The Fourth Financial Crisis

Spiritual stones contain spiritual energy inside, and are necessary precious consumables for Jiuzhou cultivators to break through and upgrade, kill people, seize treasures, and participate in auctions. According to ancient legends in the cultivation world, cultivators in ancient and medieval times directly used spiritual stones as currency.

However, using spirit stones as currency soon revealed huge drawbacks: spirit stones are special commodities with dual attributes of high-end consumer goods and financial products. There is also a commodity with very similar properties on earth, and that is Feitian Moutai.

Although these types of commodities are hard currency, they are naturally not suitable for use as currency. The reason is very simple:

The essence of currency is a medium of exchange.

Theoretically, the amount of currency issued by the monetary policy authorities should be determined based on the total market demand for currency. The total amount of currency issuance should also be adjusted according to the actual needs of economic development. It cannot be more or less.

But regardless of gold, spiritual stone, Bitcoin, or Feitian Moutai, they all have fatal flaws as currencies, that is, the growth rate of output cannot be controlled independently, so the social money supply cannot grow in sync with the total economic volume. The mismatch between the monetary aggregate and the economic aggregate will undoubtedly have disastrous consequences.

Let’s give a theoretically inappropriate, but simple and intuitive example of the gold standard:

Suppose there is only one kind of wealth on earth - flour; there is only one currency - gold; there are only 100 tons of gold and 1 million tons of flour in the world, then at this time, each ton of gold is worth 10,000 tons of flour.

With the development of the global economy and the improvement of labor productivity, assuming that the world has a wealth of 2 million tons of flour in a few years, but if the total amount of gold is still 100 tons, then one ton of gold is now worth 20,000 tons of flour. .

In this process, flour was obviously created by workers, but as a result, the wealth of those who hoarded gold increased and appreciated 100% out of thin air.

This example of flour and gold is not theoretically accurate, because the total supply of money is also related to the rate of currency circulation, but it still roughly illustrates the reason why the gold (spiritual stone) standard system will inevitably collapse: that is, with the With economic development, if the total global gold (spiritual stone) production cannot keep up with the economic growth rate, gold will naturally appreciate in value, thus encouraging everyone to hoard gold instead of creating wealth, creating a negative incentive for workers.

Workers will find that they have worked hard for a long time to make flour, and the result is to make a wedding dress for the person who hoards gold. In this case, who will work to create value? Wouldn’t it be great if everyone went to speculate in gold?

In this case, the outbreak of currency and financial crisis is the inevitable result.

Just like the collapse of the earth's gold standard, the Lingshi standard currency system also quickly triggered a strong deflationary effect in the short term because the total amount of currency issuance (Lingshi production) could not adapt to the needs of economic development.

Lingshi is similar to Feitian Moutai. They are high-end consumer goods that are very easy to hoard. The higher the price, the easier it is to be hoarded. However, because downstream consumer demand is always very strong, this leads to the deflation trend of Lingshi being more violent than that of gold. And quickly detonated the first Lingshi financial crisis.

In order to solve the Lingshi financial crisis, successive generations of cultivation economists have successively launched the [Three Standard Currency System] in which Lingshi, gold, and silver are linked to each other, and the [Kyushu Monetary Union System] similar to the Bretton Woods System on Earth.

These two generations of currency systems were ultimately destroyed by the second financial crisis and the third financial crisis because the standard currency was never completely decoupled from the currency. The [Lingshi Credit Currency System] in the Kyushu cultivation world today is the fourth generation cultivation currency system established based on the balance sheet of the Lingshi Reserve Bank during the third Lingshi financial crisis. Its underlying logic is very close to the mainstream currency system on earth, and its issuance is basically not restricted by the spirit stone itself.

The chief architect of the fourth generation of Cultivation Monetary Policy, known to everyone in the Kyushu Cultivation world, is none other than Lu Yang, the founder of Lingshi Reserve Bank, known as the "Emperor of Cultivation Finance". He is also the latest 500-year-old in the Cultivation world One of the three immortals who ascended to heaven in the past few years.

Now Li Qingyang, the third president of Lingshi Reserve Bank, is the registered disciple accepted by President Lu Yang.

Li Qingyang was originally from the Golden Blade Sect, a little-known sect in Zhongzhou. It is said that when the Golden Knife Sect was in its lowest state, only Li Qingyang was left as the polished commander. In addition, Li Qingyang's cultivation aptitude was only poor, and the entire sect was facing the crisis of being cut off.

But just like the protagonist of the online article, Li Qingyang has shown outstanding talents in mathematics and finance since he was a child. After he just entered the middle stage of Qi refining, he was fortunate enough to be highly appreciated by President Lu and became President Lu's right-hand assistant.

His personal resume can also be described as luxurious.

From the economics and mathematics consultant of the Wuliang Sword Sect, to the director of the research department of the Xiuzhen Financial Supervisory Committee, and then to the assistant to Li Rui, the second president of the Lingshi Reserve Bank, he returned to the Xiuzhen Financial Supervisory Committee as the chairman, and finally succeeded the president Li Rui. Became the third president of Lingshi Reserve Bank and held the highest authority in Cultivation Finance for two hundred years.

According to rumors, on the eve of Governor Lu Yang’s ascension to the immortal world, such an interesting incident happened:

Someone asked President Lu Yang: "After you ascend to heaven, who is qualified to manage the Lingshi Reserve Bank?"

President Lu replied: "Li Rui, the Supreme Elder of the Nascent Soul Stage of the Infinite Sword Sect, can do it."

Someone else asked: "Elder Li doesn't have much life left. After he passes away, who can serve as the president of the Lingshi Reserve Bank?"

President Lu replied: "Li Qingyang of the Golden Blade Sect can do it."

Someone else asked: "What will happen when Li Qingyang's life span is exhausted?"

President Lu just smiled: "Don't ask me about such a distant matter. The younger monks will handle it themselves."

This plot of "Lu Xingzhang Tuogu" is a household name in the Kyushu cultivation world, and the plot itself is not fabricated out of thin air.

After all, the president of the Lingshi Reserve Bank is the core position of the Wuliang Sword Sect, and is even as important as the head of the Wuliang Sword Sect.

But Li Qingyang never formally joined the Wuliang Sword Sect, and even served part-time as the head of the Golden Sword Sect for more than 300 years, developing the Golden Sword Sect from a small sect with few people to a second-rate sect among the top ten in Zhongzhou.

Although Li Qingyang is the most famous cultivation economist in the Kyushu cultivation world today, for him to serve as the third president of the Infinite Sword Sect Lingshi Reserve Bank as an expatriate monk, he still needs a strong person to overcome all objections. And there are only a handful of big figures with such prestige who have traversed the history of Kyushu cultivation world.

Considering the early relationship between Mr. Li and Mr. Lu, the credibility of the joke "President Lu Tuo Gu" is quite high.

It's a pity that President Li Qingyang's cultivation talent is really limited. Even if the Wuliang Sword Sect fully provides him with cultivation resources, and even if he gains immeasurable merit and virtue by taking charge of cultivation finance, his cultivation is still at the early stage of the Golden Core.

For the inferior spiritual root cultivators, this kind of cultivation is unprecedented and unprecedented. It is not an exaggeration to say that Li Qingyang is the most powerful inferior spiritual root cultivator in the history of Jiuzhou cultivation world. However, even for early-stage Golden elixir cultivators, their maximum lifespan would not exceed 600 years, not to mention that Li Qingyang only had the first level of Golden elixir cultivation.

After hundreds of years passed, this legendary cultivation economist finally reached the end of his life!

It's just that President Li Qingyang has been in charge of the highest financial authority in Kyushu's cultivation world for hundreds of years. He is like a figure who defines cultivation finance, and his prestige is higher than that of the heads of the seven major sects in Kyushu.

Suddenly hearing the news that he was about to pass away, even an ordinary Haiya City drinker would inevitably have an unacceptable feeling.

As soon as the news came out, people immediately gathered around the newsgirl. Everyone just threw the spirit stone coins into her hand without even asking the price, just to be the first to know the details of this big news. The heavy newspaper bag carried by the newspaper seller was quickly sold out.

Before she could recover from the surprise, Yang Lu shrugged at her and said, "What did I tell you? It's much better to reveal a little bit of information to whet everyone's appetite than to hide it. This sales method is called hunger marketing!”

At this moment, two more newsboys came from the corner of the street through the snow.

Obviously, these low-level newsboys are not short of smart people, and there are many people who can think of coming to the tavern to sell newspapers.

Unfortunately, because the newspaper girl dropped the bombshell first, almost all the drinkers now have a newspaper. The remaining two newsboys looked around and saw no one in need of newspapers, so they had no choice but to leave with a sigh.

Seeing the desolate figures of the two newsboys slowly disappearing into the wind and snow, the girl selling the newspaper felt only grateful.

She didn't know that Yang Lu was actually a prostitute, and thought she was lucky enough to have an expert to guide her. Thinking that if Yang Lu, an expert, hadn't secretly given her some advice, she might have been the unlucky one, and the newspaper-selling girl couldn't help but feel a little scared.