Why Henry III's Gold Penny Failed

Minted in 1257, only eight of Henry III's gold pennies have survived. This is odd given that medieval historian David Carpenter's analysis of historical records indicates that 72,000 of these coins may have been produced within a year or two.

Why are there so few of Henry III's gold pennies still in existence? In this short post I'll suggest that the gold penny was a failure. Rather than circulating in trade, as one would expect of a coin, most of them were melted down within a year or two after issuance. And so there are very few gold pennies left for detectorists to find.

In his paper Gold and Gold Coins in England in the Mid-thirteenth Century, Carpenter maintains that Henry III picked the right ratio between gold pennies and silver pennies. A gold penny weighed the same as two silver pennies. At Henry III's chosen exchange rate of twenty silver pennies to one gold penny, this implied a price of ten grams of silver to one gram of gold. Carpenter says that this was in line with the prevailing 10:1 market rate between silver and gold bullion at the time.

But historian John Munro suggests otherwise. What Carpenter omits is that an English silver penny was only 92.5% pure, the remaining 7.5% being comprised of base metals. This means that Henry III's chosen exchange rate of twenty silver pennies to one gold penny actually valued the quantity of gold inside a gold penny at just 9.3 times that of an equivalent amount of silver, not 10 times.

Thus the king's chosen rate undervalued gold. And so Henry III's gold penny would have run smack dab into Gresham's law. It would have been more profitable for an English merchant to melt down 1 kg of gold pennies into bullion and buy 10 kg of silver with the proceeds at the going market rate than to spend that 1 kg of gold pennies as coins...

To read the complete article, see:
Why Henry III's gold penny failed(http://jpkoning.blogspot.com/2022/01/why-henry-iiis-gold-penny-failed.html)

To read an earlier E-Sylum article, see:
ARTICLES HIGHLIGHT HENRY III GOLD PENNY(https://www.coinbooks.org/v20/esylum_v20n54a27.html)

Digital Cash

The U.S. is gingerly considering whether to adopt a digital version of its currency, one better suited for today's increasingly cashless world, ushering in what could be one of the dollar's most fundamental transformations.

In that scenario, the U.S. would not only mint the coins and print paper bills. It would also issue digital cash, or a central bank digital currency (CBDC), that would be stored in apps or "digital wallets" on our smartphones.

It's a vision of a cashless future that other countries are already embracing. China, for example, has already unveiled the digital yuan on a trial basis. India this week said it would also unveil a digital rupee.

Now the U.S. is weighing whether it wants to get into the game.

To read the complete article, see:
The U.S. is considering a radical rethinking of the dollar for today's digital world(https://www.npr.org/2022/02/06/1072406109/digital-dollar-federal-reserve-apple-pay-venmo-cbdc)

An Age-Old Problem

To read the complete article, see:
Daily Cartoon: Monday, January 3rd(https://www.newyorker.com/cartoons/daily-cartoon/daily-cartoon-monday-january-3rd)