Let's Get Physical

6 snips

Jan 27, 2026

They revive the Savoy Gold Dinner ratio and compare a 1971 meal to a 2026 bill to show gold’s changed buying power. They explore a rotation from digital to capital-heavy physical assets like metals, fertilizers, shipping and energy. They argue AI is commoditising software moats while governments’ rising debt and money creation boost demand for scarce tangible stores of value.

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ANECDOTE

Savoy Dinner Research Trip

George Cooper and Gerald Ashley revived Julian Baring's 'Savoy gold ratio' by dining at the Savoy Grill to compare gold's purchasing power across eras.
Their January 7 dinner cost £236.32 per head, yielding 14 dinners per ounce of gold versus three dinners per ounce in August 1971.

INSIGHT

Gold's Long-Term Purchasing Power

The 1971 Savoy dinner cost £5.67 and gold was ~$40/oz, so one ounce bought ~3 dinners then versus 14 today.
Gold's purchasing power rose about 4.7× over 54 years, outperforming inflation and wages.

INSIGHT

Savoy Tracked Wages, Not Gold

The Savoy's price relative to average wages barely changed: 1.4 days' wages in 1971 vs 1.6 days today.
The restaurant's pricing has effectively tracked labour costs rather than gold or monetary debasement.

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In the first episode of 2026, George Cooper and Gerald Ashley examine the persistent “debasement trade”: fiat money weakening while physical assets surge. They revive the “Savoy Gold Dinner ratio,” a metric from the 1970s/80s created by gold mines fund manager Julian Baring.

In August 1971—days after Nixon closed the gold window—a comparable Savoy Grill dinner cost £5.67 per head. With gold at $40/oz (£16.66/oz at the fixed rate), one ounce bought roughly 3 dinners. At their recent meal on the 7th January: The bill came to £236.32 per head (with modest wine), with gold at $4,460/oz (~£3,303/oz), yielding 14 dinners per ounce—a 4.7× gain in gold’s purchasing power over 54 fiat years. Interestingly in wage terms, the meal’s burden barely budged: 1.4 days of average weekly earnings in 1971 (at £20 a week) vs. 1.6 days today (now at £736 a week). The Savoy has kept pace with labour costs, but gold has vastly outrun inflation as a store of value.

This reflects a wider rotation: investors favour scarce physical assets—industrial metals, fertilizers, shipping, energy—over easily copied digital ones. AI commoditises software moats (e.g., image generation displacing Adobe tools; potential chip-design replication), eroding advantages for asset-light firms. Gold supplants bonds as the prime safe haven amid fiscal stress.

Governments are increasingly close to Hyman Minsky’s “Ponzi stage,” with US debt interest topping $1 trillion yearly, driving money creation that inflates tangible-asset demand. But Bitcoin, despite debasement hype, is stalling - its digital replicability (via substitutes) contrasts with bullion’s scarcity. This episode highlights a return to capital-hungry physical realities over ephemeral software.

View the article on Gerald and George's dinner at the Savoy in The Times:

https://www.thetimes.com/business/companies-markets/article/dine-out-on-gold-how-an-ounce-will-now-buy-lunch-for-14-at-the-savoy-grill-qx8hpb8rh

This episodes book recommendations

Gerald
Does God Play Dice?: The New Mathematics of Chaos by Ian Stewart

George
Genghis Khan and the Making of the Modern World by Jack Weatherford