I posted this in the evaluator thread but it might be of more general interest as an illustration of the wider application of the supposedly more recent phenomenon of currency debasement.
If you think about it, pounds sterling was a term originally used to denote a specific weight of money: a pound (14.5833 troy ounces) of sterling (92.5%) silver.
Here's a visual illustration of currency debasement as it has occurred over hundreds of years
First of all, a literal fifty pounds of sterling silver, in troy ounces:
Now a synthetic "fifty pounds sterling", from which more than 75% of its literal meaning has been removed
It gets worse! £50 is now just this amount of silver
And this is where we are right now
You can see that the process of currency debasement is not a new phenomenon. It has been going on for a long, long time, far beyond our lifetimes. We are not in the final stages of a 40+ year process, it's the endgame of a 200+ year process.
Or in economic terms, we are getting into not merely a Kondratieff Winter but a Kondratieff Supercycle Winter.
The last Kondratieff Supercycle turning point saw a lot of economic, social and political events known as cycle revolutions: the agricultural revolution, the industrial revolution, the enlightenment, the American revolution, the French revolution. All these things were symptoms of a supercycle transition.
If we are headed into a similar epoch, it may be fair to surmise that things will change far more radically than a "muddle-through" hypothesis provides for.
Thanks, that's very interesting the 2001-2011 pic is especially revealing as a Brit
Nice write up silvernomics, appreciate the time you took.
Is there not 12 troy ounces in a Troy Pound?
Is the 14.5833 troy ounces you mention account for a fraction of the Troy pound (% purity), or the number of Troy ounces in an AV pound (lb.)?
I stand corrected, Dimeboy. Having checked, £ pounds sterling is derived originally from troy pounds. The 14.5833 was based on AV pounds.
The visual effect remains broadly the same, I think you'd agree!
Very eye opening for us in the UK thanks!
What are those? 3d? 6d? crowns?
A British pound (e.g., sovereign) 100 years ago would reflect 4 crowns = 4 x .841 oz = 2.83 oz (approx.)
An ounce of silver is 13.25 pounds tonight, after the close of trading in NY. So a pound's worth of sterling -- 2.83 oz -- would cost approx. 37.5 pounds today.
US is easier. According to coinflation.com, a US silver dollar has $15.86 in silver, while 10 dimes (.72 oz, compared to the .77 oz in a silver dollar [don't ask]) has $14.83 in silver.
8 Swiss francs (until 1968) contained 1.074 oz of silver. [Don't include the post-1932 5 franc coins -- they hold 3 francs worth of silver.] An ounce of silver today costs 18.94 francs. So 1.074 oz would cost 20.35 CHF. In other words, it takes 2.5 modern Swiss francs to purchase a silver Swiss franc. Amazing! Unparalleled, as far as I can see.