Shi Bufan feels that this is really a historical joke, and it is really funny. Pen~Fun~Pavilion www.biquge.info has always been a country that perishes because it is weak, but if the country perishes because it is too strong, this is actually a very funny historical joke. At present, Shi Bufan has released the maximum productivity of Datang. However, there is also a huge consequence, that is, the currency cannot meet the market demand. If deflation persists, but productivity increases a hundredfold or a thousandfold, the consequence of this will inevitably lead to further deflation of the currency, and the market will collapse completely.

In the end, it will cause social unrest, and a large number of people will not increase their income after increasing their production, resulting in the tragic situation of "overcharging three or five buckets of rice". There is a serious oversupply of market output, and the people will be dissatisfied with it. The society undergoes a drastic adjustment, and this process may break out into violent reform, and Datang may become a victim of destruction under this violent reform.

This is not impossible, on the contrary, it is very likely. It must be solved as soon as possible, otherwise Datang may really perish because of excessive prosperity.

"Zhao Qiang, next, I plan to join forces with you, as well as the officials of the Datang Budget Committee, to jointly write to the imperial court to find a way to increase the money supply and ensure the needs of the people." Shi Bufan said.

Zhao Qiang was also aware of this consequence and immediately agreed to this result. In terms of financial management, no one in the entire Datang knows more than Shi Bufan, so Zhao Qiang didn't dare not listen to Shi Bufan's opinion.

"Still, it doesn't have to be resolved. The first thing we need to solve is the lack of money supply. Since the money itself is already insufficient, it is better to loosen it further and adopt an easy monetary strategy. Ensure that our market has as much currency as possible to circulate and protect private business exchanges! Shi Bufan said.

This monetary policy is no stranger to Shi Bufan, and when there is severe deflation, the government often adopts loose monetary policy in response, that is, to increase the money supply. In fact, there are just a few tricks that come and go, and Shi Bufan, as a macroeconomic scholar, naturally understands the means here.

"First, we lowered the interest rate on savings. In the future, we will stop collecting savings, and even lower the interest rate on savings, and take the initiative to lower the interest rate to encourage the people to consume. Shi Bufan said.

If the interest rate on savings is too high, then people often want to earn interest through savings, which further reduces the circulation of money in the market, which is not good news. So when there is deflation, the central bank often lowers the interest rate on savings to "force" people to spend. The fact that "negative interest rates" have even been created through various means has encouraged the people to consume, expand domestic demand, and promote circulation as soon as possible.

Shi Bufan first used this trick to take the initiative to reduce the interest rate on savings and encourage people to consume. The process of consumption will also increase the supply of money in Europe and drive economic development.

The biggest victim of this deflation is the money bank, and they naturally dare not continue to collect savings, for fear of smashing their hands. Reducing interest rates is inevitable.

"Second, make it easier to get a loan. In the future, when reviewing loans, the conditions can be appropriately relaxed, so that businessmen can obtain loans. Even, reduce the interest rate on loans, take the initiative to reduce the interest rate on loans, so that more people have the idea of loans, and support businessmen to expand production. At the same time as production is expanded, a lot of the wealth of the merchants will flow into the hands of the common people through various means, such as wages or other means, and finally flow into the hands of the people, but we have lowered the savings rate, and the people will spend it as soon as possible. “

The method used by Shi Bufan is very simple, but it is also the most effective. Direct monetary easing is also the most common way for governments to tackle deflation. The most common way to solve inflation and deflation is actually this "three-board axe". In the event of inflation, by raising the reserves, as well as raising the interest on deposits, and tightening the monetary system, it will be difficult to increase the interest rate on loans, which can reduce the circulation of money in the market and reduce the curbing of inflation.

And in the case of deflation, on the contrary, the loan is made on the terms of the loan, and the interest on the loan is reduced. It also reduces the interest on deposits, promotes the people to consume, and causes the currency to circulate as soon as possible.

This practical mathematical metaphor is a metaphor between positive and negative numbers, inflation is positive, deflation is negative, and the most appropriate way is to "go to zero". Whether it is to solve inflation or deflation, that is, to make this as "zero" as possible. Once it is a positive number, then the result of zeroing is achieved by "subtraction". However, once it is negative, it is necessary to reset it to zero through "addition", which is the right way to solve it.

Now that Datang has begun to deflation, what the extraordinary thing to do at that time is to reduce the reserves of the bank as soon as possible, reduce the interest on deposits, and reduce the interest on loans to promote the circulation of money in the market and ease the pressure of deflation.

At that time, after Bufan said this three-plank axe to alleviate inflation and deflation in later generations, everyone present had no opinion.

"Husband, that's not enough, is it? According to what you said, deflation is a serious shortage of money supply, but we are only alleviating it, not curing the root cause. At present, the biggest pressure is that the rate of material increase is too fast, and the increase in productivity far exceeds the supply of money, not even double or two, which is a very large multiple. When we do this, it's just relief at best. If we want to solve the problem fundamentally, we must increase the amount of currency issued by the imperial court," Qin Jiarui said.

Shi Bufan also sighed and said, "Jia Rui, you have also made a lot of progress!" That's right, I'm alleviating this, but it's still a symptom but not a cure! The current copper mine in my Datang is a fatal shortcoming, the copper production is insufficient, and even the money supply of the imperial court is too slow. The cost of minting money in the imperial court is too high, and sometimes it is even at a loss. ”

In fact, the coinage of the Tang Dynasty was sometimes at a loss, and perhaps ordinary people could not believe that the coinage would lose money. But don't think of the coinage of the Tang Dynasty as the printing of money in later generations. In later generations, the cost of printing money was naturally simple, but in ancient times, it was not only the price of metal raw materials, but also the price of labor, the backward technology of coinage, and the backward means of those government organizations, resulting in the high cost of coinage.

In later generations, coinage may be able to collect "seigniorage tax", but during the Tang Dynasty, coinage was a risky thing. Sometimes you can make money, but not much. But sometimes it loses money, because this is also physical money, and physical money itself is valuable. Paper money itself has no value, so the cost of printing money is very low, and it is almost all seigniorage!

Why did the standard system in later generations change again and again, in fact, from the copper standard to the silver standard, and finally to the gold standard, and as a result, the gold standard finally collapsed again. In fact, this is caused by various reasons. The disadvantage of the copper standard is that copper is an industrial product, and the price changes are very volatile, and the price changes will further drive the price fluctuations of other commodities as a whole.

Commodity prices should be stable, if the price is unstable, whether it is arrogant or falling, the consequences are great. People don't want to be on a roller coaster on a regular basis, and the roller coaster of prices is very fatal enough to give people a heart attack. Price and stability is the pursuit, so from the copper standard to the gold and silver standard, and finally the gold and silver mining volume can not meet the economic development, so the gold and silver standard will also collapse.

"At present, Datang has this trend, the copper standard is no longer able to meet the supply, the mining of copper ore has been unable to meet the demand, or the mining cost is too high, and finally the imperial court is unwilling to mint money. The pressure is too great, but this Tang Dynasty does not have the opportunity to implement paper money! Shi Bufan thought.

In the Tang Dynasty, there was no opportunity to implement paper money, because paper money was not easy for the common people to accept. Even if paper money is introduced, the consequences are even more unimaginable. Let's not talk about how to prevent counterfeiting, let's just say that once paper money is implemented, once the bureaucrats of the imperial court taste the sweetness, they will desperately print paper money and plunder the wealth of the people. The ancient economic research was very shallow, and if paper money was rashly implemented in the case of insufficient economic theory system, then the Jiaozi of the Song Dynasty and the Jiaozi of the Ming Dynasty would be a lesson from the past.

The imperial court casually printed banknotes and plundered, and the people were miserable. Therefore, Shi Bufan did not dare to rashly use paper money, and the consequences of using paper money were too miserable.

"Husband, what do you think of using gold and silver as auxiliary coins? Gold and silver have a high value and can be used as a coin, as a medium of exchange for large transactions. As far as I know, in fact, before that, people used gold and silver as a medium of exchange for large transactions, and used gold and silver as auxiliary currency, so that gold and silver could officially flow into the market and alleviate the shortage of copper coins. Qin Jiarui said.

Shi Bufan still shook his head and said, "It's not appropriate, it's still not appropriate." You're actually using a double standard system, and the double standard system seems to avoid risks on the surface. However, it also has the consequence that bad money drives out good money, because you can't guarantee that the price of the two materials is stable. The exchange rate of gold and silver and copper coins is always changing, and you can't guarantee that their prices will always be stable. ”

Shi Bufan knows very well that on the surface, the double standard system is relatively "good", but why was the double standard system eliminated in the end? In fact, because of the situation of the two standard systems, there will be two kinds of price changes. The price of gold and silver will change, and the price of gold, silver and copper will also change. Once there is an error between the legal price comparison and the real price, it will also cause the people to collect the high-value metals, and then spend the low-value metals at the legal price.

When the whole society is like this, the high-value metal collection, the low-value metal spent, it will cause the result of "bad money drives out good money", and finally the market circulation is still the kind of low value, so the double standard system is also a very risky way.

Although the double standard system proposed by Qin Jiarui seems to alleviate the shortage of copper coins to a certain extent, it is also a huge risk. In particular, Shi Bufan knew that gold would continue to be promoted in the future, and gold would appreciate more and more, which would make gold collected, which would also not solve the problem.

Seeing that her plan was vetoed by Shi Bufan, did Qin Jiarui say anything, because she knew very well that Shi Bufan was far better at this kind of macroeconomic than herself. Shi Bufan's weakness lies in the micro economy, Qin Jiarui is better at micro economy than Shi Bufan, but macroeconomics is Shi Bufan's strength.

This kind of money supply definitely belongs to the category of macroeconomics, and Qin Jiarui knows that since Shi Bufan has denied her idea, it will definitely be reasonable.

"Paper money doesn't work, the double standard system doesn't make much sense, so in the end it has to come back to the problem of copper coins. If the copper money is not solved, then all the so-called regulation and control are alleviation, and the problem of deflation cannot be solved from the root. Even if there is a lot of money in ancient times that is 'when five', 'when ten' and 'when hundred', this is actually the result of bad money driving out good money. Shi Bufan thought.

In ancient times, it was common to mint large coins, which may weigh only two copper coins, but they were used as five. Of course, some are more excessive, and the weight of five copper coins can even be used "as a hundred".

In the beginning, this approach did help to alleviate deflation, and the people were willing to accept it. Later, however, the government discovered the benefits of doing so, and began to mint a large number of large coins without restraint, but instead reduced the minting of ordinary small coins. Because in the eyes of the government, big money is more valuable, and those who originally minted a few copper coins can now mint "dangbai", isn't that good?

However, this has caused the collapse of this monetary ecology, and the people are unwilling to trust this kind of big money, but will let the big money return to its true value. This is similar to the fact that some governments in later generations only printed large denominations, but did not print small denominations. Although the people were willing to accept it at first, once the denomination of the banknote was extremely inflated, the people would also readjust the value of the market.

In the final analysis, the invisible hand of the market will correct many things on its own, and no matter how hard the government tries, it will not be able to completely replace the invisible hand of the market. The government can only regulate appropriately, but it cannot completely replace the market. This big-money strategy also collapsed in the end, because the government couldn't control itself and its own desires, and finally let the market forcibly correct it.

"This is also the case in the middle and late Tang Dynasty, those 'big money' also collapsed in the end, and it will not work to solve deflation through big money." Shi Bufan thought.

The problem of deflation has been running through the entire Tang Dynasty, and it is something that the Tang Dynasty cannot solve, and even spread to the Song Dynasty, which also had a headache about it, and had to make all kinds of "iron money", Jiaozi Huizi and other paper money, and finally collapsed as well. It was not until a large amount of silver flowed into China during the Ming Dynasty that China successfully entered the silver standard, which was considered a temporary relief.

"The problem of deflation runs through the entire ancient history of China!" Shi Bufan scratched his head and thought.

(To be continued.) )