[Cyfer]

Ok I understand that the cash value plummeted because suddenly the bank of Britain (talking about britain specifically here) had no more set value for money. But I don't understand why this would lower the value of things like pounds and such. Why would such a thing lower the economic value? My history has no idea and told me to ask an economics teacher but I know none.

[MrJohnDClare]

Are you talking about the exchange rate?
What dates are you talking about?

Try to be a bit more specific about your question, please.

I am confused by two phrases:
'cash value' - this is what you might manage to sell something for; for example, my computer has a cash value of perhaps £75.
'set value for money' - ??? = exchange rate? In the 1930s, the Bank of England had a set value for the £ against other currencies (I think it was about £1=$4-ish); even when I was a child in the 1960s the government set the value of the £ - occasionally we had to 'devalue' the pound (ie say that it was worth less). However this was abandoned (don;t know the date) and the £ was allowed to 'find its own level' against other currencies. The Conservatives tried to restore some fixed level by joining the European 'exchange Rate Mechanism', but this went disastrously wrong ('Black Friday') andwe pulled out and let the pound find its own level again.
Recently, during the recent recession, the pound has lost value against the euro, which makes foreign goods more expensive and your holidays abroad more expensive - but it makes British exports to other countries cheaper. Is this what you mean?

[Cyfer]

sorry for my very confusing opening, I usually have this if I'm busy or my mind is on other things.

Basically am I right in saying that the Bank of England/Britain had a set value for money. For example the exact money circulated round the capital and colonies was equivalent in gold in the bank. So there was always a constant amount of money never changing. Obviously having such a large population this set value started collapsing causing the Bank to release things like notes which have no real time value, causing money to lose it's set value.

At the same time, from accounts I have read (in books, not internet) I generally find that money starting rapidly losing it's value. £1 became worth 80p and so on (of course they had different currency). I'm curious why this happened.

Another 'am I right?', in the rural to urban migration were there so small amount of people for there to be, lets say, extra money floating around? Not sure where, maybe in the hands of the government? So that the influx in population could still be maintained by the economy. Although my first sentence may be untrue there HAS to be something along the lines of this (this is just a theory). Otherwise Britain would stop importing and exporting materials since they would have a credit crunch.

Than the building of railways and using coal was offset by the fact that Britain had a huge abundance of coal since before they had enough wood to burn as fuel and they did not need coal. Workers also worked extremely cheap. So would this cheap labour and cheap resource price offset the building? Would the economy still be stable?

So why did money lose it's value? Whether it be hyperinflation or minimal. I have presented my ideas (which are probably wrong, ) to my sister who's been studying economics for 2-3 weeks but she gets on considerably well and she can give me no explanation apart from that there might have been a prophecy as she calls it (*sigh* another misleading economic tech word). Just in case, this means there was a sudden change in the psych of the people to make them lower or raise their prices. But if this was true how could nearly the whole of Britain have this psych?!

I think I've gone deeply wrong. Hopefully I'll be able to meet up with an economics teacher in this week or the next.


By the way do you have any good resources on mathematically and manually calculating the probability of certain factors and aspects of the modified (by the Germans, 5 dial version) Enigma machine? And just as a bonus if possible the Colossus. I know the facts and statistics but I'm supposed to write a page on a certain feature of a trip to Bletchly Park I found interesting and I'd like to explain how it was mathematically calculated and such. Hopefully I will be able to incorporate methods used by mathematicians and scientists such as Roger Penrose to include mathematical formulae without isolating the reader. (this will be alot easier since maths teachers will be reading mine )

That's it from me. On a quick point of interest did you enjoy your half-term? Or do teachers have to prepare material for future lessons? I'm fairly lucky since I got a 2 week break.

~Cyf

[MrJohnDClare]

WOW!
You're buzzing with ideas today!
On the economics side, I think part of your problem is that you appear to be muddling up a number of different features of different periods.

Cyfer, on Nov 3 2009, 07:22 PM, said:

Basically am I right in saying that the Bank of England/Britain had a set value for money. For example the exact money circulated round the capital and colonies was equivalent in gold in the bank. So there was always a constant amount of money never changing. Obviously having such a large population this set value started collapsing causing the Bank to release things like notes which have no real time value, causing money to lose it's set value.

I think here you're referring to the Gold Standard. The Gold Standard was an issue in the 1920s and 1930s. Google it if you want to know more - this is a fairly accessible description..

Quote

At the same time, from accounts I have read (in books, not internet) I generally find that money starting rapidly losing it's value. £1 became worth 80p and so on (of course they had different currency). I'm curious why this happened.

Here you;re talking about inflation. Inflation can have many causes - for example a rise in the scarcity of certain goods (e.g. the price of food rises during a famine). Nowadays, 'monetarist' economists concentrate on the amount of money in the economy - more money chasing fewer or the same number of goods means each good's price rises accordingly.

Quote

Another 'am I right?', in the rural to urban migration were there so small amount of people for there to be, lets say, extra money floating around? Not sure where, maybe in the hands of the government? So that the influx in population could still be maintained by the economy. Although my first sentence may be untrue there HAS to be something along the lines of this (this is just a theory). Otherwise Britain would stop importing and exporting materials since they would have a credit crunch.

I can't understand what youp;re getting at here, and you;re mixing up two different ideas - the movement of people and the balance of trade. people moved from the country to the towns in the industrial revolution because wages were higher; but this was nothing to do with the government, which was laissez faire at that time - wages were higher because the factories were booming, so there was a shortage of labour, so the employers had to pay more.

Quote

Than the building of railways and using coal was offset by the fact that Britain had a huge abundance of coal since before they had enough wood to burn as fuel and they did not need coal. Workers also worked extremely cheap. So would this cheap labour and cheap resource price offset the building? Would the economy still be stable?

Investment does not take money out of the economy - it puts money into it. Economic historians suggest that there was a great amount of unused capital (accumulated in the great farming estates, and by the slave and sugar trade), and that the building of the railways/factories etc. took this money out of savings and poumped it into the economy. the economy certainly did not remain stable - the effect was rapid growth.

Quote

So why did money lose it's value? Whether it be hyperinflation or minimal. I have presented my ideas (which are probably wrong, ) to my sister who's been studying economics for 2-3 weeks but she gets on considerably well and she can give me no explanation apart from that there might have been a prophecy as she calls it (*sigh* another misleading economic tech word). Just in case, this means there was a sudden change in the psych of the people to make them lower or raise their prices. But if this was true how could nearly the whole of Britain have this psych?!

Prices is nothing to do with the psych of the people - the changes in psych follows the changes in prices! Prices change according to economic stimuli - they tend to rise in a boom (demand outstrips supply), and fall in a recession (demand falls, so there is over-supply, so prices fall as producers reduce their prices to try to get a sale). Hyperinflation is something different again - runaway inflation; this was an issue in germany in 1923. Ask your sister to explain the law of supply and demand to you, and how this works to set prices.

Quote

By the way do you have any good resources on mathematically and manually calculating the probability of certain factors and aspects of the modified (by the Germans, 5 dial version) Enigma machine? And just as a bonus if possible the Colossus.

No - you're way beyond my comfort zone here!

[Mr. D. Bryant]

Cyfer, on Nov 3 2009, 07:22 PM, said:

By the way do you have any good resources on mathematically and manually calculating the probability of certain factors and aspects of the modified (by the Germans, 5 dial version) Enigma machine? And just as a bonus if possible the Colossus. I know the facts and statistics but I'm supposed to write a page on a certain feature of a trip to Bletchly Park I found interesting and I'd like to explain how it was mathematically calculated and such. Hopefully I will be able to incorporate methods used by mathematicians and scientists such as Roger Penrose to include mathematical formulae without isolating the reader. (this will be alot easier since maths teachers will be reading mine )
~Cyf

I don't know if its exactly what you want but 'Enigma: The Battle For the Code', by Hugh Sebag Montefiore, originally published in 2000, does have some technical appendices which may be of interest.

[Cyfer]

Hi, did you receive my comment? my internet failed and it was a comment I can't really retype since I can't really remember it, but I said quite a few important things. Please delete this if you did.

[MrJohnDClare]

Cyfer, on Nov 4 2009, 05:50 PM, said:

Hi, did you receive my comment? my internet failed and it was a comment I can't really retype since I can't really remember it, but I said quite a few important things. Please delete this if you did.

It looks like we didn't.
I don;t know about you, but the forum quite often 'freezes' on me.
When I'm making long posts I find it much safer to write it in WORD and then paste it onto the forum.

[Cyfer]

MrJohnDClare, on Nov 4 2009, 06:07 PM, said:

Cyfer, on Nov 4 2009, 05:50 PM, said:

Hi, did you receive my comment? my internet failed and it was a comment I can't really retype since I can't really remember it, but I said quite a few important things. Please delete this if you did.

It looks like we didn't.
I don;t know about you, but the forum quite often 'freezes' on me.
When I'm making long posts I find it much safer to write it in WORD and then paste it onto the forum.

No it's me. Since my family owns a B&B they need a separate wi-fi over there than at my house (next door). Just had a new ASDL installed there which is much better than mine but from the distance from my room to the lobby it acquires a connection of near to nil. Just got mine working again (hoping to install a new one here also, god damn internet shuts down. RANDOMLY. I've tried everything and nothing works)

I'll re post it when I have time.

~cyf

[Cyfer]

MrJohnDClare, on Nov 4 2009, 01:31 AM, said:

WOW!
You're buzzing with ideas today!
On the economics side, I think part of your problem is that you appear to be muddling up a number of different features of different periods.
I think here you're referring to the Gold Standard. The Gold Standard was an issue in the 1920s and 1930s. Google it if you want to know more - this is a fairly accessible description..
Here you;re talking about inflation. Inflation can have many causes - for example a rise in the scarcity of certain goods (e.g. the price of food rises during a famine). Nowadays, 'monetarist' economists concentrate on the amount of money in the economy - more money chasing fewer or the same number of goods means each good's price rises accordingly.
I can't understand what youp;re getting at here, and you;re mixing up two different ideas - the movement of people and the balance of trade. people moved from the country to the towns in the industrial revolution because wages were higher; but this was nothing to do with the government, which was laissez faire at that time - wages were higher because the factories were booming, so there was a shortage of labour, so the employers had to pay more.
Investment does not take money out of the economy - it puts money into it. Economic historians suggest that there was a great amount of unused capital (accumulated in the great farming estates, and by the slave and sugar trade), and that the building of the railways/factories etc. took this money out of savings and poumped it into the economy. the economy certainly did not remain stable - the effect was rapid growth.
Prices is nothing to do with the psych of the people - the changes in psych follows the changes in prices! Prices change according to economic stimuli - they tend to rise in a boom (demand outstrips supply), and fall in a recession (demand falls, so there is over-supply, so prices fall as producers reduce their prices to try to get a sale). Hyperinflation is something different again - runaway inflation; this was an issue in germany in 1923. Ask your sister to explain the law of supply and demand to you, and how this works to set prices.

No - you're way beyond my comfort zone here!

Thanks for the definition and my sister says she has an exam so she can't help me now but I understand it fully so it's no problem.

What I think I need in this case is roughly accurate charts and spreadsheets of:
1) Population increase
2) Percentage of migration to urban areas
3) Rate of Inflation
4) Rises in real income
5) Costs of imported materials
6) Payments from other colonies

All these for a chart starting at the elimination of the Gold Standard and ending at the end of the industrial revolution or roughly 1850.

I know this is going to be near impossible to find and probably most of the ones have never been done before but I'll keep on attempting to research, it's just that I find the criteria I'm inputting into google to be producing no results maybe from complication (does complexion mean the same thing? I know it means arrangement of the face but..)



Oh and I've decided to do the Bombe, enigma is much too easy. But whenever I type bombe into google I just get results of how to make naphta or something. Even if I try bombe alan turing.

Mr. D. Bryant, on Nov 4 2009, 05:08 PM, said:

I don't know if its exactly what you want but 'Enigma: The Battle For the Code', by Hugh Sebag Montefiore, originally published in 2000, does have some technical appendices which may be of interest.

Thanks, but as I said to Mr Clare I've decided to do the Bombe and I've encountered some problems...

[MrJohnDClare]

Cyfer, on Nov 4 2009, 08:20 PM, said:

All these for a chart starting at the elimination of the Gold Standard and ending at the end of the industrial revolution or roughly 1850.

Britain went onto the Gold Standard in 1844, came off it for WWI in 1914, but returned to the Gold Standard (disastrously) for the period 1925-1931.
This wikipedia article might help.

[Cyfer]

MrJohnDClare, on Nov 4 2009, 09:54 PM, said:

Britain went onto the Gold Standard in 1844, came off it for WWI in 1914, but returned to the Gold Standard (disastrously) for the period 1925-1931.
This wikipedia article might help.

I'll keep on looking for those charts. I hope I can find them. Thanks for the link.

[glitterglitter]

Hi Cyfer,

I've done Standard Grade and Higher Economics.

I'm intrigued as to where this investigation of yours is going!!!!!!!!! Could you sum up in a sentence exactly what you're trying to find out the theory you're trying to prove? You have a fascinating range of ideas!

Economics is a difficult topic to teach yourself - why not nick your sister's book? . The Bank of England website has some very useful information. I also think that if you're looking at the value of money you must also look at interest rates (which are basically the price of money).

You talk about the value of the pound falling. This is also linked to interest rates.

I was going to apply to do economics at uni next year, but I've been warned it gets really mathematical, and I hate maths!

[Cyfer]

glitterglitter, on Nov 5 2009, 06:12 PM, said:

Hi Cyfer,

I've done Standard Grade and Higher Economics.

I'm intrigued as to where this investigation of yours is going!!!!!!!!! Could you sum up in a sentence exactly what you're trying to find out the theory you're trying to prove? You have a fascinating range of ideas!

Economics is a difficult topic to teach yourself - why not nick your sister's book? . The Bank of England website has some very useful information. I also think that if you're looking at the value of money you must also look at interest rates (which are basically the price of money).

You talk about the value of the pound falling. This is also linked to interest rates.

I was going to apply to do economics at uni next year, but I've been warned it gets really mathematical, and I hate maths!

It's not a theory really. A question/statement mix. Did the abolition of the Gold Standard cause the inflation of the English currency starting from the abolition of the Gold Standard to the end of the Industrial Revolution?


My sister's very good at what she does, but she tends to be very stressed out. I tend not to bug her with anything unless it's major. And if she is socializing or is not focusing on a task than her mind seems to go blank apart from the part of her brain that is active in socialization.

Please explain the interest rates? Did they rise? Why? Psychology?


One of my cousin has done economics in two universities that I am aware of. Not sure if he did something else in one or what. First he went to the Imperial College (not sure if that was a uni thing) and now he's in the University in Exeter. He says economics is extremely hard and in one course he did only four out of around sixty people managed to finish it (him included). In the rare moments I see him, he does his best to explain the economic world to me ^^.

For me, maths is fun. I even do algebra to relax... just simple easy tasks. Or if I want to start focusing I try and incorporate algebra into word puzzles which I know the answer to... which is almost always impossible but it helps me focus.

[MrJohnDClare]

Cyfer, on Nov 5 2009, 08:49 PM, said:

Did the abolition of the Gold Standard cause the inflation of the English currency starting from the abolition of the Gold Standard to the end of the Industrial Revolution?

From the abolition of the gold Standard (1931) TO the end of the Industrial Revolution (1850)?
I don't understand.

Anyway - whatever you mean, the answer to your question is No.

[glitterglitter]

Hi,

Okay. What Mr JDC is saying is that your dates are WAY out. The UK didn't come off the Gold Standard until this century, and I'm not really sure why you're linking the Gold Standard so much to the Ind Rev and Inflation! Also, I don't think population increase and migration have any link with inflation etc. Sorry to sound so negative. I think you're a wee bit muddled with all this wonderful new information

Interest Rates are the price of money. The 'bank base rate' of interest is set by the Bank of England (please do look at their website!) but businesses can charge their own rate. When you put money in a bank you get paid interest and so make money. When you borrow money you get charged interest so it costs you money. The rate of interest goes up and down all the time. Interest rates affect how likely people are to save or borrow and spend, and this affects inflation. It also affects how much the pound is worth against other currencies (when you hear about 'the pound is falling' etc.). Just now interest rates are really low cos the Gov are wanting people to go out and spend. When interest rates are low many people pay less for their mortgage so have more to spend. It's also supposed to encourage people to sped rather than save.

I think the abolition of the Gold Standard this century did lead to inflation, but the Gvt felt it had no real choice.

This is complicated. Go to your school library and see if you can borrow a textbook! Economics isn't like History, it's much harder to just 'dip into'. Anyone can read a history book, but to read about economics you need to understand the basic concepts.

I'm going to sleep now! Happy algebra