Looking at Old Zhu who was putting on a brave face, Zhu Xiong Ying said, "I'm thinking that if the Ming Dynasty conquers the Silver Mountain, our Ming Dynasty will have more silver. At that time, Grandfather should also allow the paper money to be exchanged for silver and gold, and then the paper money will be worth more!"
Paper money like the Baochao would have been very difficult to promote if it weren't for Zhu Xiong Ying's efforts. However, Zhu Xiong Ying was also well aware that the Baochao could not be exchanged for silver, or at least the official currency did not recognize it, which was somewhat unreasonable.
Old Zhu nodded and then said, "Of course we know that. These years we've been short of silver and copper coins, so we can only use paper money."
“Grandfather, this is exactly what I’m worried about,” Zhu Xiong Ying quickly said. “Printing paper money is certainly convenient, as it’s lighter than copper coins or silver. If it’s opened for exchange in the future, our national treasury will have even more silver. However, we need to have rules and regulations for printing paper money; we can’t do it arbitrarily.”
Zhu Xiong Ying began to explain the significance of silver reserves in a serious manner. The main point was that the Ming Dynasty didn't have enough gold, so silver was the only option. Sufficient silver reserves were naturally intended to safeguard the economy, stabilize the state-owned economy, maintain currency stability, and prevent inflation, among other things.
Zhu Xiong Ying was actually quite helpless. He wasn't an economist or a financial expert; he had only heard about many things or had a general idea of them. If he actually tried to do it, he might end up being all talk and no action.
In recent years, China has generally placed great emphasis on the Four Books and Five Classics, and almost all graduates are "liberal arts students." Economists are naturally included, and the Ministry of Revenue wasn't joking; there were indeed some "experts" among them.
Having sufficient silver reserves will help improve the practicality and circulation of paper money in the future, but we also need to be careful. If the desperate emperor were to print paper money indiscriminately, it could cause financial chaos.
This refers to Zhu Di in history. Although many people did not recognize the Ming Dynasty's official paper money in the early Ming Dynasty, it still held a certain status. After Zhu Di became emperor, he embarked on voyages to the Western Ocean and northern expeditions, both of which were extremely costly, and the paper money was printed at an unrestrained pace.
As a result, the value of the paper money continued to depreciate, and eventually, more and more people stopped recognizing it.
Old Zhu nodded, he knew that, "We know that the paper money exchanged for the previous yuan was just a piece of tattered paper."
This concern extends beyond the over-issuance of paper money; it also includes the potential for corruption among some civil officials. The Yuan Dynasty serves as a cautionary tale. In ancient times, when the financial and fiscal systems were underdeveloped, the fact that paper money was not pegged to metal currency posed a significant risk.
Perhaps in the future, we'll need to consider things like banks. After all, money also needs to circulate.
However, there's no need to rush. The Ming Dynasty isn't wealthy enough yet, and it hasn't completely escaped hunger. Besides, the silver mines haven't been secured yet; the Ming treasury doesn't have much silver.
Some things can't be rushed right now!
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