Chapter 633 Military Ticket 2
“That’s right.”
Paul looked at Eileen and said, “Money is worthless. We can call this phenomenon inflation. The word currency refers to the currency used as a means of circulation in social and economic activities. As the name suggests, it has expanded like a bubble, but its quality—that is, the corresponding material wealth in society—has not increased.”
“Correspondingly, if the Lord of Light appears again and reduces the number of gold coins in human society to five, then each gold coin corresponds to two loaves of bread, twice as much as before. In society There are fewer coins in circulation. This phenomenon can be called deflation."
Paul's explanation made the two sisters nod, but Catherine couldn't help but ask, "But this has nothing to do with what we discussed at the beginning. What does it matter?”
What about the “immature thoughts” Paul spoke of at the beginning?
“Okay, okay, it’s time to mention it next, be patient, don’t be anxious.”
Paul smiled, the explanation just now was a bit showy, and he said unknowingly It's a little too much.
“The materials that make up money cannot be seen everywhere or easily obtained, such as water, soil, and stone. Otherwise, everyone can easily create a credit certificate, so that it will be available immediately. There will be the inflation phenomenon I just mentioned."
"As for precious metals such as gold, silver, and copper, they are difficult to extract and are scarce in quantity, but they are not so rare that everyone is rare. This is just right. Their properties make them an excellent material for making coins.”
"I have a conclusion below - coins made of this precious metal are naturally compressible."
Catherine and Irene looked at each other and asked strangely: "Naturally compressible? According to what you just said, the total amount of metal coins in the world will become less and less?"
"Yes, it will become less and less, uh...I mean compared to material wealth, it will become less and less. Less." Paul nodded.
Irene was puzzled: "How could this happen? After everyone receives coins during a transaction, they will spend them in another transaction. The coins are just circulating, and the total amount will not decrease. Unless..."
The little princess blinked her eyes, "Unless it was the Lord of Light who reduced the number of coins like the example you just gave?"
"Haha." Paul laughed out loud, "Of course the Lord of Light would not do such a boring thing."
"In reality, there are many reasons that lead to fewer metal coins in circulation. Pay attention, what I said It’s a currency in circulation.”
Under the curious eyes of the two sisters, Paul explained.
“First of all, there is a relative decrease. You see, with the growth of population and the improvement of certain technologies, people create more material wealth, but the speed of minting new coins often cannot keep up with the growth of material wealth. The speed of mining and smelting precious metals is a big problem, am I right?”
Catherine and Erin nodded.
"Then there is real reduction. Metal coins are not easy to perish and are easy to preserve. As long as a normal person has the instinct to save coins, so when it is not necessary, people will try their best to keep money in their hands instead of Spend it." "That's right," Catherine agreed.
Paul continued, "Especially the big nobles and the rich! Many families have built vaults that can only be accessed and cannot be accessed, which are passed down from generation to generation."
"They have broader income channels than ordinary people and can obtain a large amount of money. Many of them squander the money at a much slower rate than the income speed, and some even take the money to their graves. This is As a result, more and more metal coins are being stored, and fewer and fewer metal coins are circulating in the market. "So, deflation or money shortage has occurred, and there is still a problem. Regarding another question, we know that gold coins and silver coins are not pure gold or pure silver. They are always mixed with some other metals. The quality of coins minted in various countries and periods is different, so there are good coins and pure silver coins. There are bad coins, and people often like to keep good coins with good quality and spend bad coins with poor quality. Eventually, the entire market will be filled with bad coins. This is the so-called bad money driving out good coins. . So..."
Paul paused.
Irene immediately looked like I have realized it, and said first: "From an overall perspective, the coins that the royal government can collect are destined to be less and less, and the money will never be enough to spend."< br>
And Catherine had already frowned and was lost in thought.
"That's right." Paul nodded, "Unless there is a violent social unrest, the owners of money can take the initiative - or be passive - to let the hidden money come to light and continue to circulate. This situation. "
The two princesses looked ugly, how big a turmoil was that? At that time, it would be hard to say whether the Aldo Kingdom would still have the surname Rodney.
Paul said: "Okay, I have said a bit too much. But Irene also said just now that the Royal Government will definitely be short of money, but what it is short of is those metal coins, and if we don't take care of those shiny scattered metals , only looking at material wealth such as food, cloth, livestock, minerals, etc. that can satisfy people's clothing, food, housing and transportation. Does the royal government lack these wealth?"
Catherine thought for a moment and shook her head.
Paul said: "Yes, the royal government does not lack wealth at all. The royal family directly rules the largest and most fertile land in Aldo, and the output of the land is countless. Logically speaking, it is The richest man in the country may never be able to exchange for enough currency because of the tightness of metal currency."
"What do you mean?" Eileen asked: "Let the royal family not give money. Instead of giving military pay to soldiers in kind, such as food and cloth,?”
“Well, this is a method.” Paul nodded, “There are many in history. Similar measures, such as using salt as military pay, are temporary and expedient and will certainly not last long.”
"If we directly use the original method of distributing supplies to pay soldiers, it will mean a lot of trouble. If the soldiers are stationed near an orchard owned by the royal family, so we pick a bunch of apples from the orchard and give them to the soldiers as military pay, and this pile Apples are equivalent to soldiers’ military pay in coins. Theoretically, we don’t owe the soldiers anything, and it’s very convenient.”
“But the soldiers have to eat, drink, wear, and even feed their families. , Just a bunch of apples can't do these things. He must take them to the market to exchange for money. Is it possible that most of the apples will rot before his eyes? Then think about the soldiers in the entire military camp. The scene of selling apples is so funny! Do the soldiers still have to march to fight with their property - a bunch of apples? "
"Haha!" Irene was described by Paul. Amused.
(End of this chapter)