Gold, French Farm Labourers and Wages

Dear Reader

Those of you who haven’t been watching the Gold price of late should take heed now!

I’ve talked in the past of the inevitability of a price rise due to the coming US default (August 2nd) and also the bailouts of Greece, Portugal, Ireland, France (others to come?)

It closed this weekend just under $1600 a new all time record, with Silver just under $40, both of these barriers will be tested next week, so I’d get in quick if I were you.

Another article that caught my eye on the BBC and the reason I am writing today is the recent find of a hoard of Gold coins in France.

“A French couple have found a hoard of gold coins worth at least £89,000 in the cellar of their home in the town of Millau.
They were working on their drains when they dug up the 34 coins in a little clay pot”

Whilst 34 coins isn’t bad, I’d hardly call it a hoard. As you can see from the pictures its barely a handful, yet at an average of over £2,600 per coin that’s a pretty good find!

These coins date from 1595 to 1789, around Louis XIII to the French Revolution. We know they are worth £89,000 now, but what did that mean to someone then?

It took a lot of digging as people mainly were “self employed” back then as blacksmiths, farmers, etc, so there really wasn’t an average wage to compare it to. So using a few different sources of information I managed to compile a guide to its value, though with my limited knowledge of 17th century France it’s a bit of an educated guess.

In the early 1600’s a labourer on the land would have earned around 3 sous a day, but with the latest coins dated in the late 1700’s it was around 15 sous per day. With 20 sous in a franc and a Gold Louis XIII coin worth about 20 francs. That’s a yearly wage of about 14 Gold coins. So this hoard represents under 2.5 years of savings (assuming you spent nothing at all!)

Not in my mind this raises 2 main points which are food for thought.

Firstly you have savings in coins that stretched over 200 years but STILL retained value and were legal currency. In fact they still have value NOW 400 years later! Try paying in shillings now, only 40 years later.

Secondly a farm labourer in the 1700’s would have earnt (the equivalent of) £89,000 in less than 2.5 years or £36,650 a year. That’s almost double the average annual wage now.

Thanks BBC, if I ever wanted an article to prove my argument that;
(1) Gold retains it’s value over time
(2) Gold always has been and will be redeemable
(3) Inflation devalues your currency

Hopefully a lesson learnt today and I don’t mean that if you earn less than £36,650 you earn less than an 18th century farm worker, I mean GOLD IS MONEY.

Doesn’t matter how big the number you get in your wage packet is, if there is no value behind it. Things are coming to a head at an ever increasing rate, don’t get left empty handed when the crash comes.

As currencies devalue Gold WILL rise, its cause and effect. In early 2009 I would have given you 2 ounces of Gold for a £1000, now its only 1 ounce. How long will you wait?