Cutting 1719

Chapter 669 Land and Currency

At the high-level financial meeting held by the State Council, Minister of Finance Chen Shangtai seriously analyzed the current currency issue of Dachu, and reached a conclusion through the analysis of the current market data, if the foreign trade of Dachu continues to rise for five years , then there will be a relatively large shortage of domestic currency circulation at that time.

Everyone's expression is a bit serious. After all, everyone is not completely ignorant of the economy. In fact, once the national currency is in short supply, it means that there will be a market without a price in the original transaction model, and it will prompt More people choose to hold currency and no longer trade, which will lead to a further decline in prices or even a collapse, which is the phenomenon of deflation in the economy.

Of course, in the current era, apart from Ning Yu, a time traveler, there are no real economists who analyze the phenomenon of deflation in the economy, and there are no decent theories. It has to wait until Marx's "Das Kapital" comes out. The expansion and contraction of currency in circulation among economic phenomena will be analyzed.

In Marx's theory, the problem of deflation is generally caused by the industrial cycle of the economy, and it may also be caused by changes in the quantity and price of commodities in circulation, or by changes in the velocity of currency circulation. However, in this theory, because the object is Currency circulation based on gold coins has a certain value in itself, so it will more or less not cause changes in the value of the currency.

However, the current situation in Dachu is not the same. On the contrary, it is more like the situation before Longqing opened the sea. At the end of the year, like Shaanxi, it was because of the taxation of money instead of goods that the entire Northwest economy collapsed.

This is the current situation in Dachu. Although the reserves of gold and silver have been greatly increased, due to the emergence of the industrial revolution, the productivity of Dachu has been greatly increased. Coupled with the agricultural reform and the commodity economy Development has increased the amount of money in the hands of the people. They prefer to save money rather than consume it, and hide a large amount of money in jars underground, which further leads to problems in circulation.

In Ning Yu's thinking, the current problem facing Dachu is more like a preliminary version of Keynesian deflation theory in later generations, that is, due to the second industrial revolution, inflation has appeared in all countries, that is to say, relatively In terms of things that can be purchased, there has been a huge expansion in the supply of spending money.

After inflation, in order to regain control of their financial situation, many countries were not satisfied with just eliminating inflation, so they excessively reduced their money supply, and then tasted the bitter fruit of deflation. The latter will also have an impact on the production of wealth. The former has an over-stimulating effect, while the latter has a hindering effect. At this point, deflation is more harmful.

The reason why deflation is more harmful is that it will lower social production activities. That is to say, under the redistribution effect of deflation, it is difficult for producers to exchange for money no matter what they produce. Most of the funds are borrowed. In the case of deflation, producers stop operations, reduce borrowing, and turn their physical assets into currency, which is more beneficial than hard work.

At this time, the difficulties encountered by industry and commerce will be devastating, and people will no longer have any value in labor and production.

In the face of this problem, this era is not completely helpless. In fact, according to the experience of later generations, the countermeasure for governance is naturally to expand effective demand. In terms of expanding effective demand, fiscal policy is more effective than monetary policy, that is, In a period of deflation, what the government has to do is to print more money to create liquidity.

"Impossible. It is absolutely impossible for the central bank to suddenly create a currency that is sufficient for the entire financial market out of nothing. Even in the case of a large trade surplus, our currency is still not enough for the current market."

Ning Zhongde, chairman of the China Banking Regulatory Commission, had a look of helplessness on his face. It's not that he hadn't thought about doing this, but he finally discovered one thing, that is, if the source of this problem is not blocked, other methods can only alleviate it at best.

The reason is actually very simple. At present, the market size of the entire Dachu is much larger than that of the Western foreign trade market and the foreign trade markets of other countries in the East, and Dachu is more of an extensive form of resource plundering for these markets in other countries. As a result, the currency of Dachu replaced a certain amount of circulation in these countries.

Under the current fixed exchange rate system, countries cannot use exchange rate leverage to adjust the balance of payments, and can only adopt economic policies or control measures that are detrimental to the realization of domestic economic goals. That is to say, if Dachu wants to achieve rapid currency appreciation, From the current point of view, it is not very ideal, and it is fundamentally contrary to Ning Yu's original intention.

Ning Zhongde continued: "Under the circumstances that the total amount of money cannot be increased rapidly and in large quantities, we can only start by tightening the monetary system and controlling the outflow of money to reduce the pressure on the domestic currency circulation."

"No."

Liu Tongxun, the left servant of the Ministry of Industry and Commerce, stood up and denied it immediately. He shook his head and said: "If we tighten the monetary system and control the currency circulation, then we will really go down the old road, and everything we do now will be meaningless, especially in the current very At a critical time point, we must not cut off our future."

Ning Zhongde sighed softly, "The old man definitely doesn't want to ruin his future, but it is really impossible to increase the currency issuance at the moment. Mr. Ernst also said before leaving that even if the gold and silver reserves of Dachu are increased a little , It is useless in front of the entire market, we must not let the people fall into a situation where they have no money to use!"

Ning Yu also waved his hand lightly at this time, and said: "Just shrinking money to suppress foreign trade demand will not fundamentally solve this problem, but it will affect our own economic market. Besides, Dachu's economy will definitely not stagnate just like this. With the advent of urbanization in the future, the period of economic explosion will last for at least ten years, so we must not let currency become an obstacle!"

Hearing that Emperor Ning had set the tone, Ning Zhongde could only remain silent at the moment. He breathed out slowly: "If we can only start from the perspective of expanding currency circulation, we can only change our gold and silver standard system at present. Consider replacing the role of currency with a non-convertible bank note."

Ning Yu nodded slightly. This method is actually not surprising. In fact, many countries in history also faced the same problem of currency deflation, and they often carried out reforms under the original gold standard system.

For example, under the gold standard system, the value of each unit of currency is equivalent to a certain weight of gold. When different countries use the gold standard, the currency exchange rate is determined according to the ratio of the gold content of these currencies—the gold parity. When it is not enough to support so many currencies, they usually use the gold standard to replace traditional gold coins.

The so-called gold standard means that gold coins are no longer minted and circulated in the country, and only bank notes representing a certain weight of gold are issued as currency for circulation. At that time, gold, silver and heavy metals will be used as reserves for currency issuance and concentrated in the central government. Instead of minting gold and silver coins, the central bank maintains a certain amount of gold reserves to maintain the link between gold and currency.

If this financial system is used, it can indeed solve the current predicament of Dachu. After all, under this system, the casting and circulation of gold coins and the free import and export of gold have been prohibited, and it has only become a kind of reserve. In theory, the Central Bank of Dachu can issue bank notes of several times the size in excess, and it will not worry about being run on.

However, Ning Yu does not intend to directly adopt this method, because under such circumstances, it is impossible for gold to play the role of automatically adjusting the supply and demand of money and stabilizing the exchange rate. In terms of this, it was a very risky choice-behind this matter, it consumed the hearts of the people of Da Chu, so although doing so could get a lot of benefits in a short period of time, in the long run it was not worth the loss.

"I agree with the issuance of banknotes, but it is unrealistic to suddenly decouple currency from gold and silver, and the common people will not understand it all at once. On the contrary, it will add a lot of incomprehension. This is contrary to my original intention."

Ning Yu shook his head, and said in a low voice: "I think that the issuance of bank notes in the early stage must be based on a certain amount of gold and silver reserves, and a certain multiplier can be enlarged on the basis, but the convertibility rights of the people must be guaranteed. "

"But Your Majesty, I'm afraid it will be difficult to promote the bank notes in this way. Even if they are finally accepted by the people, if there is any trouble in the future, they will carry out a large-scale run. At that time, everything will be in danger. -"

Ning Zhongde sighed softly, why didn't he want to do what the emperor said, but a clever woman can't cook without rice.
"You misunderstood."

Ning Yu is just unwilling to decouple from gold and silver from the very beginning, but he also understands that with the rapid development of the future economy, the decoupling of currency and gold and silver will only happen sooner or later. With the development of industry and the development of colonies, Da Chu is The economy in the next ten years may never more than double, but gold and silver reserves are absolutely impossible to double in ten years, so decoupling is only a time process.

"I thought that the decoupling of currency from gold and silver, and the realization of paper currency settlement is by no means a matter of one day, and it is not something that I can change with a paper edict. The common people must be convinced of the imperial court, and they must be given real guarantees!"

Ning Yu stood up, walked in front of the huge map, and said loudly: "There are people who have virtue, people who have land, and land who have wealth, and wealth is useful. In the hearts of us Chinese, land is wealth, land It is an existence that is more precious than gold and silver, and the amount of land in our Great Chu is more than hundreds of millions? If the foundation of bank notes is planted on the land, how can we not win the trust of the people?"

A deafening sound seemed to dispel the cloud over everyone's heads, and almost everyone realized subconsciously, yes, although Da Chu did not have a huge gold and silver reserve, he did have a huge land reserve. If the land reserve is used as a guarantee of convertibility, there is no need to worry that the common people will not accept this kind of bank notes. The reason why they use gold and silver is to seek peace of mind, and the land can also give them this peace of mind.

You must know that gold and silver themselves cannot be eaten or worn, and their actual value is really not much. Compared with the land that can be cultivated, gold and silver may not be more popular with the people, but they will worry that the court will not keep their promises. Only choose to believe in scarce gold and silver, and land can also have this effect.

Ning Zhongde thought about it carefully, but he felt that this method was very appropriate. He said with a smile: "Your Majesty's words are very reasonable. My Great Chu has gone through so many years of agricultural tax reform, and I have gained a lot of money from the east and west wars. Now the imperial court has more than 10 million acres of land. If these fields are used as reserves for currency issuance, at least several billion silver dollars can be issued. In addition, if gold and silver reserves are added to enlarge, we will Dachu can completely guarantee the subsequent stable development through banknotes."

Song Enming on the side had some doubts: "Although the number of these lands can be roughly matched, after all, they are scattered in different places and the distances are different, not to mention the landforms, rainwater, etc. How can the value be generalized? By then the value of the bank notes How should we judge? What’s more, I, Da Chu, have been cracking down on private land transactions all the time, so that the land price is so low. If so much land comes to the market, the land price will drop a thousand miles.”

Ning Zhongde said with a slight smile: "Prime Minister Song is worrying too much. In fact, there is no stable and sustainable market for so much land. Otherwise, once it is smashed down, the entire market will be destroyed. We can use these lands to Not for buying and selling, but to use it as a reserve fund to make a promise to the people of the world!"

"What promise?"

"The promise is that Da Chu is willing to put all the land on banknotes, and the people can use it with confidence, without worrying about the banknotes flooding and collapsing in the future-because no matter what, the people can exchange banknotes for land."

Ning Yu quietly added the follow-up words, he walked to the map with his hands behind his back, and said in a low voice: "In the future, there will be more land in Dachu, and they will continue to enhance the credit of banknotes, but the land is not worried about being run on. Yes, because it will take many years to allocate all these lands.”

In fact, as long as Dachu is not on the verge of extinction, the run is actually unlikely to happen, because people believe not only in the land itself, but also in the great national power of Dachu. Credit currency, but people still believe that it is strong enough. What they believe is not the piece of paper, but the country it represents and everything it owns.

Ning Yu is really envious of this kind of treatment, if one day Da Chu's currency can reach this level, then he will not have a headache for this matter at all.

(End of this chapter)