so anyway people this is Glenn back with another video and today we're gonna talk
about why inflation happens now the concept of inflation is actually not you
it's actually been around for a bad 2,000 years the Romans actually suffered
from inflation and we have inflation now but the inflation now is a bit different
than the inflation that occurred in the past because current inflation is caused
by a printing of banknotes well you if you've ever heard of our fractional
reserve banking that's where banks they give out loans
and they just pull out numbers out of thin air
so that's them creating money and then there is central bank's just printing
bank notes and also increasing liquidity as well so that's current begins more
complex and that that's basically it good in the past
basically inflation was based on silver so here we have a very worn silver half
crown so you can just barely see Victoria and in the past if Latian
happened ever because of a metal scarcity or also deflation as well or a
reduction in or increase in the quality of the silver or gold in the actual
coinage now generally gold didn't actually suffer inflation under the
Romans is kept quite pure under the Persians they didn't really issue that
many gold coins I mainly issued silver under the cushion empire you would say
that the their gold coins actually have a lot of silver content in it now Li the
Chinese they actually didn't issue silver or gold coins
so it froze that theory out that real money is a
got'em silver and if you take it out of our coinage it actually does some to the
economy the chinese have had an economy for two thousand years of our gold with
silver coins i've only had bronze coins so hmm an economy can exist without gold
and silver coinage quite well and a lot of economies have done in the past so
but we're talking about current inflation and particularly the reduction
in the size of the penny in the united kingdom so so for the united kingdom
silver it has actually been a pretty stable for the issuance of currency up
into 1920 so but in 1816 it was actually a reduction in the not the silver
content but the weight of coins had six pence was a free gram spitters reduced
to two point eight six so that's a point one point one seven of a gram reduction
and if you multiply that by twos to three point point three four grounds for
a shilling and so on and so on so before the issuance of this large
bronze coins so this one is actually supposed to have its full metal value of
copper so this is the Oh penny eighteen seventeen ninety seven
and it actually weighs twenty eight eight point three five grams as you can
see and it's quite a thick coin so I've made a video on this so if you check in
my playlist and the United Kingdom it will be there but before this columnist
issued pennies will actually silver penny so if you ever heard of a silver
penny they've been issued since the angle in sex and time and they were
actually about half a gram before this and they'll also issued
after these coins are issued up and to decimalisation and now I could actually
issue now in a Maundy sets so do you one two three and four pence coins and as
you can see the it's quite a fit coin but in 1906 they actually reduce the
size of the actual coin and the weight to about eighteen point nine grams or
thirty four millimeters which is a just two millimeters smaller than that so can
you see just just a little bit smaller and this one is actually not a penny
issue body UK government but it's actually a private token because during
the 74 1900s the UK actually could have
sufficiently mint enough coins for circulation so here I have a Holloway's
pills and ointments and if you look on the back it's a professor Holloway in
London so this was made for London's probably made at the Birmingham in so
poverty token now legal tender they were not legal tender sure so but they were
accepted as a coinage up and to probably I think 1880s we know actually taking
there to circulation in Australia New Zealand Canada United States they also
issued tokens sometimes in the past salmon's Germany France Austria a lot of
countries have because the countries couldn't actually meet the requirements
of currency so this was the okay so this way actually lasted up until 1960 when
the work was actually hard to a bear 9.45 grams so that's actually half of
what this weight is so do was actually a reduction in the penny so here we have a
1974 this was the last you of the young portrait of Queen Elizabeth the second
so here we have her and these all those coins probably would have circulated in
Australia as well as United Kingdom New Zealand Africa at different parts of
Africa even South Africa probably New Guinea as well and anywhere else at the
UK colonized and implemented their currency so if we have a look you can
see the reduction so this is only thirty point eight millimeters the large coins
are fifty four millimeters and also they change the metal composition so the
smaller coin is bronze and this coin is actually copper bronze is actually a
cheaper coin to actually use because it's only probably like 90% copper and
then it's got tin and also zinc so has different ever metallic compositions
then we in 1920 they actually reduce the silver content to half so what that
would have done it would have actually increased inflation and after the war
the prices decreased because they actually increased during the war then a
decrease in any inflation took off a little bit then it settled down and then
in 1946 they actually remove silver from coinage all together and then inflation
actually increased so here we are by 1961 sixpence and if you said this is a
75% copper 25% nickel see even if you have a lot of copper it doesn't become a
brown type of coin the 25% nickel which is actually
a silver type of coin actually override so that has something to do with like
fragments on the actual medals and I'm very curious about that should have
taken that up in chemistry so then you would have had a different type of
inflation taken over so because there is no silver in the coins you actually have
money printing which actually becomes the dominant form of inflation and he is
a fact Iceland has actually never issued silver coins of ownership base metal and
Norway in 1920 got rid of their silver coins all together and then mocked on
the same in the 20s as well so they actually never had silver coins Sweden
kept silver into the 60s so different countries at different times have got
written dose of their silver coins and
Morocco Africa African country as always issued coins and actually got rid of the
silver coins Potter 40s so but their inflation it's been pretty good so
that's mmm very interesting so here we have a one
penny from 2015 but with the exchange rate so one penny is actually worth
about two point four old pence and so the reduction size of the penny
so this penny would be more equivalent the two pants there's been a campaign to
actually remove these coins that went on to pens from circulation because they're
really really not worth anything anymore they can actually buy anything and as
you can see mmm this one is a copper plated steel coin you
really it's worthless so you just throw it away or whatever not really worth
minting really so that's what inflation does it actually reduces our purchasing
power of all these coins so this coin could have purchased quite a lot of
things in the 1800s and this coin now cannot buy anything so this is the fate
of all our currencies they revert to what they call zero that's their base
value in this case this will be metal value of these coins or collectors value
because you only today have legal tender that you can use it is to the rest of
being demonetised or they won't be accepted if they were not demand the
tires because people were not familiar with them anyway this one well this is
worth silver value whatever bullion is in it nine to five ninety two point five
percent silver so that's what it's worth anyway I hope this was a very
informative video and leave a comment down below if you have one thank you
very much for watching and have an awesome coin collecting time people okay
bye bye