Daming: Old Zhu, we agreed not to rush!

Chapter 353 Gold is not as good as silver, and silver is not as good as paper

"So that's how it is. It's a trivial matter, and it's naturally possible."

Su Jing immediately nodded in agreement.

Su Jing was quite pleased that Qin Wang Zhu Xi was so eager to learn and ask questions.

A prince should have such an attitude.

If the superiors don't learn, they will only be surpassed by the inferiors, and it is not enough just to be subordinate.

"Thank you, Mr. Su. Students still have doubts about the relationship between gold, silver and banknotes."

Zhu Xi didn't talk too much nonsense, and directly started to ask his own doubts.

The relationship between gold and silver and paper money?

Su Jing nodded involuntarily when he heard Zhu Xi's question.

To be able to ask such a question, Zhu Xi must have seriously thought about it after class.

Su Jing asked with a smile: "Then, King Qin, how do you understand the relationship between gold and silver and banknotes?"

Zhu Xi paused and replied: "Mr. Su, I thought that paper money was a substitute for gold and silver. Gold and silver are not easy to carry, which is why paper money was born. Paper money itself has no value, and it all depends on its counterpart gold and silver. I Understand paper currency as a certificate, a certificate that can be exchanged for a certain amount of gold and silver."

Zhu Xi finished speaking slowly, feeling nervous in his heart.

It is a challenge for him to express his views in front of Su Jing and explain them in detail.

Fortunately, he expressed well just now, he thought he expressed what he wanted to express.

"King Qin seems to have really thought about it seriously, and this kind of understanding is already quite profound."

Su Jing nodded and did not hesitate to praise.

Zhu Xi said at this moment: "But, Mr. Su, when I was thinking like this, a new problem appeared."

"Since paper money is only a certificate of gold and silver, the value of paper money is bound to gold and silver. If one day, gold and silver are completely replaced by paper money, will the value of paper money come from that?"

Zhu Xi's thinking has already possessed a certain degree of foresight.

In the Ming Dynasty, when gold and silver currencies were still the main currency, we saw the time when banknotes would completely replace gold and silver in the future.

"Not bad, not bad, King Qin really surprised me, he has already thought of it so deeply."

Su Jing praised sincerely.

This made Zhu Xi a little embarrassed.

"Mr. Su's absurd praise. I just thought about it casually, and I always felt that something was wrong. I couldn't figure it out, so I ran here."

Zhu Xi scratched his head.

Don't look at how easy he said, but in fact he has really thought about it seriously.

Among the princes, although he is second only to Zhu Biao in age, his level of knowledge is below average.

Being able to ask such in-depth questions can only show that Zhu Xi is not lazy at all.

Su Jing smiled and said: "King Qin, think more, you can always improve, you are doing very well now."

"Let's get back to the topic, what is the relationship between gold and silver and banknotes? In fact, we still need to start with the concept of currency."

"First of all, gold and silver are the best currency materials that humans have found in the long process of development. I won't talk about the advantages of gold and silver. Anyway, gold and silver are chosen by humans, so they become currencies, right?"

Zhu Xi nodded and said: "Well, Su Jing mentioned it in his previous lectures, and the history of currency development is like this."

Su Jing continued: "Let's ignore the banknotes first, and look at the gold and silver. Gold and silver have a characteristic that supports them as the foundation of currency. Do you know what it is? King Qin."

Zhu Xi thought for a while and said, "Because gold and silver are rare?"

"very good!"

Su Jing nodded and said: "That's right, the rarity of gold and silver is the fundamental reason why it was chosen as currency. Rare things are more expensive. Currency is money, and money must be precious."

"But rarity is the advantage of gold and silver, and it is also the disadvantage of gold and silver."

shortcoming?

rare?
Zhu Xi was confused by Su Jing's words for a while, and it was rare when it became a weakness.

"If students don't understand, please ask Mr. Su to explain."

Zhu Xi asked Su Jing.

Su Jing said lightly: "Let me give you a very simple example. A farmer raises a pig and can sell it for an ingot of gold after one year. When the breeding technology improves, the farmer can raise ten pigs in one year with the same labor. A pig, then it’s ten ingots of gold.”

"The advancement of breeding technology means the advancement of productivity. At this time, farmers' production capacity increases, the number of pigs increases, and the amount of gold remains constant. In this way, the value of pigs will decrease, right?"

Zhu Yu nodded and said: "Well, this is what Mr. Su said before. The total value of currency corresponds to the value of all items. Gold and silver remain unchanged, but with the improvement of productivity, more things will be produced, and the value of items will increase. The value will naturally shrink.”

"But what's the problem with that?"

Obviously, Zhu Xi hadn't understood the deep meaning of Su Jing's words.

Su Jing said lightly: "Then, I ask King Qin to think about it. If you were a farmer, what would you choose to do?"

"Should we try to improve the breeding technology so that we can raise more pigs, or should we keep the status quo and just muddle through?"

After Su Jing finished speaking, Zhu Xi fell silent.

After thinking for a while, Zhu Xi replied: "I understand Mr. Su. For farmers, if raising one pig and ten pigs can be sold at the same price, then they have no motivation to improve their breeding technology."

Su Jing nodded and continued: "Okay, let's continue. If the King of Qin becomes a vassal in your territory in the future, do you want this to happen?"

This is what made King Qin change his status from a farmer to a high-ranking person. Zhu Xi thought about this issue faster, because he really knew how to become a feudal vassal.

"Of course I don't want to. On my land, the people work hard to cultivate and breed, and the more things they produce, the better."

Zhu Xing replied naturally.

For Zhu Xi, the most important thing is not how much ten pigs are worth, but that he wants ten pigs.

The abundance of materials is the key to determine whether his territory is strong or not.

However, as soon as he finished answering, he realized an important question.

"So, is this the disadvantage of too little gold and silver?"

Zhu Xi asked Su Jing.

Su Jing smiled and nodded, "That's right, if the production of gold and silver cannot keep up with the development of social productivity, big problems will easily arise."

"Fortunately, for the current Ming Dynasty, there are not enough events that can subvert social productivity. Therefore, it is not a big problem to only use metal currencies such as gold and silver."

One of the basic characteristics of an agricultural society is stability.

Without the development of industry, the feudal dynasties of thousands of years are nothing more than hundreds of years of continuous reincarnation.

As long as the productive forces do not develop, everything will remain in place.

"So that's it. Mr. Su is really knowledgeable, and the students already understand a little bit."

Zhu Xi looked stunned, and was really shocked by Su Jing's theory.

Su Jing continued: "Then King Qin, do you know what kind of measures will be taken when such a situation arises?"

Zhu Yudang immediately thought about it, because this is exactly what he might encounter in the future.

You have to think about this matter.

Soon, Zhu Xi had the answer: "Mr. Su, the students thought that it is better to mine more gold and silver mines, so that the common people cannot lose their motivation to work hard, and they must continue to use their talents to improve production and increase supplies. .”

As the superior, Zhu Xi must prioritize his own considerations, so it is certainly impossible to reduce the enthusiasm of the people for production.

Su Jing said lightly: "What if the gold and silver mines can't be found? After all, gold and silver are very rare."

The precious properties of gold and silver are destined to not exist in large quantities.

The development of productive forces is extremely rapid.

Zhu Xing paused, and then said: "Then issue banknotes, which are precious banknotes."

Su Jing smiled and said: "Paper money is easy to issue, but it takes time for the people to accept it. What about during this period? What is King Qin going to do?"

Every change in the form of currency requires the slow acceptance of the people or the people.

This is not a one-time thing, and sometimes even requires a long process.

"Students don't understand, please ask Mr. Su to enlighten me."

Zhu Xi didn't say any more, and asked Su Jing directly.

Su Jing smiled and said: "I don't have any good solutions, but I know how some people deal with it."

"The method is very simple. It is to reduce the gold content in the gold ingot, and only use [-]% of the previous gold to cast gold ingots, but the specifications are still the same. In this way, more gold ingots can be cast with the same amount of gold. "

"The same method can also be used for silver ingots or copper coins. After all, even copper, which is much more abundant than gold and silver, will be used up one day."

Su Jing's method is actually a trick in the final analysis.

"So that's how it is. Mr. Su is a great talent, and the students admire him."

Zhu Xi immediately cupped his hands towards Su Jing.

Su Jing said indifferently: "King Qin, the method I mentioned is only temporary and not long-term."

But Zhu Xi said: "But if it is used during the transition from gold and silver to banknotes, isn't it appropriate?"

"maybe."

Su Jing said with a smile.

One thing Su Jing didn't say was that the method he mentioned was actually thought up by a king in the West.

The king adopted the method of reducing the gold content of the gold coins.

At first glance, it may not be much different from what Su Jing said.

But in fact, by the Ming Dynasty, whether it was gold or silver, the identification technology for silver, that is, purity, was already quite proficient.

The method of reducing the content of gold used in casting may work in the West, but it may not be so simple to implement in the Ming Dynasty.

"Mr. Su, you have finished talking about the advantages and disadvantages of gold and silver as currency, but what is the relationship with banknotes? I am not very clear yet."

Zhu Xi asked Su Jing again.

That's exactly his problem in the first place.

Su Jing said: "King Qin, if you think about it carefully, does the problem of gold and silver rarity exist for banknotes?"

Zhu Xi was stunned for a moment.

He was in a trance, he was still thinking about what Su Jing said just now, and didn't make too much contact with the banknotes.

Now that I think about it, besides the convenience of carrying, the biggest difference between paper money and gold and silver is here.

There is a limit to the reserves of gold and silver, but there is no such limit for paper money.

"Mr. Su, this is what you said in class before. Paper money can also reversely adjust the relationship between productivity and the economy."

Zhu Ming said excitedly to Su Jing.

There were too many things that Zhu Xi didn't understand about Su Jing's money lessons.

With such a small dial now, he felt that he had a smooth feeling.

Su Jing nodded and said: "That's right, it seems that the King of Qin understood very quickly. The benefits of paper money have just been revealed. The difference between paper money and gold and silver currencies is actually the connection between them."

"You always think that paper money is just a substitute for gold and silver, but in fact, paper money is not just a substitute for gold and silver. Paper money has its own functions and functions."

Zhu Xi's reaction and thinking this time also made Su Jing feel his efforts.

Sure enough, with Lao Zhu's genes, the children he gave birth to would not be too bad.

"Well, Mr. Su, I understand. Paper money is like a necessity. It may not be so necessary in Ming Dynasty now, but when the right time comes, paper money will definitely rise and completely replace gold and silver currency."

Zhu Xi said to Su Jing excitedly.

"No, King Qin, you are wrong."

Su Jing shook her head, directly rejecting the excited Zhu Xi.

Zhu Xi was not angry either, but asked: "Mr. Su, what did I say wrong?"

Su Jing said indifferently: "Banknotes have their unique functions, but in the final analysis, banknotes cannot exist alone. Without the authority of the issuing agency, banknotes are just a piece of waste paper. At the same time, banknotes also need gold to anchor their value."

"Paper money will indeed become mainstream, but paper money will never replace gold."

In his previous life, Su Jing's economics was very good, and he was quite familiar with the history of banknotes.

By the time of Su Jing's last life, the development of banknotes had taken a long time.

All kinds of problems have emerged, and their advantages and disadvantages and possible consequences have long been textbook cases.

Gold's unique position in currency can never be replaced by paper money.

Zhu Xi was still thinking about Su Jing's words carefully, and his whole body was calm and focused.

Su Jing ignored Zhu Xi, and continued on his own: "Because the currency attribute of gold can anchor the value of banknotes, when the currency value of banknotes is unstable, the currency attribute of gold will extend its hedging attribute, so Gold and banknotes are mainly reflected in a negative correlation."

“When paper money becomes mainstream, gold will become an investment product with both monetary and commodity attributes.”

"When it is affected by different events, such as wars, it will directly lead to an increase in the price of gold, after all, gold itself has value."

"So, in the money market, banknotes and gold and silver are like a pair of inseparable brothers, always influencing each other, because gold and silver are rarer and more stable, usually more variable It's paper money."

……

Su Jing talked eloquently, and she was a little absorbed in what she said.

These contents were learned many times by Su Jing in his previous life, and he even did it on the exam papers, so he remembered it very clearly.

Zhu Xi frowned tightly, not daring to be careless for a moment, for fear of missing a few words from Su Jing.

He was keenly aware that what Su Jing said was not just some theory, but something that had a profound impact on Daming.

(End of this chapter)