What We Trust
Six true stories about money, ownership and survival
A six-part GoldCore Friday Read series using true episodes from financial and social history to explore what money is, what ownership means, why intelligent people speculate, where wealth becomes safe and what we are ultimately trying to preserve.
At about three o’clock on the morning of Sunday, 2 September 1666, Samuel Pepys was woken by a maid who had seen a fire in the City of London. He put on his nightgown, looked through the window and decided the flames were far enough away that he could return to bed.
Is it an understatement to call that a miscalculation?
By the following morning, the fire was approaching with such force that Londoners were paying almost any price for carts to carry away their belongings. At four o’clock, Pepys loaded his money, silver plate and “best things” onto a cart sent over to him by a friend. He travelled with them in his nightclothes to what he hoped would be safety in Bethnal Green.
The next day he was still moving possessions but this time by boat, he was unable to move everything. Official papers that could not be carried away were placed in a pit in the garden, his wine followed and then Pepys added the item for which this episode is now infamous for: his parmesan cheese.
In a day when one can pop to the supermarket and be faced with multiple options for parmesan cheese we may find there to be something irresistibly comic about burying cheese while one of the world’s great cities burns. But was it that irrational in those days? Parmesan was imported, expensive and durable, and to Pepys, more importantly, it was his.
His diary gives us quite the intimate record of how a person creates a hierarchy of value under pressure. First came money and silver plate, both portable stores of financial wealth. Then came professional papers, valuable because of the obligations and information they contained. Finally came wine, food and other possessions that represented comfort, scarcity and the continuation of ordinary life.
Wealth usually appears to us as a total basket, as it were. We think to add the value of accounts, investments, property and possessions, and then we reduce a life’s accumulated security to a number on a balance sheet. But an emergency sees us fragment and reverse the process. It asks which pieces of that total can be reached, carried, protected or replaced and in what order of priority.
What that gives us, is a more demanding test of what wealth is for.
Some assets exist to fund everyday life and must be readily available, and then there are others that are intended to grow over decades and can accept fluctuations along the way. Insurance addresses losses that would be difficult to absorb financially. A family home may be financially inefficient by one calculation and indispensable by another, because its purpose cannot be captured by investment return alone.
But of course confusion begins to arise when all these forms of wealth are judged by the same measure. An asset should be judged first by the task assigned to it, and then what it sits alongside.
This is particularly important after sharp price movements. When an investment rises rapidly, we are tempted to imagine that its purpose was to make us richer. When it falls, we may conclude that it has failed. But a price is an observation, not to be mistaken with a complete explanation. It tells us where an asset changed hands, but it does not tell us why we own it, which risk it was intended to address or whether that risk has disappeared.
Pepys did not dig up his cheese every hour to ask whether its market price justified keeping it underground. He had made a practical decision about an item he wanted to carry into the period after the fire.
Clearly a wheel of parmesan cheese is not a monetary asset, and burying valuables in a London garden would be a questionable modern storage strategy. The point is that preservation is always preservation for something. Pepys was protecting not only abstract wealth, but the material from which his life and work could be reconstructed.
This is why the most useful question in financial planning may not be, “How much do I want?” It may be, “What do I want this wealth to allow?”
The answer could include independence from an employer, care for a relative, a home that cannot easily be taken away, education for a child or the ability to endure a period when markets and institutions are unfriendly. Once the purpose is clear, the required qualities of the assets become easier to identify. Some wealth must be accessible, whereas some must grow, others must remain outside the risks created by the rest.
Gold has occupied the final category for generations, this isn’t because it solves every financial problem, but because it can carry value without depending upon an issuer’s continuing promise. It does not produce an income and should not be asked to perform the role of a productive business. Its usefulness lies elsewhere: durability, recognisability and a degree of independence from the financial claims surrounding it.
For one family, that may justify a modest allocation. For another, different assets and arrangements may provide sufficient resilience. The starting point of the decision should be about the risk and the purpose, not with a universal percentage or a prediction about next year’s price.
Pepys’s home and office survived, although much of the city tragically did not. In the days after the fire, he retrieved his money after rumours spread about the valuables stored. Even safety had to be reassessed.
That final chapter completes what is already quite the fabled story, because we learn here that preservation was not a single action but a succession of judgements. The distant fire quickly got all too near and the garden became a concentration of valuables. Each subsequent decision was reasonable only in relation to the threat Pepys could see at the time.
Humans generally prepare for uncertainty in very much the same way. We can’t know which asset will be most useful or even valuable under every future condition, but we can decide which parts of our lives would be hardest to rebuild, and hold wealth suited to protecting them.
The question left by Pepys is therefore not really whether we would save the money or the cheese. It is what we hope will still be there when the fire has passed.
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