Lending a government money, in Dominic Frisby’s line, is buying vodka for an alcoholic. The UK private sector is lean and on sale. Gold is holding up with yields over 5 percent because someone with deep pockets is buying the only reserve asset that is not a promise. He does not think the metal makes a new high in 2026. He does think the shares, after a 50 percent correction, are more of a buy than a sell.
This is not a recommendation to buy or sell a bond, a miner, a house, gold, Bitcoin, or a fund. Dominic Frisby is a British writer and comic. He sells a newsletter, the Flying Frisby, and he owns the basket he describes. His tax ratios, his China tonnage, and his price levels are his working notes from a conversation with Peter on Mining Network, in mid-October 2026. A man with a book out, The Secret History of Gold, has a reason to talk about gold. Yields move. Governments change the rules. You can lose money.
Here is the only idea. A bond is a drink you buy for the state. Gold is the asset that is not a drink. Frisby has never bought a government bond in his life. He calls it immoral, because the loan lets the government keep doing too much. Taxes too high. Rules too wide. The state trying to be the economy. That habit is worst in France and Britain, and it is still a problem in the United States. The private sector, in his telling, is the only thing that can grow the way out, and the private sector cannot grow while the tax and the rulebook sit on its chest. So the debt is on the government’s books. The companies are lean. The stocks are cheap. Foreigners are buying the companies. And gold, which should have buckled under bond yields near 5 and 6 percent, is sitting above $4,000, because a buyer who does not want a counterparty is still in the market. He thinks that buyer is China. He does not think you should join the state at the bar.
The private sector is in shape. The state is not.
Peter opened on the fear that sits closer to home than Washington. Higher bond yields. Rising government debt. Disorder in Europe. He worries more about Britain and France than about the United States, even though America has its own debt and a five-year yield he called uncomfortably high. Would Frisby share that worry.
He does not follow the bond market closely. Then he said why. Lending governments money enables them. It is vodka for an alcoholic. The biggest problem in Western Europe, in Britain, and in the United States is the same list. Taxes too high. Regulation too expansive. Governments too keen to intervene, and trying to do too much. It is worse in France and Britain than in America. It is a problem in all three.
His tax figures are his, and they are large enough to argue with. In France, taxes as a share of the economy, “by the time you factor in inflation,” something like 57 percent. In Britain, a bit lower, but on the same adjusted basis in excess of 50 percent. Do not treat those as a Treasury release. Treat them as the size of the claim he thinks the state is already making. The response of government, he said, is not to cut the tax or thin the rulebook. It is to add to both, and to add to government activity. Government will not get the United States out of its bind. The private sector will, if it is allowed to grow. While the burden stays this heavy, it cannot. Businesses are closing and leaving.
Then he split the British story in two, which is the part a stock investor can use. The private sector in the UK, he said, is actually in really good shape. Lean. Not much debt. The debt sits on the government. He has written at length, on his Substack, that UK stocks are an opportunity because they are cheap against the rest of the world. Many FTSE companies are global businesses. Put the same business beside an American peer that does the same thing, and the American name is often at twice the market value. So American companies come and buy the British ones. It is cheaper than spending ten years building the customer list, the licences, and the legal relationships from scratch. Almost every week, he said, there is news of another UK company being bought.
The most recent one he could think of was a miner, and it is an ugly example of the same sale. First Tin. On one hand, he called it a crappy AIM resource stock. On the other, it had two promising tin assets, and the bigger tin story appeals to him. Metals Exploration was able to buy it for 15 pence. The IPO, three or four years earlier, was at 30 pence. Anyone who stayed in from the listing lost half. Metals Exploration, in his account, walked off with a prime tin asset in Australia. Typical junior-market pain, and also the pattern. The asset was real. The listing currency was British. The buyer paid a distressed price for something that already existed.
He named larger prey in the same breath. EasyJet. Tate & Lyle, a business with something like 150 years behind it, “gone for a song.” The UK private sector, he said, is a screaming buy. It also cannot grow. If he were starting a company, he would not do it in Britain. Too much regulatory complexity. Too hard to get anything done.
The niches that boom are the ones the rulebook has not reached, or the ones that arbitrage a healthier country. Recruitment is booming in Britain. The recruiting itself is for American companies that are hiring. A recruiter is paid a commission on the new salary. American salaries, he said, are probably double British ones. So a UK firm earns a US commission, in pounds, on a US wage. Talent is flowing into that trade, a slightly higher grade of talent than the same job would draw in America, because the spread is fatter in London. It exists only because America is doing well and Britain is doing badly. Finance in the City is not what it was before the global financial crisis. There are niches. On the whole, he said, “we’re a mess.”
Yields can bounce. The trend, he thinks, does not.
Bond yields are in the news everywhere. Gilts. French bonds. Frisby’s first instinct is a trader’s instinct. When everyone is talking about a market, that talk is often a contrary indicator. So government bonds might actually be a buy, for a while, because the fear is crowded. He would not marry that trade.
The long trend, in his view, reversed around 2020 to 2022, when rates went below 1 percent. They have climbed ever since. You may get a reversion toward the average over the next few months. Longer term, he thinks yields are heading higher, even with the financial repression he says is coming. Repression is the state forcing savings into its own paper. He thinks we already have a version of it. Pension funds are steered into gilts and government bonds. That pressure will increase. And the more the buying is mandatory, the less faith there will be in the debt. A buyer who is ordered to own something is not a buyer who believes in it. At the moment, higher yields are a headwind for gold and silver. He thinks they can become a tailwind, once the market decides the yield is not a sign of health but a sign that the borrower is trapped.
Peter put France on the table. Debt service, he said, is already the biggest line in the French budget. In Britain it is larger than defence and larger than education. Same shape in the United States. These bonds roll. He put a typical life near eight years. As old cheap debt is refinanced, the interest bill rises even if the government borrows nothing new. Frisby agreed, and added the obvious. They are going to borrow more anyway. You do not need a new spending spree for the bill to grow. You only need the old loans to come due at the new rate, and a government that will not stop.
Peter’s picture of America was that Trump came in promising to slash spending, and that has not quite happened. Instead, measures like the Genius Act have been aimed at the short end of the yield curve. His sharper fear is France. Riots. An election next year, and Marine Le Pen. A year-to-date chart of French yields he called a hockey stick. Too big, in the worry he hears, for the IMF to bail. Frisby’s answer was the currency. France cannot print its own money, because of the euro. The European Central Bank, he said, will find a way to bail it out. Peter asked if that bailout is inevitable, once private buyers demand higher yields and the higher yields make the debt worse, the spiral everyone names. Frisby did not give a date. He gave the tool. Financial repression. Mandated buying. A slow loss of faith. Not a single Tuesday on which the bond “collapses.”
Gold went sideways. That is the point.
Peter asked the question the gold chart forces. Yields are up. Gold and yielding assets usually move apart. Is Frisby surprised gold is holding above $4,100. They are not near the highs of February. Year to date, against January, the price is roughly flat. How does that sit with the bond market.
He answered with a memory test. If, four or five years ago, when rates were below 1 percent and gold was around or just under $2,000, you had told him that gold would be above $4,000 and rates above 5 percent, closing on 6 percent in Britain and about 5.5 percent in the United States, he would not have believed you. They pawed at the old low. The cycle low, he said, was 2015, back near $1,100. A later low near $1,600. The path since the rate bottom is the surprise. Gold holding $4,000 while rates rise is, in his word, promising.
It is not, in his map, the start of the next spike. Gold had a summer rally, to something like $4,500, then pulled back as yields rose. August, he said, often gives false dawns. He looks at the metal on its own, and he sees 2006 and 2007. Gold ran to $720 in May 2006, then pulled back, in his memory toward something like $500, and range-traded for more than 18 months. It built a base at higher lows. Around the financial crisis it went to $1,000, crashed, and went back above $1,000. The run to $720 needed a long sideways stretch to become a floor. He thinks this tape is doing the same job. The low, for now, is around $3,900 to $4,000. In January and February he told Flying Frisby readers that gold would go sideways for a year. He is still saying it. He thinks the summer low near $3,900 may be the low, and that autumn may retest it. Everything feels shaky. October through May is, in his season, the better half of the year for gold. May through October is the weak half. He does not think gold makes a new high in 2026. It could in 2027, maybe in the second half.
That forecast is not a reason, for him, to stand aside. Pullbacks are when some gold stocks have already corrected more than 50 percent. He just bought Equinox. It is making a lot of money. Peter noted the stage Equinox is in, price against net asset value, trying to grow into a better multiple. Frisby did not dress it up. A producer that is actually earning, bought after a large correction, while the metal goes sideways and builds a floor. That is the equity version of the 18-month range. The metal is digesting. The share that fell by half is where the digestion hurt. He would rather own the hurt than lend the state more money at 5 percent and call it safety.
The quiet bid at $4,000
Peter offered a number for the bid under the floor. The People’s Bank of China, he said, has bought around a thousand tonnes in the first eight months of this year. More than the whole of last year. Worth, at the prices they were paying, something like $160 billion. A twenty-third consecutive month of buying. How much of the price is that.
Frisby’s answer was that the official number is the small one. China is accumulating more than it says. Somebody is stepping in at $4,000. One has to assume it is the Chinese, among others, and that they are the really big buyers. A huge economy. Deep pockets. In 2022, he reminded Peter, gold went back to $1,600. The climb since is not a mystery if a buyer of that size never left.
He has two reasons, and he has put both in the book and in the newsletter. The first is ordinary. China has been accumulating gold since 2000. It has been making money, and it converts a lot of what it makes into gold, because that is what people with money do. The more you have, the more gold you buy. Rising official buying is, in part, just a growing economy doing what growing economies do.
The second reason is national, and it has a name. De-dollarization. He does not need to decide whether Beijing wants the yuan as the reserve currency, and whether it wants gold behind it. It is an ambitious country, so of course it has ambitions for the yuan. Whether it will back that currency with gold “remains to be seen.” What does not remain to be seen, for him, is the property of the metal. Gold is the only reserve asset that carries no liability. No counterparty. No promise that a foreign parliament can rewrite. The buying, he said, ticked up after the confiscation of Russian reserves in 2022. It is a real thing.
He put a scale on the gap. China holds on the order of $3 trillion in dollars. It is natural, he said, that it would want gold to rise from something like 2 percent of reserves, to 5, to 10. The United States keeps about 70 to 75 percent of its foreign-exchange reserves in gold. If China ever matched that share, it would need tens of thousands of tonnes. Even a move to 10 percent, in his arithmetic, is a doubling. So it accumulates, and it declares the bare minimum that still looks credible. The central bank is not the only buyer. The military. The sovereign fund. Other state bodies. The monthly announcements are small on purpose. A few tonnes do not move the boat. Look across five years and you say, in his phrase, blimey. A boiling frog. If China turned around tomorrow and said it held as much gold as the United States, or twice as much, the gold price would rocket, the dollar would be in trouble, and the turmoil would arrive before Beijing is ready. It keeps the card. It does not need to play it while it is still buying.
He compared it to his own buying, which is the cleanest version of the idea. When he buys gold, he does not announce it. He accumulates, and he tells people when the position is finished and he wants the price higher. You do the same with a stock. China does not want the price up while the order is still working. Peter asked whether a gold-backed yuan is the point. Alasdair Macleod, whom Peter has had on the channel, says they will. Frisby is not so sure. James Turk’s line, which he quoted, is that gold puts a limit on government. China’s government might not want that limit. Peter agreed with the trap. No more stimulus, if the currency is bound by how much metal you have. That is why everyone left the gold standard. They wanted to print, and to act without the count. Frisby’s extra problem for China is trust. The Hong Kong vault, the Shanghai exchange, a way to turn currency into metal. Those facilities help. They do not finish the job. To win trust quickly, Beijing would need to make the yuan convertible at a stated price and then deliver the gold when people ask. It has not even made the yuan freely tradable against the dollar. “We’ve got a way to go.”
Still, he has a sentence from the book he is willing to stand on. There has never been a global reserve currency that did not start out backed by gold. Gold may be an old tool. China could move toward reserve status quickly if it chose. He does not see that as inevitable. He sees a card. A card is not a position you have to buy. It is a reason the quiet bid at $4,000 may not be a tourist.
The shares fell by half. The metal did not.
Peter turned to the equities. Mining shares are down 50 percent. They are among the riskiest stocks that exist. A higher gold price makes the game less lethal. Where is the risk against the reward.
Frisby’s answer started as a joke and ended as a date. He does not know why mankind is addicted to mining stocks. You could find, he said, a Mesopotamian tablet with one man ruined by a mine and another man made by one. The addiction does not leave. Broadly, speaking in the first half of mid-October 2026, he would say mining stocks are more of a buy than a sell. That does not mean they cannot fall. They fall very fast when liquidity leaves. Most of them depend on new capital, because most of them do not make any money. They are development stories, or exploration. A buy, in his mouth, is not a promise that next month is up. It is a statement that the correction has already done a lot of the damage, while the metal is only sideways.
The host then read a sponsorship for a silver developer. Placeholder ounces. A project name. A ticker. That was an advertisement, not Frisby’s analysis. It does not belong in his case. What belongs is the one silver fact the ad leaned on and that he did not need. He had already said higher yields are a headwind for gold and silver that may flip. He did not build a silver deficit model on the air. A reader who wants a primary-silver story should get it from a filing, not from a host’s script.
Copper held. That is the tell he trusts.
He has been writing about copper supply. Over the summer, he is encouraged. Other energy prices jumped and sank with the latest turn in Iran. Gold came off. Copper held up. The copper equities he follows have not risen. They also have not fallen. In a tape this shaky, not falling is the information.
The fundamentals, as he lists them, are the familiar pair, and he does not pretend one side is the whole story. Demand is up because of electrification, data centers, and the rest of that list. Supply is the part that has his attention. A paucity of big new discoveries. A paucity of new mines actually coming on. Declining grades. Declining recoveries at the mines that already exist. The world, he said, badly needs a major copper discovery and major new mines if it is going to meet what lies ahead. Copper holding up in the face of higher yields is the tell. Normally, he said, it would come off. Copper is also, in his experience, the main player when a broader commodity bull market is on. If copper looks strong, commodities more generally have a protagonist. He thinks it is fair to say we are almost certainly in a long, secular bull market for commodities, with copper as one of the leads. Peter’s old rule, that copper tracks world growth like iron ore, is not wrong. This tape is both. More demand from electric cars and data centers. And a supply side that is simply not delivering new rock.
He has exposure in the newsletter. The name he likes is Koryx Copper, in Namibia. It has, in his account, held nicely between three and four dollars. A new mineral resource is coming. A study is coming. He thinks the project is large enough to be bought by anyone, even Rio Tinto or BHP, or by a Chinese buyer. That is his opinion of one developer, not a survey of the copper industry. A price that refuses to break, in a sector that usually breaks when yields rise, is the fact he wants remembered. The buyer of the developer is a separate bet, and it may never arrive.
The portfolio that is supposed to do nothing
Peter asked the question that follows once you refuse the bond. Nobody wants every pound in gold and mining shares. Ten thousand millionaires a year, he said, are leaving Britain. Regulation is up. The tax burden is among the largest they have had. The cost of living is not a theory. How do you allocate if the core is gold, or 10 or 20 percent gold, and the rest has to live somewhere. Houses in Britain. UK stocks at half an American multiple. Hard assets. What.
On property, Frisby used gold as the ruler, and then refused the trade. Over the long run, the price of real estate measured in gold is much closer to the lows than to the highs. In that frame, gold is a sell and real estate is a buy. He does not think we are there yet. Another year or two. We have not been through the maximum pain. Higher yields are bearish for houses, because they push mortgage costs up, affordability down, and the asking price has to follow. In Britain there is a second weight. The cost of buying and selling. Stamp duty. And mansion taxes he expects in the next budget, unless Labour changes tack. Those taxes start as a small bite at the top. Then they filter down until everyone pays. The instinct of this government, he said, is to tax more, not to spend less. All of that is bearish for real estate. He would not buy unless the discount to the asking price is massive. He does not follow New York or Los Angeles closely enough to shop them. He would not touch the old hotspots. His son is moving to Austin, tired of British tax, and the prices there look reasonable beside London, Los Angeles, and New York. Austin also looks, to him, like a place of growth, because the taxes are low. He would not tell you to buy it this year. He has not studied it. He would not tell you to buy London either.
The basket he does run has a name. Dolce Far Niente. Italian, he said, for the sweetness of doing nothing. Buy the assets. Hold them. Reallocate once or twice a year. Do not watch the screen to see what a miner did this morning.
Energy is in it. Oil, and uranium. The uranium is owned through Yellow Cake, the holding company, so it is the metal, not a mine plan. For oil, North American producers. You cannot, in his view, buy a UK North Sea producer. “The cluster that that is.” You just have to own energy.
Gold starts at 15 percent. Bitcoin starts at 5 percent. Because they rarely rebalance, the Bitcoin share has grown far past 5, simply because the price rose. He knows a lot of mining people dislike it. His test is small and concrete. Download an app. Buy twenty pounds. Have a friend do the same. Send each other a little. Notice that the payment is full and final settlement. Then think about what that implies. After the twenty pounds, if you still want it, buy a meaningful piece, through an ETF or through a company that holds it. He wants an allocation. He does not want a sermon.
Bonds are the part he almost apologizes for. A small slice, through the investment trusts Ruffer and Capital Gearing. He cannot pretend to understand the bond book, so he hires it. Those trusts, he has noticed, do not go up and do not go down. He is bored of them. He thinks if everything else goes wrong, he will be glad they are there. That is not a view that bonds are safe. It is a view that a professional who is paid to survive a bond market may be worth a small, dull slice, while Frisby himself still will not go and buy a gilt.
Equities are the large piece. He started with a little America, a little Europe, a little Asia, a little Japan. He ended by selling the mix and buying an index that tracks the MSCI world market. The problem is the weight. That index, he said, is about 75 percent America now, and that American slice is tech and the artificial-intelligence trade. People have complained about the concentration for more than ten years. It has not mattered. It will matter at some point. It has not mattered yet. He calls it a consequence of the passive-investing mania. His answer is not a clever underweight. It is a long view he repeats so he can stand it. Economies grow over time because people get more productive. You buy the index. You remember that. You do not try to outsmart a mania that has been right for a decade, and you do not pretend it cannot break.
Gold. Bitcoin. Energy. A large equity index. A little bond trust he does not enjoy. That is the portfolio. He said it is up about 70 percent in three years. That is his score, not an audit. The point of the design is the Italian phrase. The sweetness of doing nothing is a refusal. Refusal to trade every headline. Refusal to lend the alcoholic a fresh bottle every time the yield looks juicy. Refusal to put the house on a junior that needs a new financing when liquidity leaves.
The exit that was wasted, and the door he would not reopen
Peter raised the old argument, because it is the same argument as the tax. Brexit was the moment Britain could have become, in Frisby’s line, the European version of Singapore or Hong Kong. Slash the rules. Slash the taxes. They did not. The people executing the exit did not understand it. They imported the existing European rulebook and then added more. Regulation got worse. A wasted opportunity. He predicted, among his annual calls, that Keir Starmer would survive. He says he got that one wrong. He writes the predictions on the day, because readers like them, and he forgets them until year-end, by which time the world has moved and he looks stupid. He does not invest that way. Opinions change when the facts change. The portfolio is the thing that is not a prediction.
Rejoining, he thinks, is a bad idea, and a foolish path even for someone who wanted to stay. He called Andy Burnham a remainer and the prime minister, and said Burnham wants back in and has said so. A German chancellor, Peter noted, has talked about opening the door. Frisby’s objection is mechanical. If a prime minister takes the country back on the back of an election win, without a referendum, the next government can leave on the back of the next election. The country would be forever joining and leaving. He does not think a leader would put rejoining in a manifesto, because it would cost too many votes. If it happens anyway, on a general-election mandate and without a proper vote, another election could bring Nigel Farage, or someone like him, and another exit. He thinks even Brussels can see that. A door that swings both ways is not a settlement. It is the same instability, sold as a homecoming. The missed chance was the slash in tax and rules. Going back does not unmake the missed chance. It adds another argument about who is allowed to decide.
What would make this reading wrong
The reading is wrong if the yield spike is the high, not a pause. He allows a contrary bounce in bonds because everyone is scared. If that bounce becomes a new long decline in yields, back toward the world of 2021, then the alcoholic got sober, or at least got a cheaper drink, and gold’s strength against a 5 percent yield was the last chapter of a rate shock, not the start of a sideways base. Financial repression can also pin yields without fixing the debt. A pinned yield is not a healthy bond. It is a quieter confiscation. His tailwind for gold depends on people noticing the difference.
The reading is wrong if gold does not respect $3,900 to $4,000 and instead breaks it the way 2006 broke toward $500, and stays there. The 18-month range is an analogy, not a calendar. He already thinks autumn may retest the summer low. A retest that fails is a different market. His “no new high in 2026, maybe in the second half of 2027” is a timing opinion. Timing opinions, by his own account of his annual predictions, go stale fast.
The reading is wrong if China’s undeclared buying is smaller than the gap he infers between official tonnes and the bid at $4,000. A central bank can be a large buyer and still not be the whole bid. If the extra tonnes are not there, the floor is a story about a buyer who was mostly the last rally’s momentum. The strategic case, no counterparty after 2022, can still be true at a smaller size. Size is what would move the price if they ever spoke it aloud. He says they will not speak it while they are buying. That claim is hard to falsify on a Tuesday. It is falsified if the declared stock, over a five-year gap, does not grow in the way he expects.
The reading is wrong if UK stocks are cheap for a reason that cash cannot fix. A global business listed in London can be bought by an American, as he says, and the seller of the shares gets the premium. A person starting a company still faces the tax and the rulebook. The screaming buy is for the shareholder of what already exists. It is not a claim that Britain is a good place to build the next one. First Tin is the warning inside the bullish case. The asset was good enough to buy. The IPO holder lost half. Cheap can mean a bargain. It can also mean you were early to a listing that a better-capitalized company will pick up after you have been diluted.
The reading is wrong if you hear “more of a buy than a sell” and buy a developer that needs a financing next quarter. He said they fall when liquidity goes, because most of them do not make money. Equinox, in his example, is making money. Koryx, in his example, is a bet that a study and a resource update turn a $3 to $4 stock into someone else’s acquisition. One of those is a producer. The other is a hope with a copper price that has, so far, refused to lie down. They are not the same trade.
The idea, once
Dominic Frisby sat down in mid-October 2026 and refused the bond. He has never owned one. He thinks buying one is a drink for a government that already taxes too much, writes too many rules, and will borrow more when the old loans roll over at a higher coupon. France cannot print. He thinks the European Central Bank will find a way. Britain’s private sector, he says, is lean, cheap, and being bought by Americans, including a tin junior that was taken out at half its listing price. He would not start a company there. He would own the companies that already survived.
Gold above $4,000, with American yields near 5.5 percent and British yields pressing higher, is the fact he would not have believed five years ago. He thinks it goes sideways, $3,900 to $4,000 as the floor, no new high this year, maybe in the back half of 2027. The shares that fell by half are where he has been willing to buy a producer. China, he thinks, is the quiet bid, declaring a little, holding back the rest, because gold is the reserve with no counterparty and because you do not talk up a price you are still paying. Copper holding its ground, while Iran headlines whip the rest of energy, is his evidence that a wider commodity bull market has a lead actor. The portfolio he actually recommends is built to be dull. Energy, gold, a little Bitcoin, a global equity index he knows is too American, and a bond trust he is bored of, so that he never has to lend the state a fresh bottle himself.
A bond is vodka for an alcoholic. Gold is not a promise. Do not buy the drink. Do not expect the metal to sprint while it is still building the floor. Own a little of the thing that does not owe you the government, and let the sweetness of doing nothing do the rest.