moneymaker
August 6, 2011Mia and I were Skype-ing and suddenly we got into the topic of how money is made. It was hilarious!! We were trying to figure out how our RM 1 notes were made and who pays for the paper and who gets profit bla bla.
It was the stupidest but most interesting topic I’ve had in a long time. We laughed so much at our bimbo-ness because seriously, we were both coming up with our own theories.
Ok, so for those who don’t know, Mia was with FV for a while and then she left us for Bank Negara. We were all ecstatic for her because we all needed someone to pay for our lunches as BNM pays really well, salary AND bonus. She wasn’t sure at first (cos she loves us too much) but we were practically shooing her out the door because this is a great opportunity for her.
So Skype conversation just now (it’s long but so funny):
“Eh, so when people ask me, I say Mia now works at BNM the place where money is made. Is that right?”
“No, our money is made in Australia, I think.”
“WHAT?!!!!!!!”
With all these talk on Belilah Buatan Malaysia, Malaysian-made goods FTW, I find out that our own Malaysian currency is made OVERSEAS?!!! I felt so conned, you have no idea. -___-
“So how do they ship it back here? By ship? By air? What airlines do they use to ship our coins and notes back??”
“How would I know?”
“You should know!! You work in Federal Bank! How is our money made?”
“Ok…you know those tins they use to store cookies.. they melt it and make round designs on them and they become our coins.”
“Ok…so who pays to buy the tins?”
“Government, I guess…”
“How do they get their money back out of their purchase of the tins? Like say the cost of making 50 cents coin is 20 cents, so government gets 30 cents back? I’m so confused…”
BTW, Mia and I have gone so off-track here, this is NOT how money is made.We decided to just go along with our own theories.
“Yeah, that’s why 1 cent has been discontinued, cos government can’t make profit out of it.”
“Omg, you can make so much money from printing money. Let’s open a printing money shop together.”
I wasn’t satisfied so I turned to my life encyclopaedia Toots and asked her how money is made.
“Dey, government decides to print money, then they’ll pay the agency to go and do it.”
“Oh..so if you were the government you’d pay me, the agency, RM 100, and I go and buy paper and tins and stuff, and give you back 80 RM 1 notes and I keep RM 20 for myself for my cut? Something like that?”
“Hmm…Maybe….”
I swear all our degrees on the wall are laughing together.
3 economic geniuses
“Ok then Mia is lying. She said government pays like 20 cents to make a 50 cent coin. So they make 30 cents when public buys.”
“Hey that makes sense too! Hmm….”
Then we both went off topic.
Toots said, “It’s mandatory for all banks to keep some reserve in BNM. These money generate interest for them.”
“Who’s them?”
“Huh?”
“Huh?”
“So anyway, ppl save in bank and bank will use that money to loan people…”
Going off-topic like crazy here..
“Right, so if they have extra, they buy gold and store in their big fridge. So where do they have so much more extra cash to put in BNM as reserves? And if BNM is the one that gives them the money, why would they put it back to BNM for storage?”
Silence.
Toots broke the silence. “So wait, our money is worth like 1/3 of what we think it is?”
“According to Mia the fashion blogger….”
“I trust her, she works there..”
“Yeah…but I don’t think she’ll get employee of the month anytime soon…”
I conveyed this conversation to Mia.
Mia’s reply, “Oh yeahhh that makes more sense than my theory.. All I know is BNM comes up with ideas and proposes to the government.”
“So Sister Zeti and friends say make more money, so government will probably say yes and agencies bid to supply the notes and coins. Whoever wins, government will pay them and they will courier the boxes of money back to Malaysia. Then who gets to keep the money?”
Silence.
Toots’ answer, “BNM la.”
“But government is the one who pays the agencies. Shouldn’t the government check it? Takkan they just pay and chuck it to BNM without anything.”
“Nolah… Ye ke? Eh….”
I feel so stupid right now. If my degree had hands, it would put its hands on its forehead.
But seriously, how often do we actually ask how money is made?! They don’t teach that in high school. When we see money, we usually just go Woohoo, Rich!!
An hour later: Toots is BBMing me extracts of financial articles on money-making. All these economic jargon that I don’t understand. Such a nerd!! Toots, I’m alright, thanks. I’ve moved on with life.
I is confused.
– Risk of Rain
govt byr guna emas jongkong kt agensi oversea yg buat duit msia tu…
now u make me searching for the info, huhu!
I’m even more confused. ha-ha. Now I don’t feel like spending money at all. heh.
I’m so confused. Makes me feel like a bimbo.
ngaaa..now i’m wondering too..haiya~
i dont know if this will answer some of your questions. but hey, at least now i know the history of money. AND most importantly, now i appreciate islamic way of doing business. why interest / riba’ / MLM is haram in the first place.
try and check this out Money as Debt
yeah u guys a funny ;p comel too
*are
Eh i tot that they have one kilang duit kat shah alam..
i thought the 1sen coins were discontinued bcos they became too expensive to produce? it costs more than 1sen to produce 1sen coins. unlike the 50sen that cost 20sen, that is economical to produce.
and i don’t think anyone “keeps” the 30sen from the 50sen coins made. i think it’s like shopping at discounted price. it’s valued at 50sen, but bought (produced) at 20sen.
ntah betul ke tidak my theory ni? hahaha
Well, I thought 1sen coins were discontinued because when you drop your 1sen coin, you wouldn’t bother to pick it up. Therefore, if let’s say 1 million people dropped at least 15 1sen coins each year, then we (by we I don’t know who, maybe both government and citizen haha) may lose more than RM150,000 each year.
Who here is guilty of not picking up 1, 5, or 10 sen coins when you drop them, please raise your hand. :O
Not federal bank – central bank
hi mia.. i’ll see u at BNM ya 🙂
have you ever wonder why our RM5 notes texture is different from the others? you can actually google and read about the controversy 😉
i baru lepas search. if u nak tau kilang duit kat mana, u boleh baca kat sini.
lengkap dengan alamat lagi. huhu
http://aidil.clanteam.com/2010/07/kat-mana-kilang-duit/
Hi, heard that our money is actually made in France.. somewhere very hidden where as you drive up the building you wouldn’t realise you’re entering a mint.. cos its surrounded by bushes.. trees… forest.. etc.
hahaha.good topic!nais.I pun fikir.Tapi mmg tahu,duit buat dekat luar negara plus tak boleh keluar banyak2.Nanti inflasi jadi duit pokok pisang. #ingatsejarahlagitak?
all that i know, kena ada emas in exchange to berapa juta duit nak print. tapi mesti ada ultimate person yang own semua duit. hehe. pening dah. 😛
Let see if I can help on the agencies. There are only two agencies in the world that can produce banknotes (i) Thomas De La Rue (ii)Giesecke & Devrient. These companies have factories around the world and 1 of G&D’s factories is located in Shah Alam. Depends on the type of banknotes produced (polymer based or paper based),the agencies will get their raw mat either from their subsidiaries or a company in Australia. Method of shipment, time, date are all kept P&C as to avoid obvious reasons. Imagine if everyone find out the details!
Oh ya, the contracts to the agencies is from BNM.
haha cute lah you guys. actually BNM does not get assistance from the government to produce money. our investment team makes our own money from the money that are being kept in BNM as reserves (hence able to pay higher salary/give bonuses to BNM’s employees) 😀
So we pay an outsource agency to produce the money for us (profit for them and zero profit to BNM). Infact we actually make losses from printing of new money as on top of having to pay for the new money, we have to recall back existing cash in the market (to avoid surplus) and shred them (additional cost to us).
so there you go, lesson 101 on how we produce money. on that note, hope to see around BNM lunching with mia 😀
ana macam pernah dengar teori ni:
kerajaan hantar jongkong emas in exchange to money
tak ada ultimate person yang own semua money sebab, money yang datang akan di’niaga’kan.
dan duit hasil dari ekonomi negara akan di gunakan untuk beli jongkong emas in exchange to make new money. dan macam tu lah dia berputar.
just my 2cents =P
Thanks bnm’s employee for the clarification. I read my macroecons book and it didn’t help. Say hi if you see me. Are you by any chance from the investment team? 🙂
Eh, i tot they have their own coin’s factory in Shah Alam…bukan ker? *blur face*
hi mia, nope im from corp comm. i will definitely say hi if i see you.
appledia, yes the factory in shah alam is able to produce coins not the banknotes 😀
Thank you bnm’s employee for the reply.
How about the banknotes? Are they from France?
Hi kak vivy :-))) I’m working in a shipping company and BNM is one of our VIP customer. They will import uncut money from (so far, I know laa) from European countries coz the paper quality is good. So good that the finished product (cut money with serial numbers) can be folded more than 500 times and still looking good! :-))) I hope this info works for you!