In today’s issue:
- Sir Isaac Newton’s escape from the Tower of London
- It’s time to update the Trial of the Pyx
- How to go on your own gold standard and get paid interest
[Ed Note: If you missed yesterday’s interview about Britain’s answer to the all-conquering Nvidia, you can still watch the presentation here. It comes from the same man who recommended Nvidia to his subscribers 11 years ago. But this opportunity could reshape the entire country, not just your portfolio…] [Capital at risk.]
For almost 850 years, the UK has held a ceremony to check whether the currency of the realm has been debased by its own government. It’s called a Trial of the Pyx. And it’s time for one now…
The ceremony takes place at the Worshipful Company of Goldsmiths in London. The Master of the Royal Mint is put on trial before the King’s Remembrancer.
Coins are removed from a wooden box called the Pyx, which holds a sample of coins recently minted by the Mint.
If the coins don’t stand up to examination by at least six metallurgical assayers from the Company of Goldsmiths, the Master of the Mint could be found guilty of high treason. He might even lose a hand.
The last Master of the Mint to be found guilty was tried in 1696. His name was Isaac Newton. But he ended up proving it was down to a mistaken measure.
The point of the Trial is to ensure that the Royal Mint isn’t cutting corners… more or less literally.
By scrimping on the amount of gold or silver in the coins, the Master could be skimming the precious metal proceeds for himself. Or, worse, helping to fund the government at the cost of undermining the currency.
The Trial of the Pyx may seem esoteric today. But it was a very real solution to a very real problem for centuries. One we still struggle with today.
Many times in our country’s history, our money has been debased. Often, the market value of our currency deviated from the official nominal value. A guinea was not worth a guinea.
We’ve also had currency shortages and all manner of other money trouble.
The Trial of the Pyx was designed to instil faith in the national currency by making someone independent responsible for its value, and then holding them accountable for it too. Nobody trusts a politician to do it, after all.
Given the plunging value of our money over the last three years, and its extraordinary debasement for 15 years, I reckon it’s about time to bring back this old tradition.
Don’t you?
Actually, the Trial of the Pyx continues today. It may be Britain’s oldest judicial ceremony. But parliament made laws updating the amount of coins to be tested as recently as 2016.
The Trial is held in February every four years. You can even buy coins from the February 2024 trial.
But the meaning of money has changed so radically in the last 850 years that the Trial of the Pyx is just a hollow pomp these days. The Goldsmiths assay novelty precious metal coins produced by the Mint, not our actual coins, let alone the value of our money.
Heck, if anyone pointed out that the pound has lost 99.8% of its value in terms of gold since Newton’s day, they’d be cutting off more than hands.
But money itself is now just a digital abstraction, not a coin of specified weight and purity of gold or silver. The process of devolution was so slow that nobody seemed to notice. Nobody got their hand chopped off, or even sent to the Tower.
First money became a note you could redeem for gold or silver. Then a promise to pay gold or silver in the future. Then even that promise was removed. And then money became a number on a screen.
I’m rather worried what this will do to our children. If they don’t understand that you lose something of value when you pay money, their perception of work and savings will be out of kilter. It’ll all just look like made-up numbers to them.
And it seems they’re not the only ones who can’t distinguish between money and abstract numbers…
These days, the Bank of England is in charge of our money. (Not to mention our government.) It decides how much to issue and at what price – the interest rate.
And so the Bank of England Governor Andrew Bailey should be the one subject to a Trial of the Pyx.
He may not be charged with maintaining the amount of precious metal in our coins. There isn’t any. But he is charged with managing inflation.
So I propose updating the legislation governing the Trial of the Pyx…
If a panel of economists find Andrew Bailey has been debasing the currency, he should be charged with high treason and imprisoned in the Tower of London.
If that’s too barbaric for you, here’s an alternative. Each year, the governor should be sent forth with a twenty-pound note to try and buy lunch. If he fails, he should go hungry till dinner.
And no accepting lunch invitations from his friends in the City!
Of course, I’m not holding my breath this’ll be implemented. Some of us have been waiting hundreds of years for the government to get caught out at a Trial of the Pyx, without success.
It’s likely a Master of the Mint would’ve been locked up for debasing the currency by 2% per year in the 18th century. And yet that’s the Bank of England’s official mandate.
How times have changed…
Not that the Bank of England is very good at staying on target. But even a 2% debasement is enough to wreak havoc in the economy.
It forces savers to become investors. And encourages us all to become borrowers by inflating away our debts.
To grow our wealth, we need to outpace the tax man and inflation – a challenging combination that drives us all into a frenzy.
Ever since we first launched Fortune & Freedom, one solution has always been mentioned: own precious metals.
There’s a reason why the country’s coinage was gold and silver in the first place. It provides stability and purchasing power no government, central bank or other institution can rob you of.
People don’t trust the government to manage the money supply. They trust gold and silver. And so, for the government to monopolise money, it had to leverage the trustworthiness of gold and silver.
Just because our money isn’t backed any more, doesn’t mean you can’t access the same benefit.
That’s why we called one of our first free reports “How to establish your own gold standard”.
Gold has now outperformed the FTSE 100 over the last year, two years and five years. A sure sign it’s time for another Trial of the Pyx.
The biggest shortcoming of precious metals investing? It doesn’t pay you an income.
Actually, that’s not the case. It’s possible to generate other types of returns on your precious metals. To find out how, click here.
Until next time,
Nick Hubble
Editor, Fortune & Freedom
[Please note, Southbank Investment Research Ltd receives a commission when accounts are made and investments are deposited with Monetary Metals.]
