The news last week reported that three members of a money counterfeiting ring had been charged, and that the largest ever haul of fake pound coins had been seized. Even the BBC won’t let the facts get in the way of a good headline, as the £4m of fakes was actually four million blanks, and a hundred thousand finished coins. When the police or customs gleefully report a quantity of drugs being taken away from smugglers or suppliers, they calculate the value based on the entire bounty being sold in street deals – which is very unlikely to be the actual value of the commodity, and far more than the perpetrators would have paid or received for it. Counterfeit money is really worth around 20% of the face value, as this is what the producers can sell it for.
You could say that making money in this way is a victimless crime… How many people have fakes in their pockets right now? And what proportion of those will encounter difficulties carrying out their transactions? You can easily swap your fake pound coin for goods and services with an over the counter purchase. So if that pound coin looks (quite like) a pound coin, and can be used to buy a pounds worth of something, who is to say it is not a pound? I have had more difficulty with trying to use real Northern Irish and Scottish banknotes in a pub than with handing over decidedly suspect coinage, which was almost certainly given to me in change during my last to the bar! The only time that problems arise is when using machines that test the weight, and the inability to pay for a parking space or use of a toll bridge can have expensive consequences, in respect of time if not financially. Perhaps you should carry a supply of Swaziland Lilangeni just in case, as these are apparently the correct size and weight to act as pound coin substitutes, but are only worth around 7.5p at today’s exchange rate.
Warning – The fact remains that you are a committing a criminal act when you spend any bogus bucks, and you are taking a risk every time you carry out transactions unless you rigorously check your change for naughty nuggets (apologies for the awful alliteration). You are excused if the act was unwitting and no-one has yet been prosecuted for the unintended use of forgeries.
The quantity of Four Million!!! coins sounds incredible, and it is hard to even imagine this number is physical terms, but it is less than a tenth of the total currently believed to be in circulation. This proportion has reportedly doubled in a decade, but the figures are decidedly dodgy – some sources cite 50 million fakes, out of a 1.5 billion total circulation, or around 3%, but it could be up to 5% given that this is a prolific growth industry. In 2008 one in fifty coins was a fake, now it is one in thirty – At what threshold does the system stop working, and we have to reissue the pound coin?
Young aspiring criminals may take note of these crimes, and the risk/reward ratio for blue collar and financial crime. What about insider dealing and manipulating the markets? It is nigh on impossible to be convicted of these crimes and even then the penalties can be tolerated, just ask Ernest Saunders – assuming he hasn’t relapsed after recovering from pre-senile dementia. Some of his alleged conspirators have made a number of appeals due to the perceived injustice, and those involved in the second Guinness trial were not convicted of any crime.
3 Pounds of Fakes.
This piece produced by Pragyan in 2011 is a continuation of a series from the Zen and The Art of Making Money exhibition – which included One pound Sterling, A Pound of Fakes and A Pound of Holes.
It contains 118 counterfeit pounds (which weigh 1120g, or 3 Troy Pounds) and there are some tall and amusing tales regarding how they were acquired, often paying more than face value!
Setting the price for his work was an integral part of Prag’s art. He turned the equation on it’s head so these fakes are worth 5 times the value of real coins. This and the original A Pound of Fakes (which used 39 coins) are “signed” for authenticity by including one of the singular currency replicas, but the value of this is already included in the price tag.
What is the intrinsic difference between these “fake” pound coins and those supplied by the Bank of England? As they are made from a Nickel/Brass alloy they have no value without being part of a monetary system, unlike my old shillings and florins that are now worth around 20 times their face value thanks to the silver content.
These days it is only a special type of coin, produced for commemorative or investing purposes, that is made from precious metal. So why not invest in “New Pounds”, replicas of the original Singular Currency, which are carved from a sheet of solid silver? So far these have been produced as very limited special editions, and are a numismatists wet dream!
If the currency is authenticated and has a place in history then their value could be many times the “face value” in years to come.
The perfect positioning for New Pounds would be as a high value token in a Local Exchange Trading System, like the Lewes Pound, as this would mean that the limited supply would not be an issue. However, if they became the common currency of the numerous UK LETS then we would have to reconsider production and return to the need for workshops and apprentices. If LETS could be connected together by use of a shared currency it would remove some of the current barriers to their wider acceptance.
Footnote.
The most prolific known forger of pound coins was arrested in 2007. In a small workshop in Enfield he produced 14 million coins over a period of seven years, and although a significant proportion of these were in an unfinished state, it was still over 50% of the total thought to be in circulation.
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