In 1729, Thomas Prior was wrestling with a rather awkward problem: Ireland had gold coins, but people were struggling to find the change. Portuguese gold pieces known as moidores circulated at valuations which, he argued, had encouraged silver and other coins to leave the country. Having something valuable in your pocket was useful, although rather less so if nobody could change it.
Our CEO Stephen Flood introduced us to this story in his opening remarks at Wednesday evening’s inaugural GoldCore Summit. We were gathered at Thomas Prior Hall in Dublin, so it was a fitting place to hear it.
Prior’s pamphlet was called Observations on Coin in General, with Some Proposals for Regulating the Value of Coin in Ireland, eighteenth-century writers being admirably willing to put most of the executive summary on the cover. Behind the title lay a practical concern about the gap between the values assigned to coins and what their gold and silver contents could command elsewhere. If a gold coin bought more silver in one country than in another, there was a living to be made moving the two around, and people duly did so. Prior argued that Ireland’s relatively generous valuation of Portuguese gold had helped draw it in, whilst other money went out. The resulting shortage of smaller coins made everyday trade unnecessarily difficult, an inconvenience for those who had played no part in creating it.
Silver at $65: Paper Claims Expand as Above-Ground Stocks Thin
Reading his argument now, I find myself drawn to another of his observations, about the temptation to mistake a bigger number for greater wealth. Imagine increasing the official value of the coins, he suggested. The same gold would add up to more pounds, but a merchant buying abroad would still have to hand over the same quantity of metal for his goods. A foreign seller was unlikely to be impressed by an improvement in somebody else’s accounting.
The country would not have become richer simply because it had renamed the contents of its purse. There is something worth remembering next time we open an investment statement: a rising total is welcome, but how much more of the life we want will it actually buy? Answering that means looking beyond the statement itself, to the world in which we expect to spend the money. We make plans for retirement, our families and our businesses with certain expectations about how that world will work, often without realising quite how much we are taking for granted.
Tina Fordham’s excellent keynote later that evening gave us reason to examine those expectations. We should not, she argued, assume that events would settle down and return us to the period of globalisation and relative peace that many of us had come to regard as normal. And what, exactly, did we mean by normal? It is a word we use quite comfortably until somebody asks us to explain which years, which conditions and whose experience we have in mind.
That question took on a sharper edge when we asked the audience: “Is the world today the best or worst it has ever been?” Of those who responded, 85% chose the worst. Tina was taken aback, and spent some time reminding us that, by many measures, the world is considerably better than that answer suggests. It is easy to feel well informed about the dangers ahead and still have a rather selective view of everything that came before.
Of course, this was a poll in one room, offering a deliberately stark choice, but “the worst it has ever been” is quite a verdict once you allow the rest of history into the conversation. We can have serious concerns about where things are heading without wishing ourselves into an earlier century. Equally, recognising past progress does not oblige us to assume it will continue uninterrupted, which is why Tina’s two observations belong together. The world can be better by many measures than it once was, whilst the conditions we became accustomed to are becoming less dependable. Those of us who benefited from a particular period may have mistaken some of its advantages for permanent features of life, even as we found plenty to complain about at the time.
For anyone thinking about wealth over decades, there is a practical consequence. Expecting a return to familiar conditions can leave us poorly prepared for change, but organising everything around an inevitable disaster is a considerable assumption too. We need to leave ourselves room to be wrong, however persuasive our reading of events feels.
Prior’s writing brings that problem down to the level of a household or business. Rents had been agreed, debts incurred and contracts signed under the monetary arrangements of his day; changing those arrangements, even to correct a distortion, could hurt people who had quite reasonably organised their affairs around them. A commitment made under one set of rules could become much more burdensome under another. Nor does his story offer much comfort to anyone longing for a perfectly dependable monetary past. Those coins contained precious metal, yet their circulation was still shaped by official decisions and people responding to the incentives in front of them. Gold and silver provided a tangible asset, but holding them did not remove the need to understand what was happening around you.
An ounce remains an ounce, although what it buys can change considerably. To understand that is useful to a saver, provided we remember both halves of it.
Prior’s response to Ireland’s difficulties went beyond writing about money. In 1731, he helped found the Dublin Society, later the Royal Dublin Society, to encourage improvements in agriculture, manufacturing and the useful arts. Bringing people together to exchange knowledge was part of how he hoped to improve the country’s prosperity, which gave us another reason to appreciate Stephen’s choice of opening story. Our first summit was a great evening for GoldCore, and it was a pleasure to meet clients and guests whose questions and experiences so often reach us through a phone or a screen. Tina’s response to the poll showed what those encounters can offer: sometimes another person notices the assumption that everyone else has accepted.
We came away with plenty to think about. Stephen had taken us back nearly 300 years, and Tina had asked us to reconsider the past we expected the future to resemble. I suspect Thomas Prior would have recognised the usefulness of that conversation, particularly for people making decisions today that they hope will serve them well for years to come.
Buy Gold Coins
Buy gold coins and bars and store them in the safest vaults in Switzerland, London or Singapore with GoldCore.
Learn why Switzerland remains a safe-haven jurisdiction for owning precious metals. Access Our Most Popular Guide, the Essential Guide to Storing Gold in Switzerland here.
Receive Our Award Winning Market Updates In Your Inbox – Sign Up Here
