7 ms·
What pushes the bank of england to such an aggressive and obnoxious policy? Is there massive, perfect counterfeiting of existing banknotes?
by droopyEyelids 4y ago
What pushes the bank of england to such an aggressive and obnoxious policy?
Is there massive, perfect counterfeiting of existing banknotes?
- randomhodler84 4y agoI think the notes don’t last that long. I kept a 10 pound note in my wallet for a few years and it got destroyed far more quickly than US dollar bills. The paper just isn’t as good. I think the notes age out quite quickly.
- bombcar 4y agoAmerican "paper" money is almost a cloth, and surprisingly durable.
- randomhodler84 4y agoI didn’t actually realize that old 10 GBP paper note is now worthless except to the BoE until reading this. Sigh. Another example of physical savings in fiat paper being demonetized away by the state.
- woodruffw 4y ago> Another example of physical savings in fiat paper being demonetized away by the state. This is the reason why people joke about storing money in your mattress. You aren't supposed to do it.
- sneak 4y agoYou aren't supposed to do it because the state can't exercise veto power over cash transactions without due process. Cash is useful and powerful, so it benefits bankers and politicians to render stockpiles useless periodically.
- imtringued 4y agoActually the reason is much simpler. The government borrows money into existence. It has to eventually pay that money back. If you keep your cash under a mattress for all eternity then those debts can't be paid back because money is not returning from the private sector to the public sector. This also true for private debt, but it is particularly comical with public debt as all the money stored under a mattress has to be replenished to maintain a sufficient amount of currency in circulation. Imagine it as if you are the government and acting as a dairy farmer and your cows are constantly fleeing onto private land. You can't get those cows back, instead you breed new cows. Since no cows return from the private lands and there is a constant stream of escaping cows, private lands are being flooded by cows. People complain about the government printing too many cows, devaluing the value of their existing cows. You can see, this whole scheme is just a very backwards implemented debt jubilee in an environment where an actual debt jubilee would lead to pitchforks coming from the rich.
- randomhodler84 4y agoEg system requires rehypothication of private debt to sustain itself.
- zhte415 4y agoIf there are 'too many' of my cows on your land, my cows magically get smaller and the size of your cows on my land get bigger. You can see, car analogies are bad enough.
- zhte415 4y agoIt's value is to the person accepting it. £1 notes are worth more than £1, at least the last time I looked. As mentioned in the article, these notes can be exchanged at a bank or post office. Those out of circulation can be exchanged at the BoE.
- randomhodler84 4y agoThat’s great if you are in the UK, which I am not.
- desas 4y agoHow does it make a difference? Presumably they've always been near worthless where you are anyway?
- hn_throwaway_99 4y agoBut that doesn't explain why they would put an expiration date on the existing bills.
- throwaway742 4y agoThey want to know who has the cash.
- bombcar 4y agoSince apparently they've done it a number of times before I assume everyone's used to it, and yes, I suspect counterfeiting is the main drive. The US hasn't felt the need to enact that measure even with things like the supposed North Korean "superdollars". https://en.wikipedia.org/wiki/Superdollar https://en.wikipedia.org/wiki/Superdollar
- donatj 4y agoI think it's more to prevent you from sitting on a mountain of cash the government is unaware of. Generational money, laundering and the like. Forces you to admit to all your cash or lose it. It smells pretty evil and totalitarian to me.
- edge17 4y agoIt's similar to the demonization in India in 2016 where the goal was to force people to declare their piles of black money. People don't always declare things correctly for tax purposes, and black money leads to other parallel economies (terrorism, trafficking, etc). In modern times it also encourages people to switch to digital payments rather than handling cash, something which makes tracing money easier in general.
- aneeshnl 4y agoNote that it didn't end very well for India. The initial claims are conveniently forgotten and people just suffered. More than 99% of the currency got returned anyway, contradicting government's claims.
- edge17 4y agoNote that I didn't comment on the outcome, only the intended purpose. I suggest reading the demonization wikipedia article for more examples if the India example doesn't satisfy you. https://en.m.wikipedia.org/wiki/Legal_tender#Demonetization https://en.m.wikipedia.org/wiki/Legal_tender#Demonetization
- Symbiote 4y agoIt has little in common with the Indian situation, since the Bank of England will exchange these notes indefinitely. Other banks will usually also accept them (at least for their customers) for several years. It's routine, it's happened to 13 notes since 1990: https://en.wikipedia.org/wiki/Bank_of_England_%C2%A320_note https://en.wikipedia.org/wiki/Bank_of_England_%C2%A320_note
- imtringued 4y ago