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Category: Inspiration

5 Questions to Ask Before You Buy Gold

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Before spending your hard-earned money on any sort of asset, it’s important that you’re well-informed so you can make sure it’s the best route for you. Investing in any type of asset can carry risk as well as reward, which is why you should consider asking exploratory questions before taking the leap.

To help you navigate the world of gold in more detail, we’ll look at just some of the questions you should consider finding the answers to before you become the owner of a precious metal.

Please be aware that this is not financial advice and is merely a guide.

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The pros and cons of buying gold

As with any financial decision, weighing up the pros and cons can help you to see the bigger picture and how your decision may impact your current and even future situation. When it comes to buying gold, being able to understand the opportunities, as well as the obstacles, can put you in good stead.

What are the pros of buying gold?

The first question most people turn to when making a decision is ‘what’s in it for me?’. When it comes to your financial situation, this is important so as not to leave yourself vulnerable.

Buying gold has often been pitted as a low-risk commodity because it has been seen to maintain its purchasing power over time. Purchasing power is a gauge of how much a currency supply can buy and is affected by factors such as inflation.

With that in mind, gold is often seen as a reliable hedge against inflation, as it historically has been proven to retain its value well. No country in the world links its currency to gold, which is why many people choose to put their money into gold at times when its purchasing power may be in decline.

Generally speaking, the value of gold doesn’t fall when inflation is rising, unlike money. However, there have been occasions where gold’s value has fluctuated in light of inflation, so it’s not a guarantee.

woman using phone to research

What are the cons of buying gold?

Buying gold might sound like a promising way to protect your wealth, but it’s important to remember that nothing comes without its potential pitfalls. While gold may offer some protection against economic events like a rise in inflation, it doesn’t necessarily offer the earnings potential of other investment assets. For example, investment in stocks is high risk but could deliver high returns, providing capital growth and income.

In this sense, buying gold won’t necessarily increase your personal wealth, but could provide a method by which to diversify your financial portfolio.

Is gold better than paper money?

With what you now know about gold, the next question you may consider investigating is whether gold is actually a better option than paper money when it comes to spending and saving. After all, gold is universally recognized and accepted as a payment method; it’s valued across the world.

Paper currency used to be backed by gold, and this was known as the gold standard. The gold standard is a type of system by which the standard unit of currency is kept at the fixed value of gold. In 1971, the gold standard ended in the USA which meant that the US government was then able to print paper money more freely.

No one system is more suitable than the other, but what’s important is that the likes of gold and other assets can offer you an alternative method to limit your exposure to risk and volatility. Gold can be used as a means of exchange, providing a function to spend or save as you need, which is why it can be an attractive avenue to explore.

analysing financial information on smartphone

Should you buy gold or cryptocurrency?

If you’re hoping to find an alternative to government-issued paper money, cryptocurrency has most likely entered your radar. But before you buy cryptocurrency over a commodity like gold, there are a couple of things to note.

The argument of gold vs crypto is an interesting one, but it’s important to remember that cryptocurrencies can be hugely volatile and while they can contribute to high returns, they can also add a big risk to your portfolio. Gold is typically seen as a more stable opportunity, but it too can fall victim to fluctuations in the short term.

The likes of Bitcoin and other modern cryptocurrencies are still relatively young and unproven compared to options like gold, so it’s key that you’re well-informed on both and understand the potential investment risk before deciding which one is right for you.

How much does gold cost?

If you’ve decided that gold is a viable asset for your financial situation, it’s important to understand the cost of gold and what it means to buy physical gold, as its value is subject to change over time. This could impact your decision on the timing of buying gold bullion.

The price of gold is typically affected by demand and supply as it’s still a highly desirable precious metal. During large world events and crises, gold is seen as an even more viable and stable choice for investors and is often in demand when economies are on the downturn. You should also consider factors like inflation and interest rates, as these can play a role in the world of buying – and selling – gold.

In understanding how much gold costs, it can be helpful to turn to historical prices as they may offer further insights into the gold market and its potential future trajectory. Remember that making predictions can be difficult, but you may be able to make some assumptions along the way.

woman using smartphone at home

How do you buy gold?

Being informed on the advantages and disadvantages of gold as well as gold’s characteristics compared to other options leaves you in a good place. When it comes to buying physical gold, direct ownership is one way of achieving even more confidence in your new asset.

For example, cryptocurrencies backed by gold offer a digital token with a claim on gold, while an exchange-traded fund enables you to buy gold through owning shares in a fund. Neither of these methods allow you to own the physical gold.

When you buy gold from Glint, you can rest assured that it’s physical, allocated gold bullion that is stored in a vault in Switzerland, with no token, fund, or bank sitting between you and the ownership of your gold. Wherever you choose to buy your gold, it’s important that you are dealing with a trusted and reputable seller.

 

At Glint, we make every effort to demonstrate a balanced conversation between gold, crypto and fiat currencies when it comes to purchasing power and, while we strongly believe that gold is the fairest and most reliable currency on the planet, we need to point out that it isn’t 100% risk-free. While we have seen a steady increase over time, the value of gold can fall, which means that its purchasing power can also decline. 

To learn more, visit our homepage or give us a call at +44(0)203 915 8111.

5 Ways to Build Good Financial Habits

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Whether you’re saving for the future or simply want to take better care of your money, it’s never too late to start building good financial habits. And with inflation soaring and the cost-of-living crisis deepening, taking a firm grip of your finances now is a smart move for the future.

Of course, the internet is awash with guides on how to save money and improve your personal finances. But often, these resources provide only surface-level advice, with money-saving tips that are difficult to maintain in the long term.

Our guide is different. Here, while we’re not offering financial advice, we’re sharing help and insights that can change your financial habits for good, with five simple rules that can improve your overall financial health and help you achieve your goals for the future.

1.     Create a Personal Budget and Spending Plan

The first step in improving financial habits is to review your current spending and budgeting so you can identify where changes need to be made. From there, you can create a bespoke spending plan that allows you to live within your means while setting aside money for future saving goals.

A formal spending plan – in which you list your income vs your outgoings – is an effective way to curb unnecessary expenses, prioritize savings, spend wisely, and make sure you have money set aside for emergencies. Take a proactive and transparent approach to ensure your spending plan covers all your outgoings; an honest assessment of your finances is the only way to make definite change.

woman with laptop and paperwork

2.     Consider Your Spending Habits

What do you see when you look back at your recent bank statement? Where is most of your expenditure going? And how can you reprioritize your monthly outgoings to save money and get yourself closer to where you want to be financially?

A good habit to get into is to segment ‘needs’ and ‘wants’. These categories are generally self-explanatory, but it’s important to keep these costs separate since it’s easy to blur the line between the two and justify unnecessary purchases as needs rather than wants.

By actively taking the time to consider and separate needs from wants, you’ll slowly start to form better habits about what to spend your money on. Saying no to a handful of want purchases each month can be a surprisingly effective way to save money and get yourself in a better financial position.

3.     Start Accumulating Savings for Your Later Years

Whether you’re in your twenties, thirties, or forties, it’s important to think about your retirement years and how you’d like to spend them. Because, while putting aside money now might seem like a waste of time – and better spent elsewhere – the accumulative impact of early saving can make a huge difference to your retirement pot, not to mention the sum you’ll need to put away periodically in the future.

Say, for example, you wanted a nest egg of $500,000 by the time you reached 60. Taking a 5% interest rate into account, you’d need to save $327.65 a month over 40 years to reach your goal. By contrast, if you suddenly felt the urge to start saving for your impending retirement at 50, you’d need to save an eye-watering – and perhaps unfeasible – $3,219.94 a month.

This type of compound saving model can apply to all financial aims, not just retirement. Whether it’s the down payment on a new car or the deposit for your first home; saving in small increments over a longer period is a good habit if you don’t want to be burdened by sizeable monthly saving goals.

woman using smartphone to do her finances

4.     Be Mindful of ‘Lifestyle Inflation’

One of the biggest barriers to wealth and savings building is a concept called ‘lifestyle inflation’. This essentially means that the more you earn, the more you spend, with an increase in spending to correspond with your growing salary.

Think about it: when your salary increases, the temptation to spend those extra earnings is only natural. Whether it’s a new car, more holidays, or designer clothes, any increase in earnings is quickly eradicated by a personal need to have more than what you did previously.

This is lifestyle inflation, and it can be a particularly innocuous phenomenon that impacts your ability to save and build wealth for the future. By becoming mindful of it, you can stifle that urge to spend and ensure that you’re using those higher earnings wisely.

5.     Make Wise Investment Decisions

Investing is more accessible than ever and provides savers with a means of protecting their savings from inflation with the potential to make sizeable earnings besides. But before you begin buying stocks and signing up to investment platforms, you need to learn what makes a good investment, how to achieve long-term success, and be willing to put time into staying up to date with the latest investment trends.

For new investors, there are a whole host of different avenues which you can take to get into safe, smart investing. Your first may be to talk to your bank, which might be able to provide guidance and advice on the types of investments that best suit your savings goals and plans for the future.

Elsewhere, there are dozens of resources online which can help you get up to speed with investing, so do your research and dedicate plenty of time to learning the ropes before you commit to a specific investment pot.

 

At Glint, we make every effort to demonstrate a balanced conversation between gold, crypto and fiat currencies when it comes to purchasing power and, while we strongly believe that gold is the fairest and most reliable currency on the planet, we need to point out that it isn’t 100% risk free. While we have seen a steady increase over time, the value of gold can fall, which means that its purchasing power can also decline.
 
To learn more, visit our homepage or give us a call at +44(0)203 915 8111.

Around the campfire: Their punches didn’t land

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It was no ‘Thrilla in Manila’, as Muhammad Ali dubbed his fight against “Smokin'” Joe Frazier in 1975. Wednesday’s much-hyped two-hour ‘contest’ between American billionaire Michael Saylor and wealthy Canadian businessman Frank Giustra on Youtube was promoted as a “Great Debate” over Bitcoin versus gold.

I felt as I watched the six ’rounds’ that while Saylor (in Bitcoin’s corner) did some great ducking and weaving, Giustra (in gold’s corner) failed to deliver a knock-out punch. By the end, it felt a bit of a damp squib.

Coming a week after Coinbase, the cryptocurrency exchange, listed on Nasdaq at a heady $80 billion valuation, coinciding with the UK Chancellor Rishi Sunak’s announcement of a Treasury/Bank of England taskforce to consider the potential for a central bank digital currency, I expected more sparks to fly than actually happened. Coinbase is now trading around five times its price of six months ago. It’s an unusual IPO – a tech company that has come to market and is showing profitability, which most never manage.

The comments that stacked up on Youtube from spectators of the Saylor/Giustra dance as it happened said it all – the world seems bitterly divided between pro and anti-Bitcoin and gold cult followers. According to them you are either destined for poverty or riches from gold or Bitcoin – neither of which is true – and missed the point about both cryptocurrencies and gold. In fact both Saylor and Giustra missed the point.

Cryptocurrencies were developed and have flooded the popular imagination for a very good reason – people have lost or are losing faith in fiat or government-issued currency. I get that; that’s why I set up Glint. Who knows what the future will bring? Cryptocurrencies may well survive – but they are infants scarcely out of diapers compared to gold. In any case there’s room for both.

Saylor for his part ducked away from Giustra’s sensible punches about risk, throwing some feints along the way, such as his extravagant claim that “Bitcoin’s the most popular investment asset in the history of the world”.

But the contest got bogged down and Giustra failed to land what could have been the most devastating punch – which is that while gold has indeed been used throughout most of recorded history as money, it has once more re-gained that status, thanks to Glint. For with Glint’s App and Mastercard® you can load gold onto it, and then take that shopping and spend gold as money. That’s not easy with cryptocurrencies, which are transactionally slow and cumbersome.

Note to self: contact Giustra and remind him that his pro-gold notes need updating to take account of Glint.

Until next week!

Jason

Big Brother Digital Currencies

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Like most of you, I presume, I strongly feel that how I use my money is my own business. I don’t see why anyone should be able track or control my use of money to gather data about me or my personal tastes, or to extend in any way their surveillance over me.

Not that I have anything to hide – it’s just that how I choose to use my money seems a deeply private affair. Which is one reason for using gold as money – gold is the most universal and private store of value there is, as it owes its creation to no human. Anything made by humans can be corrupted and abused.

So I am watching with some trepidation the onward march of Central Bank Digital Currencies (CBDCs). Pretty soon governments everywhere will try to foist these cash-substitutes onto their citizens.

Ironically, cryptocurrencies were created to escape the relentless devaluation of fiat currency (cash); yet governments are now going to use the technology underpinning cryptocurrencies – blockchain – to re-assert their power over how we use the money they create, by developing CBDCs.

The world’s central bankers are accelerating their efforts to coordinate and roll-out CBDCs; they are alarmed that China’s own CBDC will leave them standing.

China is often thought of leading the charge on CBDCs but actually the National Bank of Cambodia (NBC) last October launched a payment system called Bakong, co-developed with Soramitsu, a Japanese blockchain start-up. The NBC hopes that the Bakong will stem the decline in use of the national currency, the Riel. Most transactions in Cambodia are in US dollars and the Riel is losing its status as money.

More than a dozen countries are in the process of developing their own CBDC. The deputy governor of China’s central bank, the People’s Bank of China (PBoC), recently wrote in Yicai Global that China’s CBDC should be used on a “controllably anonymous” basis and that “complete third-party anonymity… may encourage criminal activities”. “Controllably anonymous” sounds like a contradiction in terms. India said earlier this year that it is considering criminalising private cryptocurrencies while building a framework for its own official digital Rupee.

China’s CBDC has already been steadily introduced via the state giving away millions of its currency, the Renminbi (which means “the people’s currency” in Mandarin) in a series of state-run lotteries in various cities. Users have to download an app to receive the currency.

In reality, China’s CBDC will be a “stablecoin”, i.e. pegged to the Renminbi. This, hopes Beijing, will prevent speculators from driving it higher or lower. It will also, hopes the Communist Party, knock privately-generated cryptocurrencies – trading of which is banned in China, even though an estimated 65% of global Bitcoin mining happens in China – for six.

 

 

Stablecoins have other advantages for governments, too. They are programmable; in early testing for instance the Renminbi version had an expiry date, encouraging holders to spend it more quickly. It was also trackable, allowing closer monitoring of Chinese citizens.

With such state control all kinds of things become possible – such as the immediate issuing and collecting of fines.

This kind of stuff gives me the creeps. So when I read (as I did this week) that a senior member of the Bank of Japan says that seven central banks – including the US Federal Reserve and the European Central Bank – are now jointly looking into setting a common framework for CBDCs, I sniffed Big Brother around the corner.

Money is power. But money and power are in a confusing flux right now. Privately-generated cryptocurrencies (which are extremely difficult to use as money) are facing a steady but relentless challenge by government stablecoins. And as governments everywhere try to push their digital cash on their citizens, the scope for government control over how, when, and where they can use that money will expand willy-nilly.

To avoid even the risk of that kind of supervision and interference I will be using my Glint card, and its gold, even more in the future.

Until next week!

Jason Cozens

Around the campfire: Big Brother Digital Currencies

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Like most of you, I presume, I strongly feel that how I use my money is my own business. I don’t see why anyone should be able track or control my use of money to gather data about me or my personal tastes, or to extend in any way their surveillance over me.

Not that I have anything to hide – it’s just that how I choose to use my money seems a deeply private affair. Which is one reason for using gold as money – gold is the most universal and private store of value there is, as it owes its creation to no human. Anything made by humans can be corrupted and abused.

So I am watching with some trepidation the onward march of Central Bank Digital Currencies (CBDCs). Pretty soon governments everywhere will try to foist these cash-substitutes onto their citizens.

Ironically, cryptocurrencies were created to escape the relentless devaluation of fiat currency (cash); yet governments are now going to use the technology underpinning cryptocurrencies – blockchain – to re-assert their power over how we use the money they create, by developing CBDCs.

The world’s central bankers are accelerating their efforts to coordinate and roll-out CBDCs; they are alarmed that China’s own CBDC will leave them standing.

China is often thought of leading the charge on CBDCs but actually the National Bank of Cambodia (NBC) last October launched a payment system called Bakong, co-developed with Soramitsu, a Japanese blockchain start-up. The NBC hopes that the Bakong will stem the decline in use of the national currency, the Riel. Most transactions in Cambodia are in US dollars and the Riel is losing its status as money.

More than a dozen countries are in the process of developing their own CBDC. The deputy governor of China’s central bank, the People’s Bank of China (PBoC), recently wrote in Yicai Global that China’s CBDC should be used on a “controllably anonymous” basis and that “complete third-party anonymity… may encourage criminal activities”. “Controllably anonymous” sounds like a contradiction in terms. India said earlier this year that it is considering criminalising private cryptocurrencies while building a framework for its own official digital Rupee.

China’s CBDC has already been steadily introduced via the state giving away millions of its currency, the Renminbi (which means “the people’s currency” in Mandarin) in a series of state-run lotteries in various cities. Users have to download an app to receive the currency.

In reality, China’s CBDC will be a “stablecoin”, i.e. pegged to the Renminbi. This, hopes Beijing, will prevent speculators from driving it higher or lower. It will also, hopes the Communist Party, knock privately-generated cryptocurrencies – trading of which is banned in China, even though an estimated 65% of global Bitcoin mining happens in China – for six.

 

 

Stablecoins have other advantages for governments, too. They are programmable; in early testing for instance the Renminbi version had an expiry date, encouraging holders to spend it more quickly. It was also trackable, allowing closer monitoring of Chinese citizens.

With such state control all kinds of things become possible – such as the immediate issuing and collecting of fines.

This kind of stuff gives me the creeps. So when I read (as I did this week) that a senior member of the Bank of Japan says that seven central banks – including the US Federal Reserve and the European Central Bank – are now jointly looking into setting a common framework for CBDCs, I sniffed Big Brother around the corner.

Money is power. But money and power are in a confusing flux right now. Privately-generated cryptocurrencies (which are extremely difficult to use as money) are facing a steady but relentless challenge by government stablecoins. And as governments everywhere try to push their digital cash on their citizens, the scope for government control over how, when, and where they can use that money will expand willy-nilly.

To avoid even the risk of that kind of supervision and interference I will be using my Glint card, and its gold, even more in the future.

Until next week!

Jason.

Around the campfire: Lockdown’s ending amid mixed messages

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As  I stir the ashes of this week’s campfire I find myself in a state of slight confusion – will I need a vaccine ‘passport’ to able to go the pub for a drink and a much-needed ‘in person’ meet-up with my Glint team? Or to travel abroad? Or to sit down for a meal in a restaurant?

According to the UK Prime Minister Boris Johnson, when non-essential shops and pub gardens in England re-open on 12 April “there is absolutely no question of people being asked to produce a certification or a Covid status report when they go to the shops or to the pub garden or to the hairdressers or whatever…”

For good measure, he added “we’re not planning that for step three, either”. Step 3 (which will be no earlier than 17 May) will see the re-opening of theatres, cinemas, galleries “subject to specific conditions: that they comply with COVID-Secure guidance including taking reasonable steps to limit the risk of transmission, complete a related risk assessment; and ensure that those attending do not mix beyond what is permitted by the social contact limits”. Those social contact limits ban groups of more than six people or two households indoors. How will that work in a cinema or pool hall for example?

Not even by 21 June is it guaranteed that the abnormal conditions of life which have been imposed by the government (and heartily supported by the general public, if most opinion polls are to be believed) during Covid-19 might be removed. “This is subject to the outcome of the Events Research Programme, and a review of social distancing measures”, says the government’s website. Restrictions on what we can do, how we can mingle, where we can go, are being lifted; at a snail’s pace.

But the introduction of vaccine certificates or passports – which would include vaccination status, test results or evidence of someone having contracted and recovered from Covid-19 – “could potentially play a role” in the future, says the government.

Boris Johnson said during a debate on national identity cards, when a previous (Labour) government introduced plans for them in 2003: “I will in no circumstances carry one and even were I compelled to do so, I would take it out and destroy it on the spot were I ever asked to produce it. It is a plastic poll tax that will do nothing to assist the struggle against terrorists and will hugely expand the powers of the state over the individual”.

The last time the UK legally imposed compulsory identity cards was during the Second World War – everyone had to carry the card at all times and failure to do so was a criminal offence. That lasted until 1952 – seven years after the war ended.

The sheer bureaucracy of administering all these ‘steps’ (the ‘tier’ system has been quietly dropped in England at least) and ensuring compliance is mind-boggling. Whole new businesses have grown up around Covid testing, like moss on an ill-tended garden path.

There is already opposition building among MPs and others outside Parliament to any idea of compelling the introduction of ‘Covid passports’ – but the private sector may start imposing them anyway. The risk is not just Covid-19 but widespread confusion as to what is or is not permitted, and on what basis.

Until next week!

Jason.

Gold – according to Dominic Frisby: From Constantine to the Islamic empire

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By the time Rome fell in 476 AD, after a hundred years of struggle against Goths, Huns and other barbarians, the nucleus of the empire had long since moved east to Constantinople, today Istanbul.

The emperor Constantine I had declared it a ‘New Rome’ in 330 AD, and this ‘Eastern Roman Empire’ would survive another thousand years, a trading hub and military buffer between Europe and Asia, before it finally fell to the Ottomans in 1453.

We may call it the ‘Byzantine Empire’ today, but its citizens called themselves Romans and their empire was, to them at least, the Roman Empire. Its zenith came during the reign of Justinian I, who ruled during 527–565, when much of North Africa, as well as Italy and Rome itself, had fallen under its authority.

War with the Sasanians to the east in the early 7th century, however, exhausted the empire’s resources, and paved the way for the Muslim invaders to take many of its richest provinces from Egypt to Syria.

Byzantine money, meanwhile, followed the trajectory of the money of most empires: it started sound, and ended worthless.

Diocletian had introduced the solidus in 301 AD to Rome to replace the aureus, and under Constantine I use of the solidus became widespread. Constantine I, or Constantine the Great as he is known, must be one of the more capable individuals who ever lived. Despite being of low birth, he fought and won battles as far afield as Persia and Britain, emerged victorious from the Roman civil wars, relocated Rome to Byzantium, founded an empire that lasted 1,000 years and eradicated the rampant inflation that had infiltrated the empire with the implementation of the solidus, the gold coin that became the standard for Byzantine and European currencies for hundreds of years.

The solidus was 4.5 grams of gold, and it remained essentially unaltered in weight, dimensions and purity, until the 10th century. Most were minted in Constantinople itself, but other cities of the empire such as Thessalonica, Rome, Syracuse, Alexandria, Carthage, and Jerusalem would also mint coins. In medieval Europe, one solidus was worth 12 silver pennies, and the Italian word for money, ‘soldi’, has its roots there. In Western Europe, the valued Byzantine solidus also became known as the “bezant”, although legally solidi were not supposed to be exported beyond the empire – else how would the emperor get his taxes?

Smaller denomination money tended to be bronze. Silver was not as widespread as it had been under the Greeks or Romans.

It was in the 11th century that the debasement began in earnest. The debasement was gradual at first then accelerated rapidly – heard that one before? The carats were reduced from 24, to 21 then to 18; to 16, to 14 to 8 and eventually below. That process took 50 years. The solidus was then abandoned and replaced with another coin, the hyperpyron. By the time Constantinople fell to the Ottomans, Byzantium had stopped issuing gold coins altogether. The silver stavraton was the currency.

Constantinople may have fallen, the Byzantine empire may have gone, but the golden constant had not. It lived on elsewhere.

Thanks to victory in battle, exhausted Byzantine and Sasanian empires, astute occupation of trade routes and promises of equal treatment for all, within three decades of the death of Mohammad in 632AD, the Islamic empire had become one of the largest in the world. Arabian solidi, minted from the captured gold supplies of the upper Nile, were soon circulating.

The Islamic armies swept across North Africa and eventually into Spain. All fell before them. Conquered lands put up little resistance. Heavily burdened with taxes as they were under their previous regimes, they had neither the means nor the inclination. “In the name of God, the Merciful and Compassionate”, exhorted a conquering general, “become Muslim and be saved. If not, accept protection from us and pay the poll tax. If not, I shall come against you with men who love death as you love wine”. Death, taxes or Islam – that was the choice. Many chose Islam. Even those who did not convert were often glad of the relief the Islamic invaders brought. The largest body of converts were Christians.

Islamic money soon followed, and, just as they would leave existing tax structures in place, the Islamic conquerors mimicked the money of their predecessors. Even the word dinar comes from the Latin denarius. But the denarius was a silver coin, the Arabic dinar was 4.4 grams of gold, similar in weight to the solidus. However, the overtly Christian symbolism inscribed on the solidus would, first, become religiously innocuous pillars on the Arabic equivalent and, eventually, simple inscriptions, expressing the ruler’s faith.

The silver dirham – about 3 grams of silver – also came into widespread use. Like the Roman denarius, and the Greek tetradrachm before it, these tended to be minted wherever soldiers would be receiving their pay – from Andalusia in Spain, through North Africa to Georgia, as far as Pakistan and India.

Islamic gold coinage became one of the senior currencies of the medieval world, especially across the Mediterranean. Silver dirhams even reached Scandinavia, probably as a result of the fur trade.

The word dirhem derives from the Greek drachma, meaning handful, although, like the dinar, the dirhem was a measure of weight. Both the dinar and the dirhem predate Mohammed, even if they were embraced by his successors. Currencies of the same name are widely used throughout the Arab world today, from the Moroccan dirham to the Kuwaiti dinar, although sadly, like their western counterparts, which have also kept their names, none have kept their underlying gold or silver.

* Dominic Frisby, author of Daylight Robbery – How Tax Shaped The Past And Will Change The Future, out now in paperback at Amazon and all good bookstores with the audiobook, read by Dominic, on Audible and elsewhere.

Around the campfire: Economics starts to trump health – crowds are OK again

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Spring is here and finally, we have some sunshine! In the UK, the mood is lifting, nicely coinciding with the easing of the government’s restrictions on social interaction. As of Monday, this week the rules allow six people (or two households) to be free to meet outdoors, and outdoor sports and open-air swimming pools are again open.

In the past 12 months – the UK went into its first ‘lockdown’ 23 March 2020 – we have acquired lots of new vocabulary; ‘social-distancing’, ‘flattening the curve’, ‘lateral flow tests’, ‘immunocompromised’, ‘intubation’, ‘personal protective equipment’, ‘proning’ … the list goes on. Will we still be using them a year from now or will they just be distant bad memories. We are told that Covid-19 (or some variants) will still be with us but that we will have to live with that. They can’t lock us away forever though. Economic need is starting to trump health anxieties. Policymakers are starting to realise (I hope) that they need to get the economy restarted.

From 12 April, gyms, hairdressers and other venues can re-open in England but not until 21 June (on current plans) will all legally-imposed limits on social contact be removed. Nightclubs from that date can throw their doors again.

Brits can, in other words, look forward to going back to ‘normal’. But after a year of more or less enforced social distancing, we have no idea what that might be. I presume that at most social gatherings there will be one main topic of conversation – ‘how was life for you under lockdown?’

But at least it will soon be legal to rub shoulders with strangers, shake hands with friends, and hug one another again – crowding will be back and I can’t wait.

For the Glint team, crowds are starting to re-appear. As we have been advertising in recent editions of The Treasury, we are offering Glint clients the chance to pre-register their interest in investing in Glint, and to join our gold-as-money movement. Very soon now, we are throwing the invitation open to the wider public – crowds are back!

Have a great week!

Jason.

Around the campfire: UK Census time – how private is your data?

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I have just filled in my census form. It’s a job that comes round every 10 years, although Scotland is pushing back its census until 2022, “due to the impact of the Covid-19 pandemic” which, oddly enough, has not delayed that of England, Wales or Northern Ireland. The US also runs a census every 10 years – their next one is due in 2030.

What do I think of these great data-gathering exercises? A nosey-parker intrusion by the state into the private lives of 68 million people? Or a useful exercise which enables the government to make better policy decisions? On the basis of many past government errors, I’m not very hopeful about the latter.

But unless I want a criminal record, I have no choice – failure to complete the census risks a £1,000 ($1,383) fine. Refusing to complete the US census risks a fine of up to $5,000 (£3,600). Four UK ‘refuseniks’ were fined a £1,000 after the 2011 UK census; 270 more were fined an average of £218.

Censuses have expanded their probing over time. As with the first (1790) US census, there were just six questions in the first (1801) UK census – no names or addresses. From 1871 to 1911, the UK one even asked if anyone was blind, deaf, dumb, an imbecile or lunatic.

For 2021’s model the (now) 50 questions range from “what is your name and date of birth” to “how well can you speak English?” and (voluntary) ones about religion and gender.

Personal data is big business these days. The UK’s Office for National Statistics promises “your information is safe with us” and will remain confidential for 100 years. But how strong can that promise be? The US moved its census on-line to an outsourced company from 2016; but it was hacked from IP addresses in Russia during 2018 testing.

There were ‘thousands’ of data breaches in UK government departments between 2019 and 2020. The UK government awarded a £65 million contract for administering this year’s on-line census to a US-based company called Leidos, which the Stockholm International Peace Research Institute (SIPRI), listed as the 19th biggest arms and military services company in the world in 2019. The 2011 census was run by the US-based arms company Lockheed Martin.

Gathering and using information on individuals is probably the biggest growth industry of the early 21st century. China does it very effectively and, with its Central Bank Digital Currency – and CBDCs will soon be everywhere – is tightening its grip over its citizens. Your fiat money is not really yours; your personal data is not really yours.

At Glint, we take your data security very seriously. So, I urge you to be vigilant and protect your personal data.

Until next week, stay safe.

Jason.

Around the campfire: One or two percent – no one will notice

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This is the time of year when UK (excluding Northern Ireland) property owners get their annual council tax demand for the next year. If ever there was a confirmation that inflation is back, it’s this – my council tax for April 2021-April 2022 is up by 4.8% compared to the previous year. One item – for the local police and crime commissioner’s services – has gone up by a whopping 7.4%!

Meanwhile, the government says the Consumer Prices Index (CPI) rose by 0.7% in the 12 months to January this year. The CPIH (which includes owner-occupiers’ housing costs, including council tax) rose by 0.9% in the 12 months to January this year, according to government figures. My council tax went up by 4.99% in 2019-20 and 3.99% in 2020-21. So over three years, this tax has risen by an average 4.59% a year. Across the country council tax this year will go up by an average 6.6%. Yet the government figure for the annual CPIH nationwide in 2019 was 1.4% and 0.8% in December 2020. There seems to be a discrepancy somewhere…

This creeping inflation and stealth tax hits us all; the poorest households hardest. Many have racked up debts during the Covid-19 lockdowns. Total UK household debt in the third quarter of 2020 was almost £1.9 trillion, 2.4% higher year-on-year. It’s difficult to accurately assess how many and what types of people are struggling in the UK – there are so many ways of calculating this. But the increase in foodbank use – up by 88% rise in demand during February-October 2020 compared to the same period in 2019 say independent food bank operators – gives a clue.

Yet at the same time, many UK households have managed to save during the Covid-19 lockdowns. Since March 2020 UK households have accumulated an estimated £125 billion in savings, according to the Bank of England (BoE).

 

Where will all this unusual savings go? It may well be just as quickly spent once the Covid-19 lockdown ends, although maybe it needs to be saved for rainy days ahead.

For the UK’s Chancellor, Rishi Sunak, has in mind a series of stealth taxes, by de-indexing the tax system. From 2022 through 2026 there will be no adjustments of income, inheritance or capital gains tax brackets, of pension lifetime allowances or of value-added tax (VAT) for small-business thresholds. This de-indexing will see him gather an additional £25 billion in taxes over four years and push 1.3 million new taxpayers onto the tax rolls by 2026 – with the majority at the bottom end.

Like a frog dropped into a saucepan of cool water that is actually being boiled up, a percentage here and a percentage there feels rather painless at the time. All of us facing an inflationary council tax bill will have to grit our teeth and bear it.

Is gold a good hedge against inflation? This debate rages. And opinion is deeply divided about where inflation is headed.

In any case at Glint, we promote gold not purely as a hedge against inflation, but as money, to be bought, spent and used as an alternative to paper money; since 1933 the US dollar has lost more than 90% of its purchasing power. And the amount of dollars in circulation is now 60 times greater than in 1933. Some of you may have more cash around as a result of policy decisions by your government; but holding it as cash or putting it into a bank account may not be the best use of it in these volatile times.

All the best,

Jason