Water can carry a boat but also capsize it?
As Su Jing finished speaking, Zhu Biao and others began to think again.
"Mr. Su means, does the issuance of this currency also have the effect of regulating the economy?"
Zhu Fan understood somewhat, but was more confused.
"But Mr. Su said a long time ago that the value of banknotes is actually linked to commodities. No matter how many are printed, it won't change anything."
Zhu Xiang tilted his head and found nothing.
Zhu Di was silent as always, but the confusion in his eyes already told a lot of things.
Zhu Ji was very direct. He said to Su Jing: "Master Su, the student doesn't understand."
Zhu Yuanzhang outside the door also murmured to himself: "Water can carry a boat and capsize it. Paper money can destroy the economy and regulate it, but how to regulate it?"
Liu Bowen's eyes moved, obviously thinking about something.
Only Zhu Biao's eyes lit up and he said: "Master Su, the student has some ideas."
"Prince, please tell me."
Su Jing said with a smile, after saying so much, it’s time to understand something.
Zhu Biao said: "Master Su once told me about the Ping Bian method, one of the ways to adjust grain prices. Specifically, it divides good years and bad years into upper, middle and lower grades as the standards for purchasing and selling grain. In good years, the court is higher than the market. The grain purchased in good years will be sold at a price lower than the market price in bad years.”
"Students feel that banknotes have the same effect. When a good year comes, it means that the total number of goods in the entire market increases, and the prices of goods naturally fall. If the number of banknotes increases, then the quantity of goods and the amount of banknotes increase in equal proportion, the price We can also maintain stability.”
"On the contrary, when the year is short, a small amount of currency is issued, the total volume of goods is reduced, and the total amount of banknotes is also reduced, which can stabilize food prices."
As soon as Zhu Biao finished speaking, everyone else suddenly realized.
The over-issuance or under-issuance of banknotes can change the price of goods, but the price of goods is not only regulated by banknotes, but also affected by some natural and man-made disasters.
By using paper money in reverse, the price of goods can be stabilized in a relatively balanced state, which is equivalent to turning the previous shortcomings of paper money into advantages.
"The prince's words are very extraordinary, and there are countless ways to describe them."
Su Jing smiled and nodded.
Although what Zhu Biao said is very simple, there will be more changes in actual mediation, but it is enough to have such an understanding after just listening to such a class.
After all, for today's Ming Dynasty, paper money is still a bit ahead of its time.
The entire paper currency theory has not yet taken shape.
"That's it. Brother is really awesome. I definitely can't figure out what's going on here."
Zhu Ping became naive again. He had always been in awe of his eldest brother Zhu Biao.
"The mark is good, really good. This clarifies the need for the issuance of banknotes."
Zhu Yuanzhang's face was filled with uncontrollable joy. The deeper Zhu Biao's insights, the happier he was.
This is the future successor. The better he is, the more prosperous Ming Dynasty will be.
Liu Bowen also echoed: "His Royal Highness the Crown Prince has great views, and the veterans admire him. Mr. Su's teachings are truly extraordinary."
Although he was praising Zhu Biao, what he said clearly meant that Su Jing taught him well.
Zhu Yuanzhang was happy and didn't care about this little detail.
Zhu Fan said: "But brother, I understand that more banknotes are issued in good years, but how do you understand the issue of less banknotes in arrears? What if the good years come first and the arrears come last? In this way, if the banknotes are issued just in the good years, it will not matter if the banknotes are not issued in the arrears. It will decrease!”
As soon as the question of Zhu Fan, the third child, came up, it immediately aroused doubts among others.
"Yes, third brother is right. If this is the case, wouldn't the adjustment effect be achieved?"
Zhu Xi immediately agreed.
"The second brother is a wallflower who yells at anyone who says something. He really doesn't have any ideas of his own."
Zhu Yuanzhang couldn't help but frowned after listening to Zhu Xi's words.
Until now, Zhu Xi seemed to change his mind every time he listened to someone.
Liu Bowen said nothing. Even if what Lao Zhu said was true, it was normal family education for a father to belittle his son. But if he, an outsider, said that Lao Zhu's son was not good, it would be an overstep.
Zhu Di said: "Second brother, isn't this very simple? Since the court can issue banknotes, it can naturally also be withdrawn."
Zhu Di's idea was quite simple and direct.
However, as soon as he finished speaking, he was immediately met by Zhu Fan's insistence: "Fourth brother, banknotes represent the credibility of the country. The court can issue banknotes, but if they are recycled arbitrarily, it will only cause the people's distrust. If no one uses it, banknotes are just pieces of paper."
Zhu Fan's understanding of banknotes is quite profound.
This is not just a piece of paper, the credibility of the institution endorsed behind the paper currency is the key.
Zhu Di was speechless for a moment, not knowing what to do.
Everyone couldn't help but look at Su Jing again, wanting to get the answer from Su Jing's mouth.
Su Jing said: "The King of Jin is right. The national credibility represented by banknotes will definitely be lost if the people are fooled by power."
"However, this does not mean that what King Yan said is wrong, it just needs some improvement in the method."
The first sentence directly agreed with Zhu Fan, and everyone thought there was no problem.
But the topic changed in the second sentence, and Zhu Di's eyes suddenly flickered.
"Master Su, how can we improve it?"
Zhu Biao asked immediately.
Su Jing said calmly: "Although we have been talking about paper money, gold and silver coinage has not been abandoned. The role of gold and silver in the monetary system is still very important."
"I still remember what we learned at the beginning of class. Gold and silver are very rare and stable currencies, and their value is also very stable."
"So by regulating the exchange ratio of gold, silver and banknotes, can we achieve the effect of recycling banknotes? Although it is just a simple currency exchange, after the operation, it can actually change the total currency value in the entire currency circulation market."
"Of course, the prerequisite for such an operation is that the Ming Dynasty must have sufficient gold and silver reserves, otherwise a run will easily occur."
"I don't know much about the current gold and silver reserves of the Ming Dynasty, but I can probably guess that the current gold and silver reserves of the Ming Dynasty will not be too much. After all, there are too many places to use money."
"So, this is also one of the reasons why I say it is not appropriate for Ming Dynasty to issue banknotes now. There are too few gold and silver reserves."
The poverty of the Ming Dynasty is famous throughout all dynasties.
Of course, the poverty here refers to the poverty of the imperial court.
"The exchange ratio of gold and silver to paper money?"
Zhu Biao was a little confused and didn't react for a while.
Zhu Biao was like this, and Zhu Xi and others were naturally confused and didn't understand much.
Even Lao Zhu outside the door frowned and thought carefully: "Is this really okay?"
There were only two people whose eyes were different from theirs.
That is Liu Bowen and Zhu Ru.
Because the truth behind this can actually be explained using mathematics.
It happened that Liu Bowen and Zhu Xi were both better at mathematics.
"Of course it's possible, Your Majesty, what Mr. Su is talking about here is..."
Just as Liu Bowen was about to explain to Zhu Yuanzhang, Su Jing's voice sounded in the study.
"King Wu, it seems that you have an idea. You can briefly explain it to everyone."
Su Jing smiled at Zhu Xi, and there was no doubt in Zhu Xi's clear eyes.
Zhu Ru stood up and said: "Actually, an exchange ratio is a simple mathematical replacement. For example, the original exchange ratio is 1 gold for ten banknotes. When you need to reduce the number of banknotes on the market, you only need to increase the number of ten banknotes exchanged for gold. , for example, one point of gold is exchanged for ten coins of banknotes. In this way, many people who hold banknotes on the market will exchange the banknotes for gold and silver. In this way, the amount of gold and silver and the number of banknotes seem to have not changed. But as long as the imperial court reduces the issuance of banknotes, the number of banknotes in the market will naturally decrease."
"The converse principle is similar. The main thing is the change of the corresponding relationship."
After saying this, Zhu Ru sat down. For him, this was a simple mathematical problem.
Although he was precocious about the national economy and people's livelihood, he didn't think too much about it.
"It makes sense, fifth brother is smart!"
Zhu Xi was the first to speak again. At this time, King Qin was always indispensable.
Zhu Di said: "But if that is the case, how is it different from the coercion I mentioned? Doesn't this also consume the credibility of the court? After all, the exchange ratio of gold, silver and banknotes cannot be changed at will, right?"
"If you really want to change, how can the people trust the court?"
Zhu Fan nodded and said: "Yes, if this happens, the credibility of the imperial court will be greatly reduced."
Zhu Zhu shook his head and said: "I don't know about this. I just followed what Master Su said."
Zhu Xi immediately said: "Yes! What's the difference? Mr. Su."
Zhu Biao was still deep in thought, and Lao Zhu outside the door frowned even more tightly: "This kid Su Jing must have something to say, why are you always nagging!"
Liu Bowen smiled and said: "Your Majesty, just listen patiently, Mr. Su must have a clever plan."
"What King Wu said is the core method, but the actual operation requires some disguise, or changes."
Su Jing said calmly: "In layman's terms, adjusting the exchange ratio of gold, silver and banknotes means changing the amount of banknotes in the market. During operation, direct changes will definitely cause dissatisfaction or distrust among the people."
"But what if a medium is added to it? A limited amount of financial products are used to act as an intermediary for the exchange of gold and silver and banknotes. These financial products are purchased with banknotes, and then the financial products are exchanged for gold and silver."
"The amount of release and the time limit can be restricted by financial products. Even if the people do not trust it, it can be operated by the court. After all, whether it is banknotes or gold and silver, the largest holder is They must all be the imperial court!”
Su Jing once again proposed a concept, financial products.
Although everyone was not surprised that Su Jing Market came up with such a new word, it was hard for them to understand the word 'financial product' literally for a while.
"Mr. Su, what is this financial product?"
Zhu Fang wondered: "What is it? Mr. Su just invented it? What is its use?"
"Since it is a product, it should be some kind of item. The word finance is a bit obscure, but it is related to gold, maybe it is some kind of gold instrument."
Zhu Fan tried to express his thoughts.
Zhu Di looked puzzled and didn't even know what to say.
Zhu Zhu buried his head in writing and drawing on the paper, as if he was trying to do something.
Zhu Biao also tried hard to search all the courses Su Jing had taught him in his mind, trying to find clues about financial products.
"Bowen, have you ever heard of any financial products?"
Zhu Yuanzhang asked Liu Bowen on the side.
Liu Bowen shook his head and said: "Your Majesty, I don't know. If Mr. Su hadn't mentioned it today, I'm afraid I wouldn't have heard of it in the future."
Zhu Yuanzhang was a little surprised and said: "This guy Su Jing can always come up with something he has never heard of before."
Liu Bowen said: "Your Majesty, Mr. Su is a heavenly being, and he can know this from birth. This kind of thing is just ordinary."
"Heavenly beings, heavenly beings, my ears are getting calloused from hearing this."
Zhu Yuanzhang waved his hands, as if he didn't care, but inexplicably he thought of the conversation between Fengtian Palace and Su Jing.
Is Su Jing really a heavenly being?
In the study, Su Jing looked at the people who were immersed in thinking and said: "Don't think too complicated. Financial products are just a name. They can have physical objects or not. Just like the purchase of banknotes comes from the authority of the court, financial products can also It is a concept, and it is the product of economic development to a certain extent. Now you only need to know that financial products can be used as media to regulate the economy, and how to operate it, or how to do it. Everything is too early."
This course has reached the current point, and Su Jing feels that it has been talked about too much.
No, it should involve some concepts of modern finance. Although what Su Jing said was not complicated, it was still very different from what he had really learned before, and it was even wrong.
I just think about my own students. I have no foundation and can only explain it with some simple examples.
The core content of modern economics is far more complicated than what he said.
But there is no way, just like there is no way to directly use university mathematics theorems to teach mathematics problems to junior high school students.
Some things, even if you know they are wrong, you can only say that they are wrong.
The current educational level of the Ming Dynasty is like this, and Su Jing can only talk about it for now.
"Master Su, to what extent will Ming's economy develop before we can understand what you said today?"
Zhu Biao asked Su Jing seriously.
Su Jing was stunned for a moment, thought briefly and said: "I can't say for sure. Maybe there will be an opportunity within a few decades, maybe a hundred years is not enough. Who knows the development of the Ming Dynasty in the future."
According to the history that Su Jing knew, it would be impossible even if the Ming Dynasty perished.
But now, there may be such a chance.
Su Jing had no idea what kind of impact this 'butterfly' would have on the giant Ming Dynasty by gently flapping its wings.
But such an impact has definitely begun, and all we can do is wait for time to give the answer.
(End of chapter)
