You will recognise the start of this old saying but this may not be possible soon – more below. In the postscript – Clichés and the King’s head.
Market Commentary
US rate cuts, UK to follow. New Labour - concerns over CGT and tax on pensions – Budget month.
Zero Coins to be Issued
For the first time ever, HM Treasury has announced that they will not be ordering any coins – and there is a rumour that 1p’s and 2p’s could be scrapped completely.
So, what's the problem?
Firstly, spending is easier and more immediately rewarding than saving (the guilt comes later). When I hand over a £20 note I feel like I am spending real money – not so much when I wave a card around. And not just me – studies show we are likely to spend twice the amount on cards – as opposed when we pay with real money.
Secondly, when historically we have lost small currency (decimalisation), costs tend to be rounded up (see my postscript); this is not helpful from an inflationary perspective.
All of this against a backdrop of a mathematically challenged youth. So... when I am in a queue for the checkout, I work out roughly what it will cost before being asked for payment. How many young checkout operators could manage without the till’s computer? Losing cash further erodes our ability to count and makes us more likely to just accept it when the computer says ‘yes’ - even if the decimal point is in the wrong place.
Summary
We are losing a generation who are numerate and can work out in advance what things cost and the loss of real money will accelerate this process. It may be that AI will take over completely in the future with the silver lining being investment opportunities... and of course our pockets won’t wear out.
p.s.
Monetary repercussions: Clichés – what will we give for someone’s thoughts now? Who will now look after the pounds? One of the most popular pub names is the Kings Head – pubs are closing and in a double whammy Charles will not now have his head on so many coins.
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