Chapter 928 (2/2)

It is not that the coins of the current Ilus empire are over issued, but because the previous concept of gold = equivalent has been inherited, the gold coins of the old empire often have a large stock in the world and have not been recycled and recast, which leads to the current strange circle.

In fact, the existence of Star Diamond bank has greatly reduced the difficulty of gold coin trading. Bulk transactions have begun to use the bank card of Star Diamond bank for direct card swiping settlement, and the accounts are calculated within Star Diamond bank. In fact, prandal has a prototype similar to electronic payment, and has not fully realized electronic payment, Money naturally has its value.

”Do you just want to recycle old gold coins, or do you want to reform the current gold coin monetary system?”

Fiona sighed: ”if it's the former, I can find a way. If it's the latter, I'm afraid you have to discuss with Princess Aurelia and queen OLINA. The impact is too big and complex. I still can't play with political things.”

”Do it all.”

Donne said decisively: ”it is not only to recycle old gold coins, but also to carry out the existing monetary reform, abolish the monetary system of gold coins and introduce new currencies.”

”New currency?”

”Well, for example... Paper money.”

”Paper?”

Fiona was even more surprised: ”how can paper be used as money?”

Donne thought about it and said: ”Let me explain to you. For example, I am the president of Datang chamber of Commerce. You are the raw material supplier of Datang chamber of Commerce. Now I owe you one million gold coins. I don't have gold coins on hand and I don't have a card reader of Star Diamond bank for settlement. Then I write an IOU in the name of the president of Datang chamber of Commerce. You can use this IOU to pay in Datang chamber of Commerce Are you willing to accept the goods worth one million gold coins exchanged by any shop? ”

Fiona said without hesitation, ”of course.”

”Why would you?”

”Because you are the president of Datang chamber of Commerce... Oh! I see!”

Fiona immediately realized: ”the currency here represents credit!”

”That's right.”

Donne smiled with great satisfaction: ”expand the scene a little more. As the king of the Ilus Empire, I guarantee in the name of the king and issue paper money instead of gold coins. I guarantee that the purchasing power of paper money is the same as that of gold coins in the name of the royal family. Do you think businessmen will choose portable paper money or heavy gold coins?”

”Paper money, of course,” Fiona added after a pause. ”If the merchants are willing to trust the credit of the Ilus imperial family.”

”Yes, so to issue a new currency, the first thing to solve is the credit problem of the royal family, or more broadly, the economic, political and military strength of the Ilus empire. Only with strength can it be widely recognized, and the value of the currency issued can be more easily accepted by the market.”

Donne continued: ”by issuing new coins, recycling redundant gold in the market and smelting it into materials, we can greatly alleviate the problem of raw materials of oriha steel, and digest the gold coins left over from the previous dynasty in the process of currency replacement.”

”Do you want to recycle those old gold coins at a discount?”

”Of course!”

Don en said with a natural look: ”That's the currency issued by the previous dynasty, how can we recognize it! The reason why they can continue to circulate now is only because the object acting as the equivalent is' gold '. Once the status of gold is restored from the equivalent to metal material, those old gold coins will lose their trading value. Even if they are collected, it is meaningless, and they will force those people to sell them The gold coins that have been stored and do not circulate will be exchanged. ”

”Most importantly, in the process of replacing new currencies, we can control the total amount of new currencies issued. Through the replacement process, we can know how many currencies are actually issued in the market, so as to macro-control the whole market.”

Carrying out monetary reform is certainly not such a simple thing, but Donne only knows so much about this. He is completely ignorant of more complex economics and finance. He can't play with things such as treasury bonds and securities. He only knows that paper money is an embodiment of government credit, and now the new government of Ilus Empire, represented by him, has revitalized the whole empire Freshmen, the unprecedented high public support rate, coupled with the unparalleled position of Datang chamber of Commerce, the implementation of this new policy is ready, only due to the east wind.

Of course, it may be better to implement such a radical policy in a few years, but the problem is that time doesn't wait. Don can afford to wait. The world can't afford to wait

Who knows when the chaos army will arrive?

Therefore, it is better to promote policies that can promote economic development and industrial progress as soon as possible.

”But how do you persuade people to exchange the new currency?”

Fiona asked Donne, ”the emergence of new things is always accompanied by all kinds of doubts and suspicions. How can people accept the new currency so easily?”

In people's minds, gold coins are equal to gold and valuable things. If you let them exchange gold coins for paper money, they can't be so easy to accept.

It took a very long time for paper money to replace alloy money on earth. Jiaozi in the Tang and Song dynasties in China was the earliest paper money, which existed as the embodiment of bank credit. Later, Australia was the first country to completely use paper money to replace alloy money. After nearly a thousand years, we can imagine how difficult it was.

Fortunately, don really has a way.