What is £140,000,000,000?
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Posted 19/06/2012
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What is £140,000,000,000?
Shares of British banking interests were euphorically higher Friday on news that the privately owned Bank of England would mint a fresh £140 billion in an effort to further delay their dealing with reality.
![](http://www.lemetropolecafe.com/img2012/Misc/Walayat0618A.JPG)
These days, an objective take on reality seems to be a useless commodity in the investment world. What matters most is what will happen in the next 5-10 seconds. Long term investors will ponder what the Greeks will do over the weekend and those with a super long term focus will look to Wednesday's federal reserve meeting.
We felt it could be useful to apply some of our out-of-date and caveman-esque logic to this situation. This is perhaps a vain attempt to illustrate what the investment landscape could look like in the far away distant time knows as next year.
As of this morning:
£140,000,000,000 = $219,408,000,000
As reported by the World Gold Council, the 5yr average annual worldwide gold mine production is:
2,377 metric tonnes
This translates to:
83,846,207.6 ounces
At $1,621.60 per ounce, annual mine production is worth:
$135,965,010,244.16
So, as far as we can tell, the Bank of England just magically created from thin air a new batch of paper worth:
161.37%
of the market value of the gold mined in an entire year!
Printing paper is certainly much less stressful than risking capital as a gold miner. We can only wonder how long these privately owned central banks will be able to maintain public confidence in their worthless paper?
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