Derico
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British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 10:43 am

I read a brief article on the history of this currency, and I was stunned to learn how many changes it has suffered. I always had the impression it was an extremely very reliable currency (well, comparatively speaking it has been as it has not been 'changed' or 'phased out' like currencies in other countries).

Yet according to this article it has suffered repeated crisis and devaluations since WWII, in the late 40s, in the 60s, 70s, 80s, and even in 1992 (which I didn't know), apparently involving George Soros, which ended forcing the country to 'devalue' the currency. In many of those instances, specially in the 60s and 70s, Britain as did many other European countries at the time, asked the IMF for bailout loans... Now I didn't know about that and thought it was really funny, since many in Europe use IMF bailouts as indications of a country's 'thirdworldlyness'  Smile

Still as I understood the piece I read, before the 1970s, it was not decimalized, but rather it used a another system, but I don't think it was fractionalization either (1/4, 1/8, and the like).

Since there are tons of britties here, can anyone explain to me HOW one 'counted' british money prior to decimalization?? And to Europeans in general, what was the European Currency Unit??

If there were pegs of currencies throughout the post-WWII, how did the Italian Lira devalue so much, or to a lesser level the franc or peseta?
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skysurfer
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RE: British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 11:03 am

In the dark you can't see ugly, but you can feel fat
 
jafa39
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RE: British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 11:04 am

Quoting Derico (Thread starter):
HOW one 'counted' british money prior to decimalization??

It worked in funny ways, there were 2 farthings to a halfpenny, two halfpennies to a penny (d'uh!) and 12 pennies to a shilling, there were 20 shillings to a pound and 1 pound and 1 shilling to a guinea. Pounds were also known as "Quids" and shillings were known as "Bobs"

Now do you see why it was decimalised?

Quoting Derico (Thread starter):
what was the European Currency Unit??

A fictitious currency by which all euro nations could plot an exchange rate to see if their currency could be brought within a set of parameters via the "exchange rate mechanism" it was an exercise desinged to see if a single european currency would work for everyone, it may well have been the reason for the latest devaluation of the pound but I'm not totally sure about this as the whole thing was done to death on the news and got very tedious.

Jafa(ex-pom)39

[Edited 2006-01-10 03:05:03]
We, the undersigned, do hereby consent.....
 
Klaus
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RE: British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 11:05 am

The ECU was simply the initial, somewhat abstract name of what has now become the €uro. European Currency Unit - Wikipedia, the free encyclopedia

Devaluations generally happened when the pegs "didn't hold", when the strains between economic reality and the nominal pegged value became too large to bear (at least in the view of the respective politicians and/or central bankers).

Let's see if we can get this over with in a halfway civilized way, even though several red buttons have already been triggered in the thread starter...! Big grin
 
Banco
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RE: British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 5:44 pm

Quoting Derico (Thread starter):
Yet according to this article it has suffered repeated crisis and devaluations since WWII, in the late 40s, in the 60s, 70s, 80s, and even in 1992 (which I didn't know), apparently involving George Soros, which ended forcing the country to 'devalue' the currency. In many of those instances, specially in the 60s and 70s, Britain as did many other European countries at the time, asked the IMF for bailout loans... Now I didn't know about that and thought it was really funny, since many in Europe use IMF bailouts as indications of a country's 'thirdworldlyness'

It's in various parts. The British economy was utterly destroyed by the Second World War, and unlike most of the rest of the continent, did not initially receive huge cash injections from the US. As a result, Britain very quickly fell behind the economies of the rest of the continent, and by 1949 a devaluation was clearly needed.

In the decades afterwards, a combination of the bad post-war start, fractious industrial relations and poor economic management worsened the economic position, and in those days of fixed exchange rates, successive devaluations followed.

The IMF loan was probably the nadir of British economic fortunes (it's been on a relative upturn ever since) and the picture of a British Chancellor "cap in hand" to the IMF remained a powerful political image for many years afterwards.

The last "devaluation" mentioned, in 1992, wasn't really quite the same. The Pound had been floating against the international currency markets since 1973, but the decision was taken to join the Exchange Rate Mechanism of the European Monetary System in the late 1980's. This meant that currency only floated within a set band against each other, and was meant to provide exchange rate stability. The problems here were several:

The pound tended to mirror the US dollar more closely than it did individual European currencies (changed slightly with the advent of the Euro) and so the level of movement against them was much more volatile than was thecase with moist European currencies. The other major problem was that the rate at which the UK went in was much too high, and so there was scope to put Sterling under pressure.

The UK was, to all intents and purposes, kicked out of the ERM by speculator pressure. It was a bloody stupid thing to do to join it in the first place, and the fact that Britain has done very nicely thank you by returning to its position as a floating currency is strong evidence of the folly of joining in the first place.
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N1120A
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RE: British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 6:02 pm

Quoting Derico (Thread starter):
And to Europeans in general, what was the European Currency Unit??

The ECU is what became the Euro. Originally it was thought that the unit would be called the Ecu (pronounced the eh-koo) which is the name of a rather old French currency unit but the protest of other European Community members changed it to the Euro

Quoting Banco (Reply 4):
The UK was, to all intents and purposes, kicked out of the ERM by speculator pressure. It was a bloody stupid thing to do to join it in the first place, and the fact that Britain has done very nicely thank you by returning to its position as a floating currency is strong evidence of the folly of joining in the first place.

Actually, the main issue with the Pound and the peg to the Mark was the one that also caused the advent of the Euro. Irresponsible monetary policy by the Germany CDU government
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ME AVN FAN
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RE: British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 6:06 pm

Let's see. One Pound had 20 Shilling and each Shilling 12 Pennies. AFTER the decimalisation, the 1 Shilling piece was 5 Pence and the 2 Shilling piece was 10 Pence. The 6-pence piece was worth 2,5 Pence only. The change was done by the government of Edward Heath in about 1969/70 and already was fully in place when I visited London for the first time in autumn 1971 .
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And in 1971/72 those folks in the city still had those "Melon-Hats" on their heads !
 
Banco
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RE: British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 6:10 pm

Quoting N1120A (Reply 5):
Actually, the main issue with the Pound and the peg to the Mark was the one that also caused the advent of the Euro. Irresponsible monetary policy by the Germany CDU government

It depends whether you believe they have a responsibility to the other nations or not, doesn't it?  Wink
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scbriml
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RE: British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 6:13 pm

Quoting ME AVN FAN (Reply 6):
And in 1971/72 those folks in the city still had those "Melon-Hats" on their heads !

Do you mean a bowler hat?  wink 

They would have also had a rolled up umbrella. In a few years they would be using mobile phones the size of a brick with an attached battery the size of a car battery.

 old 
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N1120A
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RE: British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 6:14 pm

Quoting Banco (Reply 7):
It depends whether you believe they have a responsibility to the other nations or not, doesn't it?

When you are bound by treaty, yes, you do have responsibility to other nations. In accepting the position as the peg currency, they gave up monetary policy autonomy. Kohl's actions that led the Bundesbank to shoot up interest rates in an attempt to keep Germany from going bankrupt were absolutely irresponsible and wrecked the entire European currency regime.
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Banco
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RE: British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 6:18 pm

Quoting N1120A (Reply 9):
When you are bound by treaty, yes, you do have responsibility to other nations. In accepting the position as the peg currency, they gave up monetary policy autonomy. Kohl's actions that led the Bundesbank to shoot up interest rates in an attempt to keep Germany from going bankrupt were absolutely irresponsible and wrecked the entire European currency regime.

I'm not arguing with you. But when the same point was made by the British government at the time, rather forcefully, the Germans disagreed.

As it turned out, they did us a pretty big favour.
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gkirk
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RE: British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 6:23 pm

The best thing about the Pound?




It's not the Euro  box  fight 
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sebolino
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RE: British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 6:50 pm

Quoting Gkirk (Reply 11):
The best thing about the Pound?


It's not the Euro

Well if it is the best thing, it's rather slim !
 
racko
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RE: British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 7:29 pm

Quoting Banco (Reply 10):
As it turned out, they did us a pretty big favour.

We're so nice to you and you still don't like us  Sad
 
cornish
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RE: British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 7:36 pm

Quoting Racko (Reply 13):
We're so nice to you and you still don't like us

We like you more than the French if that's any consolation Big grin
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Banco
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RE: British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 7:40 pm

Quoting Cornish (Reply 14):
We like you more than the French if that's any consolation

I wouldn't think so. We like bird 'flu more than the French. Big grin
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ClassicLover
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RE: British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 8:36 pm

The pound is a pain... only because the Australian dollar is usually only worth about 40p. Expensive London becomes unbelievably expensive when converted into our poor Aussie dollars.

Damn strong currency, the pound  Smile

Trent.
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cornish
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RE: British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 8:40 pm

Quoting ClassicLover (Reply 16):
The pound is a pain... only because the Australian dollar is usually only worth about 40p. Expensive London becomes unbelievably expensive when converted into our poor Aussie dollars.

Damn strong currency, the pound

That's your problem - works nicely for us when we go away  Wink
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ME AVN FAN
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RE: British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 8:41 pm

Quoting Scbriml (Reply 8):
Do you mean a bowler hat? wink
yes, of course, but I could NOT remember this word --- as bowling to me has a different meaning !

They would have also had a rolled up umbrella.

sure, even at good weather in sunshine --- and of course in full black !

And the whole attire did NOT hinder them from eating some smelly fish and chips for lunch .....................
 
jush
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RE: British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 9:12 pm

Quoting Jafa39 (Reply 2):
Pounds were also known as "Quids"

pounds are still calles quid.... at least in Somerset.

Regds
jush
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ClassicLover
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RE: British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 9:47 pm

Quoting Cornish (Reply 17):
That's your problem - works nicely for us when we go away

lol... oh, I know... time to get work in the UK methinks  Smile

Trent.
I do quite enjoy a spot of flying - more so when it's not in Economy!
 
BlackandWhite
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RE: British Pound: Can Someone Explain It To Me?

Tue Jan 10, 2006 11:30 pm

it may interest you to know that banks in Scotland such as the Royal Bank of Scotland and the Clydesdale Bank issue banknotes there are still in circulation £1 notes although now uncommon , as well a £5 , £10, £20 technically these notes are classed as Bills of exchange they are valid basically only in Scotland , but can be exchanged for sterling notes at any bank in england.
Similiarly the Bank Of Northern Ireland issues its own notes again only valid in N Ireland
 
Dougloid
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RE: British Pound: Can Someone Explain It To Me?

Wed Jan 11, 2006 12:08 am

Quoting Banco (Reply 15):
Quoting Cornish (Reply 14):
We like you more than the French if that's any consolation

I wouldn't think so. We like bird 'flu more than the French.

You folks in the Islands are hilarious. You really ought to get out more. The only time you can get your shit together is if it's a Yankee slugfest.

Which is cool. That's OK. We won't mention Yorktown or New Orleans.

Just kidding, all in good fun.

Quoting ME AVN FAN (Reply 18):
And the whole attire did NOT hinder them from eating some smelly fish and chips for lunch .....................

Sod off, if I may be permitted to borrow a British country witticism.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
jush
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RE: British Pound: Can Someone Explain It To Me?

Wed Jan 11, 2006 12:36 am

Quoting N1120A (Reply 5):
The ECU is what became the Euro. Originally it was thought that the unit would be called the Ecu (pronounced the eh-koo) which is the name of a rather old French currency unit but the protest of other European Community members changed it to the Euro

I thought it is pronounced ehhh-k���h or was.
Anyway anyone here remember the EURO game published by the EU governments where you had to play in and around europe travel to every capital in Europe and you had to answer country-special questions.

This game was awesome and was calle Europa (Europe) in Germany.

Regds
jush

EDIT: i couldn't find the game again not even via google. If any has this game.
Pls send it to meeeeee..
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ME AVN FAN
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RE: British Pound: Can Someone Explain It To Me?

Wed Jan 11, 2006 1:53 am

Quoting Dougloid (Reply 22):
permitted to borrow a British country witticism

sounds more like an Iowa colloquialism ...............
 
ME AVN FAN
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RE: British Pound: Can Someone Explain It To Me?

Wed Jan 11, 2006 1:57 am

Quoting BlackandWhite (Reply 21):
Royal Bank of Scotland and the Clydesdale Bank issue banknotes there are still in circulation

when I in the 80ies visited Edinburgh and Glasgow, there were banknotes of the Bank of Scotland, the Royal Bank of Scotland and the Clydesdale Bank. Have they stopped issuing THEIR banknotes in the meantime ?
 
Dougloid
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RE: British Pound: Can Someone Explain It To Me?

Wed Jan 11, 2006 3:00 am

Quoting ME AVN FAN (Reply 24):
sounds more like an Iowa colloquialism ...............

Nope. We're far more direct than that here but because I didn't like being in the doghouse for a week the last time I shall hold my peace and let you wonder what it might be.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
gkirk
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RE: British Pound: Can Someone Explain It To Me?

Wed Jan 11, 2006 3:05 am

Quoting ME AVN FAN (Reply 25):
Have they stopped issuing THEIR banknotes in the meantime ?

No, The Bank of Scotland, Royal Bank of Scotland and the Clydesdale Bank still issue their own notes.
Got to love the £1 notes only found in Scotland  Wink
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Banco
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RE: British Pound: Can Someone Explain It To Me?

Wed Jan 11, 2006 3:32 am

Quoting Gkirk (Reply 27):
Got to love the £1 notes only found in Scotland

They were actually withdrawn from circulation 30 years ago, but the tight-fisted buggers won't let go of them...  Wink
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ME AVN FAN
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RE: British Pound: Can Someone Explain It To Me?

Wed Jan 11, 2006 3:38 am

Quoting Dougloid (Reply 26):
being in the doghouse for a week the last time

you were in the DOGHOUSE ??? I do NOT wonder about that expression in the posting before but I DO wonder about what trouble you felt "last time"

Quoting Gkirk (Reply 27):
The Bank of Scotland, Royal Bank of Scotland and the Clydesdale Bank still issue their own notes.
Got to love the �otes only found in Scotland Wink

a bit strange when seeing it for the first time, I admit, but something very special in fact. They have it with the Euro-coins but not or not yet with the Euro banknotes, which is regrettable.
 
Derico
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RE: British Pound: Can Someone Explain It To Me?

Wed Jan 11, 2006 4:03 am

Quoting Banco (Reply 4):
t's in various parts. The British economy was utterly destroyed by the Second World War, and unlike most of the rest of the continent, did not initially receive huge cash injections from the US. As a result, Britain very quickly fell behind the economies of the rest of the continent, and by 1949 a devaluation was clearly needed.

How come? Shouldn't Britain have been showered with reconstruction money since they bore the brunt of the resistance to Germany??

Quoting Banco (Reply 4):
The UK was, to all intents and purposes, kicked out of the ERM by speculator pressure. It was a bloody stupid thing to do to join it in the first place, and the fact that Britain has done very nicely thank you by returning to its position as a floating currency is strong evidence of the folly of joining in the first place.

The current British economy is really doing quite well as I've been told, and the pound is one of the most credible currencies in the world. That is why I was curious about how was this achieved following what appear to be some stormy times in previous years.

Quoting Jafa39 (Reply 2):
It worked in funny ways, there were 2 farthings to a halfpenny, two halfpennies to a penny (d'uh!) and 12 pennies to a shilling, there were 20 shillings to a pound and 1 pound and 1 shilling to a guinea. Pounds were also known as "Quids" and shillings were known as "Bobs"

So it wasn't really based on any numerical system at all, it seems almost random. I don't see a pattern to it so it seems it had to be memorized?

Quoting Gkirk (Reply 11):
The best thing about the Pound?

It's not the Euro

Oh I forgot to ask what's with the bank notes used in Scotland and other places? I heard they are different than those in England... I've been to England but not Scotland (yet), so is this true and if so I guess Scottish notes can't be used in England, but can English notes be used reversely??
My internet was not shut down, the internet has shut me down
 
Banco
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RE: British Pound: Can Someone Explain It To Me?

Wed Jan 11, 2006 4:15 am

Quoting Derico (Reply 30):
How come? Shouldn't Britain have been showered with reconstruction money since they bore the brunt of the resistance to Germany??

Because the money was intended to re-construct the defeated nations of Europe rather than the victors. The US viewed Britain as a rival, not a supplicant. Shortly after the war ended, the Labour government had to go to the US and tell them that Britain was completely exhausted and utterly bankrupt. Every single penny had gone on fighting the war, and the country was in no position to deal with the peace. It took the US quite a while to realise the gravity of the situation; this wasn't Britain pleading poverty, the country was absolutely on the edge- but you have to remember that at the outbreak of war, the UK was still arguably the world's premier power. The US was trying to deal with Britain the partner and rival, not Britain the nation on its knees.

It is somewhat ironic that despite being one of the victors, Britain did far, far worse out of the war than Germany did. For one thing, American aid to Britain was not a gift, it was a loan. The UK is due to pay back the last of that loan at the end of this year. That's not to criticise the US, once they realised how badly Britain really was struggling, they pulled out all the stops - but always with the strategic view, as they should, of course.
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Dougloid
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RE: British Pound: Can Someone Explain It To Me?

Wed Jan 11, 2006 5:18 am

Quoting ME AVN FAN (Reply 29):
you were in the DOGHOUSE ??? I do NOT wonder about that expression in the posting before but I DO wonder about what trouble you felt "last time"

Well, there's a fella on the civil aviation board who gets very upset when someone uses his name in a post, even if it's in jest or fun...he whinges to the moderators, one of whom takes a more than passing interest in the stuff I post...


So now I make a point of whingeing about every damned post there that chaps my hide at all. I'm a damned pest.

So...i've been spending more time over here where people's skins are a bit thicker and there's more humor-even if it is of the sophomoric latrine variety.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn
 
jafa39
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RE: British Pound: Can Someone Explain It To Me?

Wed Jan 11, 2006 5:45 am

Quoting Banco (Reply 4):
moist European currencies

Now there's and image to conjure with!  Wink

Quoting Derico (Reply 30):
So it wasn't really based on any numerical system at all, it seems almost random. I don't see a pattern to it so it seems it had to be memorized?

Oh there was a pattern alright, a very English pattern!! Oddly enough when we went decimal, some old people just couldn't get their heads round counting in tens! I was at primary school and our first thoughts were "Yay, no more 12 times table!"

I think the odd values were due to the currency system being very old and the larger units just got tacked on as time went by.

Remember at this time there were also 16 ounces to a pound, 110 pounds in a hundredweight, 20 hundredweight to a ton, 8 pints to a gallon, and we even had smaller fluid measurements like "Gills", the whole country was divided up into random pieces, some "traders" are fighting with all their might to preserve this archaic system of measurement and refusing to sell fruit in Kilos! Decimalisation was the best thing ever to our schoolkid minds!
We, the undersigned, do hereby consent.....
 
ltbewr
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RE: British Pound: Can Someone Explain It To Me?

Wed Jan 11, 2006 6:13 am

As far as I know, the USA since several years after it's creation has always had a decimial money system, although Federal bills and coins were not developed until well into the 19th Century. In my travels to the UK since 1983, I recall seeing some of the old smaller coins like the pence, the halfpenny, the shilling = 5 pence and so on. In old advets - pre decimal - the pricing of many goods were very clumsy.
Originally, I believe the Pound = an english pound of Silver, hense the term 'Sterling' with the pound references. A pound of silver would be broken up if it had to be into 1/20th units which would then refer to a shilling.
I believe that the UK was one of the last major countries to convert to decimal money units and it took a long time to do that! I do hope they don't convert to the Euro so as not be dragged any further into EC mess.
 
jush
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RE: British Pound: Can Someone Explain It To Me?

Wed Jan 11, 2006 6:34 am

Quoting Banco (Reply 31):
Because the money was intended to re-construct the defeated nations of Europe rather than the victors. The US viewed Britain as a rival, not a supplicant. Shortly after the war ended, the Labour government had to go to the US and tell them that Britain was completely exhausted and utterly bankrupt. Every single penny had gone on fighting the war, and the country was in no position to deal with the peace. It took the US quite a while to realise the gravity of the situation; this wasn't Britain pleading poverty, the country was absolutely on the edge- but you have to remember that at the outbreak of war, the UK was still arguably the world's premier power. The US was trying to deal with Britain the partner and rival, not Britain the nation on its knees.

It is somewhat ironic that despite being one of the victors, Britain did far, far worse out of the war than Germany did. For one thing, American aid to Britain was not a gift, it was a loan. The UK is due to pay back the last of that loan at the end of this year. That's not to criticise the US, once they realised how badly Britain really was struggling, they pulled out all the stops - but always with the strategic view, as they should, of course.

That was a really nice assesment of that situation that days. I'm glad that you're already in my RR list.
It's really kinda strange if you think that we started the war and received so much money from the Marshall-Plan. So by the mid 50s while Britain was struggling and was rationalising Germany was in the middle of what we called the "Wirtschaftswunder".
It seems quite unfair.

Regds
jush
There is one problem with airbus. Though their products are engineering marvels they lack passion, completely.
 
Klaus
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RE: British Pound: Can Someone Explain It To Me?

Wed Jan 11, 2006 6:49 am

Quoting LTBEWR (Reply 34):
I do hope they don't convert to the Euro so as not be dragged any further into EC mess.

When you leave ideology aside and are looking for the longer term, things look a little differently.

The Pound is still a rather small currency and thus much more vulnerable than the €uro, much the same way it had become a target of speculation before.

The current economic situation can't be taken for granted, either. Much of it is boosted and underwritten by a real estate boom that has catapulted british prices to levels which some deem to be unsustainable. Whether the correction will be gradual or abrupt and whether it comes at an opportune time or under unfortunate circumstances remains to be seen.

From an egoistic continental point of view I'd rather prefer the correction to happen before Britain joins the €uro. But we'll see.

All in all it's always a mistake to simply extrapolate a snapshot of the present situation into the future - that almost never works.
 
Dougloid
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RE: British Pound: Can Someone Explain It To Me?

Wed Jan 11, 2006 7:53 am

Quoting Jush (Reply 35):
That was a really nice assesment of that situation that days. I'm glad that you're already in my RR list.
It's really kinda strange if you think that we started the war and received so much money from the Marshall-Plan. So by the mid 50s while Britain was struggling and was rationalising Germany was in the middle of what we called the "Wirtschaftswunder".
It seems quite unfair.

Not really. My mom who is 85 has a bit of money put by and she sent me her last will and testament with the explanation "You're not getting any of this because you can take care of yourself. Your sister, who cannot take care of herself, will get it."

Thanks, Mom.
If you believe in coincidence, you haven't looked close enough-Joe Leaphorn

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