Friday 16th June, 2006 AD

"CITY OF THE WORLD'S DESIRE'

We have often made the observation that, if history is anything to go by, riches, wealth and affluence have tended to follow gold. Historically, when gold has flowed into an area, wealth, commerce and industry has quickly followed behind. Conversely, when gold has flowed out and away from a region, it has not been very long before business and prosperity have gone into decline. 

In the second half of the 3rd century AD, the late Western Roman Empire was suffering a severe flight of capital, resources and trade. In an effort to escape hyperinflation, ever-increasing government regulation and taxation, and declining safety and living standards, much of Rome's upper class, merchants, bankers and businessmen were heading east for greener pastures, taking with them much of the Western Empire's converted trade and more importantly, monetary gold stocks. 

In 325AD, Constantine the Great re-founded the city of Byzantium as the "New Rome" in the east. The vast riches and gold stocks of the former Western Empire had, for a time, found a new home, as the Western Empire collapsed into the dark ages, a period that has been summarized 
by some as a protracted monetary and economic depression. 

Constantinople became known as the 'City of Gold' or the 'City of the world's Desire' and was the center of trade and commerce for almost a millennia. The gold had flowed from west to east, and riches, trade and prosperity had quickly followed. During the Byzantium era, the booming economy and brisk trade was underpinned by the integrity of its gold "Bezant', the gold coin of the realm that remained widely accepted and un-debased for nearly 1,000 years. 

But, like a pendulum, in time the gold again began to flow out, this time leaving the east and heading back to the west, paving the way for the Renaissance and re-emergence and economic dominance of Western Europe. 

But was the only the gold from the east that built the west? Can these lessons from history teach us anything about today? And if so, what direction has the gold been flowing in recent years and what could that suggest about the location of tomorrow's wealth, prosperity and trade? Questions we will ask and answers we will dig for in future Daily Digs.

Sincerely - Philip Judge pjudge@anglofareast.com