[Dave Birch] Henry VIII is quite famous to many people, primarily because of his ground-breaking approach to marriage and his pioneering work on interfaith relationships, but he's famous to me because of his economic incompetence. Like a great many dictators throughout history, he mistakenly thought that the laws of supply and demand could be suspended in the case of money. Therefore, he abused the perogative of seigniorage.

Henry VIII, had been adulterating the English shilling, the basic coin of the realm, by replacing 40 percent of the silver in the coin with base metals — a clever way, so he thought, to increase the government’s income without raising taxes. It was, in short, a sneaky devaluation device; hopefully the people wouldn’t notice. Of course it was discovered and this “bad money” drove out the pure silver shillings then in circulation.

[From "Bad Money Drives Out Good"]

Henry VIII's "Great Debasement" began in 1542 and, as is so often the case on this sceptr'd isle, was initially undertaken for a good cause (war against France, of which I regard Elizabeth II as the rightful queen of, because Elizabeth I was forced to sign the Treaty of Cateau-Cambrésis under duress) but was economically illiterate and ultimately led to a collapse in commerce which was the real source of England's wealth.

Henry VIII told the Mint to add six ounces of copper to every 10 ounces of sterling silver it used to make pennies. A few months later, the amount of copper was increased to seven ounces per pound, then to ten, then to twelve and finally under Edward VI, to thirteen.

[From Box 4 from The Ecology of Money: Devaluations in Britain through the Ages]

The outcome was predictable: the "good" money disappeared from circulation and the "bad" money took over in the marketplace — an episode that led Forum hero Sir Thomas Gresham to formulate his eponymous law — thereby damaging commerce for many years until Good Queen Bess called in the debased coinage, melted it down, separated out the copper and reissued a pure silver coinage. This moved England into a new monetary age, with gold and silver in circulation. Unfortunately, since England couldn't control the price of gold or silver, this wasn't a particularly stable arrangement and led to a severe lack of silver coinage, which was needed for everyday transactions. England had an industrial revolution, but it didn't have industrial money.

Towards the end of the 17th century money the government gave up passing pointless laws (such as the 1660 act forbidding the export of bullion) and instead of asking investment bankers or celebrities for advice in the modern fashion, they decided to ask someone clever instead. Thus was the smartest man that ever lived, Sir Isaac Newton, then the Lucasian Professor or Mathematics at the University of Cambridge, appointed the Master of the Mint. Amongst other changes, he moved Britain on to a gold standard.

[Newton] advised that silver should be dropped and fixed a price for gold, to which the value of all other coins was to be related. His advice was taken and as Wilsher states: "Trade and society flourished as never before".

[From Box 4 from The Ecology of Money: Devaluations in Britain through the Ages]

A lesson for us all. Incidentally, Thomas Levenson from MIT, author of the utterly excellent "Newton and the Counterfeiter" will be giving one of the keynote talks at this year's Digital Money Forum in London on 10th-11th March, looking at innovation as a response to crisis. If you'd like to come along and listen to him, remember that the Forum will be limited to 100 places as always and book yourself an early-bird place before the end of January.

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These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.

[Dave Birch] A column by The Telegraph's economics editor Ed Conway before Christmas (vanity alert: I am quoted in said article) suggested that a cash-free society mightn't be a bad thing. This was naturally met by a torrent of outrage from The Telegraph's somewhat conservative leadership. Fair enough. But what I couldn't help but notice is that it didn't take many comments before this kind of thing cropped up:

Conway you are either nuts or part of the NWO propaganda machine.

[From I'm dreaming of a cashless Christmas - Telegraph]

NWO? NWO means "New World Order", which some of you may know from playing Steve Jackson Games best-ever tabletop game, Illuminati. But for those who do not…

The common theme in conspiracy theories about a New World Order is that a powerful and secretive elite with a globalist agenda is conspiring to eventually rule the world through an autonomous world government, which would replace sovereign nation-states and put an end to international power struggles

[From New World Order (conspiracy theory) - Wikipedia, the free encyclopedia]

An important element of the NWO illuminati (our motto: "someone you trust is one of us") master plan is the abolition of anonymity so that we can be tracked, traced and monitored by our hidden masters. Fortunately, former BBC man David Icke (who has exposed the Royal Family's extraterrestrial reptialian bloodline, a story oddly ignored by The Telegraph) has been able to warn us of this peril.

Here's a summary of what's in store for us, as written in 1998 by 'crazy conspiracy nut' David Icke: “The basic structure is designed around a world government which would take all the major decisions in the world. This would control a world central bank, currency (electronic, no cash), and army. All this would be underpinned by a microchipped population linked to a global computer.

[From Ciaran Gallagher blog: This economic collapse is part of their agenda!]

Oh dear. Can it really be true that those of us who think that electronic payments are more efficient than cash payments and are therefore better for society either illuminati puppet-masters or deluded sheeple?

cash and cashlessness, costs and interchange, notes and coins, retail

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These are the personal opinions of Consult Hyperion and its guests and should not be misunderstood as representing the opinion of its clients or suppliers. To discuss how any of the technologies discussed in this post can benefit your business, please contact Consult Hyperion.