Pickled Onions and Thatched Cottages

July 26, 2012

Economics, Economy, Government, Markets

I’m writing this while on vacation in England, in a beautiful thatched cottage in Devon, built in the early 1700’s. There’s no internet so it is easy to ignore unsettling news from the outside world, the Batman massacre, Eurozone concerns and Middle Eastern turmoil. The setting, gardens and décor are idyllic.  The cottage has seen witchcraft trials, civil war, empires and world wars come and go and yet it continues to exude the serenity of a wise and graceful old lady.  It is a calming and peaceful thought that places such this will exist long after our current economic troubles have become no more than another historical footnote.

I have no idea what the British now make that the rest of the world wants, besides T.V. shows, video games and Harry Potter books.  However, the population is rapidly increasing as a result of immigration, particularly from eastern European countries.  There is no doubt that the life-style of a Disney city (by which I mean that it’s fun to live in London) as well as easy access to social welfare benefits, are powerful magnets. High end real estate in London is being propped up by overseas cash buyers wanting a safe-haven retreat from actual or potential political and economic turmoil in their own backyard, while real estate at more modest price points and in the rest of the country, continues to fall in price.  Multi-cultural and interracial London no longer has anything in common with the provinces, which have become the last refuge of the English middle class.  The villages in Devon are almost exclusively white.

My daughter finds the British currency confusing but I told her that Britain lost a great ‘opportunity’ in 1971 when they decimalized the currency.  A rich tapestry of coinage was discarded for 100 vanilla new pence equaling one pound.  I grew up with four farthings making one penny (usually called a ‘copper’) and two farthings making one half penny (pronounced ‘haypnee’).  Two pennies were pronounced ‘tuppence’.  Three pennies were called a ‘thruppeny bit’ and six pennies were called a ‘tanner’.  Twelve pennies made a shilling, commonly called a ‘bob’.  Two shillings made a ‘florin’ and five shillings a ‘crown’.  Twenty shillings made a pound and twenty one shillings a ‘guinea’.  Faced with this bewildering historical heritage tourists would routinely dump their pocket change into the bemused hands of shopkeepers who were regularly told to ‘help themselves.’  I have never seen a calculation that took this ‘overpricing’ into account when evaluating the opportunity cost of decimalization.

The devaluation of the pound sterling over the years has been as insidious as the as the fall in value of the dollar over the same period.  My unofficial fish and chips index will illustrate the point.  As a young lad, after swimming in our local pool every week, I used to buy four pence worth of chips and a large pickled onion.  This was in the old currency where 240 pennies made one pound.  Today it costs 165 new pence (100 new pence makes one pound) to buy the same portion of chips and one pickled onion.  Moreover, the old chips were wrapped in newspaper and the ink often imprinted itself onto the chips at no extra cost. Memories are priceless.  For everything else, there’s government induced inflation.


“By a continuous process of inflation, goverment can confiscate, secretly and unobserved, an important part of the wealth of their citizens”.  John Maynard Keynes

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About Malcolm Greenhill

Malcolm Greenhill is President of Sterling Futures, a fee-based financial advisory firm, based in San Francisco. I write about wealth related issues in the broadest sense of the word. When I am not writing, reading, working and spending time with family, I try to spend as much time as possible backpacking in the wilderness.

View all posts by Malcolm Greenhill


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4 Comments on “Pickled Onions and Thatched Cottages”

  1. Susie Stockholm Says:

    Malcolm, loved your letter this evening. I lived in England in 1968-70 in East Anglia.  My husband was stationed at RAF Mildenhal, and I was teaching kindergarten at RAF Lakenheath.  My daughter, Erikka, was born at Lakenheath in November of 1969. I remember well the bobs, shillings, crowns and haypnees! The pound cost about $2.40 then. I have fond memories of my time in England…and some not so fond, like how COLD it was in our WWII Quonset hut. I taped plastic over the windows, got a heater installed in the center of the house that I found out afterwords only came on from 11 pm to 6 a.m., and always put towels on the toilet seat so I wouldn’t stick to it from the cold….those were THE days, LOL!  Happy for you that you’re enjoying yourself in your home “place.” I’m intending to get back to California this year.


  2. Jill London Says:

    Malcolm, I never realised you were such a romantic! I’m inclined to agree with you on your government suspicions (excellent quotation from the brilliant John Maynard Keynes btw). I must admit I can see how difficult it must have been for people to change over to the ‘new money’ as I can’t make ‘head nor tail’ 😉 of those old coins.


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