Dominic Frisby | They'll Blame You When It Fails

Timothy Allen: Dominic, great. Thanks for doing it. Thanks for pulling you away. I’m interested to know, to start with, how you heard about Liberland, because it’s not the kind of thing that everyone comes across. You don’t come across it easily.

Dominic Frisby: I’d heard about it a while ago. I don’t know how long it’s been going on for, but I feel like I heard about it ten years ago, eight or ten years ago, maybe a bit more recently than that. Then I saw the president do a talk at Anarchapulco in 2019, which I was greatly entertained by, particularly the line, “We are building the greatest tax haven that the world has ever seen.”

I think at one point I might have signed up to be a citizen of Liberland and given some money. We all sort of dream about living off-grid and somehow beating the system, and Liberland seemed like a legit way to do it. I’m not entirely convinced now.

Timothy Allen: Sure. I’d quite like to talk about that, because I agree. I think when people think about Liberland, they tend to stop at, yes, Liberland should exist. They don’t necessarily think about the stages afterwards, which, when I think about it, are probably quite chaotic because of the nature of what they want to do. Do you think you can do that in this day and age?

Dominic Frisby: Funny enough, I’m doing a talk in an hour and the first thing I’m going to talk about is new countries being formed. It just came to my mind this morning. I Googled it, and it turns out since 2011 no new countries have been formed. Before that, when you go back in periods of ten years, you get the Balkans and all that, then all the African new countries. You get masses and masses of new countries, and it kind of grinds to a halt in 2010.

Timothy Allen: Why is that?

Dominic Frisby: I don’t know. I’m saying it in a kind of neutral way. I don’t really know. Either we’ve just gone through, since the 1940s, because the war ended, a massive upheaval on the planet and now we’ve ended up settling down because all the big states have collapsed. Maybe America’s next. Maybe America breaks. I don’t know.

I thought we were in a trend towards lots more smaller nations. I thought Brexit was a sort of symptom of that. There was a lot of talk of Catalan separatism and separation a few years after Brexit. There were riots and things.

A friend of mine is a large landowner in the Shetland Islands and he made a case, I think he demanded, that if the Scottish National Party won the Scottish referendum, Shetland would then separate from Scotland.

Timothy Allen: It’s a pretty good idea, really.

Dominic Frisby: Well, yeah. Look at the rest of the UK. The Channel Islands, Sark is a sort of historical thing. I’ve always joked that I’m going to be the first president of the Independent Republic of Dumnonia. Dumnonia being Kernow, which is Cornwall, but in Arthurian times it was known as Dumnonia. I always joke about being that.

There is a little bit of a separatist movement in Cornwall. There always has been, a bit like Scotland and maybe a little bit Wales. I already know exactly, if I was in charge of Cornwall, the first thing I’d do. I’d invest a shit ton of money in Newquay Airport. You just look at the flight lines and where Newquay is. It could solve Heathrow’s third runway problem. It could be the stopping-off point. It’s right on the coast, so you can fly in and fly off, and it wouldn’t necessarily destroy the rest of Cornwall with air pollution and noise pollution. You make it a low-cost, free-trading thing and let the market take care of the rest. It all seems to make perfect sense.

Of course, there are a few logistical things before you get to that point. Westminster wouldn’t have it.

I gather the town of, I’m going to get this wrong because this is just stuff I’ve read cursorily on the internet, but there’s a small village called Piddington in Oxfordshire which has had an issue. I think it’s something like a population of 600, and it’s just had 1,200 illegal migrants dumped on it in the barracks up the road. It’s holding a referendum about whether it wants to remain in the UK. Again, I just happened to read the headline while doom-scrolling, so there’s no substance to what I say, but it shows there is an instinct to break away.

I remember back in the 90s they declared the independent nation of Wanstonia in Wanstead in East London. There was a big argument about where they were building, I think it was the M11 extension, and there was a tree they didn’t want chopped down. They took over some trees. There was a guy, Swampy, and they declared the independent free nation of Wanstonia.

So there is this constant urge to break away from obligations you don’t like, particularly through the tax system. Everyone dreams of designing their own little utopia and creating their own little nation run according to their own ideas.

I remember after 2008 Iceland crowdsourced its constitution. Then I don’t know whatever happened to it. The Pirate Party won the election and all of that. It just felt like a huge period of change was coming, and then, as you say, it died a death in 2011. A bit like the gold bull market. I wonder why. Something killed it dead. Maybe it was low interest rates and ZIRP and all that.

Timothy Allen: I don’t know what happened around 2010, but it would probably have been something that happened earlier and built up to that point. The internet is the biggest thing that happened around this period of time. That’s a massive thing. Think about the printing press. When that happened, there were 200 years of complete chaos. The internet has changed the world beyond all recognition. Maybe it clamps down on people as well, maybe it pacifies people. I don’t know.

I was at your talk this morning. You didn’t mention 1971, by the way.

Dominic Frisby: I did, but in the way that I thought was original. 1971 is the big story. Everyone talks about 1971. I’ve got a chapter about 1971 in the book and it was a pivotal year, but hopefully I say things about 1971 that other people haven’t said and make observations about it.

There was a big chart that showed inflation from 1695 and then you see it suddenly go vertical in 1971.

Timothy Allen: On that chart it seemed to do a bit of a pump around the 40s or 50s as well.

Dominic Frisby: The first pump was 1914.

Timothy Allen: The wars again, was it?

Dominic Frisby: France and Germany both came off the gold standard. Britain didn’t come off the gold standard, but it did effectively suspend convertibility.

Timothy Allen: Have you thought about where you think this is all going?

Dominic Frisby: Continued debasement of the currency, inevitably. It’s built into the way money is designed. It’s not even designed, it’s just sort of evolved.

The pound has lost 40 percent since 2020. After quantitative easing, all the money they printed went into financial assets, so you saw bonds go up in price, the housing market and all the financial assets. Houses are financial assets, effectively. They all went up in price.

In 2020 they gave the money directly to the people, and so you just had runaway consumer price inflation. But one way or another, if you measure money, the pound has lost 40 percent since 2020. You’re losing seven percent a year to money-supply growth. That’s the global average. Inflation is whatever they say, three, four, five percent, but money-supply growth is much higher. It’s just built in.

In ten years’ time the pound will buy a lot less than it does now.

Timothy Allen: Obviously that doesn’t end well. We know fiat currencies do end in hyperinflation.

Dominic Frisby: Well, not necessarily. That’s the narrative. What is hyperinflation? The definition differs from person to person.

With physical notes, governments control the printing press. It’s the government that prints the physical notes, or the printing company under instructions from the government. When Weimar hyperinflation happened, the governments had to have got the printing presses ready to print those notes, and they did. The Zimbabwe government printed trillion-dollar notes. They were complicit in it, and of course it was their monetary policy that resulted in it.

Now we won’t have printed notes because we don’t use printed money anymore. I don’t necessarily think you need a hyperinflationary event where everything suddenly collapses and that’s the end, and you have a big clean-up and start again. That’s how we think in stories. If you’re telling the story, that’s how it would be. You’d have the event and then the clean-up afterwards, because that’s the way the human mind works.

The human mind doesn’t work in terms of continued, endless, relentless debasement, but that’s actually how the world works. It evolves cumulatively, gradually and incrementally, with all those forces at work. Look at water erosion. It’s gradual. Gradually the rock wears away. You might get a storm one day and a big chunk of cliff falls off, but it’s gradual.

I think it’s going to be the same with money. There’ll be periods such as Covid where it accelerates and other periods where it decelerates. I don’t necessarily buy the hyperinflationary collapse story. I just see continued debasement, relentless debasement and continued inflation.

For sterling, I’m not saying it’s impossible. I’d say there’s a 20 or 25 percent chance. But a lot of people talk as though it’s inevitable, and it’s not inevitable. Maybe I’m suffering from recency bias, but sterling has been being depreciated since 1914, and the currency has been around since King Offa in the ninth century. It’s the oldest currency in the world. It will probably just continue to be debased. Once upon a time, a pound was a pound of sterling silver.

Timothy Allen: I thought the meme goes that every fiat currency has always collapsed.

Dominic Frisby: That’s what people say in podcasts. I don’t necessarily think it’s true.

Timothy Allen: I’ve never heard anyone say that isn’t true.

Dominic Frisby: Give me an example of a fiat currency that hasn’t collapsed. Well, there haven’t been that many. Fiat currency is a modern phenomenon. Has the dollar collapsed? It has if you look at a chart from 1971 and compare it to now, but we’re still using the dollar.

Timothy Allen: So you’re saying, essentially, it will just keep doing it?

Dominic Frisby: I’m not saying that. I’m saying, in my opinion, that is the higher probability.

Timothy Allen: So we’ll just have trillion-pound notes eventually or whatever?

Dominic Frisby: Maybe, but not in a hyperinflationary way. Maybe not in our lifetime either. And we won’t have notes, because we use digital money.

Timothy Allen: What do you think, then, about the future of the monetary systems we have now? Once again, I’ll probably refer to podcasters here, but the meme is that, other than the fact we enter a hyperinflationary moment, we have a reset of some description. It used to be world wars. Maybe it’s the oil crisis. I don’t know.

Dominic Frisby: Again, I think this reset mentality is born of the way human beings think in terms of stories. You get your reset at the end of the story, the wheel has turned full circle, you get your speech, then the world ends and you start again. But it’s not how it is. It’s just continued and gradual. I don’t necessarily think there is this great reset.

Timothy Allen: In your talk, right at the end, you were alluding to the fact that you think gold is going to play a big part in the future.

Dominic Frisby: Well, it already does. It’s already the second-largest asset held by central banks. It’s not official money, but central banks still hold it. I don’t think its role will be as a medium of exchange except in extremis, but as a store of value it has a huge role. As governments continue to debase their money, that role can only increase.

Timothy Allen: It was the first time I’d ever heard the story about China having potentially 30,000 to 40,000 tonnes of gold.

Dominic Frisby: There are 30,000 to 40,000 tonnes of gold in China for sure, because of the amount it’s mined, the amount it’s imported and the amount that was already there in the year 2000. Between the three, that gives you a figure of 30,000 to 40,000 tonnes, probably 35,000, something like that.

The big question is how much is owned by the state. Some analysts say 50 to 60 percent and some are a bit lower, 20 to 30. The People’s Bank of China says it has 2,300 tonnes, but there are other government departments that own gold, the military, the sovereign wealth fund and other government departments.

If you just look at gold demand last year, I think about a quarter was central banks. So if you just assume that a quarter of Chinese gold has gone to the central bank, then you’re looking at a figure of 8,000 to 10,000 tonnes, which would be more than America, which is the significant thing. China says it has 2,000, so it’s at least four times that.

Koos Jansen says China has 5,000 to 6,000 tonnes. Alasdair Macleod, another well-respected gold analyst, puts it closer to 20,000 tonnes. It could be any number, but for sure it’s not 2,000 that it says it does. China has significantly more gold than it says it does. It’s just doing the Chinese thing of, “We must not shine too brightly,” getting its head down and selling as much shit as it can.

Timothy Allen: That was the bit I didn’t really grok when you were speaking. Why don’t they just admit they have that much?

Dominic Frisby: Because they haven’t finished buying. If China turns around and goes, “Actually, we’ve got 10,000 tonnes of gold,” or 20,000 tonnes of gold, the gold price goes to the moon, and China hasn’t finished buying. The dollar goes significantly lower. China has three trillion dollars and doesn’t want to devalue those.

The financial repercussions of China coming out and saying it has five or ten times more gold than it says it does would create so much volatility and instability. Goodness knows what it would do to the financial markets. China’s approach is, “We must not shine too brightly.” It doesn’t need to do it.

If it ever gets into a conflict with America and it starts weaponising its US dollars, because people weaponise money in war, then China will do that. But for the moment it doesn’t need to. Why would it?

Timothy Allen: Just explain weaponising money in war. What do you mean by that?

Dominic Frisby: For example, when Putin invaded Ukraine, America froze Putin’s US-dollar assets. When Britain was at war with Germany, Germany printed a shedload of counterfeit British money and dispersed it around Europe to devalue sterling. When the American revolutionaries rose up against Britain, Britain printed a shedload of Continental money and devalued the currency.

You attack the currency because, if your money is worthless, you can’t fund the war.

Timothy Allen: How does that manifest in the 21st century, then, when it’s all digital? What’s the methodology?

Dominic Frisby: That’s the problem. America has total control of everything. It’s got SWIFT and you can just freeze the assets of your opponent. America could freeze three trillion US dollars of Chinese assets if it wanted. Three trillion dollars is more than UK annual GDP.

It makes that asset worthless. America controls the global economy, albeit moderately benevolently compared to how other countries would do it, through SWIFT, through the banking system.

This is one of the reasons why we’ve seen such huge buying of gold since 2022. The US froze Russian dollar assets and everyone looked at that and went, “We need to own some kind of asset that somebody else can’t freeze if they want to.”

All the countries along the Silk Road are not necessarily enemies of America, but they’re not great friends of America either. You’ve got the choice between two assets. With one, you have the power when you own the asset. With the other, you’re in the power of someone else. You’re going to choose the asset where you have the power, which is gold.

Timothy Allen: Along the same lines, is selling US bonds also a strategy? Selling US assets you own?

Dominic Frisby: Yes. For a considerable period of time the Federal Reserve has been the biggest buyer of US bonds, and it’s been buying them with printed money. China has pretty much halved its holdings of US bonds in the last ten years or so. Since 2014 was the high, every month it’s slightly less, slightly less, slightly less. It doesn’t want to be a holder of US debt, and other countries are doing the same.

One of the problems America has is, who’s going to buy its debt?

Timothy Allen: Apart from itself.

Dominic Frisby: Well, it buys it itself. Companies like Tether are going to have a big role in stablecoins. I think Bessent is hoping stablecoins will be the big saviour. We’ve seen signs of that, but we’ve not seen proper evidence that that will be the case.

Britain still buys US debt, because we’re retarded. Japan still buys it, but the purchasing power of the yen is falling, and that’s another mess waiting to happen. China does not buy. It’s a net seller.

Timothy Allen: Is there any future in which you see a new reserve currency of the world existing that isn’t gold?

Dominic Frisby: I think Bitcoin is going to have a role to play. Bitcoin is very good for international transactions, cross-border transactions. There are some countries that go against this, El Salvador and so on, but I think it’s a while before central banks start holding Bitcoin in the way they hold gold.

Ben Bernanke said central banks hold gold out of tradition. Maybe ten years ago part of their holding gold was just that they had it and didn’t feel the need to sell it. But for sure gold is becoming a strategic asset.

It might be that we’re living under the next Ming Empire in ten or twenty years and China rules the waves as it once did, and we’re all using renminbi or yuan. But for the yuan to become the global reserve currency, it would have to be freely floating, which it isn’t now, and I think it would have to be interchangeable with gold.

I don’t necessarily think China will do that, but ultimately, if it wants to be the major economic might in the world and the major military might in the world, then it would have to have the international reserve currency. It would have to be freely tradable and we’d have to be able to use it across borders, which is not currently the case.

Given China’s ambition, economic might and military might, you’d have to say there’s a good chance, I don’t know, 20 or 30 percent, that in ten or twenty years the renminbi replaces the dollar. But as a reserve asset, I’m not sure. China has demographic issues with its one-child policy and all of that. We see the rise of India. Who knows, the rupee may be the reserve currency. But I think it’s more likely to be a neutral currency, which would be gold or Bitcoin, and gold has history on its side.

Timothy Allen: I’ve heard on podcasts that being the reserve currency is great, but it also isn’t. America is a good example. It’s hollowed out the whole of America’s industry, basically, because they get to outsource. That’s actually what is required of being the reserve currency. You have to get buyers of your currency. Would China think like that, or is that a long-term problem?

Dominic Frisby: They’re clever enough. Vance was talking about that this week. It’s a thing called Triffin’s dilemma. He compared it to having a resource curse. If you’ve got the oil, it actually proves to be a curse because you don’t have to work for your money. You can just sell oil. That ends up being a curse and you end up like Venezuela or something.

America can just issue dollars, whereas other countries have to work for them. So America doesn’t need industry. The hollowing out of American industry has been a consequence of it being an unbacked reserve currency.

If it had to have the gold to back the currency, as it did prior to 1971, at least in theory, then it wouldn’t be able to just issue dollars unless it had acquired gold, for which it would have to mine the gold or sell something to buy the gold with.

That narrative is taking hold, that it’s not such a good thing. J.D. Vance has been one of the major proponents of that narrative. He’s the vice president, but he might not be the president.

Timothy Allen: It’s funny, along the same lines, your Midas touch story in the talk. Not exactly the same, because I think what that was alluding to was that scarcity is good.

Dominic Frisby: The lesson of the Midas touch is scarcity is good.

Timothy Allen: Yes. But still, it seems like, wow, if I can just get this continuously, everything’s going to be great. In the case of being the reserve currency of the world, I suppose it’s a bit like that.

Dominic Frisby: I hadn’t thought about that, but you’re absolutely right. The ability to turn everything into gold turned out to be a curse.

Timothy Allen: You had some great stories in there. What was the one with the river?

Dominic Frisby: The River Pactolus. That was the Midas touch. Midas’s power passed into the sands of the River Pactolus, and the sands of the River Pactolus provided the gold and silver from which the world’s first coins were minted.

Timothy Allen: There was something to do with Helen of Troy as well.

Dominic Frisby: That was a different story. It was an argument about gold that precipitated the Trojan War.

Timothy Allen: About a golden apple. I just wondered whether the word Troy had anything to do with anything. Troy ounces, I guess so?

Dominic Frisby: I don’t know. A lot of those traditional measures go all the way back to Croesus and Alyattes, who minted the first coins. The carat was just a seed. They used seeds for minor weights because seeds were very consistent in weight. Barleycorns, wheat and carob seeds were remarkably consistent, so you would use piles of seeds or individual seeds to measure weight, and short distance as well.

A shoe size, for example, rises in each increment by a barleycorn.

Timothy Allen: I bet you didn’t know that.

Dominic Frisby: And carats were used to weigh gold. That’s an ancient Greek measurement.

Timothy Allen: That was my takeaway from your talk. I’m a Bitcoiner through and through. I came into finance through Bitcoin. Prior to discovering Bitcoin I thought finance was boring and economics was boring. I was so, so wrong, I admit that now.

Dominic Frisby: A lot of it is boring.

Timothy Allen: Well, yeah. But the part, Austrian economics, human action, things where you can look at an economic market and see what people are doing and how they express themselves, I knew nothing about that. As a result I went straight into hard money through Bitcoin.

Listening to you speak about gold made me realise just how deeply ingrained it is in the human psyche, and how Bitcoiners who say, “Gold’s old, we’re moving into the digital world now, gold’s going to become worthless, or we can mine an asteroid,” are probably wrong. I would say. I don’t know. What do you think about that?

Dominic Frisby: When were you born, just out of interest?

Timothy Allen: 1971.

Dominic Frisby: So you were born in 1971. That’s what the fuck happened in 1971. There you go. I’m a comedian, just like you.

What I’ve found with the arguments between Bitcoiners and gold bugs is a lot of it is just generational. People born before, say, 1960 tend to be the pure gold bugs. People born after about 1980 tend to be much more pro-Bitcoin. Then there’s this sort of 1965 to 1975 middle ground, people who’d be in their 50s today, who are like, “Well, I can see the merits of both.”

Obviously there are exceptions to that. It’s just a sweeping generalisation. I think a lot of the gold bugs resent it because Bitcoin did everything that gold and silver were supposed to do, go to the moon, and it made so many Bitcoiners rich off the same arguments they’d been using for gold and silver, which never quite happened for gold and silver, not back then anyway. So there’s a bit of resentment.

Like everything on the internet these days, you’ve got to be Team A or Team B. Which team are you? There’s no room for Team Nuance.

Bitcoin is fantastic. I don’t need to start singing the praises of Bitcoin on here. It’s just one of the most wonderful inventions ever. If you’re unable to realise what a good invention it is, that’s just your inability to recognise what a good invention it is. It doesn’t mean it’s not a good invention.

The proof of what a good invention it is is the growth it’s seen from nothing to a trillion-dollar asset and the amount of people it’s brought into its network. If you don’t get it, fine, you don’t get it, but that’s on you, not on Bitcoin.

It’s just brilliant, and it’s hard money. Then you go, “Well, you can’t see it, you can’t feel it.” Well, no, of course you can’t. It’s digital. That’s why it’s such good money, because it’s created digital hard money. It’s an incredible breakthrough in computer science to have done that.

Whereas gold is hard money, and it’s nature’s money and it’s God’s money, but it’s physical. One is a physical asset and one is a digital asset. They’re both money in different senses of the word.

Gold is a brilliant unit of account, and I think it will always be a better unit of account than Bitcoin is. Bitcoin is a better medium of exchange. I was able to send a payment of one sat, which would be like a 20th of a cent or something, from me to a guy in Australia. Every day billions of dollars of value change hands, bosh, bosh, bosh, nobody’s permission, and it costs a few pennies to make the transfer. It’s a brilliant medium of exchange.

Its use as a store of wealth, well, it’s gone from nothing to $60,000, so it’s a pretty good store of wealth. But it’s not such a good store of wealth if you’re one of the people who bought at $120,000. It might go back to $120,000, I hope it does. Gold is the less volatile of the two.

But it comes back to the thing. One is physical and one is digital. There are times when physical things are useful, matter and are important, and there are times when we ascribe to them very little value. There are times when digital assets seem meaningless and there are times when digital assets are incredibly practical and valuable.

They both have their strengths and weaknesses. It’s as simple as that. There’s a lot of crossover between the two because they’re both stores of wealth and mediums of exchange to an extent, but they’re different. They both have their role. I like them both and I think there’s room for both in every portfolio.

I tell all my readers, I’ve got a newsletter called The Flying Frisby, to which I urge all your viewers to sign up, I just say own both and don’t bother getting dragged into the “which is better?” argument because it’s fruitless.

Timothy Allen: How much can you ascribe to Bitcoin in the sense that it will have a longevity like gold has?

Dominic Frisby: You don’t know, because something will come along. I don’t know when, in 50 years, 100 years, 200 years, there’ll be some new technology that gets invented that’s better than digital technology. But for the moment digital technology is awesome. It’s the number one thing. As long as it reigns supreme, Bitcoin will reign supreme.

If somebody invents something better than digital, then Bitcoin’s over. I don’t know what that can be. I haven’t got a clue. But gold is physical and there will always be that. One of the things I say in the book is that gold is older than the solar system. It’s older than the sun. It’s older than the Earth. It’s been here all that time unchanged and it’ll be here long after human beings have blown up the planet and destroyed themselves.

Timothy Allen: What use would it have, though, in the 22nd century? Gold does suffer immensely from the ability to move it around, which is a big problem. One of the things the modern world does is help us move around more. We have opportunities to move like never before. Once we go off-planet, people probably aren’t going to want to be transporting gold.

Dominic Frisby: Again, I don’t know. Maybe they will. One of the best sections of my book is about when the Nazis invaded. The very first thing they did to every country was walk straight up to the central bank and confiscate the gold, literally within an hour of invading the country.

You had these farcical wild-goose chases with central banks trying to get their gold on trucks and drive it out of the city and onto trains before the Germans got there. The Polish gold went, I’m going to get this wrong now, but it went from something like Poland to Romania to Lebanon to somewhere else to France, and ended up in Martinique and Senegal. Some of it ended up in Halifax, Nova Scotia. Talk about a wild-goose chase. That was the problem, trying to keep the Polish gold from the Nazis.

That is both the strength and the weakness of gold. I’ve got gold, I’ve got the money. It’s nobody else’s liability. You nick it off me, you’ve got the gold and I’m left with nothing. There might be an insurer, but there’s no bank to make good the theft.

When I hear these arguments about, “We’re going to start mining asteroids,” okay, there might be more gold per tonne in an asteroid than there is on planet Earth. But at the moment, if you had three grams of gold per tonne, even two grams of gold per tonne, that is considered a mineable deposit. So you have to process a tonne of rock to get two grams of gold. That’s a heck of a lot of rock you have to get through to get your gold.

How are you going to do that in outer space? Have you been to a mine? Have you seen the equipment there is in a mine? How are you going to get all those huge trucks and processing plants and flotation tanks? How are you going to get robots in outer space to do that? We are so many years from being in a position where we can do that.

Then, a tonne of gold is like a suitcase full. Are you really going to be transporting thousands of tonnes of gold from outer space back to Earth? What kind of rockets are you going to be using? Everything about rockets is that they’ve got to be as light as they possibly can.

Timothy Allen: Maybe they’ll use outer space as the central bank. You could probably push the gold around really easily.

Dominic Frisby: Okay, so then we’re into John Law territory. “That plot of gold on that bit of asteroid is mine and I’ll sell it to you for £200 million. You can buy it off me.” Fine, but there’s just a lot of scope for fraud there, put it that way. Plots of land on asteroids in outer space.

Even if there was somehow a way of mining asteroids and getting the gold back to Earth and increasing the gold supply, this is what happened in 1850 when the gold in California was discovered. That led to the discovery of gold in Australia, then Canada, New Zealand and, most significantly of all, South Africa. It all happened over a 30 or 40-year period and the gold supply went up beyond all recognition.

The Economist wrote a famous piece, and a French economist wrote an entire book, about why the gold price was going to crash with all the increased gold. They were wrong. It didn’t crash at all. All that happened is it got more widely adopted.

The big casualty of the increased supply of gold was silver. That was when we stopped using silver as money. The world went from bimetallic standards in 1850 to pure gold standards in 1900.

If we did increase the supply of gold due to asteroid mining, it might be that the casualty is not gold. It might be that the increased supply of gold leads the world back onto a gold standard because suddenly there’s more gold to go around and it makes the practicalities of a gold standard better.

You couldn’t go back to a gold standard now without revaluing gold upwards, from $4,000 to $40,000 or something. You’d have to revalue it up ten times. You couldn’t do that unless you said anyone who owns gold gets a huge tax on them, or has to hand in their gold like they did in the 30s. You couldn’t do that upward revaluation because so many people would get rich unjustly off the back of it and government would want its share of the money.

The problem-solver would be the increased supply of gold from asteroids. So the whole thing is a stupid red-herring argument from people who don’t know what they’re talking about.

Timothy Allen: Right, I’ve got another one that needs correcting, then. Another thing I heard on the internet. You were talking about how, when you invade a country, the first thing you do is grab the gold. Is it true that the gold after World War Two was given into the possession of the Americans to look after, and then they never gave it back? Is that kind of what happened?

Dominic Frisby: No, that’s not strictly true. The Nazis stole a shedload and the Japanese stole a shedload, thousands of tonnes. Everywhere the Nazis invaded they took gold off the central banks, they took gold off the citizens and sent it back to Berlin.

That was one of the reasons it was a mistake to invade Russia, because the Russian citizens didn’t have as much gold as the Dutch and the Belgians and the French. But anyway, they sent it back to Berlin.

Then, as Germany fell apart, there was literally a land grab. Some of it got buried underground. They were planning to bury it, hide it and then use it to fund the Fourth Reich, but that never happened. Some of it got buried and American forces found it, but a load of it just got nicked.

There are about a million documentaries about hidden Nazi gold. Some of it is supposedly below a lake in the Bavarian Alps, some of it is hidden in a train line in Poland. There are all these different stories about where it ended up. The reality is a lot of Nazis pocketed it and disappeared to South America.

You just need to look at Argentinian gold reserves at the beginning of the war and at the end of it, and Brazilian reserves. They all tripled or quadrupled their official gold reserves. You’re like, whoa, how did that happen? We don’t know how much went in. Gold was used to fund their escape because it was the most portable form of wealth.

The Americans found a lot of Hungarian gold. A lot of it, the soldiers and the colonels, just nicked. There were these Hungarian gold trains and they just nicked what was on there, not just gold but wealth.

But a lot of the stuff they found in Thuringia, central Germany, and other gold hoards got sent to Frankfurt, and eventually it was sent back to the nations that had had their gold stolen from them at the national level. The individuals who had their gold stolen never got their gold back. Obviously a lot of Jewish people, but a lot of ordinary European citizens as well. They just never got the gold back because to reconstitute it at the personal level was too big an undertaking.

Let’s say Belgium, for example, had its gold taken. They got a portion of that gold back at the end of the war. Not all of it, but some of it. They each got something like 60 percent, whatever the number is. So that’s the German gold. The reality is a lot of it went missing and nobody quite knows how much, hence all the conspiracy stuff.

The big one is the Japanese gold, because they stole as much as the Nazis did. They looted everywhere they conquered in Asia. China, Myanmar, Malaysia. Everywhere they went they looted the gold. They’d go into monasteries and take the Buddhist statues and all the gold leaf and all the artwork, as well as the actual coinage, and they were shipping it back to Japan.

America was torpedoing the ships, so they built a load of tunnels in the Philippines and hid it there. Then they blew the tunnels up with the people inside them because they didn’t want anyone to know the gold had been hidden there. The prisoners of war and captives they’d made into slaves were digging the tunnels. Even Japanese officers themselves would be blown up in the tunnels. Terrible story.

Some of that gold got found, and it’s believed to be what funded Imelda Marcos’s shoes, among other things. But a lot of that gold, nobody knows what happened to it. A lot of it is believed to have fallen into the hands of the US and then the CIA. There’s a conspiracy theory about that, and maybe, like a lot of conspiracy theories, it turns out to be true.

One theory is that the formation of the CIA itself had something to do with the Japanese gold, and America used it to prop up the dollar in the post-Bretton Woods era, or a lot of it was used to fund American operations in the Far East during that post-war period in the fight against communism. Ultimately nobody quite knows, but I think that’s where you might be getting it from. The Japanese gold is the big murky one.

Timothy Allen: I think it’s also to do with when the Nixon shock happened. Whose gold was that that they weren’t going to give back at that point?

Dominic Frisby: What was happening there is every country was doing it, but France was the ringleader. It had dollars and said, “We don’t want the dollars, we want the gold.”

Timothy Allen: So they hand the dollars in and say, give us your gold.

Dominic Frisby: It was never their gold per se. It was their dollars and the dollar was exchangeable for gold. Nixon, and not just Nixon, Truman, they were all at it, America had printed way more dollars than it had gold. Apart from anything else, America printed a shedload of money immediately after Bretton Woods to try to help boost the economies in the post-war era.

From about 1947 it was destined to go wrong. Nixon called their bluff, basically, but before the window closed France actually sent two battleships to New York to collect the gold. Can you imagine sending two battleships to New York today?

Timothy Allen: And they went back empty, didn’t they?

Dominic Frisby: No, they got the gold. But they also helped bring about Nixon abandoning the gold standard.

Timothy Allen: Do we ever break free from one of the problems with gold, which is paper gold? Even when you back your currency with gold, so you go on a gold standard, it’s still really easy to renege on that. Do we ever escape from that? This is one of the beauties, potentially, of Bitcoin. It’s a bearer asset, but it’s a digital bearer asset, which is an amazing idea because you can literally send that one sat. That one sat that went to Australia was actually real money. Once it left your phone, that was it. You have no control of it.

Especially in the modern world, I don’t know about you, but I think there are more bad actors now than there have ever been. People are giving up on playing by the rules everywhere you look. How do we solve that one, or do we not?

Dominic Frisby: You’re right. Bitcoin is a digital bearer asset. If I give you a gold coin, it is a bearer asset. If I give you some paper representing some gold that’s stored somewhere, it is not a bearer asset. It’s a promissory asset.

Similarly, if I send you some digital money representing gold stored somewhere in a vault, or representing a portion of a gold mine in an asteroid, it’s not a bearer asset.

That’s the problem with any kind of gold standard. In the 20th-century gold standards, ordinary citizens were not handling gold. It had been made illegal for American citizens to own gold. The British, even though Britain went back on the gold standard in 1925 and most of Europe soon followed, actually withdrew gold from circulation.

Yes, we were on a gold standard, but ordinary citizens weren’t handling gold. Until 1914, the gold sovereign, a gold coin, was the pound coin. Until 1914, gold was actually a part of the money system. It was a gold standard in that paper money was redeemable for gold, but gold itself played a role in the money because we handled gold and silver coins.

After 1914 that was no longer the case. When people talk about gold standards, it’s a sort of catch-all term that involves some clarification. Are you talking about a gold standard like America was on in 1935, when Americans couldn’t own gold? Is that a gold standard? Or a gold standard like Britain was on in 1930, when there was no gold in circulation? Or are you talking about when gold was actually money? They’re completely different.

In fact, what happened in, I want to say 1794, William Pitt was prime minister of the UK and we were very worried about French revolutionary fervour spreading to the UK. William Pitt was determined not to allow it to happen, so he spent a great deal of money funding Napoleon’s enemies on the continent. He would send them gold money to fund their activities.

Because the guineas he sent had a picture of Saint George and the dragon on them, this was known as the Golden Cavalry of Saint George. The UK ran out of gold because he’d sent so much abroad. The Bank of England came to Pitt and said, “You need to stop redeeming paper. People can’t redeem paper with us because we haven’t got the gold to redeem the paper against. You need to stop gold being interchangeable.”

Pitt said yes and took Britain off the gold standard in the 1790s. The immediate consequence was that prices doubled. We got runaway inflation. Prices always go up in war anyway, but prices doubled, we had inflation, riots and all sorts of problems at home.

We had the Great Recoinage in 1816, but formally we didn’t readopt the gold standard until 1821. So we spent 25 years off the gold standard, give or take. That’s half a lifetime for a lot of people back then, so it’s not an insignificant period of time.

There were still gold coins in circulation, but paper money was not redeemable for gold until we went back onto the gold standard. There was the remonetisation, the recoinage, the invention of the sovereign, all sorts of developments. That became the bedrock of British commerce after 1821 and the return to the gold standard.

Even when gold was money, the gold standard still failed. Gold standards fail, even reasonably good ones, because of politicians.

Timothy Allen: Maybe then the Bitcoin-gold alliance could solve that. It does solve it in a way, with the physical bearer asset backing something and the digital bearer asset being the one that gets transmitted over long distance.

Dominic Frisby: Yeah. Bitcoin and gold between them, sound money solves so many problems. Biggest among them being government overreach and big government and all the nefarious consequences of that. Sound money solves them.

“Fix the money, fix the world.” I’ve been a believer in that motto for a long time. I don’t even know who coined it. I’ve coined a lot of phrases, but I didn’t coin that one.

The logic underpins a film I wrote called Four Horsemen, which was hugely popular, a book called Life After the State, Bitcoin: The Future of Money?, and now this book, The Secret History of Gold. Sound money, fix the money, fix the world, is the central thesis behind all of them, and I profoundly believe in that.

But don’t expect politicians to do it for you, because they won’t. Out of 650 politicians in the UK Parliament, there are maybe one or two who might understand sound money, if that. There are a few more in America, I’m pleased to say, but there’s still a paucity, and nobody on the left gets it.

We’re so far from this being a fix made by politicians. The fix has to be individuals acting in their own self-interest. Central-bank buying will go a long way to doing that, but that’s central-bank buying, not policy from politicians.

Individuals acting in their own self-interest, wanting to hold good money, get rid of the shit money and interact with each other. “Do you know what? I want to pay you a 20th of a cent.” “Well, I’m going to send you a sat.”

The more the Bitcoin price goes up, the more that will happen. The more the Bitcoin price falls, the less that will happen. So we need the Bitcoin price to go up if we’re to increase adoption. People come originally for the gains and then they stay for the revolution.

The more people who do that, and the more people who start saving and spending in non-government currencies, the better the chance there is of sound money returning. But the return will be by the back door.

A very realistic possibility is that you see governments get themselves into increasing amounts of problems. Governments go bankrupt. Their currencies do collapse. Despite what I said at the beginning of the programme, they do actually collapse. Then they blame the Bitcoiners and the gold bugs.

“It is their fault. You can rest assured.”

“No, we saw this coming and we put our money…”

“No, no, no. It’s your fault, and we’re going to confiscate.”

That is a very real possibility in the event of a proper currency collapse. I’m not saying that will happen. I’m just saying it’s a possibility.

Timothy Allen: If a 6102 occurred in the contemporary world, would it have to occur everywhere, all at once?

Dominic Frisby: No. In America, I think one likely possibility is it would take the form of an unrealised capital gains tax.

Timothy Allen: I was just going to say that.

Dominic Frisby: The US government says, “Problem, problem, problem. We’re revaluing gold from $4,000 to $40,000,” and then you have to pay an unrealised capital gains tax of whatever percent. Everyone will get their knickers in a twist about it, and then, because it’s the government, they’ll get away with it.

It’s harder to do that in America, but if you’re in the UK and you saw signs of that coming, the obvious thing to do would be to leave. The UK has a massive millionaire exodus already. I think 15,000 millionaires left the UK last year or something ridiculous. The reason they all left is higher taxes and better opportunities elsewhere, and who can blame them?

They changed the non-dom laws. They wanted to bring loads of taxes on non-doms and the non-doms left. Makes sense.

The great Cowperthwaite quote was, “Money comes here because it knows it can leave if it wants to.” The UK hasn’t quite reached capital controls or exit taxes. It is an easy country to leave if you want to. You just have to leave. As long as you spend fewer than 90 days within a given year, you fill in a form and you’re no longer a UK taxpayer.

America, you can’t do that. You are an American citizen for life, wherever you are in the world, unless you renounce your citizenship. Only if you renounce your citizenship can you avoid paying US taxes.

If Britain were to do it, it would probably have to introduce an exit tax of some kind, or have a similar thing to America where you’re a British taxpayer wherever you are in the world.

Timothy Allen: I don’t want to end on a bad note and a negative note. What is the positive take on this? Let’s forget government for a moment, because they’re not incentivised to ever want a hard-money standard. It takes away their ability to print money. We know that.

What is the white pill on all this money stuff? What’s the thing we can look at and go, “Oh yeah, that’s a pretty good timeline. There’s quite a high chance of that happening if we go forward into the future”?

Dominic Frisby: The white pill meaning the good thing?

Timothy Allen: Yes, the opposite of the black pill. It’s not a racist thing, don’t worry.

Dominic Frisby: We’re all far right now.

The more people who use non-government currency, the better the chances of non-government currency becoming the norm, which is Bitcoin and gold.

I advocate their use for practical reasons, because you’re immunising yourself from government debasement. And I advocate their use for moral reasons, because you’re not enabling the fiat system to the same extent.

But if you think confiscation and all that is coming, then you need to look at where your citizenship is, what your location is, what your exit strategy is, all of those things. If, like me, you’re a bit more disorganised and you think we’re still quite a few years from that, then you can be a bit more blasé about it.

But I remember these things happen very quickly when they do happen. In 2008, I distinctly remember being a frozen rabbit. I hosted a podcast back then and we used to talk about the global margin call that’s coming. That’s exactly what 2008 was.

It was a guy who writes for my newsletter called John Worstoncroft who coined the phrase “the global margin call.” That’s what 2008 was, and it happened very quickly.

I did some things that looked nuts. I remember going with my wife at the time to the cash and carry and we bought guns, not guns, tins, rice. The garage was full of emergency supplies because we thought everything was going to break down. Then we had a huge mice problem. We laugh at it now and we look stupid, but we were trying to take sensible measures.

Again during Covid, we were dazed. We ran out of loo paper briefly. Supply chains are vulnerable when they break down. These things can happen very quickly.

We’re speaking at Liberpulco and there are a lot of hardcore libertarian, anarcho-capitalist people who really have zero faith in their government here. Sometimes I listen to what they say and think, “Oh, come on, you’re going too far here.” Sometimes I listen to what they say and I have a great deal of sympathy with their worldview.

These guys really have got their tinfoil hats and their house up in the hills. I don’t. But I guess fortune favours the prepared. Just because you prepared for it and it never happened doesn’t mean that preparation was wasted. Maybe you should have your tinfoil hat and your little hideout ready.

If it’s a choice between living in a socialist UK, I mean a proper Eastern Europe pre-1990 socialist state, for 20 years, or going to live in another country and coming back when it all unravels, or perhaps my kids coming back, then I think I would rather go and live in another country and come back in 20 years’ time rather than have to live through 25 years of socialism. Do you know what I mean?

Timothy Allen: Yeah, I 100 percent agree. I think one of the best moves of the next 25 years, potentially, is some kind of geo-arbitrage. That’s a conversation we have at the kitchen table now. My wife loves the UK deeply.

You live in the UK?

Dominic Frisby: Yeah.

Timothy Allen: But we talk about that now, when the kids get to a certain age probably, because you mentioned the wealth taxes, the capital-gains taxes.

Dominic Frisby: They’re almost certainly coming simply because they’re being talked about now, and when things get talked about publicly, they normally happen.

That’s a really insidious tax because, like you say, you basically have to start selling your assets to start paying the bill. It’s just wrong on so many different levels.

Timothy Allen: Right, exactly. For me, not least ideologically, that’s a line in the sand.

Dominic Frisby: You can be sure that Burnham and the rest of them are talking about it. They’re socialists, so they don’t have the same respect for private property that right-wingers do. The reason they won’t be imposing it will not be the moral reasons. It will be the practical difficulties of imposing it, and they are quite difficult to impose. They’ve got to look at the cost-benefit and how many votes they lose and blah, blah, blah.

Timothy Allen: But you know they’re talking about it.

Dominic Frisby: Yes, they are.

Timothy Allen: But I think, like I say, the next step for the government is putting up walls to stop you leaving, which they’re doing already with the taxes. There’ll be physical blocks to you leaving at some point. That’s what happens if you follow the timeline forward enough. They put the walls up.

Though the dinghies won’t be able to get in. How’s that going to work? What happened in Berlin when the walls went up? Everyone wanted to come the other way, right? They didn’t want to go into East Berlin, did they? Well, very few people.

So I think the dinghies will be going back. I think the dinghies will be going out. We’ll be looking for dinghies on the other side. That could be quite a funny meme, just loads of English people on dinghies going out to Calais.

Dominic Frisby: Put it in your next set, mate.

Timothy Allen: By the way, before we go, I’d never heard you live before. I listened to you live the other night. Very funny.

Dominic Frisby: Oh, thank you.

Timothy Allen: I sent your classic “Fuck the Government” video to my friend. I said, “I’m at a rock concert right now.” I sent it before the main, what’s it called, the chorus came, so you’ve got all the build-up and then, “Fuck the government.” He laughed.

Anyway, shame we can’t talk a bit longer. I really enjoyed this. Dominic, thanks. Really, really appreciate it.

Dominic Frisby: My pleasure. Can I just plug my website? My newsletter is theflyingfrisby.com, and my latest book is The Secret History of Gold, published by Penguin, available at all good bookshops. And by all accounts, the best book on gold ever written.

Timothy Allen: Right. You heard it here, right from the horse’s mouth.

Dominic Frisby: It’s not for me to say, but I’ll tell you who said that. Adam Fleming, who’s Ian Fleming’s nephew and a gold bug of many years. He’s read everything. He sent me an email saying, “I have read every book ever written on the precious metals, and yours was the best by far.”

If you do buy it, look out for the anecdote about The Wizard of Oz, which I heard years ago and I’d forgotten about. I’m not even going to tell you what it is now, so you can go and read it. That went down very well in the talk today.

Timothy Allen: Yeah, that bit did. People think The Wizard of Oz is connected with mind control and stuff though, don’t they? Don’t you know that?

Dominic Frisby: I didn’t know that.

Timothy Allen: They use Dorothy, going to the other place, in mind-control programming things and stuff.

Dominic Frisby: Oh yeah, there’s a whole rabbit hole there.

Timothy Allen: Anyway, got to go. Thanks, Dominic. Cheers, mate.

Dominic Frisby: Cheers. Thanks.

Notes

This transcript was reconstructed from the raw timestamped episode text. The pre-interview microphone and headphone setup was removed, as was the mid-conversation camera-card interruption. The transcript begins with Timothy’s first substantive question to Dominic, around 0:01:09 in the raw recording, and ends at the sign-off around 1:12:09. The fragment of off-mic conversation after the sign-off was omitted.

Speaker names were added and formatted in bold. The source transcript did not include reliable speaker diarisation, so speaker turns were inferred from the flow of the conversation, questions, answers, interruptions and context. Short interjections and overlapping speech were lightly consolidated where doing so improved readability.

Timestamps, repeated filler words, false starts and obvious transcription artefacts were removed or tidied. The conversational tone, meaning, jokes, scepticism and swearing were preserved. The camera interruption around the Bitcoin/gold discussion was removed, while Dominic’s “That’s what the fuck happened in 1971” joke was retained because it forms part of the resumed conversation.

Proper nouns and likely ASR errors were corrected or normalised where reasonably clear. These include: Dominic Frisby; Liberland; Anarchapulco; Dumnonia; Kernow; Newquay Airport; Piddington; Wanstonia; M11; Pirate Party; ZIRP; King Offa; People’s Bank of China; Koos Jansen; Alasdair Macleod; SWIFT; Tether; Scott Bessent; Ben Bernanke; renminbi; Triffin’s dilemma; J.D. Vance; River Pactolus; Croesus; Alyattes; carat; carob; The Flying Frisby; John Law; Thuringia; Imelda Marcos; Bretton Woods; Nixon; Bank of England; Great Recoinage; Four Horsemen; Life After the State; Bitcoin: The Future of Money?; The Secret History of Gold; Executive Order 6102; Cowperthwaite; Liberpulco; and The Wizard of Oz.

A few names and phrases remain uncertain from the machine transcript and should be checked against the audio before publication if exactness matters. These include the precise Piddington/Oxfordshire reference, the identity and spelling of “John Worstoncroft”, the exact route of the Polish gold described by Dominic, the unnamed Bavarian lake associated with alleged hidden Nazi gold, and the precise identity of Adam Fleming as described near the end.

No independent fact-check has been applied to the substance of claims made by either speaker beyond the spelling and normalisation pass above. Claims about monetary history, China’s gold holdings, wartime gold, Japanese gold and the CIA, taxation, migration, capital controls and political figures should be treated as speaker claims rather than editorial assertions.