Chapter 807: Deflationary Inflation

However, after all, oil is a heavily polluted resource, and while the primitive and barbaric exploitation wastes a lot of oil, it pollutes the local land and water sources, turning tens of thousands of acres of land around it into a heavily polluted area, and the incidence of malignant diseases, especially liver cancer and malformations, is extremely high.

After Zhiguo took over, while continuing to develop, while migrating prisoners to collect oil and sell it for profit.

Of course, at present, except for the salty foreign countries, the vassal states only regard oil as oil that can be burned, or use it to make ink, and rarely develop and utilize it.

Soon after the completion of the overall layout, in view of the actual demand and the rapid development of the steam engine, Bailiyan transferred the backbone in Yongxing City, opened a large-scale stamping and forging workshop, and at the same time tackled the research on stamping deformation and shaping processes such as canning, stamping, and stretching, so as to meet the needs of manufacturing various tanks and stamping parts, so the first batch of enamel iron tea jars and lunch boxes were produced in that year.

It is worth mentioning that the solution of the syringe needle production process provides the possibility for the mass production of glass syringes, but considering the problems of reuse and material corrosion, Bailiyan began to promote the acidolysis of nickel ore and cobalt ore, and obtain nickel and cobalt metal through the replacement of nickel and cobalt with low chemical valence, so as to produce a small amount of nickel-containing cobalt stainless steel, and also meet the requirements of improving the material of cannon steel.

After the relocation of the industry, the space of Yongxing City was vacated, and the Xicheng Iron Works successively excavated large-scale sedimentation tanks, and after the industrial wastewater was precipitated three times, the neutralizer was then injected and then precipitated before it could be discharged into the Yongxing River, so as not to cause water pollution and affect downstream irrigation.

Although there is no large-scale use of heavy metals such as arsenic and cadmium, there are inevitably trace amounts of harmful heavy metals in the ore, which cannot avoid the waste water generated by industrial smelting and the waste residue material entering the water source to form pollution.

During the three years of the first year of the Sheng, the Xianguo suffered three major changes. First of all, the success of the military system reform has greatly reduced the number of military personnel, which has had a great impact on the countries of the Central Plains. In particular, Zhiguo and Weiguo have the greatest impact.

After the Wei Guo incorporated the Yu Lun faction, the number of troops increased sharply by more than 500,000, and the number of posts could not be reduced until 645 of the Shengyuan Dynasty, and its strength was still as high as more than 1 million people.

Zhiguo's disarmament was slightly better than that of Weiguo, and by 644 the number of personnel had been reduced to 700,000, but it was still more than 200,000 more than the standing army twenty years earlier.

The reason for this is that the two new annexed armies of Long Yuan and Chitose are highly independent, and the Gongliang clan and the Tao clan are unwilling to reduce their own strength when they are not willing to reduce their posts, while Long Yuan and Chitose do not let go of military power, and more than 200,000 people are under his name.

If disarmament is a dose of antipyretic patches, it will be a thunderbolt for the production capacity of pig iron and steel in Xianguo to exceed five million catties in 643.

Due to the joint promotion of mechanical, chemical and smelting technologies, the popularization of mine cart tracks, the collection of ore resources has increased significantly, and the distribution of masks has improved the working environment, and the Wanchuan open-pit coal mine has prospered unprecedentedly.

The desulfurization process has improved the steel texture, and the newly built 20,000 jin blast furnaces have adopted the converter steelmaking method, making it possible to produce steel on an industrial scale.

The converter steelmaking method is to use scrap steel into the molten iron, the molten iron produces a self-rotating smelting phenomenon, through the feeding of scrap iron, the circulation of molten iron is accelerated, the time required for the full fusion of trace elements is shortened, so that there is no need to wait for a long time, and then the time of steel smelting is shortened, the consumption of coke is reduced, the steel production is accelerated and the cost is reduced, so that the steelmaking can achieve fast and efficient industrial production

Despite the sharp rise in iron production in Yongxing, the price of iron is still not lower than that of copper. On the one hand, the Central Plains market is huge, and it takes time for the intergenerational renewal of bronze farming tools.

On the other hand, demand is much greater than supply, and the production and sales areas are far away, requiring long-distance transportation, which further prompts the market to adjust prices.

More importantly, the third point is that a few years later, large-scale geological exploration found that the entire Central Plains has very few iron, uranium and precious metal ore resources, but is extremely rich in copper, tin, manganese, nickel, chromium, platinum group metals, rare earths and oil.

Copper alone accounts for 60 percent of the world's conservative reserves, 80 percent of the world's rare earths, and 45 percent of nickel.

On the contrary, iron ore accounts for less than 13 percent of the world's resources, and uranium, radium and other radioactive fission elements are less than 5 percent of the world's resources.

Forty percent of the iron ore is located south of the Sengaksan Mountains and the rest in the northern hemisphere. Less than 13% of the iron ore reserves are distributed in the vast Central Plains, and at present, it is extremely difficult to mine or find, which also restricts the development of the Central Plains from bronze to iron.

The huge market and the scarcity of resources have combined to lead to high iron prices.

Following the disarmament and restructuring and converter steelmaking, in 643 Shengyuan, in order to make up for the wealth and increase the supply of precious metals, King Xian decided to mine the silver mine in Lingshan in Jiangdong.

However, due to the dividends brought by the reform of the Xianguo Kingdom, and also because of the large amount of commodities seized by Fang Bo and exported to the Jin State, the economy of the Jin Kingdom did not improve, but deteriorated sharply, and in 643 it turned into a large-scale economic turmoil, and the cause was still land and land-related grain.

The premise of the new land policy in Xianguo was the comprehensive shrinkage and regression of the aristocratic interest class, as well as the implementation of the new policy for the interests of the newly occupied land, so there was no strong aristocratic conservative force in Xianguo, and most of the land belonged to the imperial court, and there was a major premise of redistribution.

However, the Jin State did not have this premise, so the distribution of land ownership was not resolved, but on the contrary, the Jin State popularized a large number of new agricultural farming and new agricultural tools in the Xian State, resulting in a large amount of land output, a serious surplus of salt and grain, and then caused a sharp drop in grain prices and salt prices.

For the time being, the more grain and salt is naturally the better, and the surplus grain and grass are stored for a rainy day.

However, if there is a serious overcapacity, it will inevitably lead to a sharp drop in prices, and the country's storage capacity is limited, and a large amount of grain that cannot be stored can only be stored in the market, resulting in a situation in which the supply far exceeds the demand.

Salt, as a necessity of life, was still in the hands of the nobles of the Jin Kingdom, and after the Jin State followed the example of the Xian State to dry salt, the salt was overflowing and the price plummeted. At the same time, a large number of salt workers lost their jobs and turned to peasant farming, which aggravated the grain surplus.

As a profiteering industry and the lifeblood of the country, salt's annual tax revenue accounts for more than 30% of the fiscal and tax proportions. The collapse of salt prices caused the revenue of the salt tax of the Jin State to plummet, and the internal injury of the state treasury was serious.

However, even though the price of salt is much lower than before, in fact, the price of grain has plummeted faster than the price of salt, and the price of salt has not only not fallen in terms of purchasing power, but has actually increased in disguise, and the people cannot afford to consume it.

The Jin State had bumper harvests for many years, but the land was not redistributed to the peasants, it was still concentrated in the hands of the powerful, and the whole country obtained huge amounts of grain and grass through land rights. However, the ultimate purpose of the nobles to obtain land income was to exchange for gold and silver, and the collapse of grain and salt prices, and the scarcity of precious metals, led to the inability of grain and salt to replace the city currency, and at the same time, the storage was full, resulting in a large amount of grain rotting in the hands of the nobles, and then causing the nobles to lose money in a large area.

However, this is not the root of the problem, because if there is more grain and salt, we can develop wine, vinegar, sauce, animal husbandry, etc., or change to other cash crops, but the problem is that there must be a consumer market.

If the land is not liberated, the peasants will not be able to benefit, and if the common people do not benefit, they will not be able to get rich, the consumption capacity of the largest consumer group cannot keep up, and no matter how much the non-staple food industry is developed, there is no room for consumption, so the surplus of food is further transmitted to the upstream industry and spreads to the whole country.

As a result, there was an extremely deformed economic model in the Jin Kingdom, where there was a serious overcapacity of grain, but the consumption power of the common people was low, and the resulting non-staple food industry was unconsumed, and the economy fell into stagnation.

At the same time, a large number of products seized by Fang Bo from Yongxing City were exported to the Jin Kingdom, which was subject to the limitation of the size of the consumer group, and the sluggish consumption and overcapacity, which further exacerbated deflation. It has hit the traditional domestic market, weakened the enthusiasm for production, and hit domestic production hard in a vicious circle.

On the other hand, in Xianguo, the great liberation of agricultural production brought about by the liberation of land, the comprehensive recovery of commodity production under the promotion of technology, not only the storage increased year by year, the government-run and private animal husbandry farms flourished, and the eating of meat gradually radiated from the upper class society to the middle and lower classes. Handicraft workshops of all kinds flourished, and the purchasing power of the common people and private traders increased greatly.

A large number of cheap salt in Xianguo is not only supplied for domestic export to foreign countries, but also chemicals related to salt conversion in chemical industry and metallurgy, thus providing new consumption areas, and at the same time, other related industries are driven by technology to fully occupy the commanding heights of efficiency and quality, and the products with low price and high quality quickly beat the traditional market.

The primary raw materials of cotton and soybeans in Ganfu, Shangguan, Wanchuan, Pengyuan and other places have greatly filled the domestic market demand, and have been able to produce a large number of light textile products in Xianguo and export them to foreign countries. While Fang Bo made money, he actually exacerbated the industrial imbalance and domestic deflation of the Jin State itself.

The king of Jin wanted to move troops to recapture Lingshan, and Bailiyan immediately sent a note to Ma Zhongning, the envoy of Jin, to completely stop importing the products of the Jin state, especially grain, capital, cotton, hemp, silk, wood, leather, livestock and other bulk commodities, and Chen soldiers bordered 100,000 horses, 120 artillery, 150 warships, and held for more than half a year.

Of course, things have come to this point, and Xianguo no longer needs to pay blackmail from the Jin State. But in fact, there is no absolute benefit.

The traditional industries of the Jin Kingdom have overcapacity, serious deflation, continue to expand inflation, and regain market vitality, so cash can solve the problem very well, Xianguo admitted that the increase in tribute was to give the Jin King face, and the Xianguo got Lingshan, and the Xian King also picked up a big bargain, and the two were cleared.

However, the matter is far from over, and the Jin State only knows how to solve deflation as soon as possible, but does not know that deflation under the industrial imbalance is actually a symptom of inflation.

The essence of sluggish consumption is that the people's consumption power is low, the consumption power is insufficient, and the products are unsalable, leading to deflation.

However, increasing the money supply cannot solve the fact that the people's consumption power is low. Moreover, the cash paid by the Xian State eventually went to the Jin State Treasury, and then the State Treasury passed through the bureaucracy and entered the hands of the powerful and ruling class in the name of purchase and reward, so the money finally went into the hands of the magnates.

When the money circulating in the market increases, the income of the common people is basically inconvenient, and the price increases, so it turns from deflation to inflation.