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Current value of money in any given past year?

In message , Alec McKenzie writes

Incorrect. They are NOT both pieces of paper. The majority of the money supply isn't paper or any tangible object. 'Money Supply' is measured in varying ways, M0, M1 etc.,. and even the narrowest measure, M0, includes bankers deposits at the BoE. 'Money Supply' can include customers deposits at banks. A £1 note creates about £9 of 'money' because when it is paid into a bank the bank then lends some it to somebody else who gives to another person who pays it into their bank, which then lends it etc.,. The bank discount rate (known a Repo, Base or Minimum Lending Rate et.c, over the years) controls how many times the £1 can circulate.

Reply to
john boyle
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rougher than a badgers arse and thus not at all a guide to printing money.

saying its a rough guide is equating it to be the main cause. If it wasnt, it wouldnt be a rough guide

Reply to
Tumbleweed

A bank-note is a piece of paper. A gilt-edged stock certificate is a piece of paper. So they are both pieces of paper. Right?

Reply to
Alec McKenzie

I think there we may be talking at cross purposes here. To clarify.

As I said, you are confusing 'money supply' with bits of paper. I am saying that 'money' is not 'paper'.

Gilt edged stock most certainly isn't money.

You said "To be more accurate, inflation is the action by governments to raise their finances by printing pieces of paper" This is not correct. Inflation is the increase in the money supply over and above that justified by the economy.

Whilst Governments 'raise' money for their own use by printing and issuing gilt edged stocks this action has very little direct effect on the money supply or inflation although the purposes to which the money raised is put might do.

Printing bank notes has a direct effect on the money supply but it is only a constituent part. Bank Lending is the major part of the money supply and fluctuations in it have a direct effect on inflation which is why interest rates are used to control it. The bit represented by paper and coins is quite small.

Reply to
john boyle

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