While that might seem rather old fashioned to some, there are many highly popular aspects of British tradition that are also centuries old. Think about the attire of the Royal Horseguards. Or that of the Beefeaters at the Tower. Or about the Queen’s speech that opens each Parliament. Think, for a moment, about the Monarchy itself! There are few more venerable British traditions than that. So just because something is ‘old-fashioned’ doesn’t imply that it is senseless, worthless or counterproductive now, does it?

Indeed, can you recall the historical period in which Britain rose to become the wealthiest nation in the world, overseeing a global empire on which the sun never set, and introducing the industrial revolution to much of Europe, the Americas and Japan? Now, was that period associated with sound or debased money? You know the answer to that.

You may not be as familiar with other periods, however, when careless monarchs debased the coinage out of expediency, say to pay for wars. Let the great British historian Macaulay enlighten you thus:

[W]hen the great instrument of exchange became thoroughly deranged, all trade, all industry, were smitten as with a palsy. The evil was felt daily and hourly in almost every place and by almost every class—in the dairy and on the thrashing floor, by the anvil and by the loom, on the billows of the ocean and in the depths of the mine. Nothing could be purchased without a dispute. Over every counter there was wrangling from morning to night. The workman and his employer had a quarrel as regularly as the Saturday came round. On a fair day or a market day the clamors, the reproaches, the taunts, the curses, were incessant; and it was well if no booth was overturned and no head broken.

          No merchant would contract to deliver goods without making some stipulation about the quality of the coin in which he was to be paid. Even men of business were often bewildered by the confusion into which all pecuniary transactions were thrown. The simple and the careless were pillaged without mercy by extortioners, whose demands grew even more rapidly than the money shrank. The price of the necessaries of life, of shoes, of ale, of oatmeal, rose fast. The laborer found that the bit of metal which, when he received it, was called a shilling would hardly, when he wanted to purchase a pot of beer or a loaf of rye bread, go as far as sixpence. Where artisans of more than usual intelligence were collected in great numbers, as in the dockyards at Chatham, they were able to make their complaints heard and to obtain some redress. But the ignorant and helpless peasant was cruelly ground between one class which would give money only by tale and another which would take it only by weight.

If you care to heed Macaulay’s dire warning and stabilise the value of the pound, just re-link it to gold, or to silver perhaps. The Bank of England can ‘open the mint’ to either or both metals at any time and make a market in bullion for British banks. The existing coinage of the realm can be converted back into that which it used to be: actual silver and gold, or high-grade alloys thereof.

Yes, this would be the end of QE. It would be the end of centrally-planned money manipulation and the beginning of free-market-determined interest rates. It would be the end of subsidies for excessive borrowing and risk taking, be it by the government, banks or other private entities, and of the associated tax on savers. It would be the end of monetary inflation and of the insidious wealth confiscation and concentration that it implies.

It would, however, restore Her Majesty's money to something worthy of the trust of her loyal subjects.

A MOST UNPLEASANT BUSINESS

My advice to you, Mark, is to at least consider the possibility that I am right; that the Brits are losing patience with Eurocrats trying to shrink their pints through diktat, and the Bank of England trying to debase their money through endless QE.

Mr Osborne may have informed you otherwise but don’t think that he necessarily speaks for the much-maligned British saver. He certainly doesn’t speak for me. He may not even speak for Her Majesty.

Finally, are you aware of the traditional, common-law penalty for debasing the coinage of the realm? You may want to sit down first as it is a most unpleasant business, Mark. A most unpleasant business!

John Butler is Chief Investment Officer at Amphora; Atom Capital. He has 18 years experience in the global financial industry, having worked for European and US investment banks in London, New York and Germany