Jeez! You know something is badly wrong when you can’t even make money by printing the stuff.
No, I am not talking about the sometime-controversial economic practice of quantitative easing, which the government has intermittently resorted to on several occasions since the economic crisis of 2008. Instead, I am musing on the plight of De La Rue.
Despite sounding rather like Danny’s more responsible elder sister De La Rue is the world’s largest printer of banknotes, including printing all the current banknotes for the Bank of England. And it is in financial trouble, having recently reported a £12.1M pre-tax loss for the six months to the end of September.
In the abstract, printing money sounds like it should be the most lucrative of industries, but in reality it is a business subject to the whims of changes to regulations and market vagaries as much as any other.
As a company, De La Rue has a proud history. Established as a family business in 1821, it has printed all kinds of security-sensitive materials from postage stamps to passports; bank cheques to driving licences. However, currency remains its mainstay.
When a company like De La Rue is feeling the pinch should we, as a country, be worried?
Let’s just say that when a licence to print money is no longer a guarantee of success, the truisms of a long-established economic order are beginning to look unsteady.
© Simon Turner-Tree
Simon Turner-Tree believes in looking after the pennies.