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March 21, 2008

Filthy Lucre and Maundy Money
by Adrian Ash

"...If the Queen never carries any cash, what does she keep in that stout little handbag...?"

SO THE MONEY-CHANGERS didn't get thrown out of the temple this Easter Week. Instead, they got open-ended support from the money-lender of last resort, and snapped up a near-broken bank for $2 a share.

Buried beneath the traffic jams, chocolate eggs and buckets of daffodils here in the United Kingdom, meantime, sits a very odd, ancient custom which might say something about the value of filthy lucre too - even today.

Each Thursday before the Good Friday Bank Holiday - and to remember the Last Supper, when Christ washed his disciples' feet and issued his new, eleventh commandment to "love one another as I have loved you" - the English monarch gives specially-minted coins to a special number of pensioners at a special church service dating back eight hundred years or more.

This Maundy Money is pretty much the only kind of money that the monarch ever handles. First coined in 1662 for Charles II, it was handed out this week by Queen Elizabeth to 82 men and 82 women in Armagh, Northern Ireland - one for every year of her life.

Surrounded by a 20-mile "ring of steel" of police checkpoints (it was the first ever Maundy Thursday service in Northern Ireland), she gave two small leather string purses to each of the 164 church and community elders chosen to gather before her in St.Patrick's cathedral.

The red purse contained a token sum of regular cash, given to represent alms of food and clothing. The white purse, in contrast, contained 82 pence in small silver coins.

Classed as legal tender and worth just $1.62 at today's exchange rate, this year's Maundy money is vastly under-priced compared to its 92.5% sterling silver fineness. You'll find payments from previous years trading at a significant mark-up to the legal value on eBay as well.

Maybe HRM doesn't know, care or mind about the Maundy money's real cash value - which would seem to be the whole point of alms-giving, after all. But the last known sighting of her handling regular cash like an ordinary mortal was way back in 1968, when she bought Prince Edward - then six years old - some boiled sweets (bullseyes, as it happens) at a shop near Balmoral, her Scottish retreat.

Which begs the question; just what does she keep in that stout little handbag today?

Elizabeth II has no need of an Amex or gold Morgan Stanley card, of course. Flunkeys remain on hand, more than 940 years after the first English king was crowned at Westminster, to settle whatever bills she might run up. But this tradition of separating the monarch from money - at least in the public's imagination - bears only one exception each year. God's anointed must otherwise stay away from the currency of everyday life.

The silver coins given by to the poor and needy by the English monarch - "defender of the faith" - only serve to prove the rule that there's something inherently bad about money, at least in Christian theology.

Unless it's delivered on a silver platter with great pomp and ceremony, that is.

Radix malorum cupiditas est, as Paul the Apostle wrote to Timothy; "the love of money is the root of all evil". Across the Mediterranean - where Christianity had already taken shape in late Greek philosophy - Longinus also blamed he gar philochrematia, "the love of money", for the collapse of refined civilization.

Coined money was in fact an invention of the devil himself according to Jacob of Saroug, a bishop of the Eastern Church during the sixth century A.D.

"I do not mind if the priests use their rebitha [the Syriac word for interest payments] to buy axes and smash the temple of my idols," the devil told Jacob in a vision.

"The love of gold is a greater idol than any image of a [false] god...It is worth as much to me as all those idols put together! They have cast down my idols," smiled the devil, "but they will never cast down the coins that we shall put in their place."

Neither of the other Abramic faiths - Judaism or Islam - have any such problem with cold, hard cash. The Jews of medieval Europe were even encouraged by their Christian tormentors to become money-lenders. Cast out into that damnable (if lucrative) business of making money from money, they breached the teachings of Augustine and Aquinas against usury. But even the Pope needed bankers, and still does.

As for Islam, the 12th century theologian Ghazali argued - by quoting the Koran - that honest trade is morally preferable to self-denial. Sincere merchants, agreed Ibn Jazi Al-Nahai, were doing God's work (literally "fighting the Holy war" of jihad) in the very weights and measures they used to do business.

"Death can come upon me nowhere more pleasantly," said the Caliph Umar - quoted by John Buchan in his treatise on money, Frozen Desire - "than where I am engaged in business in the market, buying and selling for profit on behalf of my family."

How alien to that poor, broken god sold for thirty pieces of silver! And how soon forgotten and abused was his poverty by Christ's followers themselves!

"In 1237," Buchan goes on, "the bankrupt Latin government of Constantinople mortgaged [what it believed to be] Christ's crown of thorns to a syndicate of Venetian and Genoese merchants." Making a loan of 13,134 coins of "exceedingly pure" African gold known as hyperpyroi, the syndicate had the crown of thorns sent to Venice. But the French king, Louis IX, then stepped in and offered to repay Constantinople's debt in return for the holy relic.

On its arrival in Paris on 18 August 1239, the crown of thorns was paraded through the streets of the city with King Louis - barefoot and in a hair shirt - leading the procession. He then spent 20,000 marks building the church of Saint-Chapelle to house it. Writes Buchan, the religious essence of Christ's crown - "that it was of thorns, not of gold - turns out to have been an illusion.

"It is of gold, after all. An entire doctrine begins to turn to powder."

All this fretting might seem arcane, irrelevant, utterly pointless today. In the proudly secular world of Western finance - where, trying to accommodate the Islamic sharia ban on usury or interest payments, the British government simply created a loophole that let commercial investors and banks avoid $40 million ($79.2m) in UK real-estate taxes over two years - who cares about theology?

Yet the arguments over evil lending, immoral profiteering, and who's been good or bad with money still go on. We've delegated them to a new class of theologians, that's all - the lawyers.

"The subprime blame game is shifting to the courts," says the Houston Chronicle. "Mortgage mess becomes prime territory for law firms," adds the Chicago Tribune.

"Societe Generale named in class action," reports a newswire. "UBS hit by another lawsuit," BusinessWeek says...

"Merrill Lynch sues bond insurer," reports The Times of London today. "Cayne risks law-suit as he seeks counter-offer for Bear Stearns," it notes elsewhere.

Usury, rebitha, who's been good or bad at lending money...all the finer points (and pay-off) may have changed. But the everyday clatter of money's morals rattles on. And while Bear Stearns didn't quite make it to investment-bank heaven last weekend, the rest of the industry is certainly going through hell.

Adrian Ash
BullionVault.com

Head of research at BullionVault.com, the fastest growing gold bullion service online, Adrian Ash is also City correspondent for The Daily Reckoning in London, and a regular contributor to MoneyWeek magazine.

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