Sovereigns Vs pounds

[Spark268]

Does the pre decimal pound always equal 1 sovereign since it was minted in the early 1800s? So any contrapranious references to £1 mean 1 gold sovereign?

I'm asking because, for example the Scott's monument in Edinburgh (pictured on this fine Saturday below) cost £16,154 to build in 1846. According to its official webpage, that's equivalent to approx £712,000 today - presumably this figure has been arrived at by using one of those inflation calculators.

However, 16,154 sovereigns, priced at their bullion value of £308, that amounts to £5mln. The 712k sounds a bit low to me, as it took 6 years to build, with heavy stone that had to be carved with intricate details in a prime part of Edinburgh, £5mln seems more reasonable.

Am I missing something?

 

 

[Roy]

10 minutes ago, Spark268 said:

So any contrapranious references to £1 mean 1 gold sovereign?

contemporaneous?

[Spark268]

Yes, i'm a part of the decimal, spell check dependant generation 😋

Edited July 10, 2021 by Spark268

[Roy]

Why did it fail you so?

edit: I read in the news that the inventor of auto-correct had passed away.

His funnel is tomato.

Edited July 10, 2021 by Roy

[HawkHybrid]

modern day bullion sovereigns track the gold price and not inflation.

 

HH

[dangelo]

I'd skip the calulations approach and simply ask a construction company to comment on how much an identical structure would cost today.  I agree with you, surely it would be a few million, especially if the materials and workmanship are high end.  I'd also consider anything delivered to a government is done so at inflated prices too, if that's who comissioned it

[Arganto]

41 minutes ago, dangelo said:

I'd skip the calulations approach and simply ask a construction company to comment on how much an identical structure would cost today.  I agree with you, surely it would be a few million, especially if the materials and workmanship are high end.  I'd also consider anything delivered to a government is done so at inflated prices too, if that's who comissioned it

I would warrant few or possibly no modern construction companies could build such a thing. You'd likely be looking at a very specialised team with the associated rates of compensation. Modern building, though clever with what can be done with materials science and applied mathematics, pales in comparison to these beautifully intricate older structures.

As for the cost comparison it seems a difficult task to make direct equivalents over time. A sovereign was a pound but a pound made from precious gold, so it's a physical representation of an esoteric idea (currency to compensate time and effort) but also something intrinsically valuable in of itself. A modern quid ain't, unless you count the copper in it.

I would personally concur that an equivalent 'value' of £712K today would be very low. If we assume that Bob the Builder could construct such a thing at his regular contract rate plus materials, several million "feels" much closer to the mark. How much was the tent that James Bond fell off? Not cheap, and that was sh*te.

Edited July 10, 2021 by Liam84
Autocorrect silliness

[HawkHybrid]

26 minutes ago, Liam84 said:

I would warrant few or possibly no modern construction companies could build such a thing. You'd likely be looking at a very specialised team with the associated rates of compensation. Modern building, though clever with what can be done with materials science and applied mathematics, pales in comparison to these beautifully intricate older structures.

the problem is that you not comparing like for like.

how much does it cost to produce a masterpiece identical to the mona lisa?(nigh impossible?)

yet it's these standards that people judge modern inflation calculations by?

for a fairer comparison,

let's say you compare a candlestick lantern versus a torch.

an identical newly created candlestick lantern is going to cost a bit more than an equally performing torch?

using things that have an artistic nature results in difficult comparisons. if nothing else, people can't even

agree on the grade of many coins.

 

HH

[eblend]

The thing is, when you look at 'value' in today's terms, you're looking at overall cost of living value, not specifically at the actual product being produced.  So yes, building costs have gone up a lot, but maybe some others haven't quite so much, and some may have gone up more.

Having said which, I calculate that the value of £16,154 in today's terms is £1,931,737, so someone's calculations are a bit adrift somewhere, especially since just the cost of restoration works in the 1990s was £2.36m.

[Spark268]

1 hour ago, Roy said:

Why did it fail you so?

edit: I read in the news that the inventor of auto-correct had passed away.

His funnel is tomato.

may he RIP.

Its because my initial attempt was bad, and likely a undiagnosed case of dyslexia also

1 hour ago, dangelo said:

  I'd also consider anything delivered to a government is done so at inflated prices too, if that's who comissioned it

yes it was commissioned by an Act of parliament according to the wikipedia article.

 

32 minutes ago, Liam84 said:

I would warrant few or possibly no modern construction companies could build such a thing. You'd likely be looking at a very specialised team with the associated rates of compensation. Modern building, though clever with what can be done with materials science and applied mathematics, pales in comparison to these beautifully intricate older structures.

 

I fully agree - one would have to insist that it was fully handmade for a like-for-like comparison, stone masons were likely dime a dozen then, if you excuse the phrase, but finding them now would be prohibitively expensive. A machine made structure would probably cost more than 700k anyway, or indeed any structure of a similar size that lasts 200 years!

 

37 minutes ago, Liam84 said:

How much was the tent that James Bond fell off? Not cheap, and that was sh*te.

I believe that metal monstrosity, in a dilapidated part of London, cost in excess of £1bln in 2000 !

[Spark268]

3 minutes ago, eblend said:

The thing is, when you look at 'value' in today's terms, you're looking at overall cost of living value, not specifically at the actual product being produced.  So yes, building costs have gone up a lot, but maybe some others haven't quite so much, and some may have gone up more.

Having said which, I calculate that the value of £16,154 in today's terms is £1,931,737, so someone's calculations are a bit adrift somewhere, especially since just the cost of restoration works in the 1990s was £2.36m.

thanks for pointing this out ! I took the 700k figure from https://sites.scran.ac.uk/scottmon/pages/the_monument.htm , i think its a government body that's responsible for Scotland's heritage.

[Martlet]

Value of sovereign decoupled from £1 worth of spot gold a long time ago.  Presumably 1931 possibly before. 

 

[Arganto]

17 minutes ago, HawkHybrid said:

the problem is that you not comparing like for like.

how much does it cost to produce a masterpiece identical to the mona lisa?(nigh impossible?)

yet it's these standards that people judge modern inflation calculations by?

for a fairer comparison,

let's say you compare a candlestick lantern versus a torch.

an identical newly created candlestick lantern is going to cost a bit more than an equally performing torch?

using things that have an artistic nature results in difficult comparisons. if nothing else, people can't even

agree on the grade of many coins.

 

HH

For many things that would be fair, however constructions like the monument in the op were not scarce. Building purposes, standards of design and methods of construction were different in the past, so it would be fairer to say comparisons are difficult because of a societal change. Historical and contemporary buildings are not apples to apples. That said the publication was trying to show a modern cost of construction if apples were apples. If you assumed skill levels were equal and the value of materials and labour were the same (obviously they aren't realistically) you should be able to come up with a figure that isn't as glaringly off base as 712K. That would be closer to the cost of a large prefab construction today, not a complex tower of heavy stone.

[HawkHybrid]

2 hours ago, Spark268 said:

However, 16,154 sovereigns, priced at their bullion value of £308, that amounts to £5mln. The 712k sounds a bit low to me, as it took 6 years to build, with heavy stone that had to be carved with intricate details in a prime part of Edinburgh, £5mln seems more reasonable.

 

57 minutes ago, eblend said:

Having said which, I calculate that the value of £16,154 in today's terms is £1,931,737, so someone's calculations are a bit adrift somewhere, especially since just the cost of restoration works in the 1990s was £2.36m.

 

£712k gives an average inflation of ~2.2%

£1.9 million gives an average inflation of ~2.8%

£5 million gives an average of ~3.3%

the difference in numbers look big but the actual change in inflation % is not all that big.

 

HH

Edited July 10, 2021 by HawkHybrid

[eblend]

2 minutes ago, HawkHybrid said:

 

 

£712k gives an average inflation of ~2.2%

£1.9 million gives an average inflation of ~2.8%

£5 million gives an average of ~3.3%

the difference in numbers look big but the actual change in inflation % is not all that big.

 

HH

True.  But I wasn't going by any average of annual inflation.  I was taking it from purchasing power statistics, which measure (or purport to measure, at any rate) the real inflationary effect on the currency over specific time periods.  I suppose it is possible that the monument's own site used some sort of assumption of annual inflation.  In my opinion, a reasonableness check on the eventual figure should have alerted them to the sense that they had miscalculated somewhere.

[HawkHybrid]

2 minutes ago, eblend said:

True.  But I wasn't going by any average of annual inflation.  I was taking it from purchasing power statistics, which measure (or purport to measure, at any rate) the real inflationary effect on the currency over specific time periods.  I suppose it is possible that the monument's own site used some sort of assumption of annual inflation.  In my opinion, a reasonableness check on the eventual figure should have alerted them to the sense that they had miscalculated somewhere.

they could be using historic data.

prices for buildings have gone up more than average inflation in recent decades.

ie the current market value for buildings are higher than it should be if it was only inflation.

 

HH

[eblend]

38 minutes ago, HawkHybrid said:

they could be using historic data.

prices for buildings have gone up more than average inflation in recent decades.

ie the current market value for buildings are higher than it should be if it was only inflation.

 

HH

Yes, but my point is that their figure seems way too low - by a factor of at least 3 - on any reasonable measure you can find.  And if buildings have gone up more, then the figure is even further adrift from where it should be.

[HawkHybrid]

31 minutes ago, eblend said:

Yes, but my point is that their figure seems way too low - by a factor of at least 3 - on any reasonable measure you can find.  And if buildings have gone up more, then the figure is even further adrift from where it should be.

 

using the calculate difference in % inflation using the different figures, it's 1.1% for the extremes,

(which include non inflation factors priced into the trading value of sovereigns). even at 1.1% that is

within what the variation in long term interest rate at 4-6%. it only looks big, there is nothing wrong

with figures that show a variation in inflation of 1.1%. the effect of compounding makes it look like it's

very wrong.

are the cheapest houses in the uk(under £100k) 2.5 times inferior to that of the average house in

england(£250k)? how much of it is location specific? how much of it is down to inflation?

 

HH

Edited July 10, 2021 by HawkHybrid

[Spark268]

2 hours ago, Martlet said:

Value of sovereign decoupled from £1 worth of spot gold a long time ago.  Presumably 1931 possibly before. 

 

that makes sense as we came of the gold standard then

[GoldDiggerDave]

I’d say the pound has lost 99% + of its buying power since then, plus it’s gone though decimalisation. 
 

I don’t even think 5m today  would touch the sides 15-20m would be closer to the final bill over run by 3 years.  
 

712k would not even buy the land it’s sat on never mind the materials. 
 

 

[Booky586]

9 hours ago, Martlet said:

Value of sovereign decoupled from £1 worth of spot gold a long time ago.  Presumably 1931 possibly before. 

 

I remember reading that, after the 1st world war, that it wasn't economically viable to produce sovereigns because the gold content value was higher than a pound Sterling. That's why the London mint produced no sovereigns after the war until 1925.

[eblend]

5 hours ago, Booky586 said:

I remember reading that, after the 1st world war, that it wasn't economically viable to produce sovereigns because the gold content value was higher than a pound Sterling. That's why the London mint produced no sovereigns after the war until 1925.

I don't believe the London Mint issued any sovereigns after the First World War (except the 1937 George VI proof coin) until 1957.  I have a 1957 sovereign, graded MS-64.  It's a beautiful coin.

[Roy]

You missed this one 😊

https://www.royalmint.com/our-coins/ranges/historic-coins/historic-sovereigns/1925-sovereign-george-v/

[eblend]

32 minutes ago, Roy said:

You missed this one 😊

https://www.royalmint.com/our-coins/ranges/historic-coins/historic-sovereigns/1925-sovereign-george-v/

Ah right.  Was that the only year?

[whitesands1]

18 hours ago, Roy said:

Why did it fail you so?

edit: I read in the news that the inventor of auto-correct had passed away.

His funnel is tomato.

May he RPI