Quote:
Originally Posted by wodin
The article said a Pound Sterling was once the actual value of a pound of silver. Let see (figger-figger), the spot price of silver is about $30 US per ounce troy, there are 20 ounces troy in a pound troy that's $600 US per pound.
Can you imagine what kind of coins would be required if a pound sterling was worth $600 US and a penny was $60 US? why, you'd need a tenth of a penny, worth about three pounds, and a thousandth of a penny worth about three pence.
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Your calculations are a little out.
There are only 12 troy ounces in a troy pound, not 20, and the pound of silver was not a Troy pound, but a slightly smaller pound, now known as the Tower pound. The original anglo-saxon silver penny was 22.5 grains, or 0.046875 Troy ounces, and the original pound was 5400 grains, not the 5760 grains of the Troy pound.
[EDIT: Further research shows I mis-understood this. While the silver penny was made with only 22.5 grains of silver, it was
worth 24 grains, making 240 silver pennies
worth a troy pound of silver, although they actually weighed less. The difference being the value of having the standard coin. This doesn't make much difference to the following calculations though.]
Your silver value gives the current silver price as £20 per troy ounce, making the silver penny worth £0.9375. But this is taking a historically very high silver value. Over the past 40 years*, the silver price has in general been between £2 and £4 per troy ounce, making the silver penny worth between 10p and 20p, a much more reasonable figure.
Now consider
inflation.
20 pence today is about the same a ha'penny in 1900.
So the value of a silver penny in recent decades has been mostly between that of a farthing and a ha'penny in 1900.
So it wouldn't be massively unweildy to have silver pennies and ha'pennies as the lowest value coin today.
Bring back the silver standard!
*Looking at the price of silver in recent decades (http://silverprice.org/silver-price-history.html), and taking into account exchange rates over that time (http://en.wikipedia.org/wiki/Tables_...tes_to_the_USD), we see that, except for speculation spikes, the price of a troy ounce of silver has been between £2 and £4.