm belief is that everybody should own some gold in their portfolio. Especially now.

(If you do not yet own any, my guide to investing in gold is here. If you are looking to buy gold or silver, the bullion dealer I recommend is the Pure Gold Company.

There is also, of course, the soon-to-be definitive book on the subject. Here it is on Amazon, and Waterstones is currently running an offer.

💥 Pre-order now at Waterstones and get 25% off.Use code SUMMER25 at checkout to get your 25% discount.

Hurry! Offer ends today, July 31.

2. Bitcoin (5%)

A huge win. Up about 450%

The potential of bitcoin remains so extraordinary, as I often say, I see the risk is not so much owning it, but not owning it.

Our bitcoin proxy for UK investors, who have been shut out of the sector by the FCA, is Strategy (NASDAQ:MSTR). That’s done even better. Up over 1,500%.

My sources tell me UK investors will be able to buy bitcoin ETFs from November. That’s what Charlie thinks anyway, and you should all subscribe to his letter.

3. Special situations (10%)

These are the small- and mid-caps that I sometimes write about on here.

We have had some big winners, and some big fat dogs too.

If you want to know what are currently my 7 biggest positions, here they are.

4. Uranium (2.5%)

Glad we reduced this to 2.5% when we did.

Yellowcake (YCA.L) is our vehicle. We reduced around 700p in February 2024. It’s now 500p

Now is probably not a bad time to buy back that 2.5%, but I’ll wait.

5. Oil and Gas (10%)

The iShares Oil and Gas ETF (SPOG.L) - North American oil and gas companies, basically - is my primary vehicle by which to play this. It’s off a little, but it’s outperformed oil itself.

I’m also of the view now that North Sea oil and gas’s time is coming and the government will u-turn on this as well.

Did you see Donald Trump’s comments today? One of the many ways he made Keir Starmer wriggle and squirm.

I’m delighted to announce my new book, The Secret History of Gold - Myth, Money, Politics and Power, published by Penguin Life.

It tells the epic tale of humanity’s oldest and most treasured currency – from its explosive cosmic origins to its role in the power games of modern geopolitics.

Watch the unboxing above 👆

Waterstones is running an offer. 💥 Pre-order now and get 25% off. Use code SUMMER25 at checkout to get your 25% discount.

Hurry! Offer ends July 31.

Here’s the blurb:

Gold (noun): A precious, yellow metal, prized for its beauty. Inert, immune to corrosion, highly malleable though with little utility. Seen as pure wealth.

The Secret History of Gold tells the epic tale of the world’s oldest, and most treasured, currency. From its origins in the formation of the solar system to its role in both ancient myth and modern finance, Dominic Frisby explores, with wit and brevity, how gold has shaped human civilisation.Gold has inspired men to do the most brilliant – and terrible – things. It has lured explorers, conquerors and thieves. It has sparked wars, it has built empires, it has empowered leaders, good and bad.

What readers have said so far:

“A fabulous, fascinating, fantastical tale, told with panache by a superb taleteller.” Matt Ridley, author of How Innovation Works.

”It doesn’t just tell you about gold – it makes you feel its weight through history. It’s just so interesting.” Toby Young, Spectator

”Written with both insight and Dominic’s signature humour, this is essential reading for anyone who wants to understand the lengths human beings will go to for the promise of riches.” Rory Sutherland, author of Alchemy.

“This delightful book is a most insightful and enjoyable romp through history and a well-researched, educational tour de force.” James Turk, author of The Money Bubble

”Dominic Frisby’s writings about economics and finance are, like his comedy, intelligent, beautifully crafted and always ahead of the curve. The Secret History of Gold is well-informed, utterly coherent and very, VERY timely.” Liam Halligan, Telegraph

“My most trusted source of information for anything to do with gold,” Konstantin Kisin, Triggernometry”Well-researched and razor-sharp. Written with passion, principle - and the occasional punchline.” Al Murray, comedian and historian

”Possibly the best-timed book ever,” Merryn Somerset Webb, Bloomberg”A brilliant, highly readable guide to the most alluring material of all,” Luke Johnson, investor and entrepreneur.”Understand the history of gold, and you start to see what politicians and central banks would rather you didn’t. Dominic reveals all with clarity and force,” Rob Dix, author of The Price of Money.

if you prefer, here’s a link to Amazon.

Prefer to listen? I hear the audiobook, read by me, is very good ;) Here it is on Audible and via Apple.

Please like, share - all that stuff - it helps.

Thank you for your support – and stay tuned. I’ll be banging on about gold quite a lot in the coming weeks…

This week I was listening to Merryn Talks Money.

My old boss and great friend, Merryn Somerset Webb, was discussing portfolio allocation - which assets should make up the 40 in a 60:40 bond-to-equity portfolio - with Nataliia Lipikhana, executive director at JP Morgan . Merryn asked if bitcoin should be one of the assets to include, alongside gold. Lipikhana, who, until then, had spoken widely, fluently and knowledgeably about a range of subjects, suddenly stonewalled.

“We don’t cover it so we can’t talk about it,” she said.

Awkward pause.

Merryn laughs.

“At all?”

“No,” says Lipikhana.

Another pause.

“Ok,” says Merryn. “Totally understand,” and she changed the subject.

This is a symptom of something much bigger that has been at play throughout the institutional world, and not just in the UK, since the emergence of bitcoin and other cryptocurrencies.

They’ve been shadowbanned.

We know of course about the UK’s Financial Conduct Authority, how its regulations went against the pronouncements of various Chancellors, and how it effectively excluded UK citizens from the sector. Something similar has long been happening at the institutional level.

“Most private banks will not accept bitcoin ETF orders for their clients, despite being able to deal with elective professionals,” a fund manager friend (who prefers to stay anonymous) tells me. “This applies in countries where there is no ban because the bank will have links to London. Even in the US, the traditional institutions will ban bitcoin internally.”

Here’s a list of the biggest holders of the iShares gold ETF. Many of banking’s biggest names are there.

Now here’s a list of the iShares bitcoin ETF’s biggest holders.

There is nothing like the same institutional weight.

(Goldman and Morgan Stanley will be market making on behalf of hedge fund clients)

“Lipikhana probably feels she might get the sack if she comments on bitcoin,” my fund manager friend continues. “So she doesn’t”.

You know my saying, “A bubble is a bull market in which you don’t have a position”. For years now, banks have been talking their clients away from this sector, often using that argument that it’s a bubble. This pre-dates the ETFs by ten years or more.

Wall Street and the City don’t like bitcoin because they didn’t get there first. Smelly private investors did. They missed out on this epic opportunity and, rather than embrace it, they ignore it.

They don’t control it. They can’t manipulate it.

Don’t talk about bitcoin. Perhaps it’ll go away.

Well, it hasn’t and it won’t. It is here to stay.

Now with the emergence of the both the ETFs and the bitcoin treasury companies, bitcoin is edging its way further and further into the financial mainstream.

“You get bitcoin at the price you deserve,” runs the saying. Ain’t it so.

What this means for investors is that there is a huge wall of institutional money that is still to come into the sector. It will eventually.

Bitcoin is the most technologically advanced money in history. Now that real estate is gone as a vehicle to protect against currency debasement (too highly legislated and taxed), the need for an effective savings vehicle is only greater.

Bitcoin is the best savings vehicle there is.

I love gold. You know I do. I think it has an enormous strategic role to play in the coming years, and should play a part in every portfolio.

But bitcoin appreciates by more. It beats stocks. It beats bonds. It beats commodities.

But JP Morgan would rather not comment.

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PS Don’t forget my brilliant book about bitcoin, if you want to learn more about the space.