"Mr. Su, if the value of treasure banknotes is not determined by the imperial court, then how should it be determined? I really can't figure it out."
Zhu Fan said.
He considered himself to be a smart person, but he couldn't understand this matter at all.
"That's right, Mr. Su, I don't understand either. The banknotes are issued by the imperial court. Could it be that the imperial court can't decide how much they are worth?"
Zhu Xi also echoed.
Zhu Xi said: "Master Su, the student 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 treasure is really determined by the people of the entire Ming Dynasty."
The people of Ming Dynasty?
As soon as Su Jing said this, everyone who was originally confused became even more confused.
"Master Su, aren't those banknotes issued by the imperial court? Why are they related to the common people again?"
Zhu Biao immediately asked Su Jing.
Su Jing said: "Prince, I have been talking to you for a long time just now, mainly about the value of this treasure banknote. Do you think it is appropriate to call this value 'purchasing power'?"
Purchasing power?
Zhu Biao was stunned for a moment, then understood.
He nodded and said: "The power of purchasing is a very appropriate description of the value of treasure banknotes, and students think it is very suitable."
"What about you? You don't need me to explain what purchasing power means."
Su Jing asked the other princes.
“Students understand.”
“Purchasing power is explained in a concise and comprehensive manner, and students understand it clearly.”
"It's a perfect fit, better than the value."
"Master Su, it's very clear. The students know it."
Several people nodded quickly, showing no difficulty in understanding the emergence of such a new vocabulary.
They were all relaxed, Lao Zhu and Liu Bowen even more relaxed.
Su Jing continued: "Okay, now that everyone knows it, let me continue to say that the purchasing power of treasure banknotes determines the value of treasure banknotes. In other words, treasure banknotes are used to buy things."
"Let's take a relatively simple example. What is the most popular commodity in the Ming Dynasty now? Food, right? Food is the most important thing for the people. There are the most farmers, and the most food is produced."
"First of all, we can be sure that the Ming Dynasty's annual grain production is limited. There is no doubt about this. What about the treasure banknotes? Think about it, if the court wants to, it can print almost infinitely."
"For treasure banknotes, there is no limit on the materials used to make them, because if the materials are not enough, just increase the denomination."
"Now, we use treasure money to buy food. No matter how much treasure money we have, the most we can do is buy all the grain, right? When the food is sold out, no matter how much treasure money is printed, we can't buy food. ”
"In fact, it's not just food, it's the same for other things. All materials are limited. Now, you can understand why the court cannot decide the value of the treasure banknotes."
Su Jing talked eloquently, but what she said was actually not that profound.
But for Ming Dynasty, this theory is quite advanced.
Needless to say, Zhu Biao and other princes must have never studied or studied economics, and this currency has nothing to do with them.
The support Lao Zhu gave them was too much.
As for Zhu Yuanzhang, he has indeed read a lot of books. Recently, he has also studied a lot of currency knowledge in order to issue Ming Dynasty treasure banknotes. But after all, it is only the front-line content. What Su Jing said is still too in-depth.
Liu Bowen suddenly became enlightened. He had learned a lot and was involved in all aspects. At the same time, he was good at thinking. He understood Su Jing's words with just a few words.
Liu Bowen now understood the reason why Su Jing warned Zhu Yuanzhang to be cautious when issuing Ming Dynasty banknotes.
"Bowen, do you understand?"
Lao Zhu knew Liu Bowen very well. Just by glancing at Liu Bowen's expression, he understood what Liu Bowen knew.
Liu Bowen nodded and said: "Yes, Your Majesty, I understand. Mr. Su's wisdom is admirable at all times."
"Tell me, what's going on?"
Zhu Yuanzhang hurriedly urged, he was eager to understand what Su Jing said.
Liu Bowen shook his head and said: "Your Majesty, I only understand a little bit. It's still not good enough for me to tell others. Why don't we continue to listen to Mr. Su? What he said is definitely more thorough than what I said."
Liu Bowen still thinks of Su Jing's kindness in his heart. At this time, he will 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 reveal it.
Lao Zhu was very satisfied with Liu Bowen who did not fight or grab.
"Master Su, the student has some ideas."
Zhu Rui, the youngest, will be the first to speak.
Su Jing immediately said: "Say it."
Zhu Rui said: "The value of paper money actually corresponds to the value of all commodities. The things that paper money can buy are at most all commodities, that is, the total value of paper money is at most equal to the value of all commodities. Therefore, the value of paper money The value can only be less than or equal to the total value of the goods and will not change based on the number of banknotes issued.”
Zhu Rui is young and may have the least experience, but this is his advantage now.
Because of his young age, his thinking can be changed more easily by studying next to Su Jing.
Su Jing was also quite surprised when she heard Zhu Xi's remarks.
Having such thoughts at such a young age will be limitless in the future.
"Yes, King Wu, what you said is basically correct."
Su Jing nodded.
At this time, Zhu Fan raised his hand and said: "Mr. Su, if it is according to what the fifth brother said, then the goods produced by the people of the Ming Dynasty correspond to the value of the banknotes. In this way, it is the people of the Ming Dynasty who determine the value of the banknotes. wrong?"
Su Jing smiled and said, "Yes, King Jin seems to understand."
Zhu Di said: "Mr. Su, even if this is the case, the value of banknotes is still so high, so what's the problem?"
Even after saying this, they still did not think clearly about the consequences of the issuance of banknotes.
After all, it’s something I haven’t learned before, so I can understand it even if I don’t know it.
Su Jing said calmly: "King Yan's doubts are very interesting. I will tell you right away what problems will arise."
"Let's take a simple example as a model. Assume that the total value of all the goods in the Ming Dynasty is one hundred. At this time, when the paper currency is issued as one hundred coins, one coin corresponds to one commodity, right?"
"Well, now the imperial court feels that the money is not enough, so it has issued another one hundred yuan banknote."
"At this time, the banknotes total two hundred dollars, so at this time, two dollars correspond to one product, right?"
"Okay, let's continue to issue banknotes and issue another eight hundred coins. There will be a total of one thousand coins, which corresponds to ten coins for each product. The price of the product has increased!"
"For the court, the newly issued nine hundred coins can indeed buy things, but for the people who hold the original one hundred coins, they have done nothing. Isn't the one hundred coins in their hands equivalent to shrinking in disguise? .”
Su Jing spoke slowly and gave a simple example to describe the disadvantages of overissuing currency.
To put it bluntly, it is actually inflation.
For example, when Su Jing studied economics in her last life, she attended countless lectures.
However, most of those examples only appeared after the Ming Dynasty. It is not easy for Su Jing to explain them here, so he can only make up one by himself.
"What's going on? Is there still such a problem with the issuance of banknotes?"
Zhu Xi looked confused. He had always felt that banknotes had so many benefits, so they should be issued more.
But now, after listening to Su Jing's explanation, he realized that banknotes didn't seem to be that good.
Zhu Fan said thoughtfully: "The continuous issuance of paper money will lead to an increase in the price of goods. In the final analysis, it just robs people of their money."
Zhu Biao looked heavy. He just wanted to tell his father Zhu Yuanzhang to suspend the issuance of Ming Dynasty banknotes.
This problem is too serious!
It’s not just the increase in commodity prices and the devaluation of banknotes, it also involves the issue of the exchange of banknotes and gold and silver.
If something goes wrong, the Ming Dynasty's economy will definitely be in turmoil, and the people who will be unlucky will be the people.
Zhu Di's face was equally heavy, and he was thinking about something in his heart, but he didn't speak, just thinking silently.
Zhu Ju's expression was the calmest. He still regarded this as a difficult problem. If it was a problem, there would be a solution.
Outside the door, Zhu Yuanzhang's face looked a little ugly.
What Su Jing said was already simple and clear.
The issuance of this banknote is actually a disguised form of plundering people's wealth.
This goes against Zhu Yuanzhang's original intention of issuing banknotes. As for issuing fewer banknotes, Zhu Yuanzhang himself had the idea of using banknotes to solve the financial problems of the Ming Dynasty. If he issued less banknotes, it would be better not to issue them at all.
"Bowen, do you think I should also issue treasure banknotes?"
Zhu Yuanzhang asked Liu Bowen beside him.
Liu Bowen did not answer directly, but said: "Your Majesty, I only know that everything has pros and cons. 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 are now able to avoid the important and take the easy."
What Lao Zhu is most concerned about is whether the current Ming Dynasty can issue treasure banknotes.
Liu Bowen's answer was that it would definitely be possible for the Ming Dynasty to issue treasure banknotes in the future.
Liu Bowen said: "Your Majesty, it's not that I don't want to answer, but I am very touched by what Mr. Su said. I still have to wait until I finish listening to Mr. Su's class before I can have my own opinions and answers."
"snort."
Zhu Yuanzhang snorted coldly and said: "You just know how to shirk it. Don't you understand what this kid Su Jing said?"
Liu Bowen said no more, but the meaning was obvious.
You, Zhu Yuanzhang, said that Su Jing made it clear, so why bother asking this old man like me?
"Master Su, what if we control the number of banknotes issued? By ensuring that the value of banknotes is consistent with that of actual commodities, will this problem be solved?"
Several people were still silent, but Zhu Rui had already spoken out his thoughts.
Su Jing looked at Zhu Ju, nodded and said: "There is a certain way. In fact, this behavior of over-issuance of currency will lead to an increase in commodity prices. I call it inflation."
"To be precise, it is the phenomenon of currency depreciation caused by the currency supply being greater than the actual demand for money under the conditions of paper currency circulation, which means that the actual purchasing power is greater than the output supply, which leads to a sustained and widespread rise in prices over a period of time."
"To put it bluntly, the fundamental reason is that the purchasing power of banknotes is actually based on actual materials, but the issuing agency of banknotes can issue unlimited banknotes. No matter how many banknotes there are, there are only so many supplies, and the banknotes will naturally no longer be valuable."
"The control of the issuance of banknotes that you mentioned, King Wu, is indeed an effective way to solve the problem of inflation. However, in actual operation, this method is not so easy to implement."
"First of all, the Ming Dynasty's overall supplies are actually growing continuously. Because the population is increasing and technology is improving, output will naturally increase."
"Supplies are constantly increasing. If paper money wants to maintain stable purchasing power, it must be maintained at the same level as the supplies are increasing. This is very difficult!"
In Su Jing's previous life, she had seen many countries' economies collapse due to over-issuance of banknotes.
That is something that will still happen under the guidance of advanced economic theory.
Not to mention the current Ming Dynasty, this is easy to say but too difficult to do.
"Master Su, the student understands, but the student believes that no matter how difficult it is, there is always a solution. It is better than having no solution at all."
Zhu Zhu said seriously that for him, as long as he has methods and ideas to solve problems, he is not helpless.
Su Jing smiled and nodded. He still admired Zhu Ju's attitude.
Only such people are suitable for doing research. They are not afraid of difficulties and have the spirit of research. They are very good.
"Mr. Su, you just said that the level of supplies is actually increasing, right?"
Zhu Fan suddenly asked.
Su Jing replied: "That's right."
Zhu Fan added: "Then if there are no more issuances of banknotes after they are issued, as supplies continue to increase, will the purchasing power of banknotes of the same denomination increase compared to before? Just like the example you gave before, a one-hundred-dollar banknote will total If the value remains the same and all the products are sold from 100 to 200, then you are buying two products for one dollar."
"Yes, 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 originally sold for one dollar, but now two commodities can be sold for one, which means that it takes twice as much labor to obtain the original remuneration. Invisibly, the producer's production value has decreased. Deprived of something.”
"This is also where I say that King Wu's control method is difficult, because whether there are too many or too few banknotes, problems will arise. The degree of this is difficult to grasp."
"Once the control is improper, the interests of certain people at the bottom, that is, the majority of ordinary people, will be damaged."
"Now you still think that the issuance of banknotes is very necessary, do you want to implement it now?"
(End of chapter)
