Monday, 31 March 2008

WRONG: Money is printed by the government

The Royal Mint at Llantrisant, South Wales (or “the hole with the mint in it”, as more than one disappointed visitor has called it) issues about 1,500 million British coins per year, which sounds like a lot till you realise that up to 6.5 billion 1p coins alone have gone missing since they were introduced in 1971. Though owned by the Government, the Royal Mint is a business – it made over a million pounds in profit in 2006-7 by also making coins and blanks for foreign countries, including France, Belgium and Austria. Presumably not Argentina though.

Notes are a different matter entirely. Bank Of England notes are made exclusively in Loughton, Essex by a division of De La Rue plc, a company that prints money for 150 countries. While the Bank of England is the only bank currently licensed to issue notes (in England - see here for a list of others), this wasn’t always the case. In 1921, the last private bank entitled to do so, Fox, Fowler & Co of Somerset, merged with Lloyds and lost its privileges.

At the Bank of England’s Mutilated Notes Department in Leeds, they use high-speed sorting machines to remove from circulation any notes that are falling apart, dirty or counterfeit, and £15million worth of notes annually are removed. They used to be burned as heating fuel for the Loughton offices, but these days they are shredded there and in Leeds and used as landfill, fuel or compost.

In America, on the other hand, shredded dollars are turned into construction materials or enterprisingly sold back to tourists as bags of “shreddies” at the Federal Reserve Bank in Washington DC.

In China, “hell” bank notes – not legal tender, except in the underworld – are burned as a way of getting money to your deceased relatives. While the workings of the infernal economy remain shrouded in mystery, the fact that these notes are available in denominations of up to $8billion indicates that the Lord Of Hell needs to get a tighter rein on inflation. Such is the problem of smoke pollution on religious festival days that the Bank Of Taipei has introduced Bank Of Hell credit cards.

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