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Pound sterling

   

History



The history of the pound, or pound, one of the oldest currencies in the world, has more than 1,200 years. The genealogy of the pound is approximately 775 years, when the main Anglo-Saxon kingdoms currency was sterling, or more simply - a silver coin. In case you have on hand was 240 pounds, all together they weighed a pound tower (approximately 350 grams), and you were very wealthy man by the standards of the VIII century. Hence the matter and the name - the pound sterling (the pound of silver).



Pound silver stars



The national currency of sterling, however, was only at Etelstane, the first king of England, who built dozens of mints and in 928, approved in sterling as the single currency (coins then paid tribute to the Vikings). In this case, the word sterling came much later. The first mention dates back to 1078 sterling a year, the reign of William the Conqueror, and in turn became a vernacular in the XIII century. When William was also introduced shilling, amounting to one-twentieth of a pound. Every shilling, in turn, divided into 12 pence. Pound himself had for centuries remained a standard unit, because physically the coins did not exist.



The evolution of the English monetary system was no less bizarre. In England minted pennies, crowns, half-crowns, florins, and farthings. There was also a golden guinea, is equal to 21 shilling (252 pence). Later, the gold sovereign of 20 shillings. Tradition so well preserved in a society that Britain has moved to a regular decimal system (pounds, consisting of one hundred pence) only in 1971.



The roots of the word sterling is now not so easy to find and. Various scientists offer different versions, for example, that the word derives from the name the sterling silver Norman penny, which had little stars. According to another version, the word sterling came from the name of the eastern lands of northern Germany, where silver coins were minted. One way or another, but this word has finally mean high-quality silver, which were made of English coins.



English monarchs diligently to uphold the authority of its currency, often quite bloody ways. In 1124, King Henry I castrated nearly one hundred employees of the Mint for the production of defective coins, thus putting the beginning of a series of attempts of British rulers to restore confidence in their national currency. Stressing the continuity of their money, even the British retained the Roman abbreviations of the names. The famous pound sign - crossed letter L - comes from the Latin "Libra" (of weight) means "pound".



Currency superpowers



Bank of England, to the creation of which was stored in Sterling Tower of London, was founded only in 1694, then immediately began to produce first pound notes (in fact, debt securities with silver, and later - gold), which were discharged by hand right up to 1725 year. Later, there were more small bills, since the Bank of England did not have enough silver trite to print new coins.



Naturally, such a receipt immediately began to forge. As a result, the Bank of England, by the way, was the first central bank in history, was forced to introduce a watermark, and counterfeiters in the country was introduced to the death penalty. After that, special forms were printed, but they fit the hand and the sum of the signature of bank official.



Fully printed pounds, which is not signed, appeared only in 1855. In this paper currency was the main global financial superpower up until 1928 were only a rather pathetic - pounds, mostly in black and white and one-sided.



Pound for centuries has been the most reliable and solid European currency, and on a global scale was finally pushed back the dollar after World War II. The political and financial power of Great Britain and partly stemmed from a careful treatment of the kingdom to its currency. Not surprisingly, the British Empire one of the first switched to the gold standard, first, however, purely for internal use.



By 1821 the currency was firmly tied to the precious metal on a strictly fixed price. But in 1844 parliament passed a law under which the Bank of England notes are guaranteed exchanged on demand for gold at 7.32 grams per pound.



Also in 1844 the Bank of England was declared the only bank in the UK, which was allowed to print bank notes (however, the Bank of Scotland still managed to retain the right to issue their own sterling). In addition, the Bank of England, to the point already well acquainted with inflation, began to control the release of the money supply in the country. With the widespread introduction of the gold standard in 1870 that allowed exchange rates to stare and laid the foundation of the era of large-scale international trade (the nation began to back up paper money amount of gold in their vaults), the pound was the world's main reserve currency, backed by faith in the sterling and the power of the British Empire.



In 1914, Britain abandoned the gold standard because of the war to cope with inflation, but only in order to have a 1925 re-bind it to the pre-war rate of gold and the dollar. However, it is the gold standard, which did not work in a fast increase international market caused a series of crises in the global economy, and eventually led to the pound eventually lost its power, giving the title of the world's main reserve currency, the dollar.



Irreparable damage to the British currency has caused and the Second World War, during which the government of Nazi Germany in order to weaken the currency rival, mass production of counterfeit pounds. By 1943 the Germans released on 500 000 counterfeit banknotes in the UK a month, most of which, however, was destroyed by allied forces. However, counterfeit pounds and met many years later, forcing the Bank of England to enter as a protective measure metal wire.



Sunset pound



In 1944 conference in Bretton Woods in the U.S. actually put an end to the dominance of the pound in world trade. Although the pound and the dollar were approved by then as the major reserve currencies and curtsy to the British currency was made solely out of respect for a country mired in post-war debt. In addition, the dollar was pegged to gold, but gold also on the pound, tightly tied to the dollar in the world of banal is not enough. As a result, the central banks of other countries withdrew the pound from its reserves by buying dollars.



In September 1949, Great Britain, unable to cope with trade deficit, devalued the pound by 30 percent, which was the straw that broke the backbone of its national currency. Another devaluation in 1967, he completely gave up hope that the pound will be able to return to their former height. In June 1972, the British government capitulated, deciding to let the pound. Then it was assumed that this is a temporary measure, but since the pound is exchanged for floating.



British authorities, plagued by economic crises and inflation, and later tried to establish a ceiling for the pound against the European currencies (doychmarke, franc, lira and), but all experiments failed. In 1976, the pound for the first time fell below $ 2 dollars. Then London was forced to turn to the IMF for a loan to support its currency.



Pound began to strengthen again, but in early 1990, weakened by the crisis in the country, caused by the collapse of the housing market and decreased consumer spending due to rising interest rates. Substantial damage to the currency of Great Britain paid an American financier George Soros, who played in 1992 against the pound and fell upon the British currency. However, whereas in the fall of the pound made the state and other successful investors, less known than the American speculator.



Great Britain and today continues to pound, gaining from the mid-2000s popularity as a reserve currency, carefully preserving its currency from the critics. Perhaps it is the historical memory (a single national currency is the British came 600 years before the French franc and nearly 900 years earlier than the currency of Italy and Germany) have a role in that Britain refuses to move to the euro after EU countries.