Henry VIII¶
Henry VIII (1491–1547) was King of England from 1509 to 1547, famous for his six wives, his break with the Roman Catholic Church, and his brutal methods of maintaining power. Yet Henry also deserves infamy for "The Great Debasement"—a systematic program of mixing copper with silver coins to fund his wars and lavish lifestyle. His reign provides a textbook case of currency debasement and Gresham's Law in action.
A Reputation for Violence¶
Henry VIII's character is evident through examples of his brutality. "His methods often reflected a willingness to use violence and force to achieve his goals." He executed two of his wives and suppressed the Pilgrimage of Grace rebellion in 1536 through military action, "leading to the execution of many of its leaders and participants."
Notable members of his advisory circle, including Thomas More and Thomas Cromwell, "fell out of favor and were executed on charges of treason or heresy." His military campaigns in Ireland "often resulted in a massacre of both soldiers and civilians, earning Henry a reputation for ruthlessness."
When a cook named Richard Roose "jokingly" poisoned his diners, Henry invented a new form of execution: boiling alive, slowly. The king reportedly said, "I have cooked the cook!"
The Financial Imperative¶
"King Henry VIII's lust for power, blood, women, and a lavish lifestyle required money—more money than the kingdom had." This insatiable appetite for wealth drove him to an audacious monetary crime.
The Great Debasement¶
"In May 1542, Henry issued a decree whereby he ordered that the amount of gold and silver within the country's coinage be secretly reduced." The operation was methodical: "Newly minted debased coins were stockpiled in Jewel Tower in the Palace of Westminster over a period of two years. In 1544, they were circulated to the public."
The debasement was severe and systematic. Silver content dropped from 92.5% in 1544 to 50% in 1546, with copper replacing the precious metal. "By 1549, a 'silver' coin was mostly copper and only 33% silver."
The king's subjects gave him a new nickname reflecting his debased coinage: "Old Coppernose"—because the raised features on coins wore down first, exposing the copper beneath the thin silver coating.
Gresham's Law Engaged¶
The predictable consequence followed: "English merchants quickly discovered that the new silver groats had become debased and begun offering a lower price for them. The introduction of these debased coins caused coins at similar face value but with higher precious metal content to disappear from circulation, in line with what would become known as Gresham's law."
People hoarded the older, genuine silver coins and spent the debased ones. Good money disappeared from circulation while bad money proliferated. The dual currency system created precisely the problem that Sir Thomas Gresham would later diagnose for Queen Elizabeth I.
Legacy of Economic Disorder¶
By the time Elizabeth I assumed power, Gresham characterized the economy as being in an "unexampled state of badness." The explanation was straightforward: "all your fine gold was conveyed out of this your realm."
"Gresham told England under Queen Elizabeth I (AD 1558) not to run a coinage system this way. One-hundred years later, the English government were doing it anyway and things were a mess. Paper money was seen as a stopgap measure while they tried to sort things out. But they couldn't sort things out. It would take another 100 years to implement Gresham's original advice, with the Great Recoinage of 1816."
Thus Henry VIII's debasement created monetary chaos that persisted for nearly three centuries.
Historical Pattern¶
Henry VIII's Great Debasement fits a pattern documented throughout history. Faced with fiscal needs exceeding revenues, governments resort to currency manipulation. The short-term gain—immediate access to funds—creates long-term economic damage. "Throughout history, there is only one economic solution that governments know: borrow money. Repayment, frequently in blood, will be somebody else's problem well into the future."
Henry belongs alongside other monetary villains: Kublai Khan printing unbacked Jiaochao, Justinian II refusing debased dinars, and countless others who chose monetary expedience over economic stability.
Lesson Unlearned¶
Despite the clear historical record of debasement's consequences, Henry VIII's approach remains the default governmental response to fiscal pressure. Hyperinflation in Weimar Germany, the petrodollar system, and post-1971 monetary expansion all echo the same basic mechanism Henry employed: using control of money issuance to extract wealth from citizens without their explicit consent through taxation.
Henry VIII could clip silver from coins and mix in copper. Modern central banks need only adjust a spreadsheet. The technology changes, but the essential practice—and its consequences—remain constant.