Section 33 New Monetary Policy
Yifan said: "I disagree with his train of thought. First of all, the pound and the dollar are based on the fact that they are a large manufacturing country. Our current production capacity is high in efficiency and low in total volume. With limited production capacity and products, Most of the investment needs to be focused on upgrading itself - in the short term, it cannot even effectively meet mainland China's demand for industrial consumer goods, so relying solely on the sale of Lingao's products is still difficult to support the large-scale export of credit papers. It’s even more impossible to make currency circulate using force alone.”
"I don't agree either. The Du Gong's thinking is still the all-powerful planned economy," Wu Di said. "He just infinitely belittles the role of financial instruments. It's just that a few decades ago, the country only had the People's Bank of China as the central bank and a retail bank. Later, the People’s Bank of China withdrew from the second line and created a model in which four specialized banks took over.”
"Let's put this issue aside for now and let's talk about the new monetary policy." Chen Ce said, "Is it a planned economy? We are originally a planned economy, and it is a more planned planned economy than the Soviet revisionists."
"Monetary policy is a menstrual issue. There is no monthly BB that does not talk about this nonsense. Everyone wants to be an economist," Yifan said. "I think the Executive Committee is already overwhelmed with this issue - Chapter 1 First, they know there is a problem with the grain circulation vouchers; second, they don’t know what to replace it with; third, this is also a fundamental problem, there are too many opinions.”
Wu Di said: "From our perspective, basically copying the silver standard system is the most operational and stable system at the moment. It is easy to implement and acceptable to the people."
The current system is clearly an unsustainable temporary means. Therefore, in order to be prepared, people from the finance department have held many working meetings on this issue, and so far there are certain differences.
Chen Ce said: "We are a service department, and we cannot interfere with the executive committee on this matter. The production department and sales department are the leaders. We are just cooperating with their work to solve the problems that exist in the crossing industry. We can only look forward five years. By ten years.”
"Okay, go ahead and talk about your plan." Everyone present knew that Chen Ce was actually entrusted by the Executive Committee to draft a new currency system. His words set the tone.
"The current theories are all kinds of weird, but they can be boiled down to two ideas." Chen Ce said, "One is the silver standard, and the other is pure credit currency. Both have benefits. I personally feel that given the current situation of Lingao, A credit currency system linked to silver can be established.”
"I think it is very good to use the silver standard at this stage. It is convenient, intuitive, and has guaranteed credit." Wu Di said, "Referring to the use of Spanish Eagle Ocean in China, silver coins with a fineness of no more than 900 are in real circulation because of their exquisite casting and easy devaluation. On the contrary, it is easier to use than the 925 loose silver. In many cases, the silver dollar of seven cents and two cents can be worth one or two cents in the transaction, which can generate profits by itself. And you have to consider the demand for foreign trade. Without silver, you can't buy goods at all. "
"Mechanical silver dollar." Yifan said, "If it circulates, it will definitely become the object of hoarding by the old moneymen on the mainland. Bad coins drive out good coins, so we must be on guard. China's silver black hole is not called a black hole for nothing."
"It's okay, let them store it. Anyway, they have to bring money to buy things in Lingao. As long as the outflow and inflow are equal. According to our development momentum, I am afraid there will be serious outflows and severe inflation in the future." Wu Di said.
"I'm afraid it's not that simple. What we need most is bulk goods. A businessman who sells bulk raw materials may not necessarily want to buy anything from us. He will just walk with the silver instead of purchasing our goods. Besides, what is taken away? It's a standard silver dollar, so what you bring may not necessarily be 925 silver. People always tend to use the worst currency."
"Yes, the role of silver is equivalent to foreign exchange for us." Chen Ce tapped the teacup with a pencil, "Where are our circulating coupons? In fact, they are the RMB before 1990. The Executive Committee hopes that the circulating coupons can be used on a large scale Circulation, but in fact this is impossible - at least temporarily impossible. Despite various measures, the number retained in the hands of foreign merchants is still limited. Circulation coupons have no purchasing power outside Lingao. Foreign merchants will only The choice is either to accept the silver or to spend all the circulating notes,"
"Are you going to link currency to silver?" Yifan immediately understood what he meant.
"Yes, it is wrong to deny the value of silver, at least not right now. Let's first look at what are the problems we face?"
He opened his notebook:
"First, there is a lack of raw materials. Except for steel, which is about to be self-sufficient in the short term, it is almost completely dependent on imports; second, export products almost all rely on indigenous channels; third, the population under control is too small."
"Is this very similar to the early British?"
"Yes, but our burden is greater than that of the British." Chen Ce said, "The British only need a sufficient navy, and we have to build and maintain a strong military at the same time. The military, navy, Merchant fleet; ever-expanding administrative and technical teams; large-scale basic education... these all require huge investments. And what about our productivity? Unfortunately, most of the industrial products produced in Lingao are used for infrastructure Construction and expansion of new production capacity, only a small part is used for export. Currently, the balance of payments of the current account is maintained..."
Yifan coughed. Chen Ce realized that this was talking about state secrets. "Everybody knows what I mean," he said.
Yifan said: "Of course, in the foreseeable future, Lingao's industrial production capacity will not be enough to effectively meet even East Asia's demand for industrial consumer goods, so it is simply impossible to export grain circulation coupons, and people will not admit it. So, in fact, there is only one answer - follow the historical practice and temporarily implement banknotes based on the silver standard, especially since this is the only precious metal that we can control in large quantities and is recognized by everyone."
"No, this is too wasteful." Chen Ce saw that what he had said had been directly tampered with by Yi Fan. "It is a credit currency with a silver-linked exchange rate." He continued, "The existence of silver circulation in economic activities within Lingao is a waste of resources. "
"Use silver dollar certificates," Wu Di said. "There are no silver dollars on the market. It only stipulates that one yuan of banknotes can be exchanged for one silver dollar; or there is an incomplete silver standard. It stipulates the silver content of banknotes, but limits the number of silver exchanges. To avoid sudden occurrences A situation where there is no redemption due to a run.”
"If I had to choose one, I would rather choose the first one. The second one will only add credit bankruptcy when our credit is not high. If it can't be 100% converted into silver, what's the point of stipulating the silver content? One day, if a big businessman comes to exchange a large amount of circulation coupons, and you say, 'Sorry, this is beyond the exchange limit. You can buy the goods back.' Do you think he will understand what an incomplete silver standard under limited exchange is? ? No." Chen Ce emphasized his tone, "He only knows one fact, that circulation notes cannot be exchanged for silver. Then everyone who does business with us will know this, and the credit of our banknotes will be ruined. If it cannot be exchanged, It’s better not to specify the silver content.”
"You are talking about the Great Leap Forward." Yifan knocked on the table, "Not to mention whether your so-called credit currency can be realized, first tell me how big the economic scale of Lingao is? Do you know that the total economic scale cannot be discussed at all? The problem is the total amount of currency. We cannot print money according to demand, otherwise we will be second to Mr. Chang."
"Aren't you responsible for the accounting of Lingao's economic scale?" Chen Ce kicked the ball back, "The Ministry of Finance has asked all departments to establish a primary financial system. This thing can be trained by indigenous accounting personnel and they will be able to get started quickly. "
"Difficult" Yifan said this word, "It's very difficult. I don't even have anyone to do the audit now. Talking about this is simply delusional." He took a sip of tea and said, "Just one accounting is enough for you to pass out."
"We will discuss this later. I will continue my thoughts." Chen Ce continued to talk about his monetary policy. "To put it simply, we can imitate the currency system of the Celestial Dynasty. The circulation of precious metals is prohibited within the country. Not only foreign merchants, but also control All commercial activities in the area have also switched to using circulation coupons. No one can buy anything except using circulation coupons. By withdrawing precious metals and redeeming them, all precious metals in the control area will gradually be in the hands of the Crossing Group and used as foreign exchange. Reserve and use. Paper currency is pegged to silver at a managed fixed exchange rate, which is not the same thing as the silver standard. The exchange rate between silver and circulating notes is only meaningful in trade.”
"I understand what you mean." Yifan said, "It boils down to this: all traversing group-controlled areas use circulation coupons; foreign small businessmen exchange circulation coupons through designated banks to purchase Lingao products; all bulk trade transactions are priced using circulation coupons , but the settlement will be done in a currency acceptable to the other party, which will be completed by a specialized agency; domestic and foreign trade enterprises that cross the group's control area will use circulation vouchers for foreign trade through designated banks; circulation vouchers will no longer use the grain standard alone, but will use a The basket of basic agricultural and industrial products will be linked; the circulation certificate will be specified and the silver exchange rate.”
"Absolutely." Chen Ce said, "The key to this policy is to implement compulsory foreign exchange settlement and sales. Under the influence of Lingao's infrastructure, technology, and policies, a number of domestic joint ventures and wholly-owned enterprises will inevitably be born. Their The silver and gold earned from exports must be compulsorily settled at Delong Bank; for their domestic consumption, expansion of production, and recruitment of labor, circulation certificates are enough; the silver they need to import must be reviewed and approved by Delong before the silver is sold. Of course, with the The outflow of negotiable coupons will also generate a certain amount of daily consumption in overseas locations such as Guangzhou and Leizhou. Different from deposit certificates, the negotiable coupons in Li Luoyou's hands can be purchased in Guangzhou from enterprises controlled by Lingao. Consumer services and products. But this number will be limited in the near future and will not mean much."
"This thing of yours is still a disguised silver standard. It's just that you are now using forced foreign exchange settlement to control the financial risks in the rising economy. You need to understand that industrial products are priced in currency, not currency in industrial products. .For Lingao, the largest and most important imported product now is coal, iron and grain. After the production capacity of Hongji and Tiandu normalizes, the most important input product will be people. Slave labor is used in mines, and workers in enterprises and agriculture are employed from a large scale. 6 input, as long as they don’t fall out with the Ming Dynasty, how much money can the refugees spend? In the end, it’s a food problem. And the food problem is very likely to be solved by itself. Lingao sees it as inevitable in the long run, and the only thing to consider is inflation. problem. This closed economy can only rely on the export of capital and the diffusion of technology to prevent itself from being killed by inflation."
"This is an issue that needs to be considered in the future," Chen Ce said. "The fact at this stage is that we are running a deficit. And this deficit will still exist for a long time."
"Your system still has to rely on increasing silver reserves in the early stages. Otherwise, the risk is still very high." Ji An recorded in his notebook for a long time, "The problem is that our recent export growth is not very satisfactory."
"After the First Five-Year Plan, trade will definitely increase after the production capacity of light industry increases. I am not very worried about this aspect."
"Well, in fact, it is still a question in the final analysis, how big is the economic scale of Lingao. The size of bank bonds cannot be calculated based on silver reserves, but should be based on the economic scale of Lingao."
"Don't you have to do this?" Chen Ce said with a smile.
"Okay, okay. If your policy is passed, I have to talk to Cheng Dong and expand the accounting office. It's best to set up a statistics bureau to enforce a unified accounting system," he thought for a while , "The currency is single-pegged to silver. Gold coins follow the market."
"right."
"Let's do this for the time being. In the long run, silver is not suitable as currency." Yifan stretched his body and said, "The amount of silver is still too much. It would be better to have a gold standard - or a stainless steel standard or something like that."
Wu Di said: "There is one more thing about the stainless steel standard. No matter what plan the executive committee implements in the end, I strongly demand that a unified legal currency be implemented in Lingao and the current circulation of various silver and copper coins be cancelled. The current circulation in the market is too chaotic. Yes. Silver, copper coins, currency notes, copper coins and silver have different fineness, so it is too difficult for banks to convert them."
"The governor has discussed this matter many times, but he needs it from the industrial field. The main thing is to recycle copper coins - there is very little silver in the daily circulation in Lingao. Copper coins are the bulk. But even the poorest quality copper coins contain It also contains a lot of lead, wouldn’t it be better to use it as metal?”
"I would say it is better to traffic it directly to Southeast Asia. This kind of low-quality small money is the most widely used currency in Southeast Asia. There are maritime merchants who specialize in trafficking this to Manila."
"The reality is that what we need most are auxiliary coins, and what is most needed in the circulation process are also small-denomination auxiliary coins." Wu Di said, "Small-denomination auxiliary coins are best made of metal. Nowadays, the 1 cent, 5 cent and 10 cent banknotes are not ideal, and the people are not used to it. Used, copper coins still have a lot of circulation in small-value payments.”
A few people pondered for a moment, and it was best to continue casting copper coins, but this was a strategic material, and it was in great demand in both the military industry and the electric power industry. And the self-lubricating properties of copper make it even more useful in the crossing industry. Lingao's copper reserves are small, and the Planning Institute will definitely disagree; nor can they use iron money - the status of this thing in the minds of the people is too low. Moreover, iron money was not very popular in the era, and it was a currency with a very bad reputation.
"How about the steel money? It's like RMB. It's shiny and looks similar to silver. Let's call it 'mithril'." Wu Di came up with a plan.
"The RMB is made of stainless steel. Ordinary steel-stamped coins look okay at first, but they will rust after a while. People will know they are iron at a glance, and you will get a reputation as a counterfeit. It is not advisable."
"What do you need to make stainless steel?" Yifan has already had plans for stainless steel coins. If he wants to have this "mithril", why bother with so many eggs? Just use stainless steel as the base. Anyway, only the Time Travel Group can make stainless steel, and not even a gram of stainless steel exists in this time and space. It can be used without considering external factors. Moreover, "mithril" looks good and is not light in weight, so it is unlikely that it will replace silver.
"Need a nickel."
"Do we have this?"
"As for non-ferrous metals, the Holy Ship basically brings some reserves - including a lot of stainless steel. However, it is impossible for people like the Executive Committee to use it for coinage - according to this If you plan to help engineers, it would be better to use the money in the industrial field as well.”
"As long as there are suitable substitutes, I have no objection." Yifan said, "Can nickel be imported?"
"If you want to import from Southeast Asia, you may have to mine it yourself - you have to do everything yourself these days. It seems that it is also available in Guangdong. But making stainless steel may not be that simple."
"Can we submit it? Let the industrial department solve it." Yifan said, "By the way, we can also make aluminum coins. Aluminum products were also very powerful at the time, and they were cheaper than silver. As long as we control the output, we can Acts like mithril.”
"Aluminum coins are too light, and the quality doesn't look good after a long time. I really like the concept of stainless steel." Wu Di said, "I should have bought more one yuan and one dime RMB if I had known it. It can be used directly. The new version of the coins There is no country name, and there is no need to even explain.”
"It's too heavy. Instead of carrying this, it's better to carry stainless steel. At least you can define the denomination and size yourself."
"Okay. Let's go up with two sets of plans. The issue of auxiliary coins must be solved."
Everyone has reached a basic agreement on this issue. The next thing is to decide on various details and formulate a plan at the work meeting. This plan must be reported to the Executive Committee for discussion, and after approval, it must be sent to the Senate Standing Committee for approval. The latter is basically just a formality.
"On the executive committee, it's hard to say what Duke Ma's attitude is." Chen Ce said to Yi Fan, "The Duke is not interested in your proposal of a comprehensive accounting of the economic system." x! ~!
