New Shun 1730

What Liu Yu said was so "reasonable", but Fazakle used his many years of experience in living in China to subconsciously come up with an idiom in his mind.

Quite the opposite.

I thought, while you were saying that foreign trade in exchange for a pile of silver was a loss of national wealth.

On the other hand, they raised tens of millions of shares to establish a Western trading company with great fanfare.

How is this different from driving north when a person wants to go south?

Your words are truly untrustworthy.

Of course, we in the UK have nothing worth buying with silver. Silver is indeed not an effective international currency for Dashun in this "unequal" national trade.

But is it possible that there is something worth buying in the Netherlands?

I'm afraid that instead of reflecting on exchanging your so-called "national wealth" for a pile of "useless" silver, you will intensify your smuggling efforts!

His emotions at this moment were clearly shown on his face.

Liu Yu has learned a lot about people like Liu Yu's ability to observe words and emotions, and what he said...he himself doesn't quite believe it. This is a standard way of setting a target and shooting it yourself.

Twisted mercantilism into heavy precious metalism. Then he criticized his own mercantilism disguised as heavy precious metalism.

Seeing Fazaklai's color, Liu Yu was not in a hurry to convince him immediately, but added: "Of course, the general recognition of the people is the basis for the currency's popularity. However, I say that the imperial court feels that some things must be done We may even need to restore banknotes. Of course we know it will be difficult to implement, but we have to do it.”

"You in the UK have the Bank of England, which has the power to issue banknotes. Japan has the Iwami Ginzan. Spain has the Potosi silver mines. Austria has the Schwarz silver mines. France also has paper money introduced by John Law."

"But what does China have? There are neither big silver mines nor big gold mines. The state cannot control currency, and foreign trade has completely become the note-issuing bank of China."

"Starting from the middle of the previous dynasty, inflation and deflation occurred alternately. During the Thirty Years' War, the import of silver dropped sharply, and a big problem immediately arose. After the war, the price of rice began to soar again, and the ratio of silver exchange rates continued to decrease."

"If the current silver income of the Celestial Dynasty is converted into grain, it seems to be much more than that of the previous dynasty, but in fact, after conversion, the difference between the annual income and the previous dynasty is not much."

"However, prices have been basically stable in recent years. Do you know what this means?"

This is true and false, but it is not nonsense.

Dashun actually only has the theoretical right to issue banknotes.

At least, before the development of the Yunnan copper mine, even money such as copper and Tongbao had to be judged by the Japanese side. There was a period of time when there was no copper from Japan, so making money was a problem.

This is true for copper, not to mention gold and silver mines, which are even more scarce in China. Relative to the size of the economy, although the country has a lot of gold and silver, it is definitely not enough.

The monetization of silver in the Celestial Empire was purely caused by the development of international trade and trade between the East and the West. If there was no trade between the East and the West, either paper currency would be paired with copper coins, or taxes in kind would still be made with silk.

Liu Yu said that foreign trade is Dashun's note-issuing bank, which is not wrong in theory.

These problems are easy to understand for Fazaklai, who has experienced the 20-year economic crisis and experienced Lord Niu's reform of the currency gold standard.

The last question raised by Liu Yu made Fazaklai feel from the beginning that Liu Yu was purely "Stank tones, fun of foolish talk". Gradually, after thinking about it, he felt that it seemed to be "the high opinion of the Duke of the country".

The last question is actually a very simple economics question.

Under the premise that Dashun's huge annual silver surplus is an irrefutable fact, Dashun's prices have remained basically stable. What does this prove?

To put it simply and crudely, it proves that the huge amount of trade silver entering Dashun every year is basically the same as the growth rate of Dashun handicrafts.

Fazaklei understood the subtext of what Liu Yu said.

If, one day, something goes wrong with foreign trade and a large amount of silver stops flowing into Dashun, but the growth rate of Dashun's handicraft industry remains unchanged, what problems will it cause?

Deflation, obviously.

What does deflation mean?

This means that if you can buy 10 kilograms of rice today and store it in the cellar, you can buy 12 kilograms of rice next year, and maybe 15 kilograms of rice the year after that. Then why spend money? Then why invest? Does the rate of return on your investment outperform the appreciation of silver?

Wouldn’t those who are qualified to spend money keep their money in storage and not spend it? There will definitely be a big problem.

Fazaklai has experienced European inflation and short-lived deflation, and various strange problems have arisen in the economic crisis that swept Europe in the past 20 years - including irrational and fanatical investment, and the skyrocketing stock prices that defied any economic principles - —have all been staged.

He seemed to be able to understand what Liu Yu meant when he said, "I am an official and you are a businessman, so we think in different ways."

If a similar silver currency problem really occurs in Dashun, something big will happen to such a big country.

Dashun, on the other hand, does not have the right to issue banknotes.

The little copper from the Yunnan copper mines is used to issue banknotes, which cannot keep up with the rapid economic growth in recent years.

Once the "Dashun Central Bank" of foreign trade stops issuing money, Dashun's economy will have problems.

"Your Majesty the Duke, although what you say makes sense, it is not a plan for a rainy day, but more like unfounded worries. If the sky collapses, it will naturally perish. It is absolutely correct to think so. But the reality is, how can the sky collapse?"

"How can your country's overseas trade not make silver?"

Liu Yu shook his head and sighed: "Nothing in the world is permanent, and trade advantages are even more so. I have been to Europe, visited the silk weaving factory in Lyon, and also seen the porcelain of Mason. I have also studied the development of cotton textile industry in various European countries."

"I am not optimistic about the future. Especially Britain, which has the high-quality cotton of the thirteen colonies, and has developed the flying shuttle and blending technology... The technology is not available for the time being, but it can always be learned. Once it catches up in the future, can the large-scale exports of the Celestial Empire continue?"

"You have to know that the exchange of civilizations will bring about a technological explosion. It is impossible to prevent the theft of porcelain technology, the outflow of tea seeds, and the private export of jacquard machines and other equipment forever."

"If the quality of Manchester's cotton, linen and wool blended products reaches a certain level, it does not need to be completely equal to Songjiang cloth in price."

"Tariffs, freight, capital turnover, and the annual interest rate of the Celestial Empire all make Manchester's cotton, linen and wool blended products only need Tian 130% of the price of Korean cotton cloth can make it completely unsalable. "

"That day, of course not now. But what about ten years later? Twenty years later? Thirty years later?"

"Besides, any sober and politically minded person knows that the European war has not ended yet, and the next war has already begun to brew. The maritime conflicts, the conflicts within the Holy Roman Empire, and the colonial conflicts, none of them have been resolved in this war."

"Once there is another war that is no less than the Thirty Years' War, the Celestial Empire's exports will drop sharply, and silver will instantly deflate. What will the Celestial Empire do?"

"I am an official, a senior official of the court. In my eyes, silver can only be currency, not wealth. Do you think this is still groundless worry?"

"The court, or the government, is about standing firm, stability, and continuity. It is not about paying attention to how much profit cotton cloth makes today or how much profit spices make tomorrow."

Fazaklay agrees with this very much. He has gradually understood what Liu Yu meant by the difference between "officials and businessmen".

Although most of what Liu Yu wanted him to understand, this understanding at least makes sense.

Fazaklai did not think he had a strong political mind, but he agreed with Liu Yu's statement that the next war was brewing and that even if there was a ceasefire now, it would only be a truce for the countries to lick their wounds.

The company would definitely continue to compete with France in India, there is no doubt about that.

The conflicts in North America, the Caribbean, and Africa are no less than those between the French Asia Company and the British East India Company, and this is no secret.

Moreover, Liu Yu mentioned a very scary scenario in the eyes of the East India Company, that is, with the technological progress of various countries, the prices of goods in various countries tend to be similar after deducting tariffs and freight.

For a British trading company, whether British goods are cheaper than Chinese goods or more expensive than Chinese goods, it is acceptable.

The East India Company can accept Manchester cotton cloth, which is cheaper and better than the cotton cloth of Songjiang Prefecture, and the weavers of Songjiang Prefecture starved to death at home one by one.

It is also acceptable that Songjiang's cotton cloth is better than Manchester's, and Manchester's weavers have been forced to go to North American plantations as indentured servants.

The only thing that cannot be accepted is that the prices of Songjiang's cotton cloth and Manchester's cotton cloth are about 80% of each other.

In an era when the funds of international trade are often based on the annual monsoon cycle, according to the interest rate level in the UK, about 80% is actually not profitable.

Is this situation possible?

Although Fazaklai was very alert to every word of Liu Yu in his heart, he was worried that Liu Yu was deceiving him again and engaging in various kinds of deception.

However, what Liu Yu said was all correct and true.

There are no lies, no deceptions. If you think along this line of thought, you can indeed come to the same conclusion as Liu Yu - as long as your brain is normal.

Liu Yu is creating anxiety.

He is just creating anxiety, but he himself is not anxious.

But he uses a kind of anxiety that is inevitable in reason to pass on anxiety to others.

From the perspective of the identity of a shareholder of the company, Fazaklai easily accepted this anxiety and had to consider the future of the company.

Before the Dashun expedition to Southeast Asia, the East India Companies of various countries would not have too much anxiety. They could fight against each other and cheat each other.

But no one had ever thought that a huge company with hundreds of millions of assets, which had lasted for more than a hundred years and could influence the Amsterdam Stock Exchange in the financial market... could go bankrupt, close down, and lose everything overnight.

At least, before the Dashun expedition to Southeast Asia, people would think that the Dutch East India Company might be in debt, might not be able to pay enough dividends in a certain year, might have financial problems of one kind or another, and might have infighting in the board of directors.

But no one had ever thought that the giant company that once shook the European trade with a stomp of its feet became part of history in just half a year.

Until this moment, many European businessmen suddenly realized:

It turned out that the Dutch East India Company brought people this sense of stability only because the giant dragon not far away had been asleep before.

When the giant dragon is asleep, and it does not wake up even if you poke it with a knife twice, but just twists its body, when people analyze the problem, they will subconsciously think that this thing is dead and is just a background board.

Just like when everyone thinks about a problem, they will not consider that if the sun goes out, I still can't do this. In the normal state that the sun has never gone out and will rise every tomorrow as usual for thousands of years, the existence of the sun has become a kind of background board.

The same is true for the Celestial Empire before.

The various market confidences in various East India companies also stem from the premise that the Celestial Empire is just a background board. Otherwise, no one would have confidence in the Dutch East India Company: with such a huge profit and a country with a population of over 100 million next to it, how can there be financial confidence under normal circumstances? How can enough stocks be raised? How can bonds be issued and still be bought?

Twenty years ago, this dragon suddenly woke up. As a result, the Swedish East India Company had to accommodate half of the Chinese shares, and the Dutch East India Company collapsed overnight.

This anxiety started with the Sino-Swedish cooperation and reached its peak when the Dutch East India Company collapsed overnight. Behind the anxiety is that we can no longer regard the Celestial Empire's sleep as the normal state of the sun rising as usual.

This is like assuming that Europeans have now discovered a huge gold and silver mine comparable to Potosí around Dashun. At this time, the miners said they had made a fortune and wanted to raise shares in Europe. If the Celestial Empire was awake and Europeans recognized that the Celestial Empire was awake, then if this mine could raise a silver coin, it could be confidently said that this silver coin was definitely a trust.

The market confidence and investment confidence of the European investment community in the East India Company such as the Netherlands and Britain can only prove a sad fact.

From the day they came to Southeast Asia and received a large amount of investment when the spices had a maximum profit of 1400%, the whole of Europe subconsciously believed that the Celestial Empire was dead and asleep, and regarded this as normal and believed that it was impossible to wake up.