Chapter 1226 National Team Takes Action (First Update, Please Subscribe)
The empire and its economy will be - nailed to the golden cross!
Emperor Zhu's words made everyone's heart tighten. While Qian Degong and Cheng Dingkang frowned, Fang Zhanbo said.
"Your Majesty is right. If the Empire implements the 'gold standard', we will definitely be nailed to the golden cross, not only now, but also in the future!"
In fact, among the top leaders of the empire, Fang Zhanbo has always been a staunch "Silver Faction".
"Many people who support the gold standard believe that the empire's annual trade surplus can allow the empire to obtain sufficient gold reserves. This is true. The empire's annual gold reserves are currently increasing at a rate of about 100 tons. But once a war breaks out, can the empire continue to maintain a trade surplus? Is there a stable import of precious metals? These are all problems. However, silver is different. We have large silver mines in our country, and the copper mines in Shanxi also provide a large amount of associated silver. The Mexican Empire is also the world's largest silver producer. They can also provide sufficient silver supply. On the other hand, what about gold? California belongs to the United States, Australia belongs to the United Kingdom. Of course, the empire also has gold mines, but the output is always limited! Therefore, only by continuing to adhere to the "gold and silver composite standard" can the currency security of the empire be fundamentally guaranteed."
This era is different from the 20th century. In the 20th century, currency could be linked to national credit and oil, but now... people believe in gold and silver. As for oil, let's wait until the era when every family in the major countries has its own car.
"What Fang Qingjia said is very true!"
Emperor Zhu nodded and said.
"What is the truth about the gold standard? The truth about the gold standard is that it is essentially a financial hegemony established by British and American bankers, and what this financial hegemony relies on to achieve it is gold. Now, the British are planning a "currency war" in an attempt to use the "silver devaluation" to induce us to abandon the "dual gold system" and switch to the "gold standard." Once we fall into the trap, they can use their monopoly on gold supply to reap the wealth of the empire at will."
“The instability of money supply is the main cause of economic crisis. The economic and financial panic caused by it will not only weaken the government’s monetary system, but also lead to the shrinkage of social wealth. In this process, bankers who control the money supply can reap wealth at will. Who controls the money supply?”
After throwing out this point, Emperor Zhu gave a warning.
"Not the Imperial Central Bank, but the Anglo-American Bank! Because they control the gold mines and the world's main gold supply!"
The issue of currency is too complicated. The core is what is the basis of the currency mechanism? The value of currency in later generations depends on the public's confidence in the government, but in this era, precious metals are the foundation.
"Under such circumstances, the Ming Dynasty must firmly control the money supply in its own hands. Only in this way can the financial security of the empire be ensured!"
"But Your Majesty, once India abolishes the silver standard, gold will become more valuable than silver. As silver continues to depreciate, the impact on the empire's economy will be unimaginable!"
Minister of Revenue Lin Hongju thought for a moment and said.
"Choose the lesser of two evils. Although the gold standard is in crisis, isn't the British trying to use the devaluation of silver to severely damage the empire's economy? If we don't follow suit, won't we fall into their conspiracy?"
"But if we implement the gold standard, wouldn't that be exactly what they want?"
It must be said that the bankers in Britain and the United States are absolutely a group of geniuses. They easily created a dilemma - no matter what choice they made, they could not escape the fate of being harvested.
"Dilemma..."
Emperor Zhu sneered.
"That's what they think. Since they want to fight a 'currency war' with the Empire, then we will fight them directly. They think the 'golden cross' is the most stable, but they are totally wrong!"
With the corners of his lips raised slightly, Emperor Zhu sneered.
"What is the basis of currency? Precious metals! Gold and silver. They only see the rarity of gold, but fail to see that sufficient money supply is the foundation of national economic development. How can gold alone satisfy the demand for currency in the market? Gold is a tool of the despotic regime, while silver is a symbol of liberation and freedom. Silver is the people's currency against gold, the currency of the oppressed and exploited, and can eliminate debts for farmers and all regions of the country... Because its quantity is sufficient, increasing the amount of money and inflation is not only necessary for economic development, but also a way to increase the price of agricultural products and reduce farmers' debts."
Pick up the beautiful "Suzaku Silver Coin" in your hand. The special feature of this era is that currency without precious metal anchoring is worthless waste paper. The premise for countries around the world to issue paper money is that they must have hard currency, that is, gold or silver.
Looking at the "flame pattern" on the silver dollar, this will be the rebirth of the silver coin, the rebirth of the people's currency. During an economic crisis, credit contraction will lead to deflation. However, under the gold standard, the central bank cannot adopt an expansionary monetary policy - that is, printing more money, which further aggravates deflation.
But with the silver standard, at least there is one more possibility. With silver and sufficient silver supply, we can adopt an expansionary monetary policy to stimulate the economy.
"As for the devaluation, it was because silver had lost its currency function. This was a conspiracy by the big bankers in Britain and the United States that led to the devaluation of silver. In order to combat the devaluation..."
Emperor Zhu said directly.
"We can pass a bill to stabilize the value of silver, for example, using 18.5 as the silver coinage parity. Once the silver price falls below this point, the Ministry of Revenue will start purchasing silver and use it for coinage, which will be put on the market to meet the market demand for currency."
In fact, Roosevelt did the same thing in history - he passed the "Silver Purchase Act" and doubled the price of silver.
Upon hearing this, Hu Xueyan immediately cried out in surprise.
"Your Majesty, if this happens, India and other countries will inevitably ship silver into the empire to sell in order to buy gold."
“That’s just wishful thinking!”
Emperor Zhu sneered.
"My idea is to change the empire's 'dual gold system' to a 'silver standard'. At the same time, in order to stabilize the financial market, we should stop the export of gold and prohibit the circulation of gold. The British want to ship silver to us for sale, which is fine... However, they can only exchange it for paper money!"
His Majesty's words brightened everyone's eyes. Qian Degong, who had been silent, spoke excitedly.
"Your Majesty is wise. In this way, even if British and American profiteers bring silver to our country to sell for arbitrage, they can only exchange it for Ming Yuan banknotes. And the banknotes in their hands can only be used to buy goods in the empire. This will only further stimulate the development of the empire's economy. It can be said that the empire has not only stabilized the currency value, but also stimulated industrial production and boosted exports!"
What currency war? This move can directly resolve Britain’s “currency war” into nothingness.
"Your Majesty is wise!"
For a moment, the conference room was filled with compliments. In response to their compliments, Emperor Zhu simply smiled, without any trace of pride in his expression.
It is unknown whether one is wise or not, but Roosevelt relied on this move to help the United States win the first battle of the Great Depression - ordering a gold embargo, prohibiting banks from paying gold coins, gold bars and warrants abroad, and requiring the Secretary of the Treasury to approve the export of gold. Then he reduced the gold content of the dollar by 50%, which allowed the US government to print hundreds of millions of dollars out of thin air.
So the market had money, and under the stimulating monetary expansion, the US economy was pulled back from the brink of collapse.
Then he began to raise the price of silver, seemingly in order to buy over the silver-producing states in the west, but in fact he was taking advantage of the rising silver price and purchasing silver to achieve the goal of issuing more currency.
The silver price doubled, which easily stimulated commodity exports. In addition, by raising the silver price, a large amount of silver coins flowed out of China. When the silver coins were melted and shipped to the United States for arbitrage, the money supply in the market was seriously insufficient, which directly triggered a nationwide economic depression.
During the Great Depression, countless businesses and families went bankrupt. Some people were overwhelmed and chose to commit suicide. There was even a collective suicide. Countless people starved to death by the Huangpu River...
Looking at His Majesty who was silent and seemed to be thinking about something, Qian Degong asked.
"Your Majesty, when should we implement the bill then?"
"Um……"
After thinking for a while, Emperor Zhu asked.
"Let's wait until it falls below 19! But before they implement their plan. After all, once India abolishes the silver standard, it will only increase the difficulty and cost of our defense of the silver standard!"
Even war has costs.
"But I think we can do something appropriate to add fuel to the fire and speed up the depreciation process. Then, through market speculation on the expectation of silver depreciation, we can obtain ammunition to defend the "silver standard". Moreover, I believe that those British and American bankers will definitely speculate. If we hedge, we should be able to get relatively rich returns..."
It's not just relatively generous. If handled well, maybe even the ammunition for this currency war will be provided by them. After all, those people will never miss the opportunity to speculate.
The currency war may look like a war, but what is it actually?
It was just an opportunity for the bankers to speculate and make money, but they overlooked one point - the Empire could fight with the whole country. This was of course the limitation of the times. After all, in this era, no country had ever deployed a "national team" in the financial market. They took it for granted that the market was just the market, but the problem was that their opponent was the Empire!
What is dimensionality reduction attack?
This is a dimensionality reduction attack!
(End of this chapter)
Continue read on readnovelmtl.com
