Am I the only one who doesn't understand a word of that?
Exactly, that makes 2 of us.
So called Fiat currencies have operated since the early 1930s when countries began to abandon the Gold Standard. There is insufficient true money in the system to pay out all of the deposits held by savers, and this was a key reason for Alistair Darling's decision to bail out the Banks in 2008 and subsequent years, to stop 'Bank runs' which would have turned a financial crisis into a repeat of the Wall Street Crash, but on a much larger scale.
Please explain the meaning of or define 'true money'
QE surfaced around 2011/12 in the aftermath of the Financial Crash, so well after Wilson & Callaghan, and Central Bank Controls plus Exchange Control Regulations, allied to Fixed Exchange Rates [Remember the £ devaluation from 2.8 to 2.4 against US$?], meant that QE was not possible. George Osborne was Chancellor when QE was implemented and there was great suspicion amongst Financial Journalists about a] the potential inflationary impact of 'printing' money [in fact it is created electronically so no trees are harmed in the process; very environmentally friendly ...]; and; b] whether the Treasury could take the interest derived from the initial QE issue as an income to offset against the borrowing the Government had created, whether this was remotely ethical. Recent Modern Monetary Theory takes a much more mature and relaxed view about the process and argues that a country can issue as much currency as it needs to finance its operational needs and can use interest rates to dampen any inflationary pressures. Professor Richard Murphy's regular blogs are really good reading [I'm a wow at parties, slightly less popular than Victoria Wood's man in the Fair Isle Jumper, standing alone on the landing, sipping Lambrusco, and bursting to met someone to whom he can explain how cost efficient it is, and how easy it is to do one's own conveyancing ...
]'True money' [not a strict economic term, but a handy reference phrase to describe the actual levelof cash and quasi cash deposits held by Banks] pre-dates Fiat currencies, or Fractional Reserve Banking Systems which rely upon the presence of Cash Deposits and other Eligible Reserve Assets [the formal ratios that were used to control the amounts of lending that Retail Banks could make whilst staying solvent were abandoned by the Bank of England in the mid 1980s] to expand lending, and in turn, economic activity. Originally, Bank Notes were originally Promissory Notes issued by Goldsmiths ['I promise to pay the Bearer on Demand the sum of Five pounds ...' on currency notes] to save merchants from having to heave gold around the place to pay bills, and the Goldsmith would exchange the Promissory Note for the equivalent value of gold originally deposited with him 'on demand', i.e. at the request of the Depositor].
That's why money was invented.
Exactly my point, you were the one who said "I still think the concept of money is very strange"
Even more bizarre is the practice which [apologies for the assumption here] you, I and millions of people in UK/almost globally accept of having a credit of £x hundreds/thousands appear in our Bank Accounts and regarding that as 'money' which we 'spend' by typing in figures via the online banking App to transfer 'money' to the Building Society, Local Council, supermarket etc to buy goods and services, without any 'true money' [which is not 'true money', because there are insufficient cash deposits to allow for the total savings to be paid back out to the Savers! But those Savers can't complain, because they transferred 'money' into the account electronically, originally ...
I still do, but we have to live with it, can't think of anything better to replace it
Yes an even stranger concept than money is real money and 'virtual' money but as long as it works and everybody accepts it.
Now there I disagree strongly! Gravity is a myth; the earth just sucks ...Yes an even stranger concept than money is real money and 'virtual' money but as long as it works and everybody accepts it.
Even stranger is the concept of gravity
Chaser if it make you fell better I'm in your camp. Straight over me head......
No, what is it?
Blimey! Wish I had. I use the card too!
I think a lot of people use it to "hide`" monies!
Dah - I'm baffled too
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