O/T With the risk of sounding stupid

[chez]

Why, seeing as we have the royal mint, do they not just print shit loads more money when a company or charity or country is in need of cash.

I presume its something to do with not buggering up the economy but does anyone know the real reason??

 

[dougdeep]

Simply,the more money that there is in circulation the less it's worth.

 

[Safeway]

If you print shitloads more money then prices will go up, the value of money will go down and you'll have a situation like in Germany during WW2 (I think) where you'll have to fill a WHEELBARROW with money just to buy a loaf of bread.

No doubt one of the so-called intellectuals on here will go into it in far more detail, but that's about the size of it.

 

[Little Piggy]

I thought that the cash represents the gold reserves that the UK has?

 

[chez]

Simply,the more money that there is in circulation the less it's worth.

I can see what your saying but to be honest I'd much rather have to push a wheelbarrow of cash around for a loaf of bread than be bollocking skint all the time!

Also this explanation doesn't explain why we cant just print loads and then give it away to 3rd world countries. Surely that wouldn't effect the value of OUR money.

 

[Dover]

I belive the gold reserves are higher than the money in circulation.

 

[dougdeep]

There is enough cash in the country for everyone to have a million pounds each. But if it was shared out like this everyone would pack up work and the country would fall apart.

 

[Cian]

I belive the gold reserves are higher than the money in circulation.

By far the opposite. The cash in circulation is somewhere around 4x what the treasury has in gold and/or other currency as backup

Switzerland and only Switzerland has all its currency gold backed.

 

[chez]

There is enough cash in the country for everyone to have a million pounds each. But if it was shared out like this everyone would pack up work and the country would fall apart.

Hmmm, yeah never really looked at it like that.

 

[Brightonfan1983]

I can see what your saying but to be honest I'd much rather have to push a wheelbarrow of cash around for a loaf of bread than be bollocking skint all the time!

I'm not taking the mickey, but that was a superb line!

I know what you mean though. Someone once explained it to me that if money did indeed grow on trees, its value would plummet cos it'd be everywhere.

.....I understood it at the time........

 

[Safeway]

The cash in circulation is somewhere around 4x what the treasury has in gold and/or other currency as backup

Okay, my turn to be thick now.

Does that basically mean that if everyone in the country suddenly lost all their money then the government would have to sell off the gold reserves to give us some money back?

 

[Beach Hut]

It causes a real problem when there is too much money in circulation - more people have and inflation goes through the roof.

No idea Safeway but we aren't all that careless are we to loose our cash

 

[Ernest]

Shouldn't this be posted on a Wrexham board marked c/o Mickey Thomas ?

 

[Pevenseagull]

As pointed out above, if the Bank of England release money into the economy inflation rises. To the average person inflation is RPI; the government is proud of their record of keeping RPI low, but they've cheated.

The "basket of goods" that indicates inflationary pressures on household expenses now includes outgoings in support of luxury goods (subject to techonology fueled deflationary pressures).

bottom line is, whilst ciggies, petrol, a pint in the pub and FOOD etc. are more expensive, the cost of mobile phone calls and a VCR have fallen - SO RPI for the household is regarded as pegged at <3% - HOWEVER, if major (unavoidable) expenses such as insurance, utilities, stamp duty & council tax were included, the average increase in load on the household disposable income is well in excess of 10% net

wankers

 

[Safeway]

As pointed out above, if the Bank of England release money into the economy inflation rises. To the average person inflation is RPI; the government is proud of their record of keeping RPI low, but they've cheated.

The "basket of goods" that indicates inflationary pressures

I switched off about there.

wankers

Bugger, I want to know who the wankers are now.

 

[chip]

I thought that the cash represents the gold reserves that the UK has?

Gordon Brown sold of ~25% of our gold reserves a few years back to buy euros. Since then, gold has risen in value by far more than the euro. Money, the coins and cash, is a promise that the central issuing bank will pay the value printed on it and in itself is generally worthless. The value of the money is therefore essentially the strength of the issuer divided by the ammount of money in circulation.

 

[Stumpy Tim]

I can see what your saying but to be honest I'd much rather have to push a wheelbarrow of cash around for a loaf of bread than be bollocking skint all the time!

Also this explanation doesn't explain why we cant just print loads and then give it away to 3rd world countries. Surely that wouldn't effect the value of OUR money.

First point is that the wheelbarrow of cash would be worth exactly the same as a pound coin now. So you would still be skint, but going to the shop would be a pain in the arse.

If you print off loads of pounds for a 3rd world country, you would need to go through someone who would exchange it for the local currency - so those pounds stay in the UK economy as pounds can't be used anywhere else

 

[Cian]

Okay, my turn to be thick now.

Does that basically mean that if everyone in the country suddenly lost all their money then the government would have to sell off the gold reserves to give us some money back?

Lost as in mislayed or lost as in "spent on a Gareth Glover tip"

In either case no. If you lose the physical cash, tough shit. If you lose your money through whatever reason, tough shit (to an extent, there is the welfare state).

If for some reason the UK Government needed to raise cash from the treasury, they'd probably sell their large amounts of dollars, Euro, and Swiss Francs first, before touching the gold. They sold a lot of gold recently to buy said £/€/SFR and it reduced the gold price a fair bit.

 

[Pevenseagull]

Bugger, I want to know who the wankers are now.

give it an hour or two

 

[Cian]

Gordon Brown sold of ~25% of our gold reserves a few years back to buy euros. Since then, gold has risen in value by far more than the euro. Money, the coins and cash, is a promise that the central issuing bank will pay the value printed on it and in itself is generally worthless. The value of the money is therefore essentially the strength of the issuer divided by the ammount of money in circulation.

The promise to pay on banknotes is symbolic and has been since 1933 when Britain left the Gold Standard.

On Swiss currency it is valid but I believe you need to bring the entire price of a gold bar with you to get one from the central bank