If everyone in the UK burned a five pound note what would the effect be on UK and global economies?

Answer 1

There are 50million population in UK. If everyone in UK burn a 5 pound note, there will be a shortage of 250million pounds, making the pounds currency appreciate in value. Good move.

But why burn the 5 pounds each? such a waste. I can make better use of it. Why not give me the 5 pounds per person? And i will give out 2 pounds per person to feed the starving peasants of Sudan, and another 2 pounds per person to boost cancer research. I will do these all in the name of UK. That way, perhaps the UK currency won't increase, but the name, the brand of UK will get a lift in the world!

p/s: interested? contact me.

Answer 2

Actually the UK population is 60 million, so that would destroy 300 pounds of money. That would cause a modest decline in both demand and savings -- because when not burning money, you are either spending it or saving it. So it WOULD have an effect on the real economy and the real trade of goods and services. However the effect would be no big deal because 300 million pounds isn't much compared to the overall UK economy, and is nothing compared with the world economy.

Note that this is entirely different from when the official treasury system destroys old bills collected from banks. In that case the paper currency is decoupled from the money supply first, so you're just burning trash.

Answer 3

Actually money only has nominal value. If 300 million pounds were taken out of circulation consumers would have less money to spend, so sellers will correspondingly drop their prices. Likewise if the government printed an extra 300 million pounds and gave it to everybody prices would rise (inflation), and the value of the sterling relative to other countries will fall, all other things remaining equal.

As for Africa, you could relieve the debt. Flooding a poor country with banknotes is actually highly disruptive and makes no difference to fixing major food supply, governance and other issues that hold countries back.

Answer 4

it'd have almost no effect on the global economy (UK-maybe some, but not much. its like if you lost 8bucks or something). this is global stuff were thinking about here-and if the US owes like a trillion or something, think of the total money in the world economy. but, why burn all that money?

Answer 5

It would probably do nothing to the economy, as the action would neither stimulate nor stunt the exchange of actual goods.

Answer 6

I don't know about the global economy, but it might increase global warming! lol

Answer 7

Why pollute? Just send it all to me. I'll sit on it a year before spending it. You find out your answer and I'm happy too.

Answer 8

I think the U.N. would move to the U.K.

Answer 9

it would drop by a fraction

Answer 10

ok
take a deep breath
have some water!!!

and, next time please ask some good question!!!!