By the early Spring of 1696, England was on the brink of a major currency crisis that had been building for decades.
This was back in an era where English money was primarily silver; more than 1,000 years ago, in fact, Britain’s pound sterling was originally struck by Anglo-Saxon kings in the British Isles as one “Tower pound” of sterling silver.
(The ‘Tower pound’ was a medieval unit of measurement roughly equivalent to 0.75 modern pounds.)
But over time, of course, English kings heavily debased their coins and reduced the silver content; by the mid-1600s, the pound only contained about 1/3 its original silver content.
This massive debasement, though, wasn’t just a game for kings. People across England realized that they too could reduce the silver content of the coins.
Continue reading “Even the smartest man in the world was a terrible central banker”
