How does money work?

[Wacky Racer]

OK,

Obviously if money did not exist, we would all be reduced to a kind of bartering system....You cut my grass, I'll paint your garden shed in return....You let me ride on your bus, you can have a bag of potatoes, etc.

Also we know that if the Bank of England kept printing more and more notes the value of the currency would be almost worthless similar to the situation in Zimbabwe....

So, given that there around 60 million people in the country (that we know about) how do they decide the level or amount of currency to release into circulation.....£100 per person, £1000 per person, £50,000...

[SS HSV]

You surely havent been taken in by that scam have you? The governements not offering to pump any money into the economy, it's just a Nigerian scammer who has spooked an MP's email address and they believe it..

[Scuffers]

Wacky Racer said:

OK,

Obviously if money did not exist, we would all be reduced to a kind of bartering system....You cut my grass, I'll paint your garden shed in return....You let me ride on your bus, you can have a bag of potatoes, etc.

Also we know that if the Bank of England kept printing more and more notes the value of the currency would be almost worthless similar to the situation in Zimbabwe....

So, given that there around 60 million people in the country (that we know about) how do they decide the level or amount of currency to release into circulation.....£100 per person, £1000 per person, £50,000...

you might want to consider that there is way less 'physical' money in existence than there is in the UK economy (if you get what I mean).

this latest step by the BOE does not involve printing any more money.

[lawrence567]

It's basically all a crock of st.

[phumy]

Wacky Racer said:

OK,

Obviously if money did not exist, we would all be reduced to a kind of bartering system....You cut my grass, I'll paint your garden shed in return....You let me ride on your bus, you can have a bag of potatoes, etc.

Also we know that if the Bank of England kept printing more and more notes the value of the currency would be almost worthless similar to the situation in Zimbabwe....

So, given that there around 60 million people in the country (that we know about) how do they decide the level or amount of currency to release into circulation.....£100 per person, £1000 per person, £50,000...

Nah, its easier than that, when the notes get old, they just burn them and print a shed load more off. They just look to see whats in circulation and say lets do a few billion more.

[Simpo Two]

The only real money is gold, and we sold it

[Mattygooner]

We print more monies to make economy good.

[sleep envy]

Scuffers said:

you might want to consider that there is way less 'physical' money in existence than there is in the UK economy (if you get what I mean).

this latest step by the BOE does not involve printing any more money.

thanks for the explanation

so how much 'physical' money is there in the system at any one time?

[Scuffers]

Simpo Two said:

The only real money is gold, and we sold it

well, yes and no...

we came of the gold standard long ago...

see: http://en.wikipedia.org/wiki/Gold_standard

[BMWBen]

sleep envy said:

Scuffers said:

you might want to consider that there is way less 'physical' money in existence than there is in the UK economy (if you get what I mean).

this latest step by the BOE does not involve printing any more money.

thanks for the explanation

so how much 'physical' money is there in the system at any one time?

It depends on demand - the bank of england will allow any bank to swap computer money balances for actual physical money at any time they like and vice-versa.

So the answer is "exactly as much as there needs to be".

[Wacky Racer]

Scuffers said:

Simpo Two said:

The only real money is gold, and we sold it

well, yes and no...

we came of the gold standard long ago...

see: http://en.wikipedia.org/wiki/Gold_standard

More on the Gold standard here......

http://www.youtube.com/watch?v=LS37SNYjg8w

[NDA]

Wacky Racer said:

More on the Gold standard here......

http://www.youtube.com/watch?v=LS37SNYjg8w

I never tire of that clip - a personal favourite.

[TVR_Scamp]

The value of notes in circulation varies but is currently around £45,000m

See BoE website:
http://www.bankofengland.co.uk/banknotes/about/sta...

[Fittster]

Go and google "Money Masters"