Saturday, May 28, 2016
The Penny's Decline in Value Over Time
In 1266 King Henry III introduced an "English Peny, called a Sterling," 12 of which weighed an ounce with 20 ounces in a pound. The relative values of the penny, shilling and pound remained the same until decimalisation in 1971. But over time the penny has declined in value. The Sterling penny was silver with a little alloy mixed in about the fineness of modern sterling silver. The name Sterling may have been an indication of it value being equal to that of a yearling steer.
We can do a rough calculation to determine the rate of decline in the penny's value over time assuming a yearling steer was worth one penny in the year 1300 and $1500 in 2000.
That's less than half the modern annual rate of inflation in the US of about 4%.