Smile of the day - What is yours?

[TamSV]

Originally Posted by Bibio

if Scotland gained its own legal tender then the BOE owes the new holding bank in Scotland the deposits they hold for the three note issuing banks in Scotland. the problem is, i very much doubt that the BOE has the reserves to do so. why do you think the Gov bailed out RBS.

I think you’re confusing legal tender with currency. It’s not the same thing. Legal tender is a pretty archaic notion designed to make people happy with taking worthless coins for real stuff with the knowledge they’ll be able to spend it afterwards. Notes aren’t legal tender in Scotland. Prior to the union we didn’t use notes.

Only about 4% of the money in the economy exists as cash. More than 96% of it isn’t legal tender. In fact, it doesn’t exist at all in any durable form. It has value for no reason other than we all agree to the delusion.

The Scottish cash in circulation is nothing to the BOE. The bank bailout made available an amount of money that was considerably larger than the entire Scottish economy. They have the muscle.

Sterling is a Scottish thing as far as i know.

Stirling is a Scottish thing. Sterling is the UK’s currency

Not a single note or coin has come into or out of my business for the last 2 years. No legal tender is required.

[Bibio]

i blame Gordon "drunken" Brown for taken the BOE out of the gold standard. you can blame that man for the state of the country. lets just take us out of the gold standard and sell all the reserves then drop interest rates to almost zero so we can borrow more money from the BOE but keep the same payments.. that should help.

so what is the "worth" of a BOE note, how can i redeem it and what do i get?

[TamSV]

Apologies again for the derail, so here’s another smile of the day.

Tomorrow I’m getting air conditioning installed in my garage.

I don’t have air conditioning in my house. Got to get your priorities straight.

[TamSV]

Originally Posted by Bibio

i blame Gordon "drunken" Brown for taken the BOE out of the gold standard. you can blame that man for the state of the country. lets just take us out of the gold standard and sell all the reserves then drop interest rates to almost zero so we can borrow more money from the BOE but keep the same payments.. that should help.

so what is the "worth" of a BOE note, how can i redeem it and what do i get?

Aye he sold it cheap. He’s remembered as a better chancellor than a PM but I reckon it might be the other way round (and I don’t think he was a good PM).

As far as the worth of money is concerned, that’s the magic. You can’t redeem it for anything. It doesn’t exist in any material sense.

Once you’ve created imaginary money and let people lend it for nothing other than interest, the money starts to grow on its own and the economy gets bigger. All from nothing!

Don’t stare at it too long. Don’t ask questions. It won’t survive the scrutiny

[Ruffy]

Originally Posted by TamSV

Don’t stare at it too long. Don’t ask questions. It won’t survive the scrutiny

Yes, fractional reserve fiat currency is one of the biggest confidence tricks ever, probably more probability-maths involved than quantum physics!

Perhaps it would have been better to call it 'Schrodinger's cash' - is the backup there or isn't it, don't look, that spoils it!

[svenrico]

Originally Posted by Bibio

so what is the "worth" of a BOE note, how can i redeem it and what do i get?

Go to a Poundland or Poundstretcher shop (whatever they are called ) they have lots of things for a pound so you could get 10 items for a ten pound note !!!!

[svenrico]

Originally Posted by TamSV

As far as the worth of money is concerned, that’s the magic. You can’t redeem it for anything. It doesn’t exist in any material sense.

Can't you redeem it for material goods ?!

[Bibio]

Originally Posted by svenrico

Can't you redeem it for material goods ?!

yes but you cant redeem it for gold/silver from BOE any more which used to be the case before brown stained pants got his way. there is now no "material" worth and its value is linked to (i believe) the GDP for world trade. its all a gentlemen's handshake that they dont ask for material value. even the USA does not deal with gold as a backing for their currency. IIR the gold in fort knox belongs to china but i could be wrong.

brown stained pants needed money to keep the public happy. he gave control of the BOE back to the directors with a deal that they lower the interest rate. he borrowed more money but with lower interest rates kept the payments the same. the trouble is the rest of the world had to do the same or people would borrow from the UK and not them.. brown stained pants wrecked the financial world overnight.

[Craig380]

Hmmmm ... I disagree. You can just as easily trace the roots of the 2008 crisis back to the 'big bang' deregulation of the City under Thatcher.

I'd agree that Brown was too easily taken in by the ongoing assurances of the City that only light-touch regulation was needed and that 'the financial market will police itself' (as every other PM since Thatcher has been), but he did not cause the problems, they were already there.

[svenrico]

Money ,say a £20 note can be exchanged for goods or services to the value of £20. That will do for me.