Money, Money, Money

#1
This afternoon I spent some time sorting out some of my junk and I found my old coin collection from when I was a lad and it got me thinking. What makes money valuable? In the olden days when Auld Yin was a twinkle in his Fathers eye they had gold and silver coins to use. You could go any where in the world with a silver or gold coin and buy something, no need to get robbed at the bureau de exchange.

In short, modern money is a bit cr@p it's copper-nickel alloys, it's not shiney, it's not got that nice feel :D Lets be fair "Cross my palm with Alloys" does not have the same ring. Digging up a chest full of nickel alloy just does not get the blood rushing. Our currency is Stirling not Alloy!

If we go back to Gold and Silver coins Gordon Brown would have a heart attack so it's not all bad!
 
#2
I have thought about this too. Paper money is a promissory note as in, I promise to pay the bearer on demand the sum of.....
So what does an actual pound look like as opposed to the promissory notes and coins we use in their place?
 
#4
the_butler said:
I have thought about this too. Paper money is a promissory note as in, I promise to pay the bearer on demand the sum of.....
So what does an actual pound look like as opposed to the promissory notes and coins we use in their place?
I think you used to be able to bimble up to the Bank of England and ask for your promissory note to be exchanged for gold. Not sure what the deal is now, they would most likely tell you to F.O.
 
#6
According to the blurb that goes with them, each of these bars is 1oz of pure silver:



Each one is apparently one inch long and (obviously) 16 of them would make a pound of silver.
 
#7
LordVonHarley said:
This afternoon I spent some time sorting out some of my junk and I found my old coin collection from when I was a lad and it got me thinking. What makes money valuable? In the olden days when Auld Yin was a twinkle in his Fathers eye they had gold and silver coins to use. You could go any where in the world with a silver or gold coin and buy something, no need to get robbed at the bureau de exchange.

In short, modern money is a bit cr@p it's copper-nickel alloys, it's not shiney, it's not got that nice feel :D Lets be fair "Cross my palm with Alloys" does not have the same ring. Digging up a chest full of nickel alloy just does not get the blood rushing. Our currency is Stirling not Alloy!

If we go back to Gold and Silver coins Gordon Brown would have a heart attack so it's not all bad!
When we went off the gold standard we opted for a system of currency based not on perception of value ('gold is valuable because everyone wants some')but on perception of reliability ('I'll agree this is worth the same as a pound of gold because the Bank of England tells me it is').

In other words, our financial system is smoke and mirrors. The moment people stop trusting the central bank to do its job, we're screwed, and the only things of value will be tinned goods and shotguns.
 
#9
smartascarrots said:
LordVonHarley said:
This afternoon I spent some time sorting out some of my junk and I found my old coin collection from when I was a lad and it got me thinking. What makes money valuable? In the olden days when Auld Yin was a twinkle in his Fathers eye they had gold and silver coins to use. You could go any where in the world with a silver or gold coin and buy something, no need to get robbed at the bureau de exchange.

In short, modern money is a bit cr@p it's copper-nickel alloys, it's not shiney, it's not got that nice feel :D Lets be fair "Cross my palm with Alloys" does not have the same ring. Digging up a chest full of nickel alloy just does not get the blood rushing. Our currency is Stirling not Alloy!

If we go back to Gold and Silver coins Gordon Brown would have a heart attack so it's not all bad!
When we went off the gold standard we opted for a system of currency based not on perception of value ('gold is valuable because everyone wants some')but on perception of reliability ('I'll agree this is worth the same as a pound of gold because the Bank of England tells me it is').

In other words, our financial system is smoke and mirrors. The moment people stop trusting the central bank to do its job, we're screwed, and the only things of value will be tinned goods and shotguns.
So who has`the gold? Has Brown flogged it all to China?
 
#10
LordVonHarley said:
So who has`the gold? Has Brown flogged it all to China?
It's been sold to people who aren't as easily fooled and want something more tangible for their money. UK banking, by contrast, works on the understanding that banks will agree to pay the bearer on demand provided the bearer never actually demands. Like I said, smoke and mirrors. Most of the money in circulation is notional at best and imaginary at worst, like loans secured on house value.
 
#12
LordVonHarley said:
If thats the case the money that exists in my bank account is it in the form of gold or money tokens?
All your banking credits are exchanged for shiny new pennies and stored in a shoebox under the counter of your local bank branch.
 
#13
LordVonHarley said:
If thats the case the money that exists in my bank account is it in the form of gold or money tokens?
These days? Electrons.

Money isn't anything tangible anymore, it's just a series of agreements - I agree to work for my employer, the bank agrees that it will move a certain number of electrons around in a way that will temporarily advantage me until I agree with a shop that it can have some of my electrons in exchange for food.

It works because of a) habit: people do it every day; b) faith: nobody really understands how it works, but it seems to and is a damn sight easier than lugging gold around and c) what's the alternative? there are so many things you simply can't do unless you have a large established organisation giving the nod from behind you.

Take credit, for example. 'Currency' began as an expression of reliability. You could feel confident that a lump of gold with the Kings head on was a particular level of purity and could reliably be exchanged for something the value of that amount of gold. Nowadays, 'currency' is a guarantee of value - subject to variables like inflation or exchange rates. But what is credit if not a promise to pay the bearer on demand the value of their goods or services? And it's not under the control of a government or central bank, but of private companies with profit as their motivation.

There's even an argument to say that money is irrelevant as a concept nowadays, insofaras the series of agreements outlined above can be carried out without it.
 
#14
But what would happen if the bank turns around and breaks the agreement and tells all the little people to hop it?

If money is becoming irrelevent with the increased use of bank cards why not re-inforce the value by using using gold or silver.
 

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#15
LordVonHarley said:
If money is becoming irrelevent with the increased use of bank cards why not re-inforce the value by using using gold or silver.
Convenience.

It's Sunday night so I'm currently slobbing about in shorts and a t-shirt. Within sight though is my wallet (weight - not very much) which has no actual money in it but several thousand pounds worth of promissory stuff. Also within sight is my thing where I decant keys and so on. About a tenner worth of shrapnel there (weight - considerable).

Buggered if I could be bothered walking about with pounds of silver in me trews :D
 
#17
smartascarrots said:
LordVonHarley said:
This afternoon I spent some time sorting out some of my junk and I found my old coin collection from when I was a lad and it got me thinking. What makes money valuable? In the olden days when Auld Yin was a twinkle in his Fathers eye they had gold and silver coins to use. You could go any where in the world with a silver or gold coin and buy something, no need to get robbed at the bureau de exchange.

In short, modern money is a bit cr@p it's copper-nickel alloys, it's not shiney, it's not got that nice feel :D Lets be fair "Cross my palm with Alloys" does not have the same ring. Digging up a chest full of nickel alloy just does not get the blood rushing. Our currency is Stirling not Alloy!

If we go back to Gold and Silver coins Gordon Brown would have a heart attack so it's not all bad!
When we went off the gold standard we opted for a system of currency based not on perception of value ('gold is valuable because everyone wants some')but on perception of reliability ('I'll agree this is worth the same as a pound of gold because the Bank of England tells me it is').

In other words, our financial system is smoke and mirrors. The moment people stop trusting the central bank to do its job, we're screwed, and the only things of value will be tinned goods and shotguns.
Absolutely correct,

Even more smoke and mirrors since Gordon Brown sold a large quantity of our gold reserves to china at bargain basement prices a few years back (only to see the value double since then)

http://www.timesonline.co.uk/tol/news/politics/article1654931.ece

Edited to say oops too slow finding the link so already been said :oops:
 
#18
Brown lost £2 Billion! Sold at a 20 year low!

Right now I really do think going back to a gold standard would be a good idea.
 
#19
LordVonHarley said:
Brown lost £2 Billion! Sold at a 20 year low!

Right now I really do think going back to a gold standard would be a good idea.
Peanuts, he just spent 24 Billion on the Northern Rock collapse and there's no guarantee of getting that back.
 
#20
If you are really interested and not just a drunken whimsy then have a read.

http://en.wikipedia.org/wiki/Fiat_currency


This little bit is interesting -


as some currencies, (notably sterling issued by Scottish banks[1]), are not legal tender but are accepted by longstanding confidence.
Bet a lot of our northern colonists didn't know that. :)
 

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