Knut, pronounced 'nut', was the term of choice to refer to a rich young layabout in the era of Edwardian England. Just as the regency had its Corinthians and swells, the Edwardians had the Knuts and the Bloods.
"George Grossmith was the first to emphasize the distinction between the Nut and the Blood. The Blood was a young man who caused riots in restaurants: the Nut is too listless to do anything so energetic. For listlessness and a certain air of world-weariness, combined with a colored collar, a small moustache, a drooping carriage, the minimum of frontal development, and a high-power racing-car, are the chief qualifications of the Nut. He is bored to death, but he does it simply because it’s done."
--The Knuts O’ London by P.G. Wodehouse, 1914
Of course, Wodehouse admitted that the in-crowd properly spelled it with a silent K, as properly laid out in the popular revue song Gilbert the Filbert, as sung by Basil Hallam. While the term had been in use before this (often without the silent K), the 1914 hit The Passing Show popularized the term.
I’m Gilbert, the filbert,
The nut with a k.,
The pride of Piccadilly,
The blasé roué;
Oh, Hades, the ladies,
They’d leave their wooden huts
For Gilbert, the filbert,
The colonel of the Knuts.
Listen on YouTube.
The Knuts were the idle rich, those who owned motor cars and yachts, belonged to gentleman's clubs, had attended a good public school, and were generally all-around good old chaps, albeit not chaps highly motivated to make anything of themselves. This persona has been a popular subject of the stage since at least the early 1900s, portrayed by actors such as George Grossmith, Jack Buchanan, and G. P. Huntley. The Knut has perhaps been best immortalized in Wodehouse's own works, with Psmith and Bertie Wooster epitomizing the type.
This usage probably contributed to the current (although aging) slang "you're such a nut". 'Nuts' has been used as an adjective to mean crazy since at least 1864, but previous to the rise of the Knut, as a noun the word had been limited to seeds, bolts, and people's heads ('off your nut'). It may also be worth noting that the word 'nutter' to mean a crazy person was not recorded until 1958, although no connection is likely.
The Knuts O’ London by P. G. Wodehouse
Related: The preface to Joy in The Morning, also by Wodehouse.