British Pound of Sterlings - 1025 Words

The birth of the currency The pound is 1200 years old, born about 775AD, when sterlings or silver coins were the main currency in Anglo-Saxon kingdoms. If you had 240 of them, you had one pound in weight - a vast fortune in the 8th century. A century and a half later Athelstan, the first King of England, founded a series of mints and made sterling a national currency in 928. In 1124, a disgusted Henry I had 94 mint workers castrated for producing bad coins. Sterling retained importance through the middle ages. Before the foundation of the Bank of England, the Tower of London was the store for spare money. Silver penny were the only coins right through until the 13th century and silver was the currency standard till the 18th†¦show more content†¦After the war, rumours swirled that sterling was to devalue, and so many countries converted their pounds to dollars. The pound was devalued by 30 per cent in 1949. The enormous postwar balance of payments deficit was just too much for the UK. Sterling s weakness and decline became too obvious. National banks wanted dollars not pounds. Not a penny less: the 1967 Devaluation In 1967 the currency wasdevalued again, this time by 14 per cent. Overseas, the sterling currency was of lesser importance. Dollars were more alluring - and as many thought stable. But in 1971 President Nixon devalued the dollar - a response to damage done by the Vietnam War - and opened the gates to a new era of floating exchange. The stability of the postwar settlement was over. The currency snake Meanwhile 1972 saw the first efforts to fix the pound to other European currencies. At the start of the year the four major European Economic Community currencies - sterling, the deutschemark, the French franc and the Italian lira - formed the so-called snake . The economic bloc then floated their currencies together on the markets, each country having responsibility for the stability of its currency within parameters. The experiment failed, though, not long off the ground. Sterling dropped out after only six weeks, weaker than ever, bowing to the dictates of the markets. ERM to today Since 1992 the pound has floated free although the Government hasShow MoreRelatedU.S. Semiconductor Ltd.Case Study1036 Words   |  5 Pageskept producing their products domestically and delivered them to UK by plane. British firms also confronted exchange risk due to the difference between import costs and sales revenues. This case mainly involves the discussion on the method of debt funding. Discussion Learned from the analysts commands, there are two financing alternatives: through a five-year loan in USD at 8% per year or take a loan in pound sterling at 12% per annum. Both the difference of interest rates and the volatility ofRead MoreU.S. Semiconductor Ltd.Case Study1028 Words   |  5 Pageskept producing their products domestically and delivered them to UK by plane. British firms also confronted exchange risk due to the difference between import costs and sales revenues. This case mainly involves the discussion on the method of debt funding. Discussion Learned from the analysts commands, there are two financing alternatives: through a five-year loan in USD at 8% per year or take a loan in pound sterling at 12% per annum. Both the difference of interest rates and the volatilityRead MoreHistory Of Colonial New England Colonial Policy Essay1564 Words   |  7 Pagesbacking the paper bills, as opposed to a shock to the money supply was the rationale for inflation of colonial New England currency. New England colonial paper currency will be the predominant focus, but this paper will also examine the Pennsylvania pound. New England colonial currency experienced a considerable amount of inflation in the latter years of 1740. This can be attributed in part to large amounts of paper money issuance and the funding of King George’s War. 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