Opening game, American Tycoon

Chapter 1224 The Weakness of the Empire (Second Update, please subscribe)
His Majesty summons!

After receiving the call from the palace, Hu Xueyan, the president of the Imperial Bank, rushed to Zhongdu on the "American Star" immediately.

The car sent by the palace was waiting for him on the platform.

"Something must have happened!"

Hu Xueyan was thinking so in his heart, he ignored the surprised eyes of others, and got into the car directly. When the car left, he had a slightly worried expression on his face, thinking about various problems in his heart.

What will be the big deal?
What's the big deal with the bank?

As soon as the forefoot entered the imperial study, Emperor Zhu asked.

"You came just in time, I have something to ask you, what is the latest price of silver?"

"The price of silver has fallen again! The current ratio is 1:18.3. According to our estimates, by the end of the year, the ratio of gold and silver may fall below 18.6, or even 19!"

When His Majesty mentioned the price of silver, Hu Xueyan immediately understood the reason - the price of silver!
Your Majesty cares about the price of silver!

Silver was the legal tender of the Empire.

"What caused the price of silver to fall?"

Facing His Majesty's question, Hu Xueyan replied.

"Your Majesty, since the United States abolished the gold and silver dual standard 12 years ago, the international silver price has continued to fall. Of course, the decline is within a controllable range, and the decline in silver price is beneficial to the export of the empire. After all, the empire is an industrial exporter. , a proper depreciation has a certain stimulating effect on the imperial economy..."

"So what if the decline continues? For example, a further plunge."

"A further plunge?"

Hu Xueyan frowned and replied.

"If the empire allows the price of silver to fall, it will not only cause heavy damage to the empire's financial industry, but also mean that the empire's monetary system will suffer a failure, and the empire is likely to encounter an unprecedented crisis."

Hu Xueyan frowned. In fact, as early as a few years ago, the Imperial Bank fully assessed the various impacts of the drop in silver prices.

"For the empire, if this kind of thing happens, either the strong man will lose his arm and change the empire's gold and silver dual standard to the gold standard, or he will buy silver vigorously to restore the silver standard."

After pondering for a moment, Emperor Zhu asked back.

"So, in your opinion, what should we do?"

"This……"

After thinking about it, Hu Xueyan said.

"Your Majesty, the Empire and its allies own the largest silver mine in the world. We and Mexico account for 70% of the world's silver production, and the Empire, Datang, Mexico and other South American countries all implement the silver standard. From here In a sense, we must choose the latter, because the silver standard is related to the financial and monetary security of the empire and its allies."

When Hu Xueyan mentioned "financial currency security", Emperor Zhu had already stood up. He walked to the window and cast his eyes on the royal garden outside the window, staring at the distant sky.

Emperor Zhu knew very well what this "financial currency security" referred to.

Unlike the value of currency in the 21st century, which mainly relied on the people's confidence in the government and the market's confidence in the government, in the 19th century, many people believed that without precious metal coins as a reserve, as a strong backing, the currency would be worthless.Because, the holder of the paper money must be able to exchange the paper money for metal at the bank or the Treasury.

Now all the banknotes in the world are "gold and silver coin coupons" that are redeemable by ticket. South America is rich in silver, not only supplying the world's silver in history, but also silver pesos in local circulation. The legal tender of the Ming Empire is also silver coins. Of course, because of the implementation of the gold and silver dual standard, the Imperial Household Department also minted gold coins, but the market is dominated by silver dollars. Although silver dollar certificates are actually in circulation, they are still silver dollars in essence.

Once the price of silver plummeted, silver depreciated sharply.This also means that Ming's currency and social wealth have depreciated sharply.In the world, Ming, Mexico, and Datang all use silver as the main currency in circulation.

"Indeed, even if Mexico and the Tang Dynasty are not counted, just the empire... the wealth loss caused by the depreciation of silver to the empire is immeasurable. Every 10% drop in the price of silver means that the empire's economy has retreated by 10%."

This kind of retrogression does not seem to be an industrial retrogression, but the depreciation of silver has caused a decline in the valuation of local currency assets, leading to a recession in finance, insurance and other related fields, which in turn dragged down the country's overall economy.

This is the most typical feature of the "currency war". It seems that there is no smoke, but the more this kind of war is invisible, the more tragic it is.

Edward Elias Sassoon...

With a cold smile, Emperor Zhu said.

"So India abolishes the silver standard and implements the gold standard, what will happen!"

"what!"

Hu Xueyan said in a voiceless voice.

"Your Majesty, is this news accurate?"

"I'm asking if!"

"Your Majesty, besides Ming Dynasty, Tang Dynasty, and India, the countries that implement the silver standard in the world are the largest silver standard countries. As for Mexico, Persia and South America, they are not worth mentioning. If India implements the gold standard system, it will kick silver out of the country. Currency. As we all know, the demand for silver is a huge demand for its role as a currency. Therefore, this move will reduce the demand for silver precipitously, which will definitely lead to a sharp depreciation of silver."

Almost subconsciously, Hu Xueyan said.

"Your Majesty, although the silver circulating in the Indian market is not as good as that of the Empire and the Tang Dynasty, once the silver standard is abolished in India, it will not only reduce the demand for silver, but also further affect the confidence of the market. Confidence... confidence is the ultimate important."

Frowning into a ball, Hu Xueyan continued.

"Once India, as the third largest region in the world that implements the silver standard, switches to the gold standard, it is bound to fundamentally damage the silver standard. Facing the reality of the sharp drop in silver prices, other countries are bound to follow suit. , the price of silver plummeted due to losing its qualification as an international reserve, and the confidence in the silver standard will also be destroyed. Once the confidence is destroyed, the price of silver will not fall, but plummet! The gold-silver ratio may even fall below 30 !"

Emperor Zhu shook his head and said in a very affirmative tone.

"It will fall even more! In the long run, it may even fall below 70!"

The reason why Emperor Zhu made such a judgment is because the price of silver has indeed fallen to this point in history 1:70!

But now it is 1 to 18, and it has fallen to that extreme, what does it mean?
"1 to 70, this, this is equivalent to shrinking the empire's economy..."

Shocked, he made some calculations in his heart, and Hu Xueyan said hastily.

"Your Majesty, with the discovery of many silver mines in the United States, the world's supply of silver continues to increase, and the depreciation of silver is inevitable. We must make early plans to avoid severe damage to the empire's economy. Maybe it's time to consider implementing the gold standard. After all, the gold standard is the mainstream right now..."

(End of this chapter)