What’s ‘Funny’ about the Bank of England’s money?

The Bank of England’s notes originally represented deposits of gold coin and bullion with the Bank and until 1931 (when Britain finally came off the gold standard) could be exchanged for gold at a fixed rate - hence the words “I promise to pay” on the face of the notes. Since 1844, the Bank has been authorised to issue notes against securities - the fiduciary issue of notes - instead of just gold or silver. After 1939 only a nominal amount of gold was held and today the note issue is almost wholly backed by securities.Recently the Treasury launched an auction aimed at reducing the UK’s remaining gold reserves by half. The sell-off will be the start of a 415 tonne sale by the Government. The gold will be replaced with Euro, Yen and Dollars.

Pound notes are controlled by outside forces, such as multinational corporations, foreign investors and large banks. Pounds visit our community for a short while then leave, having being used primarily to pay for food, accommodation, fuel, and car costs. Lately more money has been leaving Calderdale than has been coming in. This creates debt, poverty and suffering.

The pound’s value has continually fallen in real purchase terms, primarily because it is backed by nothing more than debts that can never be repaid. To cope, the Bank of England prints more notes in order to buy even more things it cannot afford. That’s real Funny Money. If the pound ever loses the confidence of its traders and investors it would collapse, just like the rouble.