Gold Standard

[Stonegiant]

Evreaux once talked about the fact that to control the amount of gold being given out in his campaign but to also allow him to use the gold=xps formula, that he started giving 5xps per gold piece but dividing the treasure amounts of coins given by 5 and keeping the prices the same. This allowed the current coin system to say stay in place but at the same time controlled the amount of coin and made every coin found more valuable, especially if someone was looking at building a stronghold of some sort. This struck me as so simple yet so effective that I adopted it for my own campaigns.

[makofan]

I LIKE that idea!

[Finarvyn]

At one point I had tried to build a spreadsheet with an economics system so that when adventurers brought in lots of gold I could inflate prices, but it turned out to be more bother than it was worth. Fun idea, though. :-)

[Rhuvein]

serendipity said:

My games don't actually use gold, silver, or copper as the standard. We use grass. But then, we are playing bunnies.

Heh, I can see this.

Fresh, thick and long blade = 1 GP
Shorter, thinner and medium length = 1 SP
Withered, thin and stumpy = 1 CP
Dried out grass like straw = half-penny, shilling or six pense - depending on ultimate quality.

Poor bunnies!! ;D

Oh, and would a carrot be a diamond gem depending on some sort of carrot to carat ratio?? LOL.

Carrots are bunny girls best friend!! ;D

OK sorry, I'll stop now.

Regards,

Carol "Bunny" Channing.

[Red Baron]

Has anyone run a game where there is no fixed conversion rate for gold and silver, where they are in effect two different currencies operating independantly?

[cooper]

the gold standard exists in Beowulf, where amassed golden treasures were indicative of a heroes experience. Gygax wasn't mimicking history, his influence was always literature.

gold pieces are meta. if one wants to base things off of the historical buying and selling. the first question is what culture, what year? step two is just to go to Wikipedia and write down what a chicken costs in 1592 Northumberland or whatever.

[jmccann]

I agree with Delta's thoughts on the advisability of using SP as a standard. The idea of silver piece, copper piece, and gold piece is gaming silliness. No real coinage system is like that. Fin gets at the problem with his post about his excel spreadsheet. One the one hand having market prices react to events in the real world (and I recall in AD&D 1e Gygax advises that this should be done, maybe later I'll look up the citation) adds a great deal to verisimilitude, on the other it adds a lot of complexity.

I think it is an area where each campaign has to find its own desired tradeoff of complexity vs. playability. Just using a medieval price list is not enough, you need to simulate a real market with inflation, seigniorage, devaluation and so on.

[oakesspalding]

I don't think it's all about "realism" per se. Rather, it's about a system where two-thirds of the coins in any "treasure" horde are inferior to scrip. That's simply bizarre.

[Finarvyn]

Jul 27, 2014 22:39:29 GMT -6 oakesspalding said:

I don't think it's all about "realism" per se. Rather, it's about a system where two-thirds of the coins in any "treasure" horde are inferior to scrip. That's simply bizarre.

I agree on this being the crux of the problem.

If gold is the standard way to measure XP and the standard way to count money, then the silver piece has little value and the copper piece just takes up space. Imagine in the real world if you have a jar of pennies and want to buy something from the store -- huge bother. In the same way, adventurers who have to count enbumbrance will just throw away coppers as soon as they find gold and silvers. The whole M&T treasure tables are broken in that way.

If one uses the copper or the silver as the standard coin (and standard for XP) one gives those coins some in-game value and thus have a purpose in the treasure tables. Unfortunately, that means that the treasure tables ought to be redone to reflect the change in value. (E.g. instead of 1000's of silver one might roll 100's and instead of 1000's of gold one might roll 10's. Same table, just change the values at the top.)

Just thinking out loud.

[Porphyre]

My main issue with ODD gold standard is actually not that much about gold than about the size of coins.

It' not a question of "logic" or "historical realism" as much as a question of (what's the best, actual English word?), "applicability" (?) . When I speak of money coins, my players tend to picture (and I do picture) coins of actual, modern money. 10 coins to a pound doesn't correspond with such image.

I do own a real gold coin, an austrian crown (wedding gift fron an elderly relative). It's about 30 grams heavy. That's actually a huge coin. Now if I try to imagine à 45 grams coin , I can't imagine giving five of these beauties for a garlic bud.

[Red Baron]

I like huge coins.

10 coins = 1 lb is easy to remember, and they can be cut up into eighths to pay for things like a pirate.

[Porphyre]

 From now on, I will nickname avery pirate in my games "garlic bud" 

[waysoftheearth]

Jul 28, 2014 16:08:29 GMT -6 Porphyre said:

My main issue with ODD gold standard is actually not that much about gold than about the size of coins.

See my pictures here: How BIG are gold pieces?

[Porphyre]

That means I can physically put a bag of one hundred 50 cent pieces on the table, and the players can pick it up and visualise what carrying a sack of a hundred coins about would be like.

That's exactely what I was talking about

[geoffrey]

I prefer a copper standard. I like lots of different coins. I steal Gary's coinage system from his first Gord the Rogue novel:

"The lowest form of currency is an iron drab.
Five of these are equal to one brass bit,
and ten bits comprise one bronze zee.
The copper common is the next most valuable, equal to five zees,
and four commons make up the value of one silver noble.
An electrum lucky is equal to five nobles,
and ten luckies are the same worth as one gold orb.
Atop the pyramid is the platinum plate, equal to one gold orb plus one electrum lucky.
Thus, for comparison, a silver noble is worth one thousand iron drabs,
an electrum lucky equates to one thousand brass bits,
a gold orb has the same value as ten thousand brass bits,
a gold orb has the same value as one thousand bronze zees,
and a platinum plate is equal to fifty five thousand iron drabs."

Or, to put it in terms of a copper standard:

250 iron drabs = 1 copper common
50 brass bits = 1 copper common
5 bronze zees = 1 copper common
4 copper commons = 1 silver noble
20 copper commons = 1 electrum lucky
200 copper commons = 1 gold orb
220 copper commons = 1 platinum plate

I think of the various coins basically as such:

iron drab = nickel
brass bit = 50-cent piece
bronze zee = $5 bill
copper common = $20 bill
silver noble = $100 bill
electrum lucky = $500 bill
gold orb = $5,000
platinum plate = $5,500

Thus, children might carry around a few iron drabs.
Beggars might have some brass bits.
A poor man might have some bronze zees.
A common man would have copper commons (appropriately enough).
The nobility carries silver nobles (again, appropriately) and electrum luckies.
The coffers of kings contain gold orbs and platinum plates.

[oakesspalding]

I hadn't seen that post by Ways. That gets it exactly right, I think. The irony is that historically, when coins were actually worth anything (when they were made of close to pure silver or gold) most people could carry around their entire fortunes in a belt pouch. "Realistic" historical coin sizes and weights would be at least a factor of ten lighter than the D&D version. For example, a 16th century silver shilling-a working man's days wage, perhaps-was like a dime, or an even smaller "slug" version of the same.

I considered doing this, but then dropped it as it would make coin encumbrance almost meaningless. (But I may feature it for my qausi-historical Zylarthen supplement.) Ironically, OD&D accomplishes the same thing by going too far in the other direction. I think Matt Finch speaks to this in Swords & Wizardry when he talks about coins that "clink" and gems that are the size of walnuts (plums, Easter eggs?).

[tkdco2]

It depends on the campaign. If I'm running a casual game, I just stick to the regular system. B/X and 2E decimalized the money system, which keeps things simple.

I have used other conversion systems both in D&D and other games. I like to use the pound/shilling/penny system, but I have used other historical coins. I like the thought of using sp as the standard.

Lately I've used other metals like titanium and iridium in place of gold and silver. However, I've only done it in my Carcosa game. Other settings still use the standard coins.

[tkdco2]

Just to expand on my previous post, here are my currencies on Carcosa and their values compared to standard D&D money:

1 Orichalcum Piece = 1 PP Orichalcum is a mystical metal with a golden amber hue in Carcosa.
1 Anodized Niobium Piece = 2 GP (normally found only among Space Aliens)
1 Titanium Piece = 1 GP
1 Iridium Piece = 1 EP
1 Palladium Piece = 1 SP
1 Zinc Piece = 2 CP
1 Brass Piece = 1 CP

Why the weird currency? I decided that Carcosa was such a unique setting, it needed a unique currency rather than the usual gold/silver/copper coinage. The coins don't affect the races like the ray gun versions would. They're inert in their natural state.

For one of my HERO games I used the sovereign (pound)/shilling/penny system, but foreign coins like Livres and Ducats were also around.

[krusader74]

Gold as fiat money in the fantasy world. You've just plundered the Caves of Chaos. You've got thousands of gold coins burning a hole in your pocket. You're finally going to get that suit of plate armor you've always wanted! Returning to the Keep, you find that the trader (KotB, #10, p. 9) will NOT accept your gold. Nor will any of the other merchants in the Keep. "Why?" you ask. The trader holds up one of your gold coins and says "Just look at it! This coin has been defaced. It has the image of Gruumsh on it! And that one the image of Ilneval. And this one Bahgtru..." You get the idea. These details escaped your notice while you were plundering. The trader continues: "Everyone doing business in this fief has to pay taxes. But taxes can only be paid with coins minted by the Seigneur. And those coins all have the Crown's image on them." (I set KotB in Karameikos, so gold coins are minted with the image of King Stefan Karameikos.) He continues, "These coins are worthless!" He concludes his speech by throwing the coins in your face.

In a world replete with gold, gold isn't valuable as a commodity. Gold is, in fact, an intrinsically useless product. In the fantasy world, gold is fiat money, just like paper money in the real world. More specifically, gold is conventionally used for the highest denomination of coin. And the legal ratio of 1 gold coin to 10 silver coins arose because they naturally occur in that ratio.

In such a world, after adventurers score a large haul of gold coins, they'll have two main choices:

• Take it to the Seigneur and have it minted into coins.
• Find a money changer (i.e., a foreign exchange middle man)

Fortunately, the KotB has such a money changer (KotB, #11, p. 9), at the LOAN BANK, where

anyone can change money or gems for a 10% fee. The banker will also keep a person's wealth stored safely at no charge if it is left for at least one month, otherwise there is a 10% fee.

Money changers. I already wrote extensively about this LOAN BANK in my post on THREE YELLOW BALLS. But Wikipedia has some additional interesting notes on medieval money changing:

During medieval times in Europe, many cities and towns issued their own coins, often carrying the face of a ruler, such as the regional baron or bishop. When outsiders, especially traveling merchants, visited towns for a market fair, it became necessary to exchange his foreign coins to local ones at local money changers. Money changers would assess a foreign coin for its type, wear and tear, and possible counterfeit, then accept it as deposit, recording its value in local currency. The merchant could then withdraw the money in local currency to conduct trade or, more likely, keep it deposited and use its clearing facility to conduct trade.

In the market, most large transactions were done not by cash/coins, but by transfer order of funds on the books kept at the local money changer(s). After a market/fair ended, merchants gathered at the local money changers and withdrew their deposit in their own different currencies. The rate of exchange between different foreign currencies and the local one were fixed between the opening and the closing days of the market.

Seignorage. The Castellan Keep doesn't have a mint. For that, the adventurers need to travel to a large city. (See the map of Karameikos.) Once there, they'll find that they need to pay a 10% fee to have their foreign coins melted down and re-cast into official coinage. This fee is called "seignorage."

In other words, no matter which choice the adventurers make (money changer or mint), they are going to pay a 10% fee.

Minting techniques. There are two main ways to make a coin:

• Strike the metal between a pair of metal dies that contain the design of the coin. In ancient times through the Middle Ages, a "blank" or unmarked piece of metal was placed on a small anvil, and the die was held in position with tongs. The reverse side of the coin received a rectangular mark made by the sharp edges of the little anvil. This result is called "Hammered coinage" or "Struck coins."
• Melt the metal and pour it into a mould. This result is called "Cast coins."

Striking is actually the older and more widely used technology for minting coins. But striking is unsuitable for large masses of metal, so the Romans cast their larger copper coins in clay moulds.

In ancient times, the blanks were spherically shaped or lens shaped. Prior to 300AD, dies were made from bronze, and the blanks made red hot prior to striking. After 300AD, iron was used for dies and the blanks were cold struck. In the Middle Ages (and also in Ptolemeic Egypt, circa 300BC), bars of metal were cast and hammered out on an anvil. Portions of the flattened sheets were then cut out with shears, struck between dies and again trimmed with shears.

Dies had a limited lifespan. Quoting Wikipedia:

Very detailed records exist for the Venetian mint. In the late Middle Ages, the dies used to create tornesellos lasted as follows: "hammer" die, ~17,000 strikes; "anvil" die, 36,000 strikes. The mint made an average of 20,000 coins per day, so they were making one hammer die a day and one anvil die every other day.

Today, cold striking is still used, but instead of a hammer and anvil, we use presses. The result is called "milled coinage." First were monkey presses that use a falling weight, then screw presses, then steam powered presses, then electric. Large rollers powered by horses, mules, water (or later electric) reduced cast bars to flat sheets of metal and punched out round disks to use as blanks. Meanwhile, counterfeiters still use casting.

Perhaps your adventurers may get the idea to steal the official dies so they can strike their own coins from the loot they stole from the goblin lair without having to pay the 10% seignorage or money changing fees? Or perhaps they'll try to cast their own counterfeit coins?

A brief history of gold coinage. Lydia was a city in Phrygia, a kingdom occupying the western end of the Anatolian plateau. Gold and electrum coins are said to have been invented in Lydia around the 7th century BC. Here is a picture of a 6th century BC Lydian electrum coin:

By the 5th century BC, the practice of minting coins had spread to the city of Cydonia on Crete. Around the same time minting began independently in China, Japan and Korea. The Romans began minting coins in the 4th century.

In 269BC, this practice was moved to the temple of Juno Moneta. She corresponds to the Greek Mnemosyne, goddess of memory and mother of the Muses. In Rome, she became the personification of money. From "Moneta" we get the words "mint", "money", "monetize", and so on.

The pre-history (mythology) of gold and gold coinage. Lydia was the ideal origin of gold coins because the river Pactolus was rife with gold and electrum. (Electrum AKA "green gold" is a naturally occurring alloy of gold and silver, with trace amounts of copper.) Here is the aetiological explanation:

In the 8th century BC, Phrygia was without a king. At the capitol city, Telmessos, the oracle declared that the next man who drove an ox cart through the city gates would be the new king. That man was a poor peasant named Gordias.

Gordias's son, Midas gave thanks to the Phrygian god Sabazios (identified with Dionysius) by dedicating the ox cart to him. He tied the ox cart to a post in the palace with an intricate knot of cornel. No one could find the end to the knot to unbind it. The oracle declared that anyone who could unbind this knot would become not only the ruler of Phrygia, but the ruler of all Asia. It became known as the "Gordian Knot."

By the late 8th century BC, Midas had succeeded his father as King of Phygia. He had two children: a daughter Zoe (life) and a son Lityerses (death). Lityerses is the archetype of the grim reaper. He was the fastest harvester in the land. He would challenge other farmers to see who could harvest the most crops in one day. At the end of the day, after winning the challenge, he would behead his competitor and sing a song. The song of Lityerses became the archetype of all harvest songs.

Herodotus wrote about the wild rose garden at the foot of Mount Bermion as "the garden of Midas son of Gordias, where roses grow of themselves, each bearing sixty blossoms and of surpassing fragrance."

After a night of drinking, the satyr Silenus passed out in Midas' rose garden. Satyrs are companions of Dionysus with equine features. Midas treated Silenus hospitably, and entertained him for ten days and nights. Silenus delighted Midas with stories and songs. On the eleventh day, Midas brought Silenus back to Dionysus.

As a reward, Dionysus offered Midas whatever he wished. Midas asked that whatever he might touch should turn to gold. First Midas touched an oak twig then a stone, and both turned to gold. Returning home to his palace, Midas ordered his servants prepare a feast. But when Midas grabbed his food, it turned to gold. And when he tried to take a drink of wine, it turned to gold. And when he hugged his daughter Zoe, she turned to gold too. Midas cursed his new power.

Midas prayed to Dionysus, begging to be saved from starvation. Dionysus heard his prayer, and consented. He told Midas to wash in the river Pactolus. Then, what ever he put into the water would be reversed of the touch. When Midas immersed himself in the waters, the power flowed into the river, and the river sands turned into gold.

And that's why the river Pactolus was so rich in gold, and why Lydia became the first city to mint gold coins.

Etc. I still have a lot more to say about silver and the politics of bimetalism, about medieval coin size as a function of final-product transactions, and also about prices and how to make them more realistic, but I'll save that for a later post.

[premmy]

Interesting bits of information there!

Of course, knowing players, the way this would really go down in actual play is this:

*Sword out*
*Sword at merchant's throat* - this is at about the 10 second mark from the commencement of the conversation
"You WILL accept these coins, at face value, without any of this money exchange tax bulls h i t or whatever - if you want to live longer than the next 3 seconds."

Then in another 20 minutes or so either all the adventurers or all the local militia and guardsmen will be dead (largely depending on party level).

[aldarron]

Jul 27, 2014 20:40:30 GMT -6 cooper said:

the gold standard exists in Beowulf, where amassed golden treasures were indicative of a heroes experience. Gygax wasn't mimicking history, his influence was always literature....

Gygax had nothing to do with the gold standard in D&D. Arneson's treasures in '71 & ,72 consisted of gold coins, jewels, magic swords and the odd magic item - have a look at levels 7-10 of Blackmoor dungeon or Loch Gloomen. No copper or silver or any of that stuff, just gold. It was Gygax who introduced the lesser metals.

And after all, and yes like in Beowulf, treasure hordes have always been gold. It is gold that Fafnir craves.

[geoffrey]

Aug 19, 2014 0:40:14 GMT -6 tkdco2 said:

Just to expand on my previous post, here are my currencies on Carcosa and their values compared to standard D&D money:

1 Orichalcum Piece = 1 PP Orichalcum is a mystical metal with a golden amber hue in Carcosa.
1 Anodized Niobium Piece = 2 GP (normally found only among Space Aliens)
1 Titanium Piece = 1 GP
1 Iridium Piece = 1 EP
1 Palladium Piece = 1 SP
1 Zinc Piece = 2 CP
1 Brass Piece = 1 CP

Why the weird currency? I decided that Carcosa was such a unique setting, it needed a unique currency rather than the usual gold/silver/copper coinage. The coins don't affect the races like the ray gun versions would. They're inert in their natural state.

[coffee]

Aug 22, 2014 12:24:44 GMT -6 aldarron said:

Gygax had nothing to do with the gold standard in D&D. Arneson's treasures in '71 & ,72 consisted of gold coins, jewels, magic swords and the odd magic item - have a look at levels 7-10 of Blackmoor dungeon or Loch Gloomen. No copper or silver or any of that stuff, just gold. It was Gygax who introduced the lesser metals.

And this may have been a logistics move, I've realized recently.

Most of the dragon hordes I've ever seen had gems, jewelry, magic items, objet d'art, and all sorts of coins all mixed together. So the party gathers up the gems, jewelry, etc. (aka The Good Stuff) and then starts collecting the coins. Do they sort them here, just taking the gold, or take them all and sort them at home?

All the while, the DM is rolling for wandering monsters...

That seems like the kind of decision Gygax would enjoy placing before his players.

[jdjarvis]

If people aren't accounting by handfuls, pouches, and sacks counting and sorting treasure would take a while. It would easily take a minute to count 100 coins (and that's being insanely generous).

I recall LAPRING many years back and counting up a fair sized handful of coins we'd found and by candle light we couldn't tell if a few coppers were gold pieces or not as the coins didn't differentiate if they were gold, silver or copper as the difference was clear in good light but there was minor variation between orders of coins and wear/filth on the coins, we had to wait for morning to see what we really had... oh darn old coppers (of course the metals used were all the same weight so that made it tricky but old time coins were not always very consistent either). Picture how hard it would be to sort coins from a span of a 1,000 years of dragon pillaging in a dozen different domains (some now long gone) into nice even piles of cp, sp, and gp by torchlight.

I've been of mind lately that it would be better to give the coins names like Aralean Gronen and Villers Crown and let the money changers decide what they are really worth. Foreign coins at the market? A couple might get accepted but large amounts are going to have to get traded in at the local money changer. My mog campaign has 9 metals, 4 enumerated denominational quantities, and about 3 dozen coin classes for over 1200 different types of coins that could turn up in treasure hordes that date back millennia in some cases but local merchants really only want to deal with the local coins of the realm. Players started in an area where Silver shekels were common in the markets and moved to an area where merchants wanted silver shillings, some players love it, some players hate it with a passion.

Sure cp,sp,and gp are handy in their simplification but they also are really gosh-darned generico-boring.

some of my blog posts on money:
aeonsnaugauries.blogspot.com/2013/01/money-on-mog.html
aeonsnaugauries.blogspot.com/2012/10/coinage-are-we-cheating-ourselves.html
aeonsnaugauries.blogspot.com/2014/07/differentiating-coins-by-size.html
aeonsnaugauries.blogspot.com/2010/12/coin-sizes.html
aeonsnaugauries.blogspot.com/2014/05/how-many-golden-dimes-to-pound-coin.html

[tkdco2]

Some metals such as niobium and hafnium can be anodized to give coins with different hues. Bimetallic coins are of course, an option.

No one ever said coins had to be round; many are cast in different shapes. In fact, they don't even need to be flat!

Here's a webpage with some strange money. Some are bills, but I think you'll like these.

[Finarvyn]

Another thing that bothers me is that "buy charts" are given with prices in random coins. I'd rather that they pick one (typically one of the smaller coins) and build everything on one rather than many.

For example, a candle might be 1 cp and a bow 25 gp. I'd rather that they say the candle was 1 cp and the sword 2500 cp. That way I track a single unit of coinage and you decide which coins are used to pay for the thing.

In that way OD&D got it right. Everything priced in gold. (I'd rather it had been coppers, but at least it was a single coin to keep things simple.)

[Starbeard]

I never got a chance to try it out, but I always wanted to throw in a kink in the monetary system where different areas had different rates of exchange.

At first I tried some elaborate table of weights/values of coinage minted at different times in different places, but obviously after that was done I took one look at it and knew it would be way too difficult to track. Then, in order to get the same feel without having to track everything, I thought about having each place use its own variable exchange rate between coin types. For example, the town where the PCs start might have coin types scale as they do in Vol. II. After wandering off to another city, however, they learn that gold there is severely undervalued and exchanges with silver at a rate of 1:6, instead of 1:10. To implement something like that easily you'd have to redo the price tables so that everything is listed in cp.

I got the idea from the option for adding electrum at either double or half the price of gold. Imagine going from one place where you exchanged all your monies for as much electrum coins as you could get your hands on to save space and weight, only to find when you travel into the next city that the value of your electrum just dropped to 25%!

[krusader74]

Resuming the timeline started in my previous post that went from King Midas in the 8th century BC to the first Roman mint in the temple of Juno Moneta in 269 BC:

312 AD Emperor Constantine first struck the gold solidus (French: sou) as the standard gold coin of the Roman Empire.

803 AD Holy Roman Emperor Charlemagne ceded control of Venice to Byzantine Emperor Nikephoros I. Charlemagne abolished the monetary system based on the gold sou; and he standardized new silver coins (livre carolinienne).

It's important to note that from 800 to 1320 almost all gold flowed out of West Africa to Venice in exchange for slaves; then from Venice east to Byzantium, Arabia, and China in exchange for spices. Thus, there was a gold shortage in Europe after ceding Venice to the Byzantines.

Byzantium's gold standard went back to Constantine. But under Charlemagne, Europe went to a new silver standard. Charlemagne's standard silver coin had

• a silver purity of 92%
• a weight of 240 coins/deniers/shillings/pennies per pound
• an exchange rate of 240 silver coins to 20 gold coins, i.e., 1 sou = 12 denarii

But this standard only lasts until Charlemagne dies in 814 AD.

814-1300 AD There is a growing diversity of coinage: Diversity both in purity and weight. Quoting the Catholic Encyclopedia:

At first permission was granted to hold a fair (mercatus), levy a tax (telonium), and erect a mint (moneta) at some place belonging to one of the feudatories. At first the mint may have been only an exchange, the profits of which, however, in the Middle Ages were often very considerable, and accrued to the lord. Then he was permitted to have coins struck bearing his portrait, but had to maintain the uniform standard. At length these feudatory lords obtained the privilege of coining without any restrictions. When this was done uniformity in the currency of the empire was at an end, a great diversity in the coinage was rendered possible, and the right of coining, instead of being a prerogative of the emperor, became a privilege of every feudatory.

1300s: International trade unions begin to (re-)standardize the purity/weight of coins.

1320: Gold is discovered in Hungary. Venetians import Hungarian gold and then export it to France where it fetches the highest price; eventually they attempt to break into the English market.

1330-40: Gold becomes victorious in Europe. Edward III unsuccessfully attempted to block gold's ascendancy in England. Now silver is mostly traded as a commodity metal in bulk or for small purchases by the poor.

1346-53: The Black Death. Two-thirds of the population is wiped out. First there is a negative supply shock (rising prices due to lack of suppliers) followed by negative demand shock (price drops due to lack of consumers).

1350-1500: Monetary/liquidity crisis. Silver mining grinds to a halt because it becomes technically impossible to remove the ground water flooding the mines as they are dug deeper. Most small transactions only use silver. But silver is drained from the economy to buy gold. In turn, gold is drained trading with the Arabs for spices from China. There are no real exports to bring gold back into Europe, and constant wars only exacerbate the problems. This leads to 1.35% annual inflation for 150 years, considered high for the times. That results in a 7-fold price increase over this 150-year time period. The economy falls into general malaise.

1500- A gold influx from the New World. And new techniques to pump water out of European mines leads to the resumption of silver mining. This stimulates economic growth. And prices finally start to fall.

[krusader74]

Here's an example of how to use Palamedes (discussed here) to toy with prices and exchange rates quickly and easily. Paste the following code into the "Command" textarea and press the "Submit" button. See below for an explanation of what each command does and what the "Results" look like.

/* standard conversion rates */
gold gets 1; electrum gets 2; silver gets 10; copper gets 100

/* basic equip & cost, vol 1, p 14 */
equip gets {"dagger": 3, "hand axe": 3, "mace": 5, "sword": 10, "battle axe": 7, "morning star": 6, "flail": 8, "spear": 1, "pole arm": 7, "halberd": 7, "two-handed sword": 15, "lance": 4, "pike": 5, "short bow": 25, "long bow": 40, "composite bow": 50, "light crossbow": 15, "heavy crossbow": 25, "quiver of 20 arrows": 10, "case of 30 quarrels": 10, "20 arrows/30 quarels": 5, "silver tipped arrow": 5, "mule": 20, "draft horse": 30, "light horse": 40, "warhorse, medium": 100, "warhorse, heavy": 200, "saddle": 25, "saddle bags": 10, "cart": 100, "wagon": 200, "raft": 40, "small boat": 100, "small merchant ship": 5000, "large merchant ship": 20000, "small galley": 10000, "large galley": 30000, "leather armor": 15, "chain-type mail": 30, "plate mail": 50, "helmet": 10, "shield": 10, "barding": 150, "50' of rope": 1, "10' pole": 1, "12 iron spikes": 1, "small sack": 1, "large sack": 2, "leather back pack": 5, "water/wine skin": 1, "6 torches": 1,"lantern": 10, "flask of oil": 2, "3 stakes & mallet": 3, "steel mirror": 5, "silver mirror, small": 15, "wooden cross": 2, "silver cross": 25, "holy water/vial": 25, "wolvesbane, bunch": 10, "belladona, bunch": 10, "garlic, bud": 5, "wine, quart": 1, "iron rations": 15, "standard rations": 5}

The statement gold gets 1; electrum gets 2; etc. are just the standard exchange rates between various metals.

Next, the equip variable gets assigned a JSON object with the basic equipment costs from page 14 of volume 1. Note that this assignment statement is one long line, no line-breaks allowed! The costs are all in gold.

Let's say you wanted to see all the costs in silver instead. The statement table(equip*silver) displays the equipment costs in terms of sp rather than gp. If you wanted to change the exchange rate from 1:10 to 1:12, as was the case in the time of Charlemagne circa 800 AD (see my last post above), just enter the following Commands:

silver gets 12
prices set equip*silver
table(prices)
Here are the Results of running that code:


silver ← 12

prices ↤ equip * silver → {"10' pole":12,"12 iron spikes":12,"20 arrows/30 quarels":60,"3 stakes & mallet":36,"50' of rope":12,"6 torches":12,"barding":1800,"battle axe":84,"belladona, bunch":120,"cart":1200,"case of 30 quarrels":120,"chain-type mail":360,"composite bow":600,"dagger":36,"draft horse":360,"flail":96,"flask of oil":24,"garlic, bud":60,"halberd":84,"hand axe":36,"heavy crossbow":300,"helmet":120,"holy water/vial":300,"iron rations":180,"lance":48,"lantern":120,"large galley":360000,"large merchant ship":240000,"large sack":24,"leather armor":180,"leather back pack":60,"light crossbow":180,"light horse":480,"long bow":480,"mace":60,"morning star":72,"mule":240,"pike":60,"plate mail":600,"pole arm":84,"quiver of 20 arrows":120,"raft":480,"saddle":300,"saddle bags":120,"shield":120,"short bow":300,"silver cross":300,"silver mirror, small":180,"silver tipped arrow":60,"small boat":1200,"small galley":120000,"small merchant ship":60000,"small sack":12,"spear":12,"standard rations":60,"steel mirror":60,"sword":120,"two-handed sword":180,"wagon":2400,"warhorse, heavy":2400,"warhorse, medium":1200,"water/wine skin":12,"wine, quart":12,"wolvesbane, bunch":120,"wooden cross":24}

table (prices) →
                key     value
           10' pole     12
     12 iron spikes     12
20 arrows/30 quarels     60
  3 stakes & mallet     36
        50' of rope     12
          6 torches     12
            barding     1800
         battle axe     84
   belladona, bunch     120
               cart     1200
case of 30 quarrels     120
    chain-type mail     360
      composite bow     600
             dagger     36
        draft horse     360
              flail     96
       flask of oil     24
        garlic, bud     60
            halberd     84
           hand axe     36
     heavy crossbow     300
             helmet     120
    holy water/vial     300
       iron rations     180
              lance     48
            lantern     120
       large galley     360000
large merchant ship     240000
         large sack     24
      leather armor     180
  leather back pack     60
     light crossbow     180
        light horse     480
           long bow     480
               mace     60
       morning star     72
               mule     240
               pike     60
         plate mail     600
           pole arm     84
quiver of 20 arrows     120
               raft     480
             saddle     300
        saddle bags     120
             shield     120
          short bow     300
       silver cross     300
silver mirror, small     180
silver tipped arrow     60
         small boat     1200
       small galley     120000
small merchant ship     60000
         small sack     12
              spear     12
   standard rations     60
       steel mirror     60
              sword     120
   two-handed sword     180
              wagon     2400
    warhorse, heavy     2400
   warhorse, medium     1200
    water/wine skin     12
        wine, quart     12
  wolvesbane, bunch     120
       wooden cross     24

Next we are going to allow for intertemporal and geospatial price dispersion using a geometric brownian motion model. Here are the Commands:


drift gets 1/12 /* annualized drift */
volatility gets 1/6 /* annualized volatility */
GBM(drift,volatility)
newprices set round(S(equip*silver,norm [0,1,1]),0)
table(newprices) /* new prices after price dispersion */
table(newprices - prices) /* price changes */
drift (1/12 approx 8.33%) measures the tendency for prices to rise over a year. volatility (1/6 approx 16.67%) measures the random dispersion of prices around their mean over a year. These values reflect modern markets. Medieval drift and volatility were much lower. If you wanted monthly values, divide the annual drift by 12 and the volatility by the square root of 12. If you wanted daily values, divide the annual drift by the number of trading days in a year (252 in modern times) and volatility by the square root of 252.

The statement GBM(drift,volatility) initializes the model with the given annualized values of drift and volatility. The function S(oldprice,time) uses the GBM model to compute a new price from an old price and a time interval.

In our case, we want to use a spacetime interval, rather just a time interval, so we'll use the norm function as follows. Suppose we want to simulate the prices we'd encounter if we traveled a distance from the origin 1-year north and 1-year east. We're measuring space in terms of the traveling times of the average merchant: The spacetime interval separating these points is norm [0,1,1] assuming a Euclidean norm. The vector [time,north,east] measures displacement from the origin in the given directions. But to keep all the units the same, we convert distance to time using average travel times for merchants. The norm of a vector measures its distance from the origin. Besides the default Euclidean norm, other norms are supported, e.g., norm([0,1,1],"minkowski") will give you a relativistic spacetime interval. The function round(number,decimalpoints) rounds a number to the desired number of decimal points---in our case 0. Putting all this together we compute our new prices with the statement newprices set round(S(equip*silver,norm [0,1,1]),0). Next we show the table of newprices with table(newprices).

Finally, we show the price change with table(newprices - prices).

Here are what the Results look like:

drift ← 1 / 12

volatility ← 1 / 6

GBM(drift,volatility) → OK. GBM setup function S(S0,t) using parameters pct_drift=0.08333333333333333 and pct_volatility=0.16666666666666666


newprices ↤ round(S(equip * silver,norm([0, 1, 1])),0) → {"10' pole":18,"12 iron spikes":14,"20 arrows/30 quarels":75,"3 stakes & mallet":45,"50' of rope":18,"6 torches":13,"barding":2183,"battle axe":93,"belladona, bunch":108,"cart":1107,"case of 30 quarrels":130,"chain-type mail":436,"composite bow":496,"dagger":38,"draft horse":333,"flail":87,"flask of oil":29,"garlic, bud":49,"halberd":113,"hand axe":32,"heavy crossbow":235,"helmet":161,"holy water/vial":403,"iron rations":206,"lance":65,"lantern":100,"large galley":473050,"large merchant ship":259794,"large sack":35,"leather armor":205,"leather back pack":64,"light crossbow":197,"light horse":460,"long bow":452,"mace":61,"morning star":114,"mule":235,"pike":54,"plate mail":675,"pole arm":129,"quiver of 20 arrows":162,"raft":587,"saddle":264,"saddle bags":163,"shield":131,"short bow":275,"silver cross":342,"silver mirror, small":166,"silver tipped arrow":94,"small boat":1386,"small galley":130023,"small merchant ship":89666,"small sack":14,"spear":20,"standard rations":69,"steel mirror":66,"sword":179,"two-handed sword":186,"wagon":1950,"warhorse, heavy":2018,"warhorse, medium":1231,"water/wine skin":11,"wine, quart":15,"wolvesbane, bunch":138,"wooden cross":21}

table (newprices) →
                key     value
           10' pole     18
     12 iron spikes     14
20 arrows/30 quarels     75
  3 stakes & mallet     45
        50' of rope     18
          6 torches     13
            barding     2183
         battle axe     93
   belladona, bunch     108
               cart     1107
case of 30 quarrels     130
    chain-type mail     436
      composite bow     496
             dagger     38
        draft horse     333
              flail     87
       flask of oil     29
        garlic, bud     49
            halberd     113
           hand axe     32
     heavy crossbow     235
             helmet     161
    holy water/vial     403
       iron rations     206
              lance     65
            lantern     100
       large galley     473050
large merchant ship     259794
         large sack     35
      leather armor     205
  leather back pack     64
     light crossbow     197
        light horse     460
           long bow     452
               mace     61
       morning star     114
               mule     235
               pike     54
         plate mail     675
           pole arm     129
quiver of 20 arrows     162
               raft     587
             saddle     264
        saddle bags     163
             shield     131
          short bow     275
       silver cross     342
silver mirror, small     166
silver tipped arrow     94
         small boat     1386
       small galley     130023
small merchant ship     89666
         small sack     14
              spear     20
   standard rations     69
       steel mirror     66
              sword     179
   two-handed sword     186
              wagon     1950
    warhorse, heavy     2018
   warhorse, medium     1231
    water/wine skin     11
        wine, quart     15
  wolvesbane, bunch     138
       wooden cross     21


table (newprices - prices) →
                key     value
           10' pole     6
     12 iron spikes     2
20 arrows/30 quarels     15
  3 stakes & mallet     9
        50' of rope     6
          6 torches     1
            barding     383
         battle axe     9
   belladona, bunch     -12
               cart     -93
case of 30 quarrels     10
    chain-type mail     76
      composite bow     -104
             dagger     2
        draft horse     -27
              flail     -9
       flask of oil     5
        garlic, bud     -11
            halberd     29
           hand axe     -4
     heavy crossbow     -65
             helmet     41
    holy water/vial     103
       iron rations     26
              lance     17
            lantern     -20
       large galley     113050
large merchant ship     19794
         large sack     11
      leather armor     25
  leather back pack     4
     light crossbow     17
        light horse     -20
           long bow     -28
               mace     1
       morning star     42
               mule     -5
               pike     -6
         plate mail     75
           pole arm     45
quiver of 20 arrows     42
               raft     107
             saddle     -36
        saddle bags     43
             shield     11
          short bow     -25
       silver cross     42
silver mirror, small     -14
silver tipped arrow     34
         small boat     186
       small galley     10023
small merchant ship     29666
         small sack     2
              spear     8
   standard rations     9
       steel mirror     6
              sword     59
   two-handed sword     6
              wagon     -450
    warhorse, heavy     -382
   warhorse, medium     31
    water/wine skin     -1
        wine, quart     3
  wolvesbane, bunch     18
       wooden cross     -3
Remember, these are changes encountered by traveling 1-year north and 1-year east of the origin.

You could similarly simulate prices in the same location in the future, e.g., to see prices at the origin 6 months in the future, enter the Command: table(round(S(equip*silver,1/2),0))

You could also switch to monthly or daily values of drift and volatility as described above. Or you could change the assumptions about drift and volatility; for example, you could simulate a deflationary trend.

In any case, if someone were interested in simulating price changes over time and place, this may be a simpler way to do it than whipping up a custom spreadsheet and building-in lots of assumptions and formulas.

[krusader74]

Aug 28, 2014 6:51:58 GMT -6 Starbeard said:

After wandering off to another city, however, they learn that gold there is severely undervalued and exchanges with silver at a rate of 1:6, instead of 1:10.

An interesting thought experiment...

Your scenario affords a wonderful opportunity for geographical arbitrage---a PC could literally make money from nothing. Call the city with the 1:6 exchange rate "G" for the Lost City of Gold. Call the city with the 1:10 exchange rate "S" for Silver City.

The PC starts in "S" and borrows 30sp and agrees to pay it back in a month as the equivalent in gold (3gp) plus 10% (or 3sp) interest. He then travels to "G" and trades 24sp for 4gp at 6:1 keeping the remaining 6sp to pay interest and fees; he has to pay a 10% money changing fee (2.4sp, rounding up to 3sp). He returns to "S" and repays the 3gp principal plus the 3sp interest he owes. Tallying things up so far:

   4gp gold
   6sp silver
  -3gp principal
  -3sp interest
  -3sp money changing fee
  -----
   1gp profit

If we can travel from "S" to "G" instantaneously and cost-free via magic then we're done calculating. Otherwise, we need to factor in time and travel costs. We assumed 1 month of interest payments, meaning we'd have to get there and back inside of 1 month, otherwise we need to adjust the calculations. We also need to figure out how much it costs to travel from "S" to "G" and back again. That will depend on the weight of the coins we're carrying. Then we can do the final calculations for the profit, which will be a function of the size of the trade we're doing.

There are several risks. First, unless we're traveling back and forth instantaneously via magic, then the two trades are not executed simultaneously; that results in "execution risk." The interval in between the two trades allows exchange rates to change, e.g., we may get to "G" and discover rates have gone from 1:6 to 1:15, in which case we're screwed. There's also the risk that we'll be robbed by bandits during transit; hiring security increases our costs and lowers our profits.

In the long run, once a large enough volume of these trades gets done, the exchange rates will equalize in "S" and "G" and the arbitrage opportunity will disappear. This is the Law of Once Price (LOP) reasserting itself. What the equilibrium exchange rate turns out to be in the end depends mainly on how much gold and silver were in each of "G" and "S" to begin with, assuming these amounts don't change by much due to mining or an influx/departure of these metals from/to other trading partners.