<story><title>That Debt from 1720? Britain’s Payment Is Coming</title><url>http://www.nytimes.com/2014/12/28/world/that-debt-from-1720-britains-payment-is-coming.html</url></story><parent_chain></parent_chain><comment><author>MarkMc</author><text>In 1720 an ounce of gold in London cost about £4.31 [1] and today it costs £768.  So the effective interest rate for gold over that period has been about 1.8% per year, while the gilts paid 2.5 - 4% according to the NY times article.&lt;p&gt;So despite the huge depreciation of the UK pound over almost 300 years, buying UK bonds in 1720 was a much better investment than gold.&lt;p&gt;And yet buying a property in London probably would have been an even better investment - a &amp;#x27;barrel store&amp;#x27; in Picadilly cost about £2,500 [2].  Today it might be worth 10,000 times as much, giving a compound return of 3.2% per year plus a significant rental income.&lt;p&gt;[1] &lt;a href=&quot;http://www.measuringworth.com/&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;www.measuringworth.com&amp;#x2F;&lt;/a&gt;&lt;p&gt;[2] &lt;a href=&quot;http://www.independent.co.uk/arts-entertainment/books/reviews/london-in-the-18th-century-by-jerry-white-8553732.html&quot; rel=&quot;nofollow&quot;&gt;http:&amp;#x2F;&amp;#x2F;www.independent.co.uk&amp;#x2F;arts-entertainment&amp;#x2F;books&amp;#x2F;review...&lt;/a&gt;</text></comment>
<story><title>That Debt from 1720? Britain’s Payment Is Coming</title><url>http://www.nytimes.com/2014/12/28/world/that-debt-from-1720-britains-payment-is-coming.html</url></story><parent_chain></parent_chain><comment><author>Animats</author><text>&amp;quot;Never sell consols.&amp;quot; - &lt;i&gt;The Forsyte Saga&lt;/i&gt;&lt;p&gt;Britain still has some consols outstanding. They&amp;#x27;re perpetual bonds, paying interest at a fixed rate, forever. (Or at least as long as the UK lasts.) Some date back to the 18th century. It takes an act of Parliament to call them in and pay them off. That&amp;#x27;s finally happening, at least for the 4% consols.</text></comment>