Frank listened to Roland's stern warning, couldn't help but be moved, and took a step closer to him, his eyes full of earnestness: "Brother Roland, since you believe that John's plan for issuing paper money is not feasible, do you have a more secure alternative?" ”

Roland ignored the increasingly ugly "red-haired" John, and said to Frank: "When there is no other way, the 'old way' is often the safest way." In my opinion, the Imperial Treasury should first issue banknotes guaranteed by expected tax revenues, including, but not limited to, the expected profits of the Jotunheim Mining Company, promising that the value of the notes would be linked to gold and silver, not Magic Crystals, so that the debtor of the notes would no longer be a company, but the Imperial government. ”

"The difference between a country's government and a company is that the former is an 'unlimited liability' institution, and it is very likely that a company will fail to lose money if it is not operating well, but the probability of a country's regime collapsing will lead to a change of dynasty is much smaller, so the credit of paper money issued with national taxes as collateral is much greater than that of corporate bonds, and the government's promise that paper money can be exchanged for gold and silver of equivalent value unconditionally, and the people are happy to accept it."

"Your approach sounds good at first glance, but unfortunately it ignores a key factor, the Imperial Government needs to issue paper money precisely because of the lack of gold and silver, and what is worse is that the people also know that there is a lack of gold and silver reserves in the treasury, how can they believe the promise that paper money is worth enough to exchange for gold and silver? Most people, for the sake of safety, are afraid that they will rush into the bank as soon as they get the banknotes and ask for gold and silver, and we can't come up with enough gold and silver to quell the run, and the result is not a dead end! John Lauer sneered at exposing the logical holes in Roland's argument.

Roland didn't mind his cynicism, and said calmly: "I have also thought of this problem, but it is not difficult to solve. His Royal Highness Frank, the empire has the most abundant magic crystal resources in Vares, and the annual mining volume of magic crystal rough ore ranks first among all countries in Vares, but it lacks hard currency such as gold and silver; The situation in the Far East is the opposite, the magic crystal resources are scarce, but thanks to the abolition of silver's legal tender status, a large amount of silver has been recovered from the people through the issuance of silver banknotes, which are idle in the treasury and are not of use for the time being; In view of the above, I suggest that the Far East should be open to the Empire, and that the Far East export idle silver in exchange for the Empire's abundant magic crystals, so that the Imperial government would have abundant silver reserves, and that the issuance of paper money as a guarantee would not be afraid of a run on the people. ”

"Silver for magic crystals, both sides take what they need......" Frank stroked his chin and whispered Roland's suggestion, seemingly quite moved.

"His Royal Highness the Prince, I have something to say!" John Lauer was afraid that Frank would listen to Roland's advice, so he jumped up excitedly, "His Royal Highness Roland first said that paper money is guaranteed by corporate bonds, and the credit is insufficient, and the people are reluctant to hold paper money, and then he said that the expected appreciation of magic crystals will lead to the appreciation of paper money, and people are happy to hold it—isn't this inconsistent?" ”

"It is true that the two factors of depreciation and appreciation exist at the same time, and to a certain extent cancel each other out, but we cannot accurately calculate the magnitude of these two opposing forces, nor do we know under what conditions equilibrium can be achieved, and this unpredictable situation is exactly what the ruler should try to avoid."

Roland replied honestly, but could not convince the aggressive "redhead" John.

"Your Highness Roland, allow me to ask a presumptuous question, when you first issued silver banknotes in the Far East, did you predict the public's reaction in advance, and did you calculate in advance the true purchasing power of silver banknotes in the eyes of the public?"

Roland shrugged his shoulders awkwardly and replied truthfully: "The move at that time was indeed to take some risks, and in the end there was a thrilling completion of the issuance of silver banknotes, and I can't help but admit that there was an element of luck." ”

"Your Highness Roland, before the issuance of silver banknotes in the Far East, as far as I know, various economic indicators have a good growth momentum, there is no shortage of real money in the market, and the financial situation of the Kolas government is quite abundant, which can be seen from the interest rate of national bonds, in other words, the Far East did not need to rely on the issuance of silver banknotes to get rid of the financial crisis at that time, but you still took the risk of doing so, what is the plan?" John Lauer didn't wait for Roland to open his mouth and rushed to answer himself, "It's not because you realize that the issuance of paper money is conducive to the government's macroeconomic regulation and control of the national economy, and in the long run, the benefits outweigh the disadvantages, even if it is worth taking some risks!" But if you look at the current situation in the interior of the empire, the pressure of debt repayment is imminent, the finances are on the verge of bankruptcy, the contradictions between various interest groups are acute, and the consensus on reform has not been reached for a long time, can we just sit idly by and watch the collapse of the imperial government? Of course not! In such an embarrassing situation, apart from issuing paper money to recover private gold and silver, what other way can be raised as soon as possible to repay the maturing national debt and pay for national defense appropriations? At such a critical juncture, there is still a chance to get out of the predicament if you take a risk, and if you don't take the risk, you can only wait for death. ”

"I fully understand your urgency, Mr. Raul, and I really have no objection to the issuance of banknotes, but I just wish to carefully consider the strategy of issuing banknotes."

Roland calmly admonished the emotional man.

"In fact, we've thought it through enough!"

John Lauer turned abruptly to face Frank - he disdained to argue with Roland, and the crown prince was the one he needed to convince.

"Your Highness, it is precisely because paper money is less credible than gold and silver that we should use the magic crystal of expected appreciation as a guarantee for paper money, stimulate people's utilitarianism, and make people take the initiative to accept paper money, otherwise who is willing to exchange the real money and silver in their hands for paper money? If the banknotes are not issued and there is not enough gold and silver to repay the maturing government bonds as soon as possible, the financial pressure will not be alleviated - after all, creditors may not be willing to accept the repayment of the debt with paper money! ”

Frank nodded, "Raul is right, Roland, what do you think?" ”

"Mr. Raul's thinking makes sense in the short term, but if we look at it in the long term...... I'm afraid something will go wrong. Roland stopped talking.

Frank shook his head and sighed, showing obvious disappointment at Roland's inaccurate reply—when one uses a sentence like "how and how is it possible to ...... in the long run" in a debate, it often means that he has run out of words.

At this time, John Lauer also sensed that His Royal Highness the Crown Prince's position was shifting to his side, and the fighting spirit in his eyes became more and more intense, and he was determined to take advantage of the victory to pursue and completely defeat Roland.

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