It is a little known fact that, as well as being a mathematician and physicist of some note, Isaac Newton also worked in the nascent civil service first as Warden and then later as Master of the Royal Mint.

As Master he ran into the problem that the country was literally running out of money. The silver that the money was made from was becoming more valuable than the money itself, and so people were melting it down to make ingots. At the time, England was heavily involved in a war with France that was using up 80% of the Government's revenue! This meant that the national debt was rising at a time when money was falling out of circulation, which then meant that business was close to coming to a complete stop.

Newton took charge and in 1696 started the "Great Recoinage". This involved all coins being recalled and melted down while a new type of money was used. This new money, primarily in note form, was in the form of a "promise to pay". It was the start of the type of money that we and the rest of the world use today. The Treasury, to generate more money, investigated other ways of raising funds, including a lottery. It was at this time that personal cheques came into existence, when there was literally not enough money in the system.

It was also at this time that the South Sea Company started to buy up the new Government bonds, repackage them and sell them on. Initially things went well and the share price of the South Sea Company grew fast. But then they came crashing down; Newton himself lost over £20,000 - millions in today's terms.

We can see a lot of what is happening today in this little piece of history. The losses that Newton experienced were akin to those from the banks' values collapsing as they packaged and sold debt.

Wars are always expensive. The costs of the actions in Afghanistan and Iraq, whilst not being 80% of the Government's revenue, are dramatic. The quantitative easing of today is similar to the Great Recoinage of just over 300 hundred years ago.

When they say that life is like the past, they are mostly right. The question is, can we learn from it?