Episode Details

This is the last of these pieces about gold in ancient history. I’m back from the Edinburgh Fringe now, and more regular market commentary will resume.

Lots of exciting things happening on this Substack. If you missed them this week, check out Wednesday’s piece on uranium, the coming supply squeeze and how to play this (almost) inevitable bull market. On Monday I covered bitcoin - in particular, how UK investors can get exposure via a traditional broker (and thus have it in their SIPP or ISA). And Friday I told the story of one of the maddest gigs I have ever done.

Coming up this week: Dr John will be sharing his picks of the North American oil and gas plays. Plus together, with Dr John and Charlie Morris of Bytetree, I have been working on the the Do F All portfolio: a do-very-little portfolio for the hands-off investor, who wants to invest his or her money safely and well, without constantly having to monitor it. There’ll be a podcast and a piece about that very soon.

So look out for all of those. For now, your Sunday morning thought piece, a historical piece with many parallels to today: the Romans and the debasement of money.

The Roman Empire is probably more famous for debasing its currency, than for its money itself. But for that debasement to have been so prolonged (it went on for hundreds of years) and, some might say, effective, it needed an established, widely recognised and credible money as a starting point. Here look at the rise and full of sound money in Ancient Rome. There are many parallels to today.

The geology of central Italy is not particularly abundant in gold and silver, and it was only really after Rome began expanding beyond central Italy in the third century BC that it started using gold and silver. Commodity money tends to be determined by the resources available.  Bronze (copper and tin) is abundant in the area, and bronze, in the form of weights - aes rude, often as heavy as 11oz (300g) - was the early currency of choice. 

As the Republic expanded, so did access to gold and silver, either from loot, tribute or mine supply, and so did these precious metals make their way into Roman money. The first silver denarius was minted in 211BC. Within 50 or 60 years Roman coinage was widespread across Italy. Much of the silver to mint the coins came from mines in Macedonia, which Rome now controlled. 

For the next 500 years this silver coin, containing about just over 1/8th of an ounce (4g) of silver - a little bit more than the weight of a 1p coin - would be the backbone currency of Rome. One denarius was exchangeable for ten asses (the aes rude evolved to become the as) - hence its name “of ten”, or tenner. It was 95-98% pure silver. To give you some kind of benchmark, sterling silver is only 92.5% pure. 

The purchasing power of a denarius would be more than the underlying metal value - ranging between 1.5 and 3 times the value. That’s seigniorage for you.

The denarius lives on today, especially in many Latin  languages. The Italian word for money is “denaro”, “dinero” is Spanish, “dinheiro” is Portugese, “denar” is Slovenian. In many Arab nations, the currency is the dinar. The symbol for the English penny used to be ‘d’ - as in 1d.

Heads of emperors appeared on coins, and so, as a result, did their use as imperial propaganda. The more coins circulating around the ever-growing empire, spreading the mess