Section 33 New Monetary Policy

Yi Fan said: "I don't dare to agree with his way of thinking. First of all, the pound and the dollar are built on the foundation that they are first and foremost a manufacturing power. Our current production capacity is high efficiency and low total volume. Most of the limited production capacity and products must be upgraded by themselves -- in the short term, even more effectively satisfying the demand for industrial consumer goods in Chinese mainland cannot be achieved, so it is still difficult to support the large-scale export of credit money by selling Lingao commodities alone, and it is even more impossible to use force alone to make money circulate. ”

"I don't agree with it, but the Dugong's thinking is still the one that Jihua is economically omnipotent," Wu Di said, "and he is infinitely devaluing the role of financial instruments." It is nothing more than a few decades ago, when the People's Bank of China (PBOC) was the only central bank and retail bank in the country, and then the PBOC retired to the second line and came up with four specialized banks to take over. ”

"Let's put this issue aside for the time being, let's talk about the new monetary policy." Chen Ce said, "Jihua economy, we are originally Jihua economy, and it is more Jihua economy than Su Xiu." ”

"Monetary policy is a menstrual problem, and there is no month when everyone wants to be an economist," Yi Fan said, "I think the Executive Committee has a big head on this issue -- first, they know that there is a problem with the grain bills, and second, they don't know what to replace them; Thirdly, and fundamentally, there are too many opinions. ”

Wu Di said: "From our point of view, basically copying the silver standard system is the most operational and stable system at present. It is easy to implement and acceptable to the people. ”

The current system is clearly an unsustainable temporary measure, so in the spirit of preparedness, people in the financial department have been working on this issue for a long time, and there are certain differences so far.

Chen Ce said: "We are a service department, and this matter cannot be done with the Executive Committee. The production department and the sales department are the leaders, and we just cooperate with them to solve the problems that exist in the great business, and look forward to five to ten years at most. ”

"Okay, you can talk about your plan." Everyone present knew that Chen Ce was actually commissioned by the Executive Committee to draft the new monetary system. His speech was meant to set the tone.

"There are a lot of strange theories now, but in the final analysis, there are basically two ways of thinking." Chen Ce said, "One is the silver standard, and the other is pure credit money. Both are beneficial, and I personally feel that with the current situation of Lingao, it is possible to engage in a credit currency system that is pegged to silver. ”

"I think it's good to use the silver standard at this stage, it's convenient, it's intuitive, and the credit is guaranteed." Wu Di said, "Referring to the use of Spanish Eagle Ocean in China, silver coins with a fineness of only 900 are better than 925 loose silver in real circulation because they are beautifully minted and easy to value." In many cases, silver dollars of seven and two cents can be used for one or two in a transaction, and the minting itself can generate profits. And you have to take into account the needs of foreign trade, without silver, you can't buy goods at all. ”

"Machine-made silver dollars." Yi Fan said, "If it is circulated, it will definitely become the object of the cellar of the old wealth on the mainland." Bad money drives out good money, and it is necessary to prevent it. China's silver black hole is not called for nothing. ”

"It's okay, let them store it. Anyway, when they go to Lingao to buy things, they always have to bring silver. It is good that the outflow and inflow are flat. According to our development momentum, I am afraid that the future will be seriously overtaken and inflation will be severe. Wu Di said.

"I'm afraid it's not that simple. What we need most is bulk cargo. Merchants who sell bulk raw materials don't necessarily want to buy anything from us. He would walk directly with the silver, instead of procuring our goods to take away. Besides, it was a standard silver dollar that was taken away, and it may not be 925 silver that was brought in. People tend to use the worst currencies. ”

"That's right, silver is the equivalent of foreign exchange to us." Chen Ce tapped the teacup with a pencil, "What about our circulation coupons?" In fact, it was the renminbi 90 years ago. The Executive Committee would have liked to have the negotiable notes circulated on a large scale, but in fact this was not possible - at least not for the time being. Despite the measures taken, there is a limit to the number of foreign traders remaining. Negotiable bills have no purchasing power outside of Lingao. Outsiders will only choose to either accept the silver or spend all the negotiable notes,"

"You're going to peg money to silver?" Yifan immediately understood what he meant.

"Yes, it would be wrong to deny the value of silver, at least not for now. Let's start by looking at what are the problems we are facing? ”

He flipped through his notebook:

"The first is the scarcity of raw materials, except for steel, which is about to complete self-sufficiency in the short term, and the rest is almost entirely dependent on imports; second, almost all export products rely on indigenous channels; Thirdly, the population under control is too small. ”

"Isn't this similar to the early British?"

"Yes, but our burden is much greater than that of the British." Chen Ce said, "Britain only needs an adequate navy, and we have to build and maintain a strong army at the same time." Army, Navy, Merchant Marine; the ever-expanding administrative and jishu ranks; Large-scale basic education ...... All of this requires a significant investment. And what about our productivity? Unfortunately, the majority of the industrial products produced by Lingao are used for infrastructure construction and the expansion of new production capacity, and only a small part is used for export. Maintaining the current account balance ......"

Yi Fan coughed. Chen Ce realized that this was talking about state secrets. "People know what I mean," he said. ”

Yi Fan said: "Of course, in the future of Keyujian, Lingao's industrial production capacity will not be enough to effectively meet the demand for industrial consumer goods even in East Asia, so it is impossible to export grain circulation vouchers, and people will not admit it." So, in fact, there is only one answer - to temporarily implement paper money based on the silver standard, as has been done historically, 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 he said a lot, which was directly tampered with by Yi Fan, "It is a credit currency pegged to the exchange rate of silver" He continued, "The existence of silver circulation in the economic activities in Lingao itself is a waste of resources"

"With silver dollar coupons," Wu Di said, "there are no silver dollars on the market, only one dollar note is exchanged for one silver dollar; Or an incomplete silver standard. The amount of silver in banknotes is regulated, but the number of silver exchanged is limited. So as not to have a sudden run on the situation that cannot be converted. ”

"If I had to choose one or the other, I'd rather choose the first one. The second will only accelerate credit bankruptcy when we are not creditworthy. If it can't be converted into 100% silver, what's the point of stipulating the silver content? One day, if a big merchant comes to redeem a large sum of vouchers, you say, 'I'm sorry, this is over the exchange limit.' You can buy the goods and go back. Do you think he would understand what it means to be on the incomplete silver standard under the restriction of exchange? No. Chen Ce accentuated his tone, "He only knows one fact, negotiable coupons can't be exchanged for silver." And then all the people who do business with us will know this, and our banknote credit will be finished. If you can't change it, simply don't specify what the silver content is. ”

"You're the Great Leap Forward." Yi Fan knocked on the table, "Not to mention whether your so-called credit currency can be realized, let's talk about the scale of Lingao's economy?" You have to know that the total size of the economy is not a question of the total amount of money issued at all. We can't print money as needed, otherwise we will be the second to the public. ”

"Aren't you responsible for the accounting of Lingao's economic scale?" Chen Ce directly kicked the ball back, "The Ministry of Finance has asked all departments to establish a primary financial system, and this thing will train indigenous accounting personnel, and they will be able to get started soon." ”

"Difficult" Yi Fan said this word, "It's very difficult, I don't even have anyone to do auditing now, it's just delusional to talk about this." He took a sip of tea, "One accounting alone is enough for you to faint." ”

"I'll talk about this later, I'll talk about my thoughts." Chen Ce continued to talk about his monetary policy, "To put it simply, at present, the monetary system of the Celestial Empire can be imitated, the circulation of precious metals is prohibited within the territory, and not only foreign merchants, but also commercial activities in the controlled areas are all switched to the use of negotiable coupons, and no one can buy anything except the use of negotiable coupons. Through the return and exchange of precious metals, all the precious metals in the control area will be gradually mastered by the crossing group and used as foreign exchange for reserve and use. Paper money is pegged to silver at a managed, fixed exchange rate, which is not the same thing as the silver standard, and the exchange rate of silver and negotiable bills is only meaningful in trade. ”

"I see what you mean." Yi Fan said, "It boils down to the following: all the negotiable coupons are used in the area controlled by the group; Foreign small businessmen purchase Lingao products through the designated bank exchange and circulation volume; All large trade transactions are denominated in negotiable bills, but they are settled in a currency acceptable to the other party, and are completed by specialized agencies; Foreign trade enterprises in the control area of the group use negotiable coupons for foreign trade through designated banks; The negotiable vouchers will no longer be based solely on grain, but will be linked to a basket of basic agricultural and industrial products; The negotiable voucher will specify and the silver exchange rate. ”

"Roughly so." Chen Ce said, "The key to this policy is to implement compulsory foreign exchange settlement and sales. Under the influence of Lingao's infrastructure, jishu, and policies, a number of domestic joint ventures and wholly-owned enterprises will inevitably be born, and their export income of silver and gold must be forced to settle foreign exchange in Delong Bank; It is enough for them to consume in the territory, expand production, recruit labor, and use negotiable coupons; The silver they needed to import was approved by Delong before they were sold. Of course, with the outflow of negotiable coupons, there will also be a certain amount of daily consumption circulation in overseas locations such as Guangzhou and Leizhou. Different from the deposit certificate, Li Luoyou can purchase certain consumer services and products from enterprises controlled by Lingao in Guangzhou with the negotiable coupons in his hand. However, this number will be very limited in the near future and will not be of much significance. ”

"Your thing itself is still a silver standard in disguise. It's just that you are now using forced foreign exchange settlement to control the financial risks in the Lingao economy, and you have to make it clear that industrial products are priced in currency, not in currency. For Lingao, now the largest and most important import products are coal, iron and grain, and so on Hongji and Tiandu's production capacity is normal, the most important input is people, mines with slave labor, enterprises and agricultural workers from the mainland, as long as you don't turn your face with the Ming Dynasty, how much can the displaced people spend? Ultimately, it's a question of food. And there is a great possibility that the food problem will solve itself. In the long run, it is inevitable to see that the super-high will only be considered, and the problem of inflation will only be considered. This closed economy can only rely on the export of capital and the diffusion of jishu to keep itself from being played to death by inflation. ”

"This is a question to be considered in the future," Chen Ce said, "and the fact at this stage is that we are in deficit." And this deficit is here to stay for quite some time. ”

"In the early days of your system, you still relied on increasing silver reserves. 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 ideal. ”

"After the first five-year period, after the light industry production capacity comes up, the trade will definitely be surpassed, and I am not very worried about this."

"Well, in fact, it comes down to the question of how much is the scale of Lingao's economy. The size of the bank's notes cannot be calculated according to the silver reserves, but according to the economic scale of the high level. ”

"Aren't you going to have to do it?" Chen Ce said with a smile.

"Okay, okay. If your policy is passed, I have to talk to Cheng Dong about expanding the account room. It would be better to have another statistical bureau come out and enforce a unified accounting system," he thought for a moment, "and the currency is a single peg to silver." Gold coins are on the market. ”

"Yes."

"Let's do it for the time being, silver is not a proper currency in the long run." Yi Fan stretched his body, "The amount of silver is still too much, and it is better to use the gold standard - or the stainless steel standard or something." ”

Wu Di said: "Speaking of the stainless steel standard, there is another thing, no matter what plan the executive committee implements in the end, I strongly demand the implementation of a unified legal tender in Lingao and the cancellation of the current circulation of various silver and copper coins." Now the circulation in the market is too chaotic. Silver, copper coins, negotiable bills, copper coins and silver are not the same, and it is too difficult for banks to convert. ”

"The Governor has talked about this many times, but he started from the needs of the industrial field. The main thing is to recover the copper coins - there is very little silver in the daily circulation of Lingao. Copper coins are big heads. However, even the worst copper coins contain a lot of lead, and it is better to spend this thing as metal? ”

"If you want me to say that it is better to be trafficked directly to Southeast Asia. This low-quality small money is the most widely used currency in Southeast Asia, and there are maritime merchants who specialize in trafficking it to Manila. ”

"The reality is that what we need most is auxiliary currency, and what we need most in circulation is also small auxiliary currency." Wu Di said, "It is best to use metal minting for small coins, and now the paper money of 1 cent, 5 cents and 10 cents is not ideal, and the people are not used to using it, and there are still many circulation of copper coins in small payments." ”

A few people pondered for a moment, it is best to continue to mint copper coins, but this is a strategic material, whether it is the military industry or the power industry, it is in great demand. And copper's self-lubricating properties make it more useful in the traversal industry. Lingao's copper reserves themselves are small, and the Planning Institute will definitely disagree; Nor can iron money be issued - this thing has too little status in the minds of the people. Moreover, iron money was not issued in a very good era, and it was a currency with a bad reputation.

"How about issuing steel money? It's like the yuan. It's shiny, it looks like silver, let's call it 'Mithril,'" Wu Di had a plan.

"The renminbi is used in stainless steel. Ordinary steel stamped coins look okay at first, but it doesn't take long for them to rust, and the common people know that they are iron at a glance, and you still have a fake reputation. Not advisable. ”

"What do you need to make stainless steel?" Yi Fan has long had plans for stainless steel coins, why do you have so many eggs if you want this "Mithril", just use the stainless steel standard. Anyway, only the Crossing Group can make stainless steel, and there is not a single gram of stainless steel in this time and space. There are no external factors to consider when issuing and using. Moreover, the "Mithril" thing sells well and the weight is not light, so it is not known whether it can replace silver

"Nickel is needed."

"Do we have this thing?"

"In terms of non-ferrous metals, the holy ships basically have a little reserve to bring - including stainless steel, and a lot of it. But it was impossible for the executive committee to use it for coinage—it would be better to use silver for industry, as the engineers intended. ”

"As long as there are suitable substitutes, I have no objection." Yi Fan said, "Can nickel be imported?" ”

"If you want to import from Southeast Asia, you have to open your own mines -- you have to do everything yourself these days. It seems that there are also in this area of Guangdong. But I'm afraid it's not so simple to make stainless steel. ”

"Shall we report it? Let the industrial sector figure it out. Yi Fan said, "By the way, you can also make aluminum coins." At the beginning, aluminum products were also very strong, and the price was better than silver. As long as we control the production, it can also play the role of Mithril. ”

"Aluminum coins are too light, and they don't look good over time. I'm a big fan of the concept of stainless steel. Wu Di said, "I knew that I should have made more yuan and a dime in the first place." I distributed it directly. The new version of the coin does not have a country name, and it is not even necessary to explain it. ”

"It's too heavy, it's better to bring more stainless steel than this, at least you can define the denomination and size yourself."

"Okay. Let's take two sets of plans. The problem of coins must be solved. ”

Everyone reached a basic agreement on this issue, and the next thing is to decide various details and formulate a plan at the working meeting. This plan must be submitted to the Executive Committee for discussion, and after it is approved, it must be sent to the Standing Committee of the Senate for approval. The latter is basically a formality.

"On the side of the Executive Committee, Ma Dugong's attitude is difficult to say." Chen Ce said to Yi Fan, "Your proposal to conduct a comprehensive accounting of the economic system is very unkind. ”