Chapter 629: Military ticket two

"Exactly."

Paul looked at Irene and said, "Money is worthless. We can call this phenomenon inflation. The word currency in it refers to the currency used as a means of circulation in social and economic activities. As the name suggests, it is like a bubble." Inflated, but its mass—that is, the corresponding material wealth in society—has not increased.”

"And correspondingly, if the Lord of Light appears again, the number of gold coins in human society will be reduced to five, so that each gold coin corresponds to two breads, twice as much as before. There are fewer coins in circulation in society, This phenomenon can be called deflation.”

Paul's explanation made the two sisters nod repeatedly, but Catherine couldn't help asking, "But what does this have to do with what we discussed at the beginning?"

What about the "immature thoughts" that Paul started with?

"Okay, okay, it's time to mention it next, be patient, don't worry."

Paul smiled. The explanation just now was a bit ostentatious, and he said too much unconsciously.

"The materials that make up money cannot be seen everywhere, and cannot be easily obtained, such as water, soil, and stones, otherwise everyone can easily create a credit card, so that immediately there will be what I just said. Inflation phenomenon."

"As for precious metals such as gold, silver and copper, they are difficult to refine and are rare in quantity, but not so rare that everyone can hardly see them. This just right characteristic makes them an excellent material for making coins."

"The following I have a conclusion-coins made of this precious metal are naturally constrictive."

Catherine and Irene looked at each other, and asked strangely: "Naturally contracted? According to what you said just now, the total amount of metal coins in the world will become less and less?"

"Yes, it will be less and less, uh... I mean less and less relative to material wealth." Paul nodded.

Irene was very puzzled: "How could this happen? After everyone collects coins during the transaction, they will spend them in another transaction. The coins are only in circulation, and the total amount will not decrease. Unless..."

The little princess blinked her eyes wide, "Unless it's like the example you gave just now, the Lord of Light reduced the coins?"

"Haha." Paul laughed out loud, "Of course the Lord of Light would not do such a boring thing."

"There are actually many reasons why there will be fewer metal coins in circulation. Note that I am talking about coins in circulation."

Under the curious eyes of the two sisters, Paul explained.

"First of all, it is relatively less. You see, with the growth of population and the improvement of certain technologies, people will produce more material wealth, but the speed of minting new coins often cannot keep up with the growth rate of material wealth—precious metals Mining and smelting is a big deal, am I right?"

Catherine and Erin nodded.

"Then there is real reduction. Metal coins are not perishable and easy to preserve, and as long as a normal person will have 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 the truth." Catherine agreed.

Paul continued, "Especially those big nobles and rich people! Many families have built treasuries that can only be accessed and passed down from generation to generation."

"Some of them have wider income channels than ordinary people, and they can get a lot of coins. Many of them spend much less quickly than they earn, and what's more, they take money to the grave, which leads to More and more metal coins are being deposited, while fewer and fewer metal coins are circulating in the market."

"Thus, deflation or money shortage has occurred. And there is another problem. We know that gold coins and silver coins are not pure gold or silver, and they will always be mixed with some other metals. During the period, the quality of the coins minted was different, so there were good coins and bad coins, and people often liked to keep the good coins and spend the bad coins, which would eventually lead to the whole All that circulates in the market is bad money, which is what is called bad money driving out good money. So..."

Paul paused.

Irene immediately gave an expression of understanding, and said first: "From an overall perspective, the amount of coins that the Kingdom Government can collect is destined to become less and less, and the money will always be insufficient to spend."

Catherine had already frowned and fell into deep thought.

"That's right." Paul nodded. "Unless there is a violent social turmoil, the owners of the money will take the initiative—or passively—to let the hidden money see the light of day and continue to circulate. Only then can this situation be alleviated."

The faces of the two princesses were ugly, how much turmoil was that? At that time, it will be difficult to say whether the Aldo Kingdom is still surnamed Rodney. roundabout

Paul said: "Okay, I've said a bit too much. But Irene also said just now that the Kingdom government will definitely be short of money, but what is lacking is those metal coins. UU Reading www.uukanshu.com And if we don't Forget those shiny and scattered metals, and only look at material wealth such as food, cloth, livestock, minerals, etc., which can satisfy people's food, clothing, shelter, etc., does the kingdom government lack these wealth?"

Catherine thought for a while, then 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. The output on the land is countless, and it is logically the richest in the country. However, due to the deflationary nature of metal currency, it may never be possible to exchange for a sufficient amount of currency.”

"What do you mean?" Irene asked: "Let the royal family not use coins to pay soldiers, but directly use equivalent value in kind—such as food, cloth—to send soldiers?"

"Well, this is a method." Paul nodded. "There have been many similar methods in history, such as using salt as military pay to soldiers, but these are all temporary expedients and will definitely not last long."

"We directly use the original method of distributing supplies to send money to soldiers, which will mean a lot of trouble. If the soldier's garrison is adjacent to an orchard under the name of the royal family, so we pick a bunch of apples from the orchard as military pay to the soldiers, and this pile The apples are equivalent to the military pay of the soldiers in currency, and theoretically speaking, we don’t owe the soldiers anything, and it’s very convenient.”

"But a soldier has to eat, drink, wear clothes, and even feed a family. He can't do these things with a pile of apples. He must get them to the market for money. Is it possible for him to sell them all? Most of the apples can only stand rotten. Then think of the whole barracks of soldiers selling apples together after pay, how funny! Soldiers still have to march to fight? Do they take their property—a pile of apples—to march to fight?”

"Haha!" Irene laughed at Paul's description.