"The country's current gold reserves total 7,831 tons. After calculation, they can fully assume the task of currency reserves. Using this to issue a new currency is enough to achieve stability and ensure market circulation."
Zuo Xiang informed everyone, and it was absolutely good news.
The issue of new currency mainly exists in two areas.
One is printing technology.
It must be ensured that new currencies have an insurmountable threshold. In this way, we can ensure that there will be no fraud and the order of currency circulation can be assured.
The other one is the gold reserve.
Since it has been decided that the currency will be linked to gold, sufficient gold reserves can ensure that the currency will not depreciate.
As for the issue of currency redemption, it does not exist.
Although Zuo Mengeng is not a financial expert, he also knows that there is no direct payment relationship between currency and gold in later generations.
The real currency exchange system with gold only existed for a short time in history and soon collapsed.
This is because using precious metals as a currency exchange tool will fluctuate greatly as the production of precious metals increases and decreases, and is unstable.
Therefore, it is more in line with economic development to remove the payment relationship between currency and gold, realize an independent system, and change it into a credit currency.
Since it is a credit currency, the strength of the country is even more important.
Does Xia Guo have this strength?
Zuo Menggeng, the central government, and all the officials at the top and bottom are full of confidence in this.
If you are not in the Xia Kingdom system, you cannot realize how powerful the Xia Kingdom is.
The monetary system supported by this is naturally more scientific and more beneficial to the country.
"We have fully understood the operating rules of finance in Europa through studying with the Dutch. We all agree that the construction of new currencies and financial systems must be inseparable from banks. We need to establish our own banks to manage currency and the financial system.”
Hou Xun's suggestion was actually the unanimous opinion of the Central Committee.
The manufacture and issuance of currency is related to national security and the vital interests of the people. One careless move may cause great harm to the country.
Therefore, it is necessary to have a professional and safe system to engage in related work.
The rise of banks in Europa made everyone aware of its merits.
Zuo Menggeng also agreed with the establishment of banks to issue currency and regulate the circulation of currency.
After all, this is how the financial system of later generations worked.
But Zuo Mengeng discovered that everyone's cognition still has huge flaws.
This is not due to the lack of ability of the central officials, but to the gap between the times.
"My suggestion is that banks are divided into two types. One is the central bank. This bank has only two purposes and tasks. The printing and issuance of currency, and it also has regulatory responsibilities."
Zuo Mengeng's statement aroused everyone's thinking.
Obviously, the central bank he mentioned is very different from the knowledge everyone has learned.
Specifically, banks in Europa are actually more like companies in the market.
Although it also mints and issues currency, the main function of this kind of bank is actually to absorb deposits from the market and provide loans to industries with potential. Make use of the interest rate difference to achieve bank profits.
Zuo Mengeng, however, made a detailed division of the bank's functions.
Although this central bank has no functions of accepting deposits and issuing loans, it has a monopoly on the minting and issuance of currency, and it also has the power to supervise other banks.
In other words, this central bank is more like a national authority responsible for the management and control of the financial industry.
Li Banghua was very smart and figured out many joints at once.
"What His Highness means is that banks that accept deposits, issue loans and have other commercial functions can be opened to private capital and even foreign capital. Only the three functions of minting currency, issuing currency, and supervising finance can only be attributed to the central bank. ?”
Who said people in this era are ignorant?
Zuo Mengeng responded with appreciation.
"Li Xiang has a keen eye and can discern every detail. This is exactly what I mean. You may wish to discuss whether this arrangement is more reasonable?"
While everyone was pondering, Huang Daozhou said something.
“While communicating with financial scholars in the Netherlands, I learned something incredible. The Netherlands is experiencing a horrific financial disaster. A trend has emerged in the Netherlands since thirty years ago. An inconspicuous flower has become a trend that everyone is chasing. Everyone is rushing to buy this kind of flower, and then sell it at a high price. After going around like this, the price of flowers has risen to an incredible level, which is really shocking. Many people have made huge amounts of wealth through this kind of trading.”
Jiang Wei didn't know why.
“Since this kind of behavior can make money, but you don’t know what the harm is?”
Zodiac Zhou was obviously talking about the affairs of other countries, but he still felt terror in his expression.
"Xiang Jiang, just think about it. No matter how noble a flower is, its value has its limits. However, through such speculation, the price of ordinary flowers has been rising steadily. The people involved are not buying flowers for the sake of thinking. For personal use. I just saw the rising prices of flowers and the benefits contained therein. Many people even bought flowers and did not keep them for a day before changing hands and selling them again. Just the price difference is enough to make the price rise. People suddenly became rich. But in the end, the price of flowers climbed to a height that people could not afford, and they could no longer be resold. This circulation collapsed in an instant. What were the consequences?"
Everyone listened carefully, and except for Zuo Mengeng, everyone was horrified. Unknowingly, cold sweat soaked through my clothes.
“Can’t people in the Netherlands see through the crisis?”
Huang Daozhou shook his head and sighed.
"Under the huge profits, everyone is crazy about them. Even if there are so few calm people, how can they turn the overall situation around? This time, there are several Dutch people who came to the country to help us build the financial system because they did not follow the trend, resulting in It cannot have a foothold in the Netherlands."
Faced with the vivid facts, everyone in the center was a little frightened.
Although since the founding of the country, everyone has realized the importance of wealth to the country. But when it comes to the Netherlands, wealth has turned into a scourge.
Will this scene happen again in the Xia Kingdom in the future?
Qu Shi suddenly thought of something and looked at Zuo Mengeng in admiration.
"Your Highness separated the functions of the bank and established a central bank to avoid this past experience. Is that correct?"
Among everyone's expressions of sudden realization, Zuo Mengeng didn't feel any relief.
"I can see the lessons learned from this past experience and think of ways to avoid it. But who can tell what crises there will be in the future?"
Later generations of people thought of various ways and took various measures in the financial field. But in the end, the crises are not just one after another, each one more harmful than the last.
Zuo Mengeng thought to himself that with his knowledge and ability, it might be difficult to avoid various financial disasters that were emerging one after another.
(End of chapter)
