"I see, this is all a trivial matter, so of course it's okay."
Su Jing immediately nodded in agreement.
Su Jing was very pleased that Qin King Zhu Ping was so eager to learn and ask questions.
A vassal king should have such an attitude.
Those in superior positions will only be surpassed by those below them if they do not learn. Merely serving as subordinates is not enough.
"Thank you, Mr. Su. Students still have doubts about the relationship between gold, silver and banknotes."
Zhu Xi didn't waste too much nonsense and directly started asking about his doubts.
What is the relationship between gold, silver and paper money?
Su Jing couldn't help but nodded when she heard Zhu Ping's question.
To be able to ask such a question, Zhu Xi must have thought carefully after class.
Su Jing smiled and asked: "Then King Qin, how do you understand the relationship between gold, silver and paper money?"
Zhu Xi paused and replied: "Mr. Su, I thought that paper money was a substitute for gold and silver. Gold and silver are not easy to carry, which is why paper money was born. Paper money itself has no value, and it all depends on its counterpart gold and silver. I Understand paper money as a certificate, a certificate that can be exchanged for a certain amount of gold and silver.”
Zhu Ping finished speaking slowly, feeling nervous in his heart.
It was a challenge for him to express his views in front of Su Jing and elaborate in detail.
Fortunately, he expressed it well just now, and he thought he expressed what he wanted to express.
"It seems that King Qin has really thought about it seriously. Such an understanding is already quite profound."
Su Jing nodded and did not hesitate to praise.
Zhu Ping said at this moment: "But, Mr. Su, when I thought about it like this, a new problem appeared."
"Since paper money is just a certificate of gold and silver, then the value of paper money is bound to gold and silver. If one day, gold and silver are completely replaced by paper money, how will the value of paper money come from then?"
Zhu Xi's ideas are already somewhat advanced.
In the Ming Dynasty, when gold and silver currency was still the main currency, we saw the future when paper money would completely replace gold and silver.
"Yes, yes, King Qin really surprised me. He has thought about it so deeply."
Su Jing admired sincerely.
This made Zhu Xi feel a little embarrassed.
"Mr. Su was so complimentary. I was just thinking about it, and I always felt that something was not right. I couldn't figure it out, so I ran over here."
Zhu Xi scratched his head.
Although he said it lightly, he actually thought about it seriously.
Among the princes, although he was second only to Zhu Biao in age, his academic level was below average.
Being able to ask such in-depth questions only shows that Zhu Xiang is not lazy at all.
Su Jing smiled and said: "King Qin, if you think more, you can always make progress. You are doing very well now."
"Let's get back to the topic, what is the relationship between gold, silver and banknotes? In fact, we still have to start with the concept of currency."
"First of all, gold and silver are the best monetary materials that humans have found in the long process of development. I won't go into details about the advantages of gold and silver. Anyway, gold and silver were chosen by humans, so they became currency pairs."
Zhu Xi nodded and said: "Well, Su Jing mentioned it in previous classes, and this is the history of currency development."
Su Jing continued: "Let's ignore the banknotes for now, let's just look at gold and silver. Gold and silver have a characteristic that supports their foundation as currency. Do you know what it is? King Qin."
Zhu Xi thought for a while and said, "Because gold and silver are very rare?"
"very good!"
Su Jing nodded and said: "Yes, the rarity of gold and silver is the fundamental reason why it was chosen as currency. Things are rare and valuable. Currency is money, and money must be valuable."
“But rarity is both the advantage and the disadvantage of gold and silver.”
shortcoming?
rare?
Zhu Xi was confused by Su Jing's words for a while. It was rare to see when it would become a disadvantage.
"If students don't understand, please ask Mr. Su to explain."
Zhu Xi asked Su Jing.
Su Jing said lightly: "Let me give you a very simple example. A farmer raises a pig and can sell it for an ingot of gold after one year. When the breeding technology improves, the farmer can raise ten pigs in one year with the same labor. A pig, then it’s ten ingots of gold.”
"The advancement of breeding technology is the advancement of productivity. At this time, farmers' production capacity increases, the number of pigs increases, and the amount of gold remains constant. In this way, the value of pigs will decrease, right?"
Zhu Xi nodded and said: "Well, this is what Mr. Su said before. The total value of currency corresponds to the value of all items. Gold and silver remain constant, but as productivity improves, more things will be produced, and the value of items will increase." The value will naturally shrink.”
"But what's the problem?"
Zhu Ming obviously hadn't understood the profound meaning of Su Jing's words.
Su Jing said calmly: "Then, I ask King Qin to think about it. If you were a farmer, what would you choose to do?"
"Should we work hard to improve breeding technology so that we can breed more pigs, or should we keep the status quo and just muddle along?"
After Su Jing finished speaking, Zhu Xi fell into silence.
After thinking for a while, Zhu Xi replied: "I understand Mr. Su. For farmers, if one pig can be sold for the same price as ten pigs, then they will have no incentive to improve breeding technology."
Su Jing nodded and continued: "Okay, let's continue. If the King of Qin becomes a vassal in your territory in the future, do you want this to happen?"
This was to change the status of King Qin from a farmer to a superior. Zhu Ping thought about this problem faster because he really knew how to rule the vassal.
"Of course I don't want to. On my land, the people work hard to farm and breed, and the more things they produce, the better."
Zhu Ping replied matter-of-factly.
For Zhu Xiang, the most important thing is not how much ten pigs are worth, but that he must have ten pigs.
The abundance of supplies is the key to determining whether his territory is strong or not.
However, as soon as he finished answering, he realized an important question.
"So, is this the disadvantage of too little gold and silver?"
Zhu Xi asked Su Jing.
Su Jing smiled and nodded: "Yes, if the production of gold and silver cannot keep up with the development of social productivity, big problems will easily arise."
"Fortunately, for the current Ming Dynasty, there are not enough events that can subvert social productivity, so there is not much problem in using only gold and silver and other metal currencies."
One of the basic characteristics of agricultural society is stability.
Without the development of industry, the feudal dynasty that lasted for thousands of years would just be reincarnated for hundreds of years.
As long as productivity does not develop, everything will remain in place.
"I see, Mr. Su is really knowledgeable, and the students already understand a little bit."
Zhu Jing looked stunned, really shocked by Su Jing's theory.
Su Jing continued: "Then King Qin, do you know what kind of measures will be taken when such a situation occurs?"
Zhu Pingdang even started to think about it, because this was exactly the situation he might encounter in the future.
You have to think carefully about this matter.
Soon, Zhu Xi had the answer: "Mr. Su, the student thinks that we should mine more gold and silver mines. We should not let the people lose the motivation to work hard. We must let them continue to use their talents, increase production, and increase supplies." .”
As the person in charge, Zhu Ping must consider himself first, so it is definitely impossible to reduce the people's enthusiasm for production.
Su Jing said lightly: "What if we can't find gold and silver mines? After all, gold and silver are very rare."
The precious nature of gold and silver is destined not to exist in large quantities.
The development of productivity is extremely rapid.
Zhu Xi paused and then said: "Then issue banknotes, which are treasure banknotes."
Su Jing smiled and said: "Banknotes are easy to distribute, but it takes time for the people to accept them. In the meantime, what will King Qin do?"
Every change in the form of currency requires slow acceptance by the people or the public.
This is not something that happens overnight, sometimes it even requires a long process.
"The students don't understand, so please ask Mr. Su for advice."
Zhu Xi didn't say any more and asked directly towards Su Jing.
Su Jing smiled and said: "I don't have any good ideas, but I know how someone handles it."
"The method is very simple, that is, reduce the gold content in the gold ingots, and only use 80% of the previous gold to cast the gold ingots, but the specifications are still the same. In this way, the same amount of gold can be used to cast more gold ingots. "
"The same method can be used for silver ingots or copper coins. After all, even copper, which has much richer reserves than gold and silver, will eventually be used up one day."
Su Jing's method is actually a trick after all.
"I see, Mr. Su is a great talent and the students admire him."
Zhu Zhen immediately cupped his hands towards Su Jing.
Su Jing said calmly: "King Qin, the method I mentioned is only temporary and cannot be used in the long run."
Zhu Ping said: "But it would be appropriate to use it during the transition period from gold and silver to paper money, wouldn't it?"
"maybe."
Su Jing said with a smile.
One thing Su Jing did not say was that the method he was talking about was actually thought up by a king in the West.
The king used the method of reducing the gold content in the gold coins.
At first glance, it may not be much different from what Su Jing said.
But in fact, by the Ming Dynasty, whether it was gold or silver, the identification technology of silver, that is, purity, was already quite proficient.
The method of reducing the gold content used in casting may be feasible in the West, but it may not be that simple to implement in the Ming Dynasty.
"Mr. Su, you have finished talking about the advantages and disadvantages of gold and silver as currency, but what is its relationship with paper money? I am not very clear yet."
Zhu Xi asked Su Jing again.
That was his problem in the first place.
Su Jing said: "King Qin, if you think about it carefully, does the problem of gold and silver being rare exist for paper money?"
Zhu Xi was stunned for a moment.
He was in a trance. He was still thinking carefully about what Su Jing said just now, and didn't make too many connections to the banknotes.
Now that I think about it, besides being easy to carry, the biggest difference between banknotes and gold and silver is here.
There is an upper limit on the reserves of gold and silver, but there is no such limit on paper currency.
"Mr. Su, this is what you said in class before. Paper money can also reversely regulate the relationship between productivity and the economy."
Zhu Ming said excitedly to Su Jing.
There were too many things Zhu Ping didn't understand in Su Jing's currency course.
Now that he was doing this, he felt a sense of smoothness.
Su Jing nodded and said: "Yes, it seems that King Qin understood quickly. The benefits of paper money have just been revealed. The difference between paper money and gold and silver currency is actually the connection between them."
"You always think that banknotes are just a substitute for gold and silver, but in fact, banknotes are more than just a substitute for gold and silver. Banknotes have their own unique functions and effects."
Zhu Ming's reaction and thinking this time also made Su Jing feel his efforts.
Sure enough, Lao Zhu’s genes will ensure that the children born will not be too bad.
"Well, Mr. Su, I understand. Paper money is like a necessity. The Ming Dynasty may not need it so much now, but at the right time, paper money will inevitably rise and completely replace gold and silver currency."
Zhu Xi said to Su Jing with excitement.
"No, King Qin, you are wrong."
Su Jing shook her head and directly rejected the excited Zhu Xi.
Zhu Xi was not angry, but asked: "Mr. Su, did I say anything wrong?"
Su Jing said lightly: "Paper currency has its own unique role, but in the final analysis, paper currency cannot exist alone. Without the authority of the issuing agency, paper currency is just a piece of waste paper. At the same time, paper currency also needs gold to anchor its value."
"Paper money will indeed become mainstream, but paper money will never replace gold."
In her previous life, Su Jing was very good at economics, and she was quite familiar with the history of banknotes.
By the time of Su Jing's last life, the development of paper money had already taken a long time.
Various problems have arisen, and their pros and cons and possible consequences have long become textbook cases.
Gold's unique position among currencies can never be replaced by banknotes.
Zhu Ming was still thinking carefully about Su Jing's words, looking attentive and calm.
Su Jing ignored Zhu Ming and continued: "Since gold's monetary properties can anchor the value of banknotes, when the value of banknotes becomes unstable, gold's monetary properties will extend beyond its hedging properties, so Gold and banknotes mainly have a negative correlation."
“When paper money becomes mainstream, gold will become an investment product with both monetary and commodity attributes.”
"When affected by different events, such as wars, it will directly cause the price of gold to rise. After all, gold itself has value."
"So, in the currency market, paper money and gold and silver are like a pair of inseparable brothers, always affecting each other all the time, because gold and silver are rarer and more stable, and usually change more. It’s paper money.”
…
Su Jing talked eloquently, and what she said was a little ecstatic.
Su Jing had studied these contents many times in her previous life, and had even done them on the exam paper. She remembered them very clearly.
Zhu Cang frowned and did not dare to be careless for a moment, for fear of missing a few words of Su Jing's story.
He was keenly aware that what Su Jing said was not just some theory, but also something that had a profound impact on Ming Dynasty.
(End of chapter)
