• This topic has 44 replies, 32 voices, and was last updated 3 years ago by Marin.
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  • Bank of England has lost £50 billion down the sofa. Easily done.
  • Poopscoop
    Full Member

    Yeah, yeah I know. It’s never black or white but a varying shade of grey.

    Anyway, I hold it up for stw scrutiny!

    https://www.bbc.co.uk/news/business-55173402

    frankconway
    Full Member

    I’ll look under the mattress in the morning…

    mrjmt
    Free Member

    only about 15% of the US currency supply can be accounted for

    blimey!

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    pondo
    Full Member

    Deflection from the PPE procurement scandal? “We haven’t wasted billions – THEY’VE wasted billions!”

    MoreCashThanDash
    Full Member

    Well, £20 of it has been in my wallet since just before lockdown, and there’s an emergency £10 in my saddlebag.

    Can’t help with the rest, sorry.

    Onzadog
    Free Member

    I also keep emergency cash on each bike. How many members here? If there’s enough of us, perhaps that’s the issue.

    TheWrongTrousers
    Full Member

    Can they let us know when they decide to change their lounge furniture please ?

    MrPottatoHead
    Full Member

    Interested to see where polymer notes factor into this as older notes are no longer legal tender. I believe it can still be exchanged but should be easy to spot when done in large quantities.

    So yeah – if there is a concern about criminal masterminds stockpiling notes, just make the notes worthless.

    FuzzyWuzzy
    Full Member

    I don’t understand why this is even a thing let alone why a committee of MPs are commenting on it? Why/how should the BoE know where bank notes it issues end up? Short of putting tracking chips on every note I don’t see how they’re supposed to know where notes end up? Sure if, in Bad Boys 2 style, criminals have attics full of cash it’s a bit of an issue but it’s still not a BoE issue.

    matt_outandabout
    Full Member

    I find the old £50 notes more comfortable to sleep on.

    I’ve ‘found’ £1m.

    https://en.m.wikipedia.org/wiki/K_Foundation_Burn_a_Million_Quid

    squirrelking
    Free Member

    only about 15% of the US currency supply can be accounted for

    blimey!

    Not surprised, it’s the grey currency everywhere outside of Europe, every Russian and Ukrainian I ever sailed with was paid in USD and took it all home as cash.

    As said before this is just a shitty distraction technique to divert attention away from the government, and with Carney going its a perfect time to throw some shit that he’s not going to bother fighting.

    greyspoke
    Free Member

    I don’t understand why this is even a thing let alone why a committee of MPs are commenting on it? Why/how should the BoE know where bank notes it issues end up? Short of putting tracking chips on every note I don’t see how they’re supposed to know where notes end up? Sure if, in Bad Boys 2 style, criminals have attics full of cash it’s a bit of an issue but it’s still not a BoE issue.

    Indeed, there appears to be a lack of understanding of what cash is (not the same thing as money, though part of it).

    This issue was raised in the NAO report (Recommendations, para 29(e) on p. 16)

    e
    The Bank, working with other public authorities, should improve its
    understanding of both the factors that are driving the increase in demand for
    notes, and also who is holding the approximately £50 billion worth of notes
    where there is currently a lack of information. This work might help inform
    wider policy, for example on tax evasion.

    The shock horror stuff comes from the committee not the NAO.

    If you want to do something about the cash/black economy, abolish cash. They sort of did that in India recently.

    lucky7500
    Full Member

    I don’t understand why this is even a thing let alone why a committee of MPs are commenting on it? Why/how should the BoE know where bank notes it issues end up? Short of putting tracking chips on every note I don’t see how they’re supposed to know where notes end up? Sure if, in Bad Boys 2 style, criminals have attics full of cash it’s a bit of an issue but it’s still not a BoE issue.

    That is pretty much what the Bank of England have said. Heard a radio news report earlier where the official comment was* ‘people don’t have to explain why they are holding on to cash’

    *Me paraphrasing.

    I’ll have to check now but I think I still have a couple of hundred pounds in £50 notes stashed somewhere in case of emergencies. It came from a time when my card was eaten by cash machines several times and then stolen and I realised that I had no way of paying for anything until a new card arrived.

    poly
    Free Member

    Unless they are circulating on the grey/black ecconomy – isn’t this the opposite of Quantitative Easing and we should be celebrating it? if they are in being used nefariously that seems like its a policing / HMRC issue and the government rather than the bank should be addressing it.

    MoreCashThanDash
    Full Member

    I don’t understand why this is even a thing let alone why a committee of MPs are commenting on it? Why/how should the BoE know where bank notes it issues end up? Short of putting tracking chips on every note I don’t see how they’re supposed to know where notes end up? Sure if, in Bad Boys 2 style, criminals have attics full of cash it’s a bit of an issue but it’s still not a BoE issue.

    Absolutely this.

    Vaguely related anecdote – another of my recent HMRC trainee colleagues was commenting on an internal article on the work experience programme we offer for kids in pupil referral units, to try and turn them around.

    Our more cynical manager, with a long career in HMRC and fraud/evasion mentioned that he’d been involved in the project a year or two back. He realised that the kids didn’t really want to listen to him bigging up a career as a tax man, so started talking to them about their experiences of crime. Over the next hour these 15-16 year olds explained how to move and launder cash from drug deals, including using cash machines at home and abroad.

    epicyclo
    Full Member

    Probably down the sofa of one of Dominic’s mates…

    Spud
    Full Member

    Have they looked in the Cayman Islands under Rees-Smug…

    dannybgoode
    Full Member

    Does seem to be a story blown out of all proportion to be fair and I think the BoE’s closing statement sums it up:

    A spokesman for the Bank said: “It is the responsibility of the Bank of England to meet public demand for banknotes. The Bank has always met that demand and will continue to do so. Members of the public do not have to explain to the Bank why they wish to hold banknotes. This means that banknotes are not missing.”

    reluctantjumper
    Full Member

    There are lots of people in this country like my uncle. He doesn’t trust the banks with his money at all so every time his pensions and benefits get paid into his only account he withdraws all of it except enough to cover his bill payments. It is then stashed in bundles around his bungalow! Last time he mentioned it he said he had over £17,000 stashed in various places. We’ve all tried explaining to him that it’s protected in the bank whereas if he gets broken into at home it’s all gone but he won’t listen at all. A few of his friends are the same. Add in the criminal fraternity and the £50bn figure is pretty easy to believe.

    footflaps
    Full Member

    Not surprised, it’s the grey currency everywhere outside of Europe, every Russian and Ukrainian I ever sailed with was paid in USD and took it all home as cash.

    Watching Narcos it seems Escoba buried several billion all over the countryside, some of which just rotted away!

    P-Jay
    Free Member

    When you see figures like that it really highlights just how big the global grey/black market is.

    The article is a bit light on detail, does the BOE check serial numbers and what time period are we talking about, are they still counting from when fivers were twice the size they are now and £50 notes felt like they were about A5?

    £50bn is about £1000 in cash for every adult in the UK. Now I’m sure we’ve all lost a fiver now and then, maybe even ‘lost’ in a way it never reenters the economy, but a grand isn’t a small amount of money.

    Even the stereotypical dodgy builder who only takes cash and pays his guys the same way, eventually they’ll spend that money in a shop where it will reenter the economy.

    If I pulled my tin foil hat on especially tightly I might wonder if, given the scale of the 3 financial crisis the UK has dealt with / dealing with (Credit Crunch, Covid, Brexit) maybe in some dark, nondescript room in a dark nondescript building in whitehall some people who’s names have never appeared on a ballot paper decided that whilst QE was useful, it wasn’t quite as useful as actually just releasing freshly printed BOE notes into the economy someway that avoided the usual routes, it would have to be done with absolute secrecy.

    NewRetroTom
    Full Member

    Another side effect of low inflation and associated low interest rates and expectations that it will continue. If you’re only getting 0.5% interest on your savings there isn’t a lot of incentive to keep it in the bank rather than under the bed.

    footflaps
    Full Member

    I would guess the people who don’t use banks fall into three categories, those denied an account, those who don’t trust banks (and therefore don’t care about interest rates) and the black market.

    Wouldn’t surprise me if we had quite a few people with 10s of £k as life savings stuffed under the bed / in safes etc. They sell a lot of safes….

    Trimix
    Free Member

    Interest rates are so low and branches are closing fast, people cant and don’t bother to keep Cash in a bank anymore. We are also not spending cash like we did now its all chip & pin. So its fast becoming pointless paper.

    revs1972
    Free Member

    Interested to see where polymer notes factor into this as older notes are no longer legal tender

    Phew, just fact checked that for £20 notes and they are still legal tender…..for now

    good job , cos i got a couple of bags worth for paying the local tradies 😉

    Twodogs
    Full Member

    Carney going its a perfect time to throw some shit that he’s not going to bother fighting.

    Carney hasn’t been at the BoE since March

    stumpyjon
    Full Member

    It’s about time we did what India did and get rid of the £50 note at least. If nothing else Covid has shown us cashless works well and is in everybodies interest whk isnt trying tk avoid tax etc.

    Excuses about not trusting banks and low interest rates are just excuses. People hoarding cash for these reasons need to be protected from themselves like any other vulnerable person.

    There’s no reason why we can’t go relatively cashless now, for people who can’t get bank accounts the government should be providing a basic access system with a debit card. Anyway most benefits are paid into a bank account now.

    Agree with other comments this is just MPs being nobs and grandstanding, been a lot of it on various committees over the last few years.

    thebibbles
    Full Member

    Surely everyone has 10k in cash, a couple of sets of clothes and a fake passport in their Go Bag?

    footflaps
    Full Member

    Surely everyone has 10k in cash, a couple of sets of clothes and a fake passport in their Go Bag?

    You won’t get many nights at the Savoy for £10k…..

    dannybgoode
    Full Member

    Surely everyone has 10k in cash…

    £9999 – you have to declare £10k + at airports. Plus the final £9 is in pound coins – you need them for the damn luggage trolleys…

    poly
    Free Member

    It’s about time we did what India did and get rid of the £50 note at least. If nothing else Covid has shown us cashless works well and is in everybodies interest whk isnt trying tk avoid tax etc.

    I’m not sure how getting rid of one denomination solves that problem? AFAIK we still have £100 notes in scotalnd, yet the signs in the shops are “no BOE £50’s accepted”, and that’s about counterfiets not laundered money.

    Excuses about not trusting banks and low interest rates are just excuses. People hoarding cash for these reasons need to be protected from themselves like any other vulnerable person.

    Wow, that’s a rather far out view. I don’t get the interest rate argument – cash at home is earning nothing, but why should someone be forced to use a bank just because you do. I’m not worried about my bank going bust (I don’t have anything close to the protected limits in there) but I do find it creepy that my Bank know when my house insurance is due for renewal and ask if I’d like to switch to them.

    There’s no reason why we can’t go relatively cashless now, for people who can’t get bank accounts the government should be providing a basic access system with a debit card.

    who pays for providing that service? what about people who are homeless/no-fixed abode – what do they do if the card stops working? such an approach might treat those in very rural areas less favourably.

    footflaps
    Full Member

    I don’t understand why this is even a thing let alone why a committee of MPs are commenting on it? Why/how should the BoE know where bank notes it issues end up? Short of putting tracking chips on every note I don’t see how they’re supposed to know where notes end up? Sure if, in Bad Boys 2 style, criminals have attics full of cash it’s a bit of an issue but it’s still not a BoE issue.

    +1

    The job of the BoE is not to decide where you chose to store your cash.

    stumpyjon
    Full Member

    I’m not sure how getting rid of one denomination solves that problem?

    Because large denomination notes are the currency of the black market, tax evasion. Get rid of them after an amnesty and it makes it more difficult to handle large amounts of cash illicitly. This is why India did it, to destroy the cash economy which was thriving and the associated tax evasion. Also rendered a lot of ill gotten fortunes worthless, if the crims wanted to get the money into the legitimate financial world they had some rather difficult questions to answer, like where did all this money suddenly come from?

    but why should someone be forced to use a bank just because you do. I’m not worried about my bank going bust (I don’t have anything close to the protected limits in there) but I do find it creepy that my Bank know when my house insurance is due for renewal and ask if I’d like to switch to them

    Because for a lot of people it’s actually in their interest, see the post above about an elderly relative with £17k dotted around the house. Why would your bank know about your house insurance, they won’t scoop that from your financial transactions, it would be a blatant breach of GDPR, I’ve never had a bank offer me something like that, my guess is you’ve put your details into a comparison site or similar and not ticked the right boxes.

    who pays for providing that service? what about people who are homeless/no-fixed abode – what do they do if the card stops working? such an approach might treat those in very rural areas less favourably.

    The banks already are for most people and for those who can’t get some form of bank account the government should as part of it’s social responsibility (which I think they already have in the form of basic bank accounts), any cost would be more than outweighed by forcing more transactions through transparent channels rather than tenners in a brown envelope. I don’t get your point about rural areas, cards work the same everywhere, it’ll actually level things up.

    P-Jay
    Free Member

    It’s about time we did what India did and get rid of the £50 note at least. If nothing else Covid has shown us cashless works well and is in everybody’s interest who isn’t trying to avoid tax etc.

    The EU scrapped the €500 note because it was a bit too convenient for criminals, you could have a million euros for 2kgs of €500 notes, where as a million pounds in £50 notes is about 22Kgs and 50Kgs in £20 notes.

    The first you can hide on you, the second needs a decent sized case, but a million quid in £20 notes is a pretty big thing (I saw a million in a bank once, it makes you laugh in films when someone passes a case with 5 million dollars in or or whatever.) there’s a scene in Rocknrolla when Gerard Butler steals £7m in a briefcase from two accountants, and then later on, taps £2m of it to Mark Strong in sports bag. Even in £50 notes that’s 40Kgs of notes that slides along the floor with ease after a gentle kick.

    Anyway, Peter Sands, former chief executive of Standard Chartered bank, once said about high value bank notes “They play little role in the functioning of the legitimate economy, yet a crucial role in the underground economy,” he said. “The irony is that they are provided to criminals by the state.”

    Another irony though is that there’s almost an unwritten acknowledgement amongst economists that the Black and Grey Market, instead of being separate to the wider economy is an integral part of it. Maybe that’s why the BOE is releasing a new £50 note next year, much harder to forge (which doesn’t help the economy) but much better for your average Powder Wholesaler as it’s smaller, lighter and conveniently waterproof, should you decide the safest place to keep your savings is buried in the back garden.

    Edukator
    Free Member

    I don’t have a bank account in the UK so keep some notes. Enough for a week in the UK without having to worry about finding a bank my card will work at, that’s if it doesn’t get blocked at the first UK transaction.

    No criminal activities or intentions just a mistrust of the banking sytem learned the hard way.

    Marin
    Free Member

    Yes let’s do away with cash and let the banks totally rule our finances, they never lie, cheat or cause ecenomic collapse through greed and mismanagement. Only criminals use cash after all.

    reluctantjumper
    Full Member

    The first you can hide on you, the second needs a decent sized case, but a million quid in £20 notes is a pretty big thing (I saw a million in a bank once, it makes you laugh in films when someone passes a case with 5 million dollars in or or whatever.) there’s a scene in Rocknrolla when Gerard Butler steals £7m in a briefcase from two accountants, and then later on, taps £2m of it to Mark Strong in sports bag. Even in £50 notes that’s 40Kgs of notes that slides along the floor with ease after a gentle kick.

    As someone who used to drive around with up to £6m in a van every day I always laugh at the whole briefcase with £/$1m in it in films. They always show it in 20’s too claiming it to be untraceable, such a load of crap! £1m in 20’s does look relatively impressive, strangely a safe room with £300m doesn’t. The new polymer notes take up 1/3 of the space of a used paper one as they used to fluff up with use.

    thisisnotaspoon
    Free Member

    I’m not sure how getting rid of one denomination solves that problem?

    India’s method was to make them non-legal tender almost overnight.

    Which meant your average law-abiding person could go to the bank with the contents of their mattress and pay it in relatively easily with only a few questions and a slap on the wrist / tax bill for a percentage of it if they were fiddling their books a bit.

    Those committing larger-scale tax evasion suddenly went from saving their 20% / 40% or whatever it is in India, to losing 100%.

    matt_outandabout
    Full Member

    There is £1m at the money museum in Edinburgh for a start.

    Northwind
    Full Member

    OK so it seems to be a bit of misunderstanding on both fronts. Yes, it’s completely normal to not know where all the cash is, it’s not “lost”.

    But equally, it’s a fair point to say that it would be good to have a better understanding of where it is. That doesn’t mean “find the banknote”, it means knowing what the money is doing. Where’s it being invested or stored, what legal or illegal stuff is is doing or buying.

    Investigating money laundering is a good example of what it really means to “get a better handle on the currency” That works by basically moving and obfuscating the source of money and turning it from “known” money into “unknown”.

    So yes, understanding where the money is and what it’s doing is important- for tax reasons, for crime prevention reasons, for corruption reasons, and sometimes for real “lost money” reasons like dead bank accounts and reuiniting people with their own money. But people get both sides of that confused with actual bits of money rather than flows. Nobody cares where that £10 note is or where those million £10 notes are but that doesn’t mean you don’t care what’s happening with £10 million.

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