Zuo Mengeng knew that under the prosperity of Songjiang Mansion, there would definitely be hidden problems.
Blessings come from where misfortunes depend, and misfortunes come from blessings.
Just find the problem and solve it.
I didn't expect that the problem would be so big.
"Isn't the business good? Why are there still problems with money?"
Songjiang Prefecture is now definitely the largest trading center in the world, and the transaction volume every day is very impressive. If a place like this is said to be short of money, what about other places?
Qu Yin explained the whole story after a long discussion.
"Business is indeed getting more and more prosperous, but we found that we are always the ones who suffer during the transaction. At first, we didn't know what the problem was, but then the local price situation came from Batavia.
Only then did we discover that the price of silver is different at home and abroad. The price of silver in our country is twice as high as that abroad. Those Westerners came to trade with silver and could buy twice as much for half the money.
Goods. The result is that we export more goods, but we don’t earn much silver.”
Zuo Mengeng's eyebrows narrowed and he suddenly realized.
"Ah, arbitrage."
This method was common in later generations, and anyone with a little knowledge of currency would understand it.
The way to take advantage of the differences in currency exchange rates between various regions and seek benefits from them is arbitrage.
He just didn't expect that someone in this era would actually do this.
No, he was obviously negligent.
Because Xia Guo has been doing the same thing to Japan.
I just didn't expect that the Westerners were doing the same thing to Xia Guo.
Although Zuo Menggeng is not a financial expert, he at least knows that the middle and late Ming Dynasty was a period when silver from all over the world poured into China.
Because China's own silver production is not large, it was the supply of silver from the outside that promoted Zhang Juzheng's reforms.
Otherwise, if you want to divide the land into an acre, what will the private sector use to pay taxes?
The large influx of silver also caused prosperity for a long period of time.
However, the exchange rate gap will only cause harm to China in the long run.
Westerners only need to spend a small amount of money to buy a large amount of goods from China, and they get a lot of advantages for nothing.
At the same time, the influx of large amounts of silver also caused currency depreciation and rising prices, which is inflation.
Originally, if this situation continued, the harm to China would not be too high.
After all, with sufficient silver inflow, the country's finances are guaranteed.
But the problem is that the Thirty Years' War in Europe has begun.
In order to win the war, European countries desperately invested resources and strengthened themselves. As a result, the flow of silver into China decreased sharply.
Now that things are getting better, prices are soaring rapidly.
Now Xia Guo is also facing this problem.
"Most of the Westerners who came to trade in the past six months suggested bartering and could not bring out enough silver. Although the goods they brought were all urgently needed by us, they lacked the currency transaction link and the government's tax revenue
It’s starting to drop sharply. This situation has to change.”
Chen Zhi has been sitting in Songjiang Mansion and raised serious questions.
Chinese goods were urgently needed by Westerners, but they could not produce more silver for trading, so they had no choice but to return to the most primitive method of barter.
This method is actually more fair than silver trading and can smooth out exchange rate differences. But it is very unfriendly to the government.
It is inconvenient to tax.
The reduction in tax revenue will also affect the national finance.
Faced with a series of problems, fortunately Zuo Mengeng came and everyone finally found the backbone.
This issue is very important.
Zuo Mengeng understood that if it was not resolved properly, it would inevitably cause heavy damage to Xia's economy.
Ultimately, the root of the problem lies in two aspects.
One is the exchange rate issue, and the other is the source of silver.
But the two questions are one and two, and two and one.
If there is sufficient silver in the country, the exchange rate will not be a problem.
However, it is obvious that sufficient silver cannot be obtained simply based on domestic conditions.
China itself is not a country rich in silver mines. Without the import of external silver, it simply cannot meet its needs.
"Silver's problem will still take some time, but it won't be too long. It should be alleviated by the end of this year at the latest."
Seeing that everyone didn't understand, Zuo Mengeng simply spoke more clearly.
"The country is preparing to take action against the Spaniards in Luzon. After the Spaniards are dealt with, Luzon will be ours. The mineral deposits there are very rich, enough to meet the needs of silver."
Zuo Menggeng clearly remembers that the Philippines’ silver reserves rank fifth in the world.
As long as we win here, we can definitely alleviate the domestic silver crisis.
As soon as this statement came out, everyone immediately became happy.
No one expected that economic problems would be solved by Zuo Menggeng with political and military issues.
In the past, many of them felt that it was not a good thing for the Xia Kingdom to go to war. Isn't it good to do business in peace and make money?
Now that they see that they can steal money, they realize how superficial they are.
Xu Ji felt relieved and mentioned an important issue.
"Zhongheng, Westerners like to cast silver into silver coins, and use the value engraved on it as the basis for price. Unlike us, we use the weight of silver as the basis. Is there something fishy about this?"
Zuo Mengeng still understands this issue.
"This is where the concept of money comes in."
"Currency is not some kind of physical object, but a general equivalent. It is to use something with a constant price recognized by the world to achieve the purpose of transaction. This thing with a constant price is currency. In ancient times, people used shells as currency. Later,
It’s gold, silver, copper, etc. Generally speaking, the smaller the quantity and the higher the quality of the metal, the higher its value as currency. For example, gold is more expensive than silver, and silver is more expensive than copper. This is the principle. In this case,
Currency itself has no value, so if you can use gold or silver, why not set a number? As long as there is state endorsement and sufficient gold and silver reserves as a guarantee, even a piece of paper can play the role of currency."
When everyone heard this, they looked surprised.
Xu Ji was even more frightened.
"At the beginning of the founding of the Ming Dynasty, Zhu Yuanzhang also issued banknotes, but in the end nothing happened. Zhongheng, you must be cautious about this matter."
Zuo Mengeng smiled when he heard this.
"How does Zhu Yuanzhang know what finance is? He just issued an imperial edict and slapped his head, and he issued banknotes. Ming Dynasty did not have enough gold and silver reserves to maintain the value of banknotes. After a long time, it will naturally collapse. We
The Xia Kingdom is different. Although there is not much silver, the gold reserves are not a problem at all."
In the territory currently occupied by the Xia Kingdom, not many silver mines have been discovered, but the gold mines are very gratifying.
In addition to the inherent gold mines in Shandong, astonishing gold reserves have been discovered in Sakhalin Island and the Far North.
In particular, a gold mine discovered on the Arya Peninsula (Kamchatka Peninsula) is quite comical.
After the exploring soldiers came ashore, they peed everywhere.
As a result, under the impact of urine, the dust on the surface of a large stone was washed away, revealing the mystery inside.
Under the bright sunshine, the big stone exudes a dizzying golden light.
How big is that rock?
It's as big as a human head.
There is no impurity at all, the whole piece is gold.
The Northern Military Region received the report and quickly dispatched mineral experts there. As a result, it was shockingly discovered that the gold reserves on the surface of that area alone were extremely astonishing.
Now that gold reserves can be guaranteed, Zuo Mengeng feels that it is time to change the backward financial system. This chapter has been completed!