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- [00:02]
A
Get ready to take a flamethrower to the official narrative and learn what the elites don't want you to know. You're listening to the Tom Woods Show. Hey, everybody, Tom woods here. Episode 2758. We're here with the great Dominic Frisbee, who is the author, among other books, of a book that has just been released in the United States just this very week. Yet there's something a little bit odd about the book that I'm holding up here. I'll explain in a minute, but it's the Secret History of Gold, Myth, money, politics and power. But I love the Secret History of Gold. But the odd thing is here it is the United States, you know, and I'm a red blooded American, as patriotic as the next guy. But I'm actually holding the English version and Dominic is going to hold up for you the American version.
- [00:51]
B
There you go.
- [00:51]
A
That you will get in your shops, as somebody like Dominic would say there.
- [00:55]
B
Yeah, what would you say? The store.
- [00:57]
A
Yeah, you can get it at the store, right?
- [00:58]
B
You can get it at the store. I actually advised our publishers to go with black and gold. I think black and gold look very good together, but they went with white and gold. And the white and gold looks good as well. But both covers look very nice.
- [01:09]
A
I think they're very sharp. They're very sharp. Well, I have to apologize. Look, this is. I'm kind of flying by the seat of my pants here because I'm on my way to London. I'm going to be visiting Dominic. By the time you see this, probably I've already done it, but. But I'm rushing around frantic. I've just gotten out of the shower. It's just absolutely wild. But this is what's great about podcasting versus regular broadcasting. You know, occasionally you are allowed a mulligan on a day like today. So anyway, Dom, see, this is not the book that some people expected it's going to be. And it would have been fine if it had been that book. It would have been fine if it had been a book about, you know, the relative merits of gold as a money over the years. And it's held its value and it has stability and there is some of that. But this is so much more than that. This is a story of gold as a substance. That it's. What you learn in this book is not just that paper money has caused problems. I wouldn't say that's almost incidental to the story, but that's not the fundamental story. Gold permeates human history. It's in our myths, it's in our legends, it's in our turns of phrase. It symbolizes and represents honor and esteem and accomplishment. And of course, it's been the greatest money. So a good chunk of the book is talking about this, mankind's fascination with gold and how we've been drawn to it as a substance. I have a friend who's a gold dealer or precious metals dealer, and I said, I'm going to get you this book as a gift because you're going to appreciate what you're doing on a completely different level.
- [02:40]
B
Well, that's really sweet of you to say that, Tom, and I'm glad somebody's finally noticed. Actually, the response has been really good. You know, it's had really nice reviews and really nice responses from readers. But you're absolutely right. I'll start with this. If you go on Google and you say, what was the first metal human beings used? It will always say copper. And there's copper tools that date back maybe six or seven thousand years. But there are fragments of gold in Paleolithic caves in Spain that date back 50,000 years, so tens of thousands of years before we first used copper. And one of the things you commonly hear about gold is that it's useless, it has no utility, and it doesn't really. About maybe 6% of annual demand comes from industry, electronics and coats, spacecraft and things like that. But broadly speaking, gold has little or no industrial use. And yet it was the first metal human beings used tens of thousands of years before we used any other metal. And human beings would have found little nuggets of alluvial gold in riverbeds as we hunted and gathered. And we would have picked them up and they will have glistened and sparkled and captivated us. And we would have worn them as jewelry, along with bits of shells and other things that we wore, and we would have given them out as prize, as reward, as an expression of gratitude, that kind of thing, and maybe even use the fragments as a tool of barter. So in other words, we were using gold 50,000 years ago for exactly the same thing we use it for today as jewelry to store value and to display value. And its use has never changed. People often ask me about what the future of gold is, this analog asset in a digital age. And I say future is exact. You just need to look to the past and know what the future will be. Is exactly the same. And it. It is wealth in its purest, most distilled form. And as such, it has been an incredible motivator of Human action over the years. And I'd say that probably the greatest motivator of human action is probably sex, the need to reproduce, maybe it's food, the need to eat, but after that, it's wealth, it's gold. And it has inspired human beings to go to new places, explore new places, invent things, to innovate, to do the most brilliantly wonderful things and thus to progress mankind forwards. Because, you know, mankind does what he does for wealth. And yet it has also inspired human beings to do some of the most terrible things in history. And so it's not like it's, you know, it's all wonderful and pure because human beings have done awful things in the name of gold. We've killed each other, we've raped each other, we've pillaged each other. You know, so there's always this essential contradiction there. But yes, I would argue that it's even today where, you know, gold has no official role anymore. There's a sort of theme of gold to everything we do. One American New York speculator said our instinct for gold is the oldest commercial instinct of the human race. And I think he's absolutely right.
- [05:48]
A
There's so many interesting stories in the first portion of the book. And yet I feel like, given that I don't have a Joe Rogan style show, I'm going to have to leave a lot of that to the reader, which is just as well. I feel like as an author, you would sell a lot of copies on Joe Rogan, but some people would feel like, well, I basically read the book I heard them talk about for three hours, you know, whereas this way you got to go get. And plus, that is a great title. It was somebody close to you, like an agent or somebody who came up with the idea of the Secret History of Gold.
- [06:15]
B
Yeah, well, I have a friend called Toby Bray who reads a lot of my books before I publish them, and he used to be my editor at Money Week way back in the day. And he's ruthless. He's an ex army guy and he's just ruthlessly honest. And sometimes you crave honesty, as I'm sure you know, and you need someone to just absolutely pull you to bits and tell you what you've written is boring and so on. And everything I write he absolutely crucifies. It just goes, this is boring, this is boring. Where's the story? Where's the story? But in doing so, you just eliminate all the boring stuff and you just keep the stories, the nuggets. But yeah, it was his idea to call it, the secret history of gold. And it, it kind of is because it's not secret in the sense that it's not like, you know, hidden treasure, but there's loads of stuff, you know, even James Turk is one of the most famous gold investors writers in the world. He founded a company called Gold Money, very well known gold guy. And even James was like, there's loads of stuff about gold I didn't know.
- [07:12]
A
Yeah.
- [07:13]
B
In that respect, even the die hard gold bugs are going to find new stuff in there that they.
- [07:17]
A
Oh, there's no doubt about it. There's no doubt about it. I was learning something fresh on every page. So on that front, could you say a little bit about Marco Polo? Because it seems like the observations about paper money, they're so relevant to today that it's almost spooky. But it just goes to show there were recurring themes in the history of money.
- [07:37]
B
Well, yeah, I mean, Marco Polo is regarded as, you know, one of the world's early great explorers. And he was the guy who left Venice and went east. And he was a merchant basically. And a lot of merchants were explorers. You sort of did both jobs at the same time because in being a merchant you ended up being an explorer. But of course he ended up in China under Kubla Khan and he was amazed because this was shortly before the decline of China. He wrote back how the great Khan causeth the bark of trees made into something like paper to pass for money all over his country. And it's very funny what he writes. He said he hath the secret of alchemy in perfection. He makes money from the bark of mulberry trees so numerous that whole districts are full of them. All these pieces of paper are issued with as much solemnity and authority as if they were pure gold or silver. Now what Marco Polo didn't know is that shortly after he left, the currency collapsed. And what was interesting is that he went to work for Kublai Khan for a little bit and Kublai Khan paid him for what he did and he knew he was going back to Venice and he didn't want the paper. He took the gold. Marco Polo took the gold rather than the paper. He even though he reveled about it and then he got mugged I think somewhere in Turkey on his way back. And he ended up losing it all. But yeah, it was the sort of first example of paper currency, you know,
- [09:05]
A
and of course it has.
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B
And there's a whole chapter actually on alchemy, which in itself is a. Right.
- [09:08]
A
So I want to, I was thinking about. The funny thing was, just before I got to the section on alchemy, I wondered, is he going to mention alchemy? Because you talked about Isaac Newton first.
- [09:17]
B
Yeah.
- [09:18]
A
And didn't mention alchemy. And I thought, well, now, hold on a minute, Dominic Frisbee. And then of course, there's a whole section on it. But the first part you're talking about is the problem that basically people have with any kind of money, which is, are you giving me something that's fake? And this friend of mine who's a gold dealer at one of my conferences, he was showing how there are simple ways that nowadays you can get a sense, especially if you're a dealer, of the quality of the money. And he actually took a couple of coins and clinked them together for us. And he said, now you can hear, you can hear it in the way they clink, as opposed to the way base metals are going to hit each other, stuff like that. But there have been ways. Like you talk about the practice of biting the gold medal, you know, in the Olympics. So how have people dealt with that problem over the years? Because obviously everybody has to.
- [10:08]
B
Well, yeah, there are all sorts of different methods, but you're absolutely right. Just simply flipping a coin in the air, it will make a certain ring. If it's a gold coin that other metals don't make, they used touchstones which were little bit of stone and you would scrape the stone, you would scrape the stone with something you knew was gold. And then if you scraped it with what you suspected might be gold, and if the scrape was the same, you knew it was gold. That was another way they used to do it and biting them. If the gold coin was pure gold, if you bit it, it's not so much the taste of it, it's not the taste of it at all. In fact, it's that if you hold it between your teeth and it's pure gold, you can bend it slightly, you can use your teeth as a clamp. And even if you leave a couple of little tooth marks in there, then you know the gold is pure. The old dollars and the sovereigns, they mixed it with a little bit of copper, so you couldn't really do the bite test on those. You'll all see pirates in films and they're like, they bite their coins and you sort of think it's this sort of expression of pirate masculinity. But no, it's just a simple bendy test, really. But that tradition has spread on into the Olympic Games and now so now, they're. Journalists always tell Olympic gold medalists to bite their coins, but unfortunately, Olympic gold medals, not gold. They're silver plated with gold. In fact, the last time they were. They were actually pure gold, I think in the London Olympics in, I want to say, 1908. And that was the last time they used gold. And that was the sort of the peak of the British Empire, coincidentally. But, yeah, that was the last time they were pure gold.
- [11:39]
A
All right, that practice today is purely performative.
- [11:43]
B
Exactly.
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A
I mean, it's not like you were actually testing. Has the Olympic committee given me a real medal? I know that wasn't why they did it, but. All right, so what.
- [11:51]
B
What was Isaac Newton's story, though, about the Japan Olympics, The Tokyo Olympics a few years ago? All the gold, silver, and copper for the bronze medals came from recycled phones and computers. That was the sort of. They made it all from recycled metal.
- [12:06]
A
Oh, that's a novelty anyway.
- [12:07]
B
Yeah, it is a novelty. And probably the only Japanese. The only people organized enough to do something like that. Yeah.
- [12:13]
A
All right, so what's the role of Isaac Newton in all this? Before we get to alchemy, hey, gang. You and I can speak frankly to each other so I can say to you, and you will not be scandalized, that every dollar you keep away from this regime is a moral victory. So that's why if you're a business owner or you're a high W2 earner paying at least 40k a year in taxes, you need to get to know my good friend Matthew Sersley. He's a brilliant tax attorney, and he loathes the IRS every bit as much as you do. And of course, obviously, you want to work with somebody who shares your values because he has a philosophical commitment to keeping as much money in your hands as possible. It keeps him up at night. And I know Matthew well. He's been on my cruise, he's been at my murder mystery parties. He's in my elite mastermind. He's been listening to the Tom woods show from the very beginning. So you don't have to justify yourself in front of him. And because he's a tax attorney, your conversations with him are protected by attorney client privilege. So whether you're running a business or doing a side hustle or flipping real estate, or, frankly, you're just sick of handing over half your paycheck to evil sociopaths. The great Mr. Sersley helps you stay smart, compliant, and legally minimize what you pay the IRS. So your next step is go to www.agorist taxadvice.com woods that's a G O R I S T taxadvice.com woods and grab your free Agorist Tax Toolkit. It's full of powerful tools and templates you can use to get your business in order, track your expenses and reduce how much the IRS takes from you without crossing any lines. So head to www.agoristtaxadvice.com woods right now.
- [13:49]
B
Well, we all know about Isaac Newton being a brilliant physicist and a brilliant mathematician, but he was also given the job. English currency was a mess in the late 17th century and the Chancellor basically got all the cleverest people in the country together. Isaac Newton, John Locke, various others, Christopher Wren, who designed all the buildings. He just said, look, we're going to have to sort out the money. How can we sort out the money? Because the problem was all the silver was going to the Continent, being melted down and sold as bullion because it had a greater value as bullion than it did as coinage in the uk. So there was a shortage of. In those days, if there was a shortage of gold and silver, there was a shortage of actual currency because you didn't use paper money or debt in the same way we do today. So there's a genuine shortage of currency. They didn't know what to do and so they got. Isaac Newton proposed an idea which was to devalue silver. And they all hated Parliament or had that effectively meant their he was going to devalue silver by 20% and he would stop it being. Because he calculated that anyone melting down silver coins and selling it in bullion in France was a rational actor, which they were, because they were just doing what markets do. But all the House of Commons, which is all made out of British landowners, they just saw the net worth declining by 20% if you devalued silver by 20%. So they went against it. So Isaac Newton basically said, well, this is going to carry on happening. And he did two recoinages to try and stop it happening. And he went after all the currency. There were lots of counterfeiters and he went after all of them and cleaned up that side of things. And he basically designed the gold standard, which would become the sort of the bedrock of British currency for 100 years, until the Napoleonic Wars. And then we lost it again and then it came back again. But it was an accidental gold currency, because what actually happened was there was still this shortage of silver. The Portuguese discovered gold in Brazil and huge amounts of gold were mined there and brought back to Portugal. And the Portuguese spent all Their money with the British buying British goods. And most of the Portuguese gold that was mined in Brazil ended up in Britain in exchange for British manufactured goods. Bit like what's happening with China now, you know, the money ends up in China in exchange for Chinese manufactured goods. And so suddenly we had these vast supplies of gold and it enabled the gold standard, but it was an accidental gold standard because Newton was trying to devise a bimetallic standard. And so Britain became the first country to adopt a pure gold standard. Everywhere else in the world was bimetallic. And this went on right until the mid19th century. And in 1850, every country in the world, apart from Britain and Portugal, was still on a bimetallic standard. Then, of course, you had the California Gold rush. Gold discovered in California and then subsequent to that, in Australia and then South Africa. And there was suddenly a vast increase in gold supply. And all the economists at the time, and even the Economist magazine itself, it was even wrong about everything, even back then, started saying, all this increased supply of gold, the gold price is going to collapse. But what actually happened was the silver price collapsed. And the biggest casualty of the gold rushes was silver, because there was so much gold now, it enabled nations to just have pure gold standards. And so in 1850, there was only, as I say, Portugal and Britain on the gold standard. By 1900, every country in the world, apart from China, was on just a pure gold standard. And silver got abandoned. It was a huge issue in America, you know, because it affected all the farmers. And William Jennings Bryan, as I'm sure you know he was, he won the Democratic platform with a great speech. Thou shalt not crucify mankind on a cross of gold. And sitting in the audience when he gave that speech was a young author called Frank Baum, who went on, of course, to write the wizard of Oz, which was an allegory about the gold and silver standard, because in the original book, she had silver slippers on a gold standard. The yellow brick road walking towards the Emerald City. And so, yes, but it all began with Isaac Newton and his accidental gold standard. And what's so wonderful about Isaac Newton, as well as being a brilliant physicist and this sort of monetary genius, he proves to me that polymaths can exist. Because he was also nuts about alchemy. And he spent more time on alchemy than he did on actual physics or mathematics or optics.
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A
Yeah. Now, alchemy is fascinating to the modern reader because we all think of, you know, Newton is the archetype of the rational man, but at the same time, I think people sometimes mistake alchemy as pure superstition when there was a logical structure to it. But still there was something, something a little woo woo about it in that. That's an American expression that you may not be familiar with, Don. Woo woo. Yeah, it's associated with, with.
- [18:32]
B
I think I can deduce what it means.
- [18:34]
A
Yeah, I figured the context made it obvious enough. But the idea is that through it we can penetrate to the fundamental mysteries of the universe. But then you also remind us that, you know, that's true for some people. But let's not forget the mundane explanation that some people just want to get rich by being able to create gold.
- [18:52]
B
Sure. I'm sure that's the primary driver. And we're back to that thing of food and, you know, what drives mankind forward. And greed is a big, big motivator. You know, Newton was a greedy man. He liked to pound notes, as we say in England. He was speculating in the South Sea bubble and he got out just before the top and then he saw it going up again and he thought he'd sold too, and he bought back in and then lost all his money. You know, he was a speculator, same along with the rest of us. And he was into the alchemy partly for scientific reasons, but it wasn't altruistic. He wanted to get rich, same as everyone else. And he actually thought he'd cracked it. At one point he thought he'd found the philosopher's stone and he wrote that he had. And then he realized he hadn't and he went into a huge depression that lasted about a year. And it's not known if it was the sort of disappointment at his failure that caused the depression or simply the mercury that he'd been working with sent him a bit woo woo.
- [19:46]
A
Yeah, yeah, yeah. Who knows? Who knows?
- [19:49]
B
Yeah. I think Keynes described Newton, I can't find that quote, as the last of the magicians. Something like that was how Keynes described Newton. But alchemy, after Newton, it sort of started to get frowned upon, but it was a legitimate exercise until then. And you know, alchemy, I mean, it's chemistry now and a lot of alchemical practices are just, you know, used in chemistry. And it was quite rigorous and there was, you know, experimentation and so on. It was, it was quite legitimate. They were just barking up a tin Pan alley, as we say, or maybe they weren't because, you know, it still goes on today and we still have a fascination with it. You know, Harry Potter and the Alchemist stone And that book, the Alchemist, you know, one of the best selling books of all history. So we, even today we have an obsession with alchemy.
- [20:34]
A
You have to forgive me that. I do want to ask you some things that people would expect me to talk about.
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B
Go on.
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A
Because you do cover them really, really well. And in your book there is a section called, and this is around the time of World War I, the human cost of Leaving the Gold Standard. Now, by the way, have you read a book, are you familiar with an economist named Saifuddin Amus?
- [20:56]
B
Yes.
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A
Okay. His book, the Fiat Standard, have you ever read that?
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B
No, I haven't, but I know the arguments, okay.
- [21:03]
A
Because he just applies the logic of what happens with the debasement of money to all different aspects of society. So you likewise talk about the human cost of leaving the gold standard. What does that look like?
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B
Well, Safedin and I are completely on the same page as far as that's concerned. You know, it's not just money that's been debased. It's everything, you know, values, food, it's just everything. But in terms of World War I, you know, they all said the world, you know, 50 million people lost their lives in World War I, if you include the Spanish flu that followed. 50 million people. But there was not the gold to pay for that war to go on for the extent that it did. And you know, everyone said the war will be over by Christmas, and it would have been over by Christmas if we'd stayed on the gold standards, because there was not the gold to pay for it. The way the French and the Germans came off the gold standard and the English sort of, we did a usual hypocritical British thing of half coming off the gold standard but withdrawing gold from circulation. So effectively coming off it, even if technically we didn't actually come off it. But the effect of doing that and encouraging people, you know, issuing shed loads of debt, which we only paid off 10 years ago, by the way, in exchange enabled that war to go on. And if we'd stuck to the discipline of the gold standard, the war would have been over by Christmas and all that damage just could not have been done. But unfortunately, fiat money enabled that war, as it does so many wars.
- [22:35]
A
And what's so odd, I don't know what else to say, is that a U.S. congressman, former U.S. congressman like Ron Paul, gets on television and says a few kind words about the gold standard and he's treated like the craziest man in the universe, as if it's just simply obvious that the monetary system we have now is vastly superior to one that, if you look at it in any depth at all, made possible slaughters and levels of destruction that were unimagined before.
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B
Yeah, I mean, the US military industrial complex is kind of enabled by fiat
- [23:12]
A
money, I would say,
- [23:16]
B
but I mean, Ron Paul's exactly right. I think the gold standards of the 20th century are slightly misunderstood because in the 19th century, gold and silver were actually money. We used gold, silver coins. We didn't use. We used paper that represented coins that you could exchange for coins. But gold and silver coins were actually in circulation. So it was sort of a gold standard, but money was gold and money was silver. Whereas in the 20th century, after World War I, Britain and France and Germany and most of Europe went back on the gold standard, but they withdrew gold from circulation. So gold. Ordinary citizens weren't handling gold, and it was actually very hard for ordinary citizens to get hold of gold. And it wasn't really possible to exchange your paper for gold. So it was called a gold standard at the sort of government level, but for the ordinary citizen it wasn't. And then, of course, in America, you made it illegal to own gold. All Americans had to hand in their gold in 1932. So Americans weren't holding gold either. So it was completely bogus. It was like this gold standard, but if you're an ordinary citizen, you weren't allowed gold. And in ancient Egypt, gold was a royal prerogative. Only the pharaohs and those close to the pharaohs could have gold, and it gave them safe passage into the afterlife. Well, what's the difference between that and Europe and america in the 20th century? When ordinary citizens don't get gold, only the state does. It was a sort of replication of that, but yes. So they were totally hypocritical.
- [24:43]
A
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- [26:36]
B
Well, I think it was already considered, as Keynes put it, a barbarous relic. Gold standards by then. And the sound money brigade just didn't have enough influence. I mean, in fact, gold, and going back to the gold standards was a lot of the blame for the financial crisis that followed the 1929 Wall Street Crash was put at the foot of the gold standards. But as I say, they were bogus gold standards. You know, I put the blame at too much government intervention in the money system and they should just let the market choose what it uses as money. But you know, someone like Howard Buffett, Warren Buffett's dad, was a big advocate to sound money and so on in the 1930s after the confiscation. And he had no influence whatsoever.
- [27:15]
A
And he was a U.S. congressman. Most people don't know that. Yeah, and he was very sound. He was very sound. And by the way.
- [27:21]
B
Oh my goodness.
- [27:21]
A
Yes, We've discovered he had a brief correspondence with Murray Rothbard. He said, I've read Man Economy and State, I'm very interested in what you're doing. And then he also said, you know, I'd like to get some of your work on the panic of 1819 and business cycles, because I have a son who's very interested in these topics.
- [27:40]
B
Oh, wow, Very good. Yeah, I'm surprised. You know, Warren, Warren Buffett always Talks gold down, but he's talking it down from an investment point of view. Yeah, because he likes things with growth and yield and all that, which gold obviously doesn't. But I bet you, I mean Warren tends to keep his politics to himself, but I bet you coming from that family, that sound money background, I bet you he would prefer to see America with sound money, put it that way.
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A
Well, also know that Howard, I mean Howard basically was a more or less non interventionist abroad. I mean he had a very, he was like a proto, I don't want to say Trump because that would be to dignify Trump too much compared to Howard Buffett. But he was like a proto America First Buchanan type of, of guy. But very well read like Buchanan, unlike some other people, articulate, but as you say, not fashionable. You know, we're going to do things this way and all your clever arguments that you got from your dusty old books aren't going to change that. So explain to me why are some financial writers, like forget politicians, why are some financial writers so hostile when the subject of gold comes up? And I, and I mean that both in the sense of should I buy and own gold as a hedge? And I also mean should gold be in some way part of the monetary system? Either of those. There are financial writers who are hostile when you ask both kinds of questions. And is it partly that they view interest in and desire for gold as like an implicit rebuke to the system that their own prestige and relevance are tied up in?
- [29:18]
B
I think in a lot of cases the answer to that is yes. You know, a lot of investment does get politicized and it's largely the sort of libertarian leaning people that like gold, you know, sound money. Governments can't manipulate it, economists can't use statistics, all the rest of it, it puts a leash on government. And so those of a libertarian mindset tend to favor it. But there is a legitimate criticism. You know, it pays no yield, it just sits there doing nothing. So it is simply a hedge against the debasement of currency. From that point of view and in the sort of what they called the disinflation of the 80s and 90s, gold was a rotten investment. It went nowhere for 20 years. If anything, it went down a little bit. And meanwhile, if you'd just been long stocks, you were in the greatest bull market in the history of mankind, pretty much. So there are times when gold isn't a good investment. I don't think now is one of those times. I think it's a, I think everyone should have an allocation to gold, even if only as insurance. But everyone should have an allocation to gold because it's just so obvious that the dollar and the pound and the euro and all the rest of them are going to be debased. It's the only way forward. But it pays no yield, there's no growth. It's literally dead. It's the most inert thing there is. And it's funny that it should be so inert and I'm going on a sidetrack, but it never changes gold. It doesn't tarnish, it doesn't rust, it doesn't decay. And they say that gold was present in the dust which formed the solar system. And that dust gradually got compressed, you know, through accretion and gravitational pressure and so on. And that's how the planets form. But if gold never changes and it never loses its shine, that means that the gold that's in the earth's crust and therefore the gold that's on your ring or around your neck is not just older than the earth itself, it's older than eternity. I mean, sorry, it's older than the solar system. And so I often like to say to touch gold is the closest you'll ever come to touching eternity and eternity, you don't think eternity is inert, but it kind of is. So you know, there's a legitimate investment reason to not like gold. And that it is the fact that it is dead, inert and yet it's eternal. At the same time, if you're looking for an investment for your family five generations down the line, I would say gold, bury some gold in the garden, have the land and you know, put it in a code for your descendants. Gold is simply the best investment you can make because you know the value of that gold will preserve over time. If you were to give them Apple shares, well, Apple might not be around in five generations time, but over a three year period or something, you know, some growth tech company might be a better, much better investment than gold is. And professional investors like, you know, they like analyzing companies and, and looking at the yield on bonds and all these various reasons. And if you just go, you just buy gold and leave it there. Their thinking is a bit redundant. So, so it's partly political and it's partly genuine financial reasons. But I use this saying, I thought it was an old Wall street expression, but I googled it to find out the source of it and it turns out the person who said it was me. But the expression is put 10% of your net worth in gold and hope it doesn't go up. And I think there's a lot of
- [32:30]
A
wisdom to that, I should say, because I have a sponsor I like very much called monetary metals. They do gold leases in which you actually do earn a yield, you know, somewhere around 4% a year on the gold. So they've come up with a creative way to do that. But in general, I think being worried about. See, I think for me gold is, is a long term thing and I'm not going to try to time the market because no one can. I'm not going to try to time. Well, I think now it's poised to go way up. What I would do is own some using money that I can live without, own some with money that I can live without. And if during my lifetime it doesn't rise to the extent that I, you know, thought that it might, it gets handed on to my kids and eventually it will, or at least again it holds value and they can have it.
- [33:17]
B
I couldn't agree more, Tom. And the beauty of it is, is money in and of itself. It's nobody else's liability. You just give it to your kids and there's the wealth. They don't have to go through anyone else. That's why it serves so well as money. And that's why it's interesting at the moment because we have this thing called de dollarization where gradually around the world central banks are lightening up on their US dollar holdings and increasing their gold holdings. And this sort of process accelerated after America froze Russian assets, after it invaded Ukraine. But it just makes total sense for central banks to hold an asset that can't be frozen by anyone else. That is value in and of itself. And that's the beauty of gold. And for that reason, if you were to imagine a sort of pyramid of financial instruments, right at the top would be gold. And then beneath that you have things like cash and bonds, which they carry value and they're liquid and so on, but they're still somebody else's liability. Gold is the only thing that is nobody else's liability and is pure wealth in and of itself.
- [34:22]
A
You know, the obvious thing about gold in our circles has to do with the maintenance of its purchasing power over time when it was actually circulating as money. And so I feel like that that has to come up. And you say in your book at one point the price of everything should have fallen because as you say, we've gotten better at making things. So it stands to reason, as prices generally fell during PeaceTime in the 19th century, there's no reason that trend shouldn't have continued in the 20th century. And there are ways you can demonstrate this by, you know, it took this many gold coins to get this particular consumer good. And you can track that over time. How would you explain this aspect of the gold question to somebody who's never thought about it before?
- [35:06]
B
Well, we're so used to prices going up. It's just normal.
- [35:11]
A
We think it's part of life, it's
- [35:13]
B
got to be that way and it just isn't. And if you look at consumer prices, as you mentioned in the 19th century, and we've got the data and I show it in the book, prices actually more than halved over the course of the 19th century. So houses fell in value against gold and consumer goods fell in value against gold. Food fell in value against gold. So it meant those on salaries, people working, their savings bought them more over time. So it encouraged a culture of saving and investment and tightening your belt so that you could save money to have a little bit more in the future. And in the uk it saw the fastest wage growth that period, fastest wage growth in British history, and also the emergence of a new literate middle class. Whereas previously, you know, we'd just been a bunch of yokels working on a farm. We went into the cities, we worked and we saved more than we earned. And then suddenly we had a new middle class, literate and capable. And it was an extraordinary period. And then that just completely changed after 1971 when the last vestiges of the gold standard were abandoned. And it's just amazing, if you just look at a chart of consumer prices, they just take off after 1971. As Seifedine says, and I sort of say it as well, you see a decline in the standards of everything else. And it's all related to sound money, but it goes back longer because you can actually measure how much bread a certain amount of gold bought you in the Old Testament. And that same amount of gold will buy you more bread today, as it should, because bread prices have. We got better at making bread. We know how many lambs Muhammad could buy with a gold dinar in the Quran. And we know that a Roman senator could buy himself a toga and a pair of sandals for roughly an ounce of gold. And an ounce of gold would be four and a half thousand dollars today. You could buy yourself a really, really slick tailor made suit for that kind of money. And I also look at house prices and we have this idea that house prices relentlessly go up, particularly if you live somewhere Like Central London or New York or la. But if you measure them in gold, they're the same price as they were in the 1950s. It's extraordinary. And so it totally changes the dynamic of a society when the money beneath it is sound. But the source of it is that gold buys you as much food, as much clothing, as much energy, as much accommodation as it's always done. And it never changes. Now, there's three purposes to money. One form of money is to be a medium of exchange. And in fact the US dollar works really well as a medium of exchange, largely because of all the incredible fintech that's been built on top of it all the credit card systems and payment systems and so on. And in fact, I think one of the reasons why fiat money has lasted as long as it has is because of the incredible payments architecture that's been built on top of it just functions so well. But this also, that's just medium of exchange. And gold is a medium of exchange. Well, it's not very good because a tiny gold coin the size of a nickel or a dime or something is worth hundreds and hundreds of dollars. If you just want to make an everyday transaction, it's no good. And so we use silver and copper and nickel for smaller transactions. Gold's never been the greatest medium of exchange. You would only use it for large purchases. But as a store of value, as I've already discussed, it's unequal, but also as a unit of account. That's the third purpose of money to be a unit of account, to measure the relative cost of goods and services. And if you want to measure prices over time, well, you've got $26 and you've got $2015 and you've got $2000 and you've got $1990. The unit of account changes all the time and you have to sort of do inflation adjusted dollars and then nobody can quite agree what inflation is. But as I said, gold is exactly the same as it was before the solar system. Gold is a constant and for that reason we should use it as a unit of account because it's just the best unit of account there is. Because gold in itself is constant. We don't use it as a unit of account because we have to pay taxes in our local currencies and so we account in those money. But fiat money is a terrible unit of account and it's led to the spread of vast amounts of misinformation.
- [39:26]
A
You write about stuff like this all the time. In fact, I got your newsletter email newsletter just before this. And it was. What was the subject line? It was something about what you're doing with your money. And it was like nothing. What was the subject line? You remember that?
- [39:38]
B
Yeah, it was that. What I'm doing with money. My money at the moment. And then I think in brackets, I put not a lot because that's what it was.
- [39:43]
A
So, of course, I read you all the time. But what I was going to say was you write about these things all the time. And when you set about writing a book, maybe you're different from me, but I think a lot of people assume that when you sit down and write a book, you already know everything that goes in the book. But I'm learning things as I write. Typically, I have the general structure, but then there are things I want to look up. And in the course of that, I discover an interesting story or anecdote, this or that was there, and I'll. We'll wrap up after this. But when you were doing this, was there anything that came as a surprise to you, or was it all. Yeah, that's about what I expect.
- [40:15]
B
Somebody once said to me, if you want to learn about something, write a book about it.
- [40:19]
A
Yes, correct.
- [40:20]
B
And I don't know where that expression comes from, but I loved it. And, you know, I did the same with bitcoin. You know, I didn't really know anything about bitcoin. And then so I set off and wrote a book about it way back in 2014. 2013, actually. And similarly with my book about taxes, with the book about gold, I already knew. One of the reasons I chose to write the book about gold is I thought it would be an easy book to write because I already knew the subject so well. But there was loads that I learned that I didn't previously know. All the stuff about gold and eternity, I'd never really thought about. It still amazes me that gold never loses its shine. I just find that incredible. But all the stuff about why the gold standards of the 20th century failed, about how they were bogus, some of the incredible exploration journeys that people went on, I knew barely a thing about the gold rushes, which is just the most incredible time in. In human history. The conquistadors. I didn't know very much about Chinese gold holdings. I went down a rabbit hole there, and we. We haven't talked about that. But China has way more gold than it says it does. And, yeah, so there were loads of things that I didn't previously know that I learned. And that's always the way when you write about something It's a journey of discovery as much as it is a journey of communicating what you already know.
- [41:38]
A
Well, even though I'm holding up the English version of the book because I was at Dominic's launch party in London last year, he's holding up the American version that most people listening to this are likely to get. The Secret History of Gold is the book. I'll have it linked@tom woods.com 2758, but you can just type in the Secret History of Gold and go get it. It's highly entertaining. I got a copy for one of my mastermind guys and he loved it so much he's bought several copies for other people. Great gift for anybody. Anybody in our world will love it and you yourself will love it. So, Dominic, best of luck with it. I hope Americans are smart enough to buy it.
- [42:13]
B
You're very kind, Tom, and thanks very much for having me on, and I'll see you next week.
- [42:17]
A
All right, my pleasure. Dominic Frisby, everybody. Thanks so much for listening. Make yourself and those you love less vulnerable to the regime, both mentally and physically. Get more forbidden information@tomsfreebooks.com and be sure to subscribe to the show wherever you listen.
- [42:35]
B
See you next time.
- [42:44]
A
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