Which is better, the gold standard or the silver standard, Emperor Zhu Youzhen of Chongzhen doesn't care, what he cares about is which is more beneficial to the economy of the Ming currency to rule this world in the future!

How to use piles of blank paper to control the world! This is the question that Emperor Chongzhen Zhu Youzhen is most concerned about!

Emperor Chongzhen Zhu Youzhen has actually begun to explain the development trend of history to these ministers and important eunuch assistants!

The gold exchange standard is a gold standard in which the currency of a country holding a bullion standard or coin standard allows the national currency to be exchanged for huàn into the currency of that country without restrictions. Under this system, only bank bills are circulated in China, and bank bills cannot be exchanged for gold, but can only be exchanged for gold bullion or the currency of countries that implement the gold standard. Countries with a gold exchange standard maintain a fixed ratio of their currency to the currency of another country with a gold bullion or gold coin standard, and maintain a stable value of their currency by buying and selling foreign exchange without restrictions.

The bullion standard and the gold exchange standard largely disappeared in 1973.

The first country to implement the gold coin standard was the United Kingdom (Newton was the first to propose this system), and in 1816 the British government issued coinage regulations, issuing gold coins at 3 pounds, 17 shillings, and 10.5 pence for 1 ounce of gold, and silver coins were placed as auxiliary coins. In 1819, regulations were enacted requiring the Bank of England's bank notes to be exchanged for huàn gold bars in 1821 and huàn gold coins in 1823, and the restrictions on the melting of gold coins and the export of gold bars were lifted. Since then, Britain has implemented a true gold standard. By the late 19th century, the gold coin standard had been widely adopted in capitalist countries. It has become international. Due to the prominence of Britain in the world economic system at that time. It's actually a pound-centric one. The international gold standard based on gold. This international gold standard lasted for about 30 years until it was dissolved at the outbreak of the First World War. In the heyday of the gold standard, gold was the most important international reserve asset of all countries, and the pound sterling was the most important means of international liquidation. The reason why the British pound is as important as gold is due to the strong economic power of Britain at that time, London became an international financial center, and Britain was also the center of international economic and financial activities. As a result, an international gold standard centered on gold and the British pound was formed, which is also known as the Sterling Exchange Standard System.

The international monetary system before the First World War was a typical international gold standard monetary system. This international monetary system, which lasted from about 1880 to 1913, was formed spontaneously after the economic ties between the capitalist countries became closer and the major capitalist countries adopted the gold standard monetary system, which was formed on the basis of the domestic gold standard adopted by the United Kingdom, the United States, Germany, the Netherlands, some Nordic countries and the Latin Monetary Union (consisting of France, Italy, Belgium and Switzerland).

With the development of contradictions among the major capitalist countries, factors that undermine the stability of the international monetary system are also growing. Britain stopped exchanging gold and paper money during the Napoleonic Wars and the United States during the Civil War. By the end of 1913, Britain, France, the United States, Germany, and Russia accounted for two-thirds of the world's gold stock, and the vast majority of gold was owned by a few powerful countries. This weakens the foundations of other countries' monetary systems. By 1913, about 60% of the world's currency was concentrated in central banks in gold. Countries often use paper money to circulate in the market, which affects the credit of the currency, and some countries in order to prepare for war, government spending has increased sharply, and a large number of bank bills have been issued, so it is more and more difficult to exchange bank bills for gold, which destroys the principle of free exchange of huàn. In times of economic crisis, commodity exports decreased, and capital flight became strict, causing a large outflow of gold; Countries have restricted the movement of gold, and gold cannot be freely transferred between countries. As some of the conditions necessary to maintain the gold standard were gradually undermined, the stability of the international monetary system was no longer guaranteed. After the outbreak of the First World War, countries stopped exchanging bank bills for huàn gold and banned the export of gold, while inflation was severe.

During the war, countries implemented a free-floating exchange rate system, exchange rates fluctuated violently, and the stability of the international monetary system no longer existed. Thus the gold standard came to an end.

After the First World War, in 1924-1928, there was a period of relative stability in the capitalist world, in which production in the major capitalist countries returned to its pre-war level and developed somewhat. Countries tried to restore the gold standard. However, since the basis of the circulation of gold coinage had been weakened, it was not possible to restore the typical gold standard. At that time, with the exception of the United States, most other countries could only implement the gold standard with no gold coins in circulation, which was the gold bar standard and the gold exchange standard.

The bullion standard and the gold exchange standard are also called incomplete or incomplete gold standards because they do not have a series of characteristics of the gold coin standard. Under the impact of the world economic crisis of 1929-1933, this system was gradually abandoned by various countries, and they all implemented the non-cash credit currency system.

After World War II, an international monetary system centered on the U.S. dollar was established, which was actually a gold exchange standard, in which gold coins were not in circulation in the United States, but other governments were allowed to exchange gold for gold in U.S. dollars, and the U.S. dollar was the main reserve asset of other countries. However, due to the impact of the dollar crisis, the system gradually began to waver, and in August 1971, when the U.S. government stopped the dollar against gold and devalued the dollar twice, this incomplete gold exchange standard also collapsed.

The main reasons for the collapse of the gold standard, which had been in use for about 100 years, were: first, the growth in gold production was much lower than the growth in commodity production, and gold could not meet the needs of the ever-expanding commodity circulation, which greatly weakened the basis for the circulation of gold coinage. Second, the distribution of gold stocks across countries is uneven. At the end of 1913, the United States, Britain, Germany, France, and Russia accounted for two-thirds of the world's gold stocks. Most of the gold stock is controlled by a few powerful countries, which will inevitably lead to the destruction of the free minting and free circulation of gold coins, and weaken the basis of gold coin circulation in other countries. Third, with the outbreak of World War I, gold was concentrated in the purchase of arms by the participating countries, and the free export and cashing of bank bills were stopped, which eventually led to the collapse of the gold standard.

The collapse of the gold standard has had a huge impact on international finance and the world economy:

It has opened the door for the general currency depreciation and inflation policy of various countries.

This is because after the abolition of the gold standard, in order to make up for the fiscal deficit or to expand the arms war, countries will indiscriminately issue unredeemable banknotes, which will accelerate recurrent inflation, which will not only destroy the circulation of currency and credit systems in various countries, but also aggravate the contraction of export trade and the deterioration of the balance of payments of various countries.

The sharp fluctuations in the exchange rate have impacted the world exchange rate system.

Under the gold standard, the internal and external values of currencies are generally the same, the comparison between currencies is relatively stable, and the exchange rate system also has a relatively solid foundation. However, after the circulation of paper money in various countries, the process of determining the exchange rate has become complicated, and the changes in supply and demand caused by the balance of payments and inflation play a decisive role in the exchange rate, thus affecting the exchange rate system and affecting international monetary and financial relations.

The gold coin standard is a stable monetary system. Gold freely played the function of world currency, promoted the development of commodity production in various countries, the expansion of international trade, promoted the development of capitalist credit, and also promoted the export of capital. The gold standard automatically adjusted the balance of payments and promoted the prosperity and development of the world economy during the rising stage of capitalism. (To be continued......)