- Casey, Doug and John Hunt.
Speculator.
Charlottesville, VA: HighGround Books, 2016.
ISBN 978-1-63158-047-5.
-
Doug Casey has
been a leading voice for sound money, individual liberty, and rolling
back coercive and intrusive government since the 1970s. Unlike some
more utopian advocates of free markets and free people, Casey has
always taken a thoroughly pragmatic approach in his recommendations.
If governments are bent on debasing their paper money, how can
individual investors protect themselves from erosion of their
hard-earned assets and, ideally, profit from the situation? If
governments are intent on reducing their citizens to serfdom, how can
those who see what is coming not only avoid that fate by getting
assets out of the grasp of those who would confiscate them, but also
protect themselves by obtaining one or more additional nationalities
and being ready to pull up stakes in favour of better alternatives
around the world. His 1976 book,
The International Man, is
a classic (although now dated) about the practical steps people can
take to escape before it's too late from countries in the fast lane on
the road to serfdom. I credit this book, which I read around 1978,
with much of the trajectory my life has followed since. (The
forbidding prices quoted for used copies of The International
Man are regrettable but an indication of the wisdom therein; it
has become a collector's item.)
Over his entire career, Casey has always been provocative, seeing
opportunities well before they come onto the radar of mainstream
analysts and making recommendations that seem crazy until, several
years later, they pay off. Recently, he has been advising young
people seeking fortune and adventure to
go
to Africa instead of college. Now, in collaboration with medical
doctor and novelist John Hunt, he has written a thriller about a young
man, Charles Knight, who heeds that advice. Knight dropped out of high
school and was never tempted by college once he discovered
he could learn far more about what he wanted to know on his own in
libraries than by spending endless tedious hours in boring classrooms
listening to uninspiring and often ignorant teachers drone on
endlessly in instruction aimed at the slowest students in the class,
admixed with indoctrination in the repellent ideology of the collectivist
slavers.
Charles has taken a
flyer in a gold mining stock called B-F Explorations, traded on
the Vancouver Stock Exchange, the closest thing to the
Wild West that exists in financial markets today. Many stocks
listed in Vancouver are “exploration companies”, which
means in practice they've secured mineral rights on some basis (often
conditional upon meeting various milestones) to a piece of property,
usually located in some remote, God-forsaken, and dangerous
part of the world, which may or may not (the latter being the way
to bet) contain gold and, if it does, might have sufficient concentration
and ease of extraction that mining it will be profitable at the
anticipated price of gold when it is eventually developed.
Often, the assets of one of these companies will be
nothing more than a limited-term lease on a piece of land which
geologists believe may contain subterranean rock formations similar
to those in which gold has been found elsewhere. These
so-called “junior mining companies” are the longest
of long shots, and their stocks often sell for pennies a share.
Investors burned by these stocks warn, “A junior mining
company takes your money and their dream, and turns it into
your dream and their money.”
Why, then, do people buy these stocks? Every now and then one of
these exploration companies happens upon a deposit of gold which
is profitable to exploit, and when that occurs the return to investors
can be enormous: a hundred to one or more. First, the exploration
company will undertake drilling to establish whether gold is present
and, if so, the size and grade of the ore body. As promising
assay results are published, the stock may begin to move up in
the market, attracting “momentum investors” who
chase rising trends. The exit strategy for a junior gold stock is
almost always to be acquired by one of the “majors”—the
large gold mining companies with the financial, human, and
infrastructure resources required to develop the find into a
working mine. As large, easily-mined gold resources have largely
already been exploited, the major miners must always be on the lookout
for new properties to replace their existing mines as they are
depleted. A major, after evaluating results from preliminary drilling
by the exploration company, will often negotiate a contract which
allows it to perform its own evaluation of the find which, if it
confirms the early results, will be the basis for the acquisition of
the junior company, whose shareholders will receive stock in the major
worth many times their original investment.
Mark Twain is reputed to have said, “A gold mine is a hole in the
ground with a liar at its entrance.” Everybody in the gold
business—explorers, major miners, and wise investors—knows that
the only results which can be relied upon are those which are independently
verified by reputable observers who follow the entire chain from
drilling to laboratory analysis, with evaluation by trusted resource
geologists of inferences made from the drilling results.
Charles Knight had bought 15,000 shares of B-F stock on a tip from a
broker in Vancouver for pennies per share, and seen it climb to
more than $150 per share. His modest investment had grown to a
paper profit of more than two million dollars which, if rumours
about the extent of the discovery proved to be true, might increase
to far more than that. Having taken a flyer, he decided to catch a
flight to Africa and see the site with his own eyes.
The B-F exploration concession is located in
the fictional West African country of Gondwana (where Liberia
appears on the map in the real world; author John Hunt has
done charitable medical work in that country). Gondwana has experienced
the violence so common in sub-Saharan Africa, but, largely due
to exhaustion, is relatively stable and safe (by African standards)
at present. Charles and other investors are regaled by
company personnel with descriptions of the potential of the find,
a new kind of gold deposit where nanoparticles of gold
are deposited in a limestone matrix. The gold, while invisible to
the human eye and even through a light microscope, can be detected
chemically and should be easy to separate when mining begins. Estimates
of the size of the deposit range from huge to stupendous:
perhaps as large as three times the world's annual production of gold.
If this proves to be the case, B-F stock is cheap even at its current
elevated price.
Charles is neither a geologist nor a chemist, but something seems
“off” to him—maybe it was the
“nano”—like “cyber”, it's like a
sticker on the prospectus warning investors “bullshit inside”.
He makes the acquaintance of Xander Winn,
a Dutch resource investor, true international man, and
permanent
tourist, who has seen it all before and shares, based upon
his experience, the disquiet that Charles perceived by instinct.
Together, they decide to investigate further and quickly
find themselves engaged in a dangerous endeavour where not only
are the financial stakes high but their very lives may be at risk.
But with risk comes opportunity.
Meanwhile, back in the United States, Charles has come into the sights
of an IRS agent named Sabina Heidel, whose raw ambition is tempered
by neither morality nor the law. As she begins to dig into his
activities and plans for his B-F investment, she comes to see him as a
trophy which will launch her career in government. Sabina is the
mirror image of Charles: as he is learning how to become productive,
she is mastering the art of extracting the fruits of the labour of
others and gain power over their lives by deception, manipulation, and
intimidation.
Along with the adventure and high-stakes financial operations,
Charles learns a great deal about how the world really works,
and how in a time when coercive governments and their funny
money and confiscatory taxation have made most traditional investments
a sucker's game, it is the speculator with an anarcho-capitalist
outlook on the world who is best equipped to win. Charles also
discovers that when governments and corporations employ coercion,
violence, and fraud, what constitutes ethical behaviour on the part
of an individual confronted with them is not necessarily easy to
ascertain. While history demonstrates how easy it can be to start a war
in Africa, Charles and Xander find themselves, almost alone, faced
with the task of preventing one.
For those contemplating a life of adventure in Africa, the authors
provide an unvarnished look at what one is getting into. There is
opportunity there, but also rain, mud, bugs, endemic corruption, heat,
tropical diseases, roads which can demolish all but the most robust
vehicles, poverty, the occasional charismatic murderous warlord,
mercenaries, but also many good and honest people, wealth just waiting
to be created, and freedom from the soul-crushing
welfare/warfare/nanny state which “developed” countries
have allowed to metastasise within their borders. But it's never
been easy for those seeking opportunity, adventure, riches, and even
love; the rewards await the ambitious and intrepid.
I found this book not only a page-turning thriller, but
also one of the most inspiring books I've read in some time. In
many ways it reminds me of
The Fountainhead,
but is more satisfying because unlike Howard Roark in Ayn Rand's
novel, whose principles were already in place from the first
page, Charles Knight grows into his as the story unfolds,
both from his own experiences and wisdom imparted by those he encounters.
The description of the junior gold mining sector and the financial
operations associated with speculation is
absolutely accurate, informed by Doug Casey's lifetime of
experience in the industry, and the education in free market
principles and the virtues of entrepreneurship and speculation
is an excellent starting point for those indoctrinated in
collectivism who've never before encountered this viewpoint.
This is the first in what is planned to be a six volume series
featuring Charles Knight, who, as he progresses through life, applies
what he has learned to new situations, and continues to grow from his
adventures. I eagerly anticipate the next episode.
Here is a Lew Rockwell
interview
with Doug Casey about the novel and the opportunities in Africa
for the young and ambitious. The interview contains minor spoilers for
this novel and forthcoming books in the series.
October 2016 