Is it because Mr. Zhao has a mine at home?

Jiangnan Group does have many mines, and every year it can transport back gold and silver worth more than 40 million taels of silver from mines in Japan, Taiwan, Luzon, Java, and Mindanao.

Add to that the Maritime Silk Road and European trade via the Cape of Good Hope, and the net inflow could reach more than 30 million taels per year.

However, in the face of the rapid expansion of the economic scale, these 700 to 800 million taels of imported currency are still far from enough.

The biggest flaw of the precious metal standard is that the amount of money issued must be linked to the amount of gold and silver in stock. But the problem is that when society enters a period of rapid development, it will inevitably lead to a rapid increase in the total value of social commodities. Failure to issue sufficient money will lead to severe deflation.

What happens when an economy enters deflation? In simple terms, the money in people's hands becomes more and more valuable.

The appreciation of this currency itself will erode the consumption and investment desires of most people, leading to insufficient total social demand, lower economic growth, and falling product prices. Everyone will desperately store currency, further leading to more serious deflation.

The result is like a person losing blood, and the consequences are fatal.

In another time and space, economic historians have long reached a consensus that the Ming Dynasty was largely killed by the sudden onset of deflation.

The Ming Dynasty was a silver-poor country, with an annual silver output of only about 300,000 taels. At the beginning of the 16th century, the total silver stock in the country was only 50 million taels. Therefore, the society has been in a state of severe deflation, and social and economic development has stagnated for a long time.

Starting from the 16th century, the world entered the Age of Exploration, international trade exploded, and silver from Japan, Europe, and America poured into the Ming Dynasty. In 1631 alone, the amount of silver imported into Macau via Manila reached 14 million taels!

Hundreds of millions of taels of foreign silver poured in like a tide, bringing unprecedented nourishment to the long-dry body of the Ming Dynasty. The economy suddenly burst into endless vitality, society prospered unprecedentedly, urban populations increased rapidly, agriculture was rapidly commercialized, and the sprouts of capitalism appeared in industry and commerce.

As a result, the merchant class became rich, every family of the literati engaged in business, and ordinary people in the coastal areas also became well-off, and even had extra money to study, listen to operas and travel. People in inland areas also moved their families to the coastal areas of Jiangnan to seek food and clothing. The Ming Dynasty seemed to have entered a prosperous era during the Wanli period.

However, no one realized that this commercial and secular new world's dependence on silver had far exceeded the West's dependence on Chinese goods. The empire was only immersed in the prosperity of silver, and had no awareness of actively holding the country in its own hands.

History soon revealed its cruel side. Soon after, the Tokugawa shogunate of Japan suddenly banned the outflow of silver; Philip II also strictly restricted the scale of the sailing trade, causing the two major sources of silver for the Ming Dynasty to dry up at the same time.

Therefore, the inflation caused by the great prosperity of commodity economy during the reign of Emperor Longwan rapidly entered a state of deflation. At that time, the Ming Dynasty had already implemented the "One Whip Law" throughout the country, and the people had to exchange grain and other agricultural products, or sell their own labor for silver to pay taxes. Deflation led to low grain prices and high silver prices, which greatly increased the burden on the people and caused a deeper economic crisis.

The country could not collect taxes, which triggered a serious financial crisis. It had to cut spending and abolish the post station system across the country, leaving a Shaanxi post station chief named Li Zicheng unemployed...

~~

Now, because of Zhao Hao and his Jiangnan Group, the rapid increase in the total value of social commodities has far exceeded the growth rate of imported gold and silver.

If the regulations were still strictly followed, and the amount of silver notes issued was based on the amount of gold and silver income, it would inevitably lead to serious deflation. And because the scale of the commodity economy in the Ming Dynasty was several times larger than that in another time and space, once an economic crisis broke out, the harm caused would be many times more serious!

The imperial court is unaware of this crisis and cannot solve it. Only Zhao Hao and Jiangnan Group are responsible - they must provide sufficient liquidity for society.

There is no way. If you want to wear the crown, you must bear its weight.

Controlling a country's currency issuance means controlling the country's lifeline, but at the same time, it also means shouldering the task of maintaining the country's financial stability.

The reason why the Ming Dynasty did not experience serious deflation was mainly due to the over-issuance of silver notes by the Jiangnan Bank.

After being circulated for nearly 20 years, the silver bill had become the recognized currency symbol of the Ming Dynasty. Even the government and the imperial court accepted and used the silver bill.

Especially in the minds of the younger generation, money is silver notes, and silver notes are money. Many young people have never even touched the heavy and difficult-to-divide silver... Well, it's mainly because they are poor.

Today, few people exchange silver bills for silver from banks. If no one exchanges silver bills, the public will be more relaxed, and fewer people will exchange silver bills. Wouldn't it be better to keep so much silver in the bank and earn interest every year? Why leave it at home and attract thieves?

Under this virtuous cycle, the rapidly circulating silver notes gradually decoupled from the silver sleeping in the warehouse and became de facto currency.

The huge amount of silver stored in the vaults of Jiangnan Bank and its more than 500 branches made the whole society have no doubt about the ability to redeem silver notes.

This gave Zhao Hao the opportunity to avoid deflation by overissuing silver bills and continuously injecting huge amounts of money into society. He could even maintain moderate inflation to stimulate sustained economic development.

As the economy continued to develop, the demand for currency increased, and Zhao Hao had to continue to over-issue silver notes. As a result, the total number of silver notes issued was several times the amount of gold and silver in the Jiangnan Bank's inventory.

We can only wait until the overheated economy cools down in the future and then try to recover liquidity...

Central banks of all countries think so, but none of them has actually succeeded in shrinking their balance sheets.

As the saying goes, over-issuance feels good for a while, and it keeps feeling good until your whole family ends up in the crematorium.

But Zhao Hao felt that he was far from reaching the point of drinking poison to quench his thirst.

The group's economic expansion will not always be so rapid, and Ming Dynasty's desire for silver will also have a limit.

Sooner or later the galleon trade with the Spanish would resume, and silver would continue to flow in from Mexico and Peru.

The precious metal mines in Southeast Asia have just been mined, and the gold mines in South Africa, Australia, and North America will also be mined sooner or later...

Zhao Hao believed that within ten to twenty years at most, the group would be able to make up for the shortage of precious metals.

In fact, it doesn’t matter if it can’t be made up, because this is not real over-issuance - the amount of money over-issued by Jiangnan Bank is anchored by the newly increased total output of the society, so it will not cause serious inflation.

But there is a big premise that the public must always maintain confidence in silver notes!

If we go to war with the imperial court in the next few years, it will inevitably trigger a nationwide bank run... Depositors will need to withdraw silver, and silver notes on the market will also need to be exchanged for silver. All economic activities still require cash!

Where did Zhao Hao get so much cash to give them? If the payment fails, the Ming Dynasty will face extremely severe deflation!

He will also lose credit in this economic crisis. In the worst case, the group may even go bankrupt, and employees and marine officers and soldiers may revolt...

Therefore, before resolving the silver crisis, Zhao Hao was absolutely unwilling to go to war with the imperial court.

~~

There is also the problem mentioned before that it is easy to conquer the world but difficult to rule it.

Outside his control area, there are more than 200 million extremely poor people and complex interest groups. Do you really want to lead the group into the fire pit? Obviously, the current situation of only absorbing labor without assuming obligations is more beneficial to the development of the group.

When the gap in power between the two sides becomes more disparate, and when more and more labor forces flee overseas, and the poor people can no longer suppress their resentment against the princes and gentry, then they will welcome the royal army and support the group to smash the old world to pieces.

These problems determine that the group must focus on itself and take things step by step. Seize the time to make up for its own loopholes and create conditions to defeat the opponent!

After thoroughly sorting out his thoughts, Zhao Hao stayed in the cabin for the rest of the voyage and personally drafted a top-secret speech, "Our Next Path", but omitted the section on the "Silver Crisis". He was preparing to unify the thoughts of the group's senior executives at the 20th anniversary meeting at the end of the year.

~~

By the time he finished writing this extremely important speech, his next stop was Osaka Bay.

The straight-line distance between here and Xishan Island is 1,500 kilometers, and the radio reception is still normal!

The success of this experiment still made all the researchers overjoyed. This was because it dispelled a new doubt that they had after their initial success: since the surface of the earth is round, would electromagnetic waves that propagate in a straight line be unable to be transmitted over long distances? Would it be necessary to build a relay station every few hundred kilometers?

The fact that we can now receive signals from the Xishan Island Research Center at such a long distance is enough to prove that radio waves are not affected by the curvature of the earth's surface!

Zhao Hao was concentrating on writing his major article and was unaware of their concerns. It was only then that he heard the researchers' cheers that he realized what was going on.

"In fact, it still has an impact. It just uses the reflection of the atmospheric ionosphere to connect the wireless signals on both sides of the earth's 'hills'." Zhao Hao said with a faint smile.

Wang Zheng suddenly understood and immediately asked what the Earth's ionosphere was.

Zhao Hao happily explained it to his disciples. Nowadays, such opportunities to pretend to be Boyi are becoming increasingly rare.

The master and the disciple were looking up at the sky when they heard an enthusiastic "Oh Tao Sama" coming from the sea!

Everyone looked in the direction of the sound and saw that Sakai Trading Co., Ltd. had set up a ceremony of the highest standard at the Sakai City Pier. All the senior executives, led by President Sen no Rikyu, respectfully welcomed Zhao Hao.

However, the one who was dancing and shouting "Dad" was Tokugawa Ieyasu, who was short and fat and looked like a raccoon.

Zhao Hao smiled and waved towards the shore. Time passed so quickly. It had been eight years since he last came to Japan.

"Alas..." Zhao Shizhen on the side sighed depressedly. It was completely different from the last time he came here with great anticipation.

Last time he came to marry a wife, but this time he came to marry off his daughter.

Can it be the same?

p.s. Write another chapter.