The world is changing. For 200 years England was the most powerful force in managing world trade, certainly together with the other major world powers. The trade certainy wasn’t all fair, but the monetry system worked. If the king increased taxes, the workers would have to earn money and then give the actual coins to the kings men. Ask too much and revolution would threaten. At least then it was fairly clear when you were being robbed.
For the last centuary world trade has been based mainly on the dollar. First it was backed by gold, and this was abandoned in the 1971. There have been many financial booms and busts. A gram of gold in 1914 cost about half a crown, now it costs £ 33 or 264 times as much. Or, a penny in 1914 would buy more than a pound buys now. In fact gold has risen in price in real terms, but even so the pound has shrunk to about 1/100th of its value in 1914.
The Chineese used american dollars for their international trade and bought US bonds with their savings for many years. They stopped last year as they felt the rate of devaluation of the dollar exceeded the interest and so they are loosing money.
Between 1999 and 2002 Gorden Brown sold 60% of the UK’s gold reserves. The UK sold about 395 tons of gold at an average price of about US$275 per ounce. current price $1.600; The UK holds 310 tons of gold reserves. France for example has 2435 tons.
The revolutionary government will abolish working tax credits and instead give workers in manufacturing and construction industries, a new currency equivalent to the victorian shilling, which will be legal tender and exchange initially as one shilling equalls five pounds. It will be issued in real sterling silver coins containing 5.24 grams of silver. Each eligible worker will receive 5 shillings a week from the government via the post-ofice as a supplement to their wages. No bank account may be created in the new currency. Credit unions may open accounts, as these have to be fully backed by sterling or storing the new coins.
