Opening game, American Tycoon

Chapter 1225 Crucified on the Golden Cross ([-]rd update, please subscribe)
Hu Xueyan’s suggestion is not wrong. Since the discovery of a large amount of gold in California and Australia, the world’s gold stock has suddenly increased. The sufficient supply has made it possible for gold to serve as a single standard currency to meet the needs of economic development in European countries.

And what does it correspond to?

After entering the 1870s, huge reserves of silver mines were discovered in many places in the United States, and the amount of silver mines in the world increased sharply.The discovery of silver mines not only increased the supply of silver, but also increased the risk of depreciation. Therefore, for financial security, European countries shifted from the gold and silver standard to the gold standard.By 1880, every major industrial nation had adopted the gold standard.

Because of this, the empire has also considered this aspect. After all, in the long run, the depreciation of silver is almost inevitable.

But... Daming has its own national conditions!
Emperor Zhu smiled coldly and asked back.

"Why, from the point of view of Hu Qing's family, we also want to crucify the Ming Empire on a golden cross like them?"

Crucified to a golden cross!

This is what American politicians say. After the United States abolished the "gold-silver dual gold system" and changed to the gold standard, the struggle between silver and gold currency status was extremely fierce, and it directly became the issue of presidential elections in the past.Currency issues are directly deduced into political issues!Civilian presidential candidate William Jennings Bryan, who supported the restoration of the silver coinage, said, "You cannot put a crown on the head of the working man; you cannot crucify the human race on a cross of gold." This is for the world Known as the "Cross of Gold" speech! ...

"Your Majesty, in the long run, the depreciation of silver is inevitable!"

Hu Xueyan said directly.

"For the long-term development of the empire's finances and economy, the implementation of the "gold standard" is the only option to ensure currency security! After all, gold is more valuable!"

Why did the whole world change the "gold standard" in the end? In essence, gold is more valuable and more stable.

"It is true that gold is more stable and more valuable!"

Emperor Zhu agreed and said again.

"Hu Qing's family, but don't forget, the biggest difference between the empire and other countries is that we are the world's largest silver-producing country!"

This is the reason why the Imperial Household Department has always been in dispute. In fact, before the annexation of Peru-Bolivia, Daming's copper company in Shanxi had extracted a large amount of silver by virtue of its advanced production technology.As early as the 1870s, the annual silver output of Ming Dynasty had exceeded 300 tons, and with the occupation of Peru-Bolivia, especially the Potosi Silver Mine in Bolivia, the Potosi silver capital, was once the most famous silver mine in the world. In its heyday, its silver output accounted for half of the world's silver output.After it was annexed by the imperial mining company, the annual output of silver in Daming has exceeded 1300 tons.

It can be said that the current Daming, like Mexico, is the largest silver-producing country in the world.Promoting the gold standard under such circumstances is simply making fun of one's own industry.

"If we abolish the silver standard, then silver will become a commodity, which will not only deal a blow to the silver industry, but also to the economic development of the empire, because..."

Staring at Hu Xueyan, Emperor Zhu said directly.

"Our gold production is limited! Don't forget that Britain and the United States are the largest gold suppliers in the world, and our gold production in Alaska and the Northern Territory is only 50 tons, 50 tons of gold, which can support the currency system of the empire ?"

In fact, what is the biggest difference in economic policy from people in this era?It is that Emperor Zhu, who came from the 21st century, stood on the shoulders of historical giants. He knew that the "gold standard" in history had led to many economic crises, and one economic crisis caused serious internal friction of capital in various countries.

It is precisely because of this that he is so sensitive to the "gold standard".

"If you study the European and American economies, you can see that after the British economic crisis in 1825, the British economic crisis basically broke out every ten years! In 1837, 1847, and then in 1857, the crisis broke out in the United States, and it evolved into a universal world crisis. , The period from 1873 to 1879 was the most far-reaching economic crisis in the 19th century, with a time span of 8 years. When will the next crisis break out? I think it will probably be around 1892!"

Why did Emperor Zhu make such a judgment, because a crisis every ten years is the classic textbook content of the economic disadvantages of capitalism!
Moreover, he clearly remembered the economic crisis in 1893, and even this was another goal and plan of his, not only his, but also that of the entire empire.

Soon, the meeting with Hu Xueyan turned into an imperial financial meeting attended by Qian Degong, Cheng Dingkang, Fang Zhanbo, Minister of the Household Department Lin Hongju, and the Imperial Central Bank Xu Weizu.

This financial meeting will ultimately determine the future monetary policy of the empire, and of course, more importantly, how the empire will win this "currency war"

"...Why does the economic crisis break out periodically every 10 years or so? On the surface, it seems that it is due to insufficient consumption, but the so-called "insufficient consumption" is actually just a lack of money. Why is there no money?"

Emperor Zhu took out two coins, one was a gold coin and the other was a silver coin, and asked.

"Essentially, there is still a shortage of currency, President Xu, what is our currency supply?"

"Returning to Your Majesty, as of now, the currency in circulation in the empire is mainly silver dollars, of which the coins in circulation in the market are about 11.75 billion yuan. In addition, the central bank reserves 1317.37 tons of gold and 11553 tons of silver. Based on this, the central bank issued 79.85 billion notes."

After answering His Majesty's question, Xu Weizu, the governor of the Imperial Central Bank, specifically added.

"In order to stimulate the empire's economy and ensure that there is enough currency in circulation, the empire's money supply needs to increase by about 2% per year."

Appropriate issuance of additional currency is conducive to the development of the country's economy. This is the classic theory of the Keynesian flexible money supply policy. In the past ten years, the economic boom of Ming Dynasty has proved this point.

Emperor Zhu nodded and asked.

"So, what is the basis for our additional currency?"

"The empire's ever-increasing gold reserves, the current trade surplus of the empire is 1.95 million yuan, because the supply of gold coins in the empire is limited, and the market is dominated by silver coins and silver dollar certificates. Therefore, after the company's trade settlement, the company needs to exchange silver coins. Of course, the empire The stable supply of silver from silver mines is also the root cause.”

Nodding slightly, Emperor Zhu said.

"In other words, all currency issuances are based on precious metals?"

In fact, this is a well-known fact, but in the 19th century, many people believed that without precious metal coins as a reserve, as a strong backing, money would be worthless.Because the holder of the paper money must be able to exchange the paper money for gold, silver and precious metals at the bank or the Ministry of Finance.Therefore, when countries around the world issue banknotes, they do not issue them recklessly, and they all reserve a large amount of gold and silver for payment and cash.

"Your Majesty, if we don't have enough gold and silver in our treasury, tomorrow the Great Ming Yuan will become waste paper!"

Although Qian Degong is not a financial expert, he has read history books.

"Yuanming treasure banknotes are a lesson from others."

Nodding slightly, Emperor Zhu collected the silver coins in his hands, leaving only one gold coin.

"What would happen if we went on a gold standard?"

Holding the gold coin in his hand, Emperor Zhu looked at the crowd and asked back.

"With the current size of the empire's economy and a population of hundreds of millions, if we switch to the gold standard, can the current gold reserves of the empire support the value of the currency? Can the money supply meet the needs of the market?"

After a series of rhetorical questions, Emperor Zhu said.

"The gold standard seems to stabilize the value of the currency, but in fact, if "the money supply cannot meet the needs of the market", what is waiting for us? That is, the empire and the empire's economy will be crucified on a golden cross!"

(End of this chapter)