Short video spoiler history: The beginning of modern warfare

Chapter 118 Theory of Money Supply
Ming Dynasty, the Imperial Palace of Jinling City.

Since the last time we talked about Zhang Juzheng’s reforms and their subsequent impact, Tianmu has fallen silent again.

In the main hall, Zhu Yuanzhang was holding the hand of Li Shanchang, the Duke of Korea, and chatting about family matters. As they chatted, Li Shanchang couldn't help but talk about the sky curtain. It had been three months since the last time the sky curtain was extinguished.

For this reason, people in Jinling City were a little anxious, not knowing what had gone wrong. You know, since the sky had stabilized, it had only risen once every moon.

Speaking of this, Zhu Yuanzhang suddenly looked distressed. He took off his glasses and rubbed his eye sockets.

He usually reviewed memorials personally, so he was very busy. In addition, due to his extremely high position, he didn't have many close friends to confide in, so he seemed to be indifferent to this.

But if you were to ask who in the entire Jinling City most wanted the sky to light up on time, he would definitely be one of the most pious people.

Whether it is the various technologies that have not yet been obtained by later generations or as a window connecting to the future, its significance is very important.

Li Shanchang's son Li Qi also lost his appetite and complained bitterly about this.

Zhu Yuanzhang put on his glasses again and laughed. In Jinling City, every family was like this. The adults were fine, but the children kept asking why the skylight hadn't been lit yet. How could anyone answer them?

After talking about this topic for a while, Li Shanchang finally couldn't help asking, "The one your majesty is wearing on your nose is quite similar to the one you wear on your nose, but it is much more convenient than the one you wear on your nose."

It had been two or three quarters of an hour since he came in, and Li Shanchang noticed the strange wrinkle on Zhu Yuanzhang's nose. It was very common in the sky, and many young people wore it. He thought it was a new fashion in Jinling City.

Zhu Yuanzhang chuckled. This was the style that he wanted the students in the Ministry of Works to wear. It was specially made. Compared with the one worn by the guards in the Ministry of Works, it had two more frame legs and could be placed on both sides of the ears. It was a not-so-small improvement.

In the past few years, he has been reviewing memorials constantly, and his eyes have gradually aged and become blurry, so he had no choice but to get a pair.

In general, for this kind of blurred vision symptom, wearing a normal pair of glasses will do the trick. However, for veteran officials like Song Lian, wearing a concave pair of glasses is more useful.

As he spoke, he picked up a memorial and handed it to Li Shanchang.

Li Shanchang didn't understand what was going on. After taking the memorial and obtaining the emperor's consent, he squinted his eyes and took a quick look. It said that two treasure ships loaded with coal ore had capsized at sea.

Zhu Yuanzhang carefully took off his glasses and handed them to Li Shanchang. Li Shanchang apologized and took them and put them on carefully.

He tried hard to suppress the itchiness on his nose and ears, but what he saw was blurrier than usual. He couldn't help but frown.

Zhu Yuanzhang chuckled, knowing that the boy was more than ten years older than him and might need a different kind of glasses, so he ordered someone to bring out another kind of glasses for him to choose.

This time he is finally back to normal. His Majesty has a thick, dark face and a thick beard. After not seeing him for half a year, he seems to be a little fatter than before.

Li Shanchang moved his sight away without leaving a trace, and then took the memorial handed to him by His Majesty. At this point, he could see the neat and powerful handwriting on it without having to get close.

His gaze turned to his arms, which were dark from years of sun and rain, and the sweat hairs and tiny scars on them also appeared before his eyes one by one.

Zhu Yuanzhang chuckled and chatted with him again, talking about coal, oil, electricity and other energy sources, various inventions, steam locomotives, battery tricycles, etc., especially the battery tricycles, which will be further upgraded to cars in the future. They will definitely replace the existing donkey carts, ox carts, and horse carts, and can run on electricity or oil. The potential of these two is enormous.

Then he briefly talked about the problem that the Science Department had solved recently with battery tricycles, which was mainly the starting problem. For example, when the circuit was connected, the motor started working immediately, and then the whole car rushed out without any acceleration.

He also tried it a few times himself. Even though he was mentally prepared, he was still scared every time he was almost knocked to the ground. The freshness and excitement were so great that he even dreamed of being awakened at night.
Li Shanchang listened quietly. After hearing the rumors about him on the TV screen, he retired at the right time. After that, the construction of Zhongdu was stopped and he was completely free of worries.

The subsequent track laying work was not assigned to him, so he was happy to have some free time.

After being away for nearly a year, when I came back I found that both Jinling City and the palace had changed a lot. For example, the light bulb hanging above my head was now whirring like an electric fan, and the wind it blew was much steadier and stronger than that of the palace maids.

Zhu Yuanzhang talked a lot with great interest, and then asked Li Shanchang to choose a suitable pair of glasses before explaining the reason for summoning him back to Beijing, which was to rebuild the Grand Canal.

"Is this too hasty?" Li Shanchang was surprised. In his opinion, rebuilding the Grand Canal was the right thing to do, but the soldiers were tired and the people were exhausted after years of war. The war in the north and southwest was still going on, and it was a good time to recuperate. Imposing additional labor service all of a sudden would inevitably cause resentment.

Zhu Yuanzhang naturally knew what he wanted to say, so he explained the current situation. Now the Ministry of Industry has begun to apply steam engines to ships, but the progress is not smooth because the steam engine is too bulky.

Now it is almost summer, and when a typhoon comes, the difficulty of sea navigation increases sharply. However, as the connection between the north and the south becomes closer, the southern provinces need a large amount of coal ore, and the important border towns in the north are in urgent need of various food and fodder, so rebuilding the Grand Canal is inevitable.

Of course, there is no need to be too anxious about time. Zhu Yuanzhang knows that the dredging of the Grand Canal cannot be completed in a day or two.

Li Shanchang looked through the prepared plan and breathed a sigh of relief. This time's conscription was different from the previous compulsory labor. Not only did it provide two meals for the workers, but they also received a salary. It was like the court hiring people to dredge the Grand Canal.

Li Shanchang naturally knew the temperament of His Majesty. He would not generally reveal anything in advance that he was not sure of. It seemed that honeycomb coal and kerosene lamps (petroleum) had indeed greatly increased the income of the court. Just look at the spirits of the people in Jinling City. They looked more energetic than when he left last year.

Time soon came to the day when the sky lit up, and Hexing Tea Shop.

Shopkeeper Wan was feeling helpless as he listened to the diners' idle chatter. He was tired of hearing about whether the sky curtain would light up again in the past two months.

Naturally, he personally still hoped that the skylight would be restored as soon as possible, whether for the sake of the day's business or to join in the fun. In short, communication is human nature, not to mention this kind of "dialogue" spanning more than 600 years.

Just learning about the local customs and practices of each region and listening to the various outrageous stories above is enough to provide a month's worth of conversation.

"Here it comes!" someone exclaimed, interrupting Manager Wan's thoughts.

When Shopkeeper Wan saw it, he saw that it began with a conversation between cartoon characters, but there were no names on it, so he had no idea who was who.

[Today we are going to learn about money supply and demand and monetary equilibrium in economics. We know that printing too much money is not good, and inflation will occur. Specifically, the same amount of money in hand cannot buy the same amount of things as before inflation.]

[Printing less money is not good either, because deflation will occur, which is manifested as falling prices. The longer you hold the same amount of money, the more things you can buy. You and I in the market will form an expectation that the money can be kept to buy more things in the future.] [People tend not to consume, and there is less money circulating in the market. Deflation will be further aggravated, forming a vicious circle. In reality, the harm of deflation is far greater than that of inflation.]

[Because once the expectation of deflation is achieved, all kinds of goods on the market will not be sold, and if they cannot be sold, the price will be reduced, forming a vicious circle. Manufacturers will not be able to recover funds and will close the factory, resulting in a large number of employees being laid off. Because of layoffs, employees will be even more afraid to consume, etc.]

[In fact, economists have conducted research on the money supply a long time ago. They believe that the money supply should grow in sync with the total economic volume of society. Let’s build a simple model to explain it and you will understand.]

[For example, suppose there are only two households in a country, A and B. Household A has 1 kilograms of rice and household B has 100 kilograms of wheat. The price of rice and wheat is 100 yuan per kilogram. At this time, the currency of this country is exactly 1.]

[After a year, A/B harvests 100 kilograms of rice and wheat each, so there are 200 kilograms of rice and wheat each on the market, and the currency is still 200 yuan. Because this is a simple model, we assume that they do not consume rice and wheat. ]

[If we don’t issue currency at this time, then should the price of rice and wheat drop by 0.5 yuan each? To maintain currency value/price stability, should we issue 200 more currency? ]

In front of the Fengtian Hall, a group of minor clerks were writing furiously.

Zhu Yuanzhang, Hu Weiyong, Liu Ji, Hai Yuan and others could not help but substitute the proposed model mentioned in the sky curtain, which included no additional currency issuance, additional issuance of 200, additional issuance of 400, etc.

They have already seen the situation where 400 or more were issued, so it is obvious that the theory is correct. Even if the issuance exceeds a certain amount, everyone has already abandoned this kind of treasure banknote.

Logically speaking, there is nothing wrong with Tianmu's theory.

"The question is, will the market and people's hearts really be as Tianmu said?"

"Let's take the situation where there is no additional issuance. As a rice shop owner, I sold rice for 1 yuan per catty last year, but this year I can only sell it for 1 yuan per catty. I definitely won't do it."

"Yeah, this monetary theory feels weird."

Everyone in the Ministry of Revenue immediately started to simulate the situation, and what they said were very realistic and logical.

Liu Ji frowned and said, "But you forgot that in summer and autumn, when there is more rice and wheat on the market, the price will naturally drop. In winter, the price of rice and wheat will naturally rise."

"Even if you don't sell it, the product always has a certain shelf life. If you don't sell it after it expires, you can only throw it away, which is actually a bigger loss. There will definitely be bargaining during this period until a price that both parties feel is suitable is negotiated."

"Yeah, how could I forget that."

"Rice and wheat have a long shelf life, but food like roast duck and dim sum will be more directly affected."

Everyone nodded and quickly accepted this statement that was in line with the actual situation in daily life, that is, the price fluctuations of rice and wheat are very normal and are not subject to human will. They are related to the supply quantity itself and are also affected by the money supply.

People in it are basically influenced by it, because what this sky curtain talks about is in line with human nature.

"That's great! If I save money, and in a year, 1 yuan can buy an extra kilogram of rice and wheat, then I will definitely save the money for future use." Many people's eyes lit up and they were obviously very interested in this.

Zhu Yuanzhang agreed very much. If money can really be split and used, what does it matter if he waits for a year? He is willing to wait for two or three years, and even hopes to save more.

When Liu Ji and others thought of this situation, their eyes lit up. Who dares to say that they are not short of money? They even dream of splitting the money into two halves.

But think about it, isn't this the deflation that Tianmu mentioned? And this situation will be more serious than inflation?
"This theory is quite interesting! But how do we calculate the total economic growth?"

"It is nothing more than statistics on the tax revenue of grain and various crops, which is far more than the actual total output."

"But you forgot that people consume food and various commodities. If we calculate based on output, wouldn't there be more currency?"

[From this obvious example, we can know that the appreciation and depreciation of money is measured by its purchasing power]

[The money supply is generally regulated by the monetary management agencies of each country. Y-mama generally regulates the money supply in two ways]

[One is to regulate the deposit reserve rate. The deposit reserve is a mandatory requirement set by Y Ma to prevent bank runs. For example, if a depositor of Commercial Bank Y has just deposited 10 yuan, Commercial Bank Y cannot directly lend out the 10 yuan. It needs to hand over a certain proportion to Y Ma for safekeeping. This is the deposit reserve.]

[By adjusting this interest rate, the amount of money loaned out by the bank can be adjusted]

[The second is to issue currency, which is what we often call printing money or releasing water.]

[There are also two methods here, one is to rely on F loans. This kind of money release requires certain assets to be pledged. When it is necessary to reduce the money supply, Y mother will return the pledged assets and ask the commercial bank to return the money. ]

[The other is foreign exchange, such as the money earned by domestic companies abroad. These currencies cannot be used directly in China. They need to be converted into our currency at Bank Y before they can be used in China. The same is true for foreigners who come to China to invest and do business.]

[It is worth mentioning that a country’s financial market is very important and must basically be controlled by the country.]

Tang Dynasty, Chang'an City.

"Purchasing power! This word is wonderful!" Li Shimin and others' eyes lit up. It was obvious that in that simple and extreme model, the value of currency was volatile, and looking at the face value of the currency was actually meaningless.

Using purchasing power to reflect the value of currency can simply and profoundly reflect its actual situation.

"The business bank Y here is referring to the money house, right?" Everyone has guessed that it is a money house based on what he described.

Li Shimin and others were surprised, but when they thought about it, Tianmu mentioned in the Single Whip Law three months ago the consequences of the Ming Dynasty's monetization of silver.

Now we just exchange silver for paper money. There is no essential difference between the two.
(End of this chapter)