When the Royal Mint prints money, who gets it?

LondonMatt

I only ask because I stumbled upon a *conspiracy theory regarding the federal reserve - apparently, its a private company that can print its own money, which it pays the US government about $1 for a $10 bill. It got me thinking about how the BofE works and how its different from the Federal Reserve. How does the BofE decide when to print more money, and how does it distribute it?

Any comments on the BofE or on this conspiracy theory would be welcome...

*The conspiracy is that the US owes about $4 trillion, but there is only $260billion dollars worth of notes, so the US will forever be in debt - fractional reserve banking that the fed practises causes this and helps the private company get rich as they manipulate inflation for thier own benefit. Also, because the fed is a private company, it is therefore unconstitutional :confused1: :confused1:

coocoocadgoo

My boyfriend is big up on this theory and knows a lot more than I do, but what you've said is what he's told me too. It is true that the Fed Bank is a private company and that they can literally just print more money whenever they need to.
As far as I know, it used to be in this country (not sure if it still is) that the amount of money (coins & notes) had to be equal to the amount of gold in the country at any one time. However, the gold was sold off years ago and so that no longer applies.
It's a big can of worms to be opened!

welshwizard

I wouldn't like to post the T-accounts for an entry such as Debit Bank £1,000,000,000,000,000 and Credit the printing press £1,000,000,000,000,000!

Imagine the suspense account if you messed that one up a couple of times!

LondonMatt

I can't believe no one knows the answer to this!! Its seems like a question a five year old would ask, lol

...or perhaps someone knows and is just not playing nice....:confused1:

Bluewednesday

I read something on this today and I quote (The Guardian - Saturday)

"It is possible to print money as a way out of an economic crisis but this reduces its value and causes inflation.

Zimbabwe now has inflation of 231m% after it increased it's supply of money."

it's a complicated thing this finance game isn't it?

CJC

The Royal Mint these only mints coins and doesn't print notes. The Bank of England has issued banknotes since it was founded in 1694 and today all Bank of England notes are produced by De La Rue Currency situated at Loughton in Essex. Notes are distributed to various organisations under the Note Circulation Scheme (NCS), coins are treated in much the same way.

You can find more info on The Bank of England website

CJC

Bluewednesday wrote: »

I read something on this today and I quote (The Guardian - Saturday)
"It is possible to print money as a way out of an economic crisis but this reduces its value and causes inflation.

The more there is of anything the less is its exchange value. The more aged amongst us may recall how the monetarist Thatcherites were obsessed with controlling the money supply, high unemployment was for them 'a price well worth paying' to keep inflation down. The idea is that the less that people get paid, the less money there is in the system and inflation comes down. To put it another way, it's OK to have a few rich people getting much richer as long as there's plenty of poor people to balance things out and keep inflation down.

Money supply is something you hardly hear about these days but is still pretty much at the heart of financial policy.