Daming: Old Zhu, we agreed not to rush!

Chapter 336 Inflation and Deflation

Chapter 336 Inflation and Deflation
"Mr. Su, if the value of the treasure notes is not set by the court, then what should be set? I really can't figure it out."

Zhu Yan opened his mouth and said.

He considered himself a smart person, but he couldn't understand this matter at all.

"That's right, Mr. Su, I also don't understand, the treasure banknotes are issued by the imperial court, so the imperial court can't decide how much it is worth?"

Zhu Xi also echoed the Tao.

Zhu Lu said: "Master Su, the students can't figure it out."

……

Several people were all confused about this question, and looked at Su Jing with doubts on their faces.

Of course, there were also Zhu Yuanzhang and Liu Bowen outside the door, listening carefully.

Su Jing said lightly: "The value of this precious banknote is really determined by the people of the entire Ming Dynasty."

The people of Ming Dynasty?
As soon as Su Jing's words came out, the originally confused people became even more confused.

"Master Su, isn't the treasure banknote issued by the imperial court? How come it has something to do with the common people again?"

Zhu Biao immediately asked Su Jing.

Su Jing said: "Prince, I talked to you for a long time just now, mainly about the value of this treasure. Another way to say this value is 'purchasing power', do you think it is appropriate?"

Purchasing power?
Zhu Biao was stunned for a moment, then he understood.

He nodded and said: "The power of purchase, this statement is very appropriate for describing the value of treasure banknotes, and the students think it is very appropriate."

"What about you? I don't think I need to explain what purchasing power means."

Su Jing asked the other princes again.

"Students understand."

"Purchasing power is concise and clear for students."

"Too fitting, more fitting than worth."

"Master Su, it's very clear, the students know."

Several people nodded quickly, and there was no difficulty in understanding the emergence of such a new vocabulary.

They were all relaxed, and Lao Zhu and Liu Bowen were even more relaxed.

Su Jing continued: "Okay, since everyone knows it, I will continue to say that the purchasing power of treasure notes determines the value of treasure notes, that is to say, treasure notes are used to buy things."

"Let's take a relatively simple example. What is the most commodity in Ming Dynasty now? Is food right? Food is the most important thing for the people, and the most farmers produce the most food."

"First of all, we can be sure that the annual grain output of the Ming Dynasty is limited. There is no doubt about it, but what about the treasure banknotes? Think about it, if the court wants to, can it be printed almost infinitely?"

"For treasure banknotes, there is no limit to the materials used to make them, because if the materials are not enough, just increase the denomination."

"Now, we use treasure banknotes to buy food. No matter how many treasure banknotes there are, at most we can buy all the grain, right? gone."

"In fact, it's not just food, but other things are the same. Any material is limited. Now, you can understand why the court can't decide the value of the treasure."

Su Jing talked eloquently, but what he said was actually not that profound.

But for Daming, such a theory is quite advanced.

Needless to say, Zhu Biao and the other princes must have never studied or studied economics on weekdays, and this currency has nothing to do with them.

The support that Lao Zhu gave them was too much.

As for Zhu Yuanzhang, he has indeed read a lot of books. Recently, he also studied a lot of currency knowledge in order to issue the Ming Dynasty banknotes, but after all, it is only the content of the front line. What Su Jing said is still too in-depth.

Liu Bowen suddenly became enlightened. He has studied various things, dabbled in all aspects, and is good at thinking. Su Shi said that he can understand with just a little bit.

Now Liu Bowen already understood why Su Jing warned Zhu Yuanzhang that he must be cautious when issuing Daming banknotes.

"Berwin, do you understand?"

Lao Zhu still knew Liu Bowen very well, just glanced at Liu Bowen's expression, and he understood what Liu Bowen knew.

Liu Bowen nodded and said: "Yes, Your Majesty, I understand that Mr. Su's wisdom is always admirable."

"Tell me, what's going on?"

Zhu Yuanzhang hurriedly urged, he was eager to understand what Su Shi said.

Liu Bowen shook his head and said: "Your Majesty, the old minister just understands a little bit. It's still not good for me to explain it to others. Why don't we continue to listen to Mr. Su's explanation. He must be more thorough than me."

Liu Bowen still thought of Su Jing's goodness in his heart, and at this time, he would not steal Su Jing's limelight.

Zhu Yuanzhang glanced at Liu Bowen and said, "Okay, then I'll listen to what Su Jing has to say."

Lao Zhu still understood Liu Bowen's thoughts, but he didn't point them out.

Lao Zhu is very satisfied with Liu Bowen who doesn't fight or grab like this.

"Master Su, the students have some ideas."

Zhu Huan, the youngest, will speak first.

Su Jing immediately said: "Say it."

Zhu Wei said: "The value of banknotes actually corresponds to the value of all commodities. The things that banknotes can buy are at most all commodities, that is, the total value of banknotes is at most equal to the value of all commodities. Therefore, the value of banknotes The value can only be less than or equal to the total value of the commodity, and will not change due to the number of banknotes issued."

Zhu Wei is young and may have the least knowledge, but this is his advantage now.

Because of his young age, learning by Su Jing's side, his thinking can be changed more easily.

Su Jing was quite surprised when he heard Zhu Xi's remarks.

At such a young age, with such thinking, there is no limit to the future.

"Yes, King Wu, what you said is basically correct."

Su Jing nodded.

At this time, Zhu Yan raised his hand and said, "Mr. Su, if according to what the fifth brother said, the goods produced by the people of Ming Dynasty correspond to the value of the banknotes. In this way, the people of Ming Dynasty decide the value of the banknotes. wrong?"

Su Jing smiled and said: "That's right, King Jin seems to understand."

Zhu Di said: "Mr. Su, even if this is the case, isn't the value of the banknotes still so much, what's the problem?"

Even after saying this, they still haven't thought clearly about the consequences of the issuance of banknotes.

After all, it's something you haven't learned before, and you can understand it without knowing it.

Su Jing said lightly: "King Yan's doubts are very interesting, I will tell you immediately what problems will arise."

"Let's simply take an example as a model. Assume that the total value of all goods in Ming Dynasty is one hundred. At this time, when the banknotes are issued as one hundred coins, one coin corresponds to one commodity, right?"

"Then, now that the court feels that the money is not enough, it has issued another one hundred yuan banknote."

"At this time, there are a total of two hundred banknotes, so at this time, two coins correspond to one commodity, right?"

"Okay, let's continue to issue banknotes, and issue another [-] coins, so there will be a total of [-] coins, which corresponds to ten coins per commodity, and the price of the commodity has increased!"

"For the court, the newly issued [-] coins can indeed buy things, but for the people who hold the original [-] coins, they have done nothing. Does the [-] coins in their hands mean that they have shrunk in disguise? .”

Su Jing spoke slowly, and gave a simple example to describe the disadvantages of over-issuing currency.

To put it bluntly, it is actually inflation.

Such an example, when Su Jing was studying economics in her last life, she did not know how many lessons she took.

It's just that most of those examples only appeared after the Ming Dynasty, and it's not easy for Su Jing to expand on it here, so he can only make up one by himself.

"What's going on? Will there be such a problem when issuing banknotes?"

Zhu Xing looked bewildered. He always felt that paper money had so many benefits, so it should be issued more.

But now, after listening to Su Jing's explanation, he realized that the banknotes didn't seem to be that good.

Zhu Wei thoughtfully said: "The continuous issuance of banknotes will lead to an increase in the price of commodities. In the final analysis, it just plunders the money from the hands of the people."

Zhu Biao's face was heavy, and now he just wanted to tell his father Zhu Yuanzhang to suspend the issuance of Daming Banknotes.

This problem is too serious!

Not only the price increase of commodities and the depreciation of banknotes, but also the exchange of banknotes and gold and silver.

If something goes wrong, Daming's economy will definitely be in turmoil, and the people will be unlucky at that time.

Zhu Di's face was equally heavy, and he was also thinking about something in his heart, but he didn't speak, just thinking silently.

Zhu Wei's expression was the calmest, he still just regarded this as a problem, if it is a problem, then there is a solution.

Outside the door, Zhu Yuanzhang's face was a little ugly.

What Su Jing said was already simple and clear.

The issuance of this banknote is actually a disguised form of plundering the wealth of the people.

This is contrary to Zhu Yuanzhang's original intention of issuing banknotes. As for issuing less banknotes, Zhu Yuanzhang himself has the idea of ​​using banknotes to solve the financial problems of the Ming Dynasty. It is better not to issue less banknotes at all.

"Berwin, do you think I shouldn't issue treasure notes?"

Zhu Yuanzhang asked Liu Bowen beside him.

Liu Bowen did not answer directly, but said: "Your Majesty, I only know that there are pros and cons in everything. Since Mr. Su has mentioned the benefits of banknotes, the issuance of banknotes is possible."

Zhu Yuanzhang glanced at Liu Bowen, and said with a smile: "Bowen, you will avoid the important things now."

What Lao Zhu is most concerned about is whether the current Daming can issue treasure notes.

Liu Bowen replied that the future Ming Dynasty would definitely be able to issue treasure notes.

Liu Bowen said: "Your Majesty, it's not that I don't want to answer, but what Mr. Su said moved me very much. I still have to wait for Mr. Su's lecture before I can have my own opinions and answers."

"Humph."

Zhu Yuanzhang snorted coldly and said: "I know how to shirk, what this kid Su Jing said, don't you understand?"

Liu Bowen didn't speak any more, but the meaning was obvious.

You, Zhu Yuanzhang, said that Su Jing understood what he said, so why bother to ask me this old man?
"Master Su, what about controlling the number of banknotes issued? Guaranteeing that the value of the banknotes is the same as that of the actual commodity, will this solve the problem?"

Several people were still silent, but Zhu Wei had already spoken out his thoughts.

Su Jing looked at Zhu Wei, nodded and said: "There is a certain way. In fact, this kind of excessive currency issuance will lead to the increase in commodity prices. I call it inflation."

"To be more accurate, it is that under the conditions of paper currency circulation, the supply of money is greater than the actual demand for money, that is, the actual purchasing power is greater than the supply of output, resulting in currency depreciation, which causes a sustained and general rise in prices for a period of time."

"To put it bluntly, the fundamental reason is that the purchasing power of banknotes is actually against the actual goods, but the issuer of the banknotes can issue banknotes indefinitely. No matter how many banknotes there are, there are only so few supplies, and the banknotes are naturally no longer valuable."

"Wu Wang, what you said about controlling the circulation of banknotes is indeed a few effective ways to solve the inflation problem, but in the actual operation process, this method is not so easy to implement."

"First of all, the overall materials of Ming Dynasty are actually growing continuously, because the population is increasing, technology is improving, and the output will naturally increase."

"Materials continue to increase. If banknotes want to maintain a stable purchasing power, they must maintain the same level of material increase. This is very difficult!"

In Su Jing's previous life, he had seen many countries' economies collapse because of over-issued banknotes.

That is something that will still happen under the command of advanced economic theory.

Not to mention the current Daming, this is easy to say, but too difficult to do.

"Mr. Su, the student understands, but the student believes that no matter how difficult it is, there is a solution. It's better than nothing."

Zhu Huan said seriously, for him, as long as he has a method and ideas to solve a problem, he is not helpless.

Su Jing nodded with a smile, he still appreciates Zhu Xi's attitude.

Only such people are suitable for research. They are not afraid of difficulties and have the spirit of research, which is very good.

"Mr. Su, you just said that the level of supplies is actually increasing, right?"

Zhu Yan asked suddenly.

Su Jing replied: "That's right."

Zhu Yan continued: "Then if the banknotes are issued and no more are issued, will the purchasing power of the banknotes of the same denomination increase compared with before with the continuous increase of supplies? Just like the example you gave before, the [-]-yuan banknotes always If the value remains the same, one hundred of all the products will become two hundred, so it’s not like buying two products for one money.”

"That's right, King Jin's thinking is very clear."

Su Jing immediately nodded and said: "This phenomenon also has a name called deflation."

"Deflation is also harmful. For producers, one commodity was originally sold for one money, but now two commodities can be sold for one, which means that they need to pay twice as much labor to obtain the original remuneration. Invisibly, the production value of producers will be reduced. Stripped of some."

"This is also where I said that King Wu's control method is difficult, because no matter whether there are too many or too few banknotes, there will be problems. The speed of this is difficult to grasp."

"Once it is not properly controlled, certain bottom-level people will be damaged, that is, the interests of most ordinary people."

"Now you still think that the issuance of banknotes is very necessary, and you should implement it now?"

(End of this chapter)

Tap the screen to use advanced tools Tip: You can use left and right keyboard keys to browse between chapters.

You'll Also Like