Beiyang reactionaries

"1264 tons."

"What about the silver reserves?"

"11.4 billion taels."

"What about foreign exchange reserves?"

"It's 670 million pounds, 1300 million dollars, 135 million rubles."

Duan Xun was silent.

I began to calculate in my mind how much China's foreign exchange reserves are.From the perspective of foreign exchange, China has about 3000 million US dollars in reserves.Calculated according to the current gold and silver prices, the price of China's gold and silver reserves is about US$13 billion or more.In other words, for a country as big as China, the current foreign exchange reserves are all calculated to be less than 14 billion US dollars.

Not too little, but not too much either.

The most important foreign exchange reserve here is the gold reserve.This is the amount of gold that the Bank of China collected from all over the country, and China's gold production has also increased a lot in recent years, and finally hoarded gold.

Compared with those big powers, it is much worse, but for a backward agricultural country like China, these foreign exchange reserves are enough.

With $14 billion, there are many things that can be done.

"If the U.S. economy really has a major problem, there will be advantages and disadvantages for us. Director Zhang (Zhang Jiaao) just mentioned the disadvantages, but Director Zhang did not mention the advantages."

After Duan Xun listened to the report, he began to express his views.

"The United States is the world's largest industrial country. Once there is a problem in the economy or a financial crisis, a large number of factories will close down and a large number of workers will be laid off. This is an opportunity for our country, a very good opportunity. We formulated a few months ago During the second five-year plan, there were many industries that we did not dare to set foot in. Because we did not have enough technical foundation. It is too expensive to introduce some mechanical equipment. But now such opportunities fall on top of our heads .We have the opportunity to import a large amount of equipment and technology at low prices and develop our country's industrial strength."

"What does the prime minister mean by using our country's gold reserves?"

"Yes."

Duan Xun waited for this opportunity for a long time.

Although this gold reserve is still a lot worse.But has been able to do a lot.It was for such an opportunity that Duan Xun had reserved so much gold a few years ago.Now the gold can finally come in handy.Duan Xun said excitedly: "my country's industry currently has some foundations, but there are still gaps in many aspects. Just take advantage of this opportunity to fill these gaps. Even like the second five-year plan, the Economic and Development Commission can determine several key points The project is advancing. After you have determined a few key projects, you will import machinery and equipment according to these projects. Wasn’t Director Zhang worried about our country’s exports just now? Since there will be problems with exports, we will digest these resources at home.”

"Prime Minister."

Zhang Jiaao was very surprised and said: "Prime Minister, how can we digest so many resources internally?"

Zhang Jiaao didn't understand at all.

How to digest?

China exports so many resources every year, how can the country have enough strength to absorb them.Duan Xun smiled and looked at Wang Yongjiang who was thinking below.Wang Yongjiang soon found that Duan Xun was looking at him, so he put down the pen in his hand, and immediately said: "Yes, we can completely digest it. As long as we plan well, we can completely digest the excess resources. Continue to promote some big projects and digest We don’t have any problems with the resources we have now. Railways, highways, urban expansion, and then using gold reserves to import machinery and equipment for our big projects from abroad, it’s easy to digest these resources.”

"Premier Wang, the second five-year plan we formulated is already relatively reluctant. If exports are blocked, our country's finances will have problems. How can we promote other major projects?"

Zhang Jiaao immediately questioned.

Blockage of exports will make the finances short of money.After all, China's annual export volume is very high, and tariffs are an important part of China's finances.If this part of the money is missing, China's finances will definitely suffer losses.In this way, even the second five-year plan will be affected, and Wang Yongjiang actually wants to promote big projects.

Wang Yongjiang looked at Zhang Jiaao and said, "Director Zhang (Zhang Jiaao), you have a background in finance. Once we use our gold reserves, not only will we not be short of money, but the money in the whole society will increase."

"What does Premier Wang mean?"

Zhang Jiaao has a background in finance and was the president of the Bank of China.At present, China's monetary policy and financial policy are basically created by Zhang Jiaao.Of course he understood what Wang Yongjiang meant.Wang Yongjiang is going to start the "money printing machine".

In fact, in the past few years, whenever the government's fiscal deficit was serious, it has adopted such an approach.

However, the government's so-called activation of the "money printing machine" does not mean printing money casually.Printing money casually is not what a normal government should do.

There must be procedures for the government to issue banknotes.

If the Chinese government wants to print money, it will never directly let the Bank of China print money, or directly borrow money from the Bank of China.The Chinese government wants to print money through commercial banks.Because of China's special financial situation, the procedure is like this.If the Chinese government wants to use funds, it will ask the commercial banks it controls to come forward and ask them to borrow money from the Bank of China.The Bank of China is the central bank. It has no assets and no money.Therefore, the Bank of China will print money and lend money to commercial banks.

Then the Chinese government borrows money from commercial banks, but it is impossible to take all the money away.This is always the case with large deposits, and the cash is not actually withdrawn.It's just that with the bank's ticket, the money continues to be deposited in the bank.Although the bank has already lent to the government, the cash is still lying in the bank and still belongs to the bank's deposits.Commercial banks can take advantage of this opportunity to continue lending to others after handing in a certain amount of reserves.

After lending to others, except for a part of the funds, everyone will still deposit the money in the bank.This is the case with large amounts of funds. It is absolutely impossible to withdraw all of them. Generally, they continue to be stored in the bank.The difference is that there is either this bank or that bank.Then the money will continue to lie in the bank, and the bank will hand over a reserve fund again, and the remaining money can continue to be loaned.That is to say, a sum of funds is transferred between major banks, and commercial banks can lend the rest of the funds except for the reserve funds.In other words, a piece of capital is eventually loaned many times, which is the amplification effect of the financial industry.

This is the difference between base money (M0) and broad money (M2).

The base currency put into the market by the central bank will soon expand several times through the handwriting of these commercial banks and financial institutions.For example, in the current situation in China, the finance is not very developed, but if the Bank of China puts [-] million in the market, then after expansion, there will be about [-] million.

This is the effect.

Similarly, when the central bank feels that there is too much domestic currency and is about to tighten the money supply, it will ask commercial banks to pay back the money.So don't look at the central bank only withdrawing a little money, but the reduced funds in the market will be huge.

That's what finance does.

The same is true now.Once the government decides to use the gold reserve, it is a billion dollar fund.One billion U.S. dollars, converted into Chinese currency, is more than 30 billion yuan.Once so much money flows into the market as the base currency, through the amplification effect of financial institutions, there will be an amplification effect of tens of billions across the country.

Tens of billions, what an amazing monetary data.At present, China's annual fiscal revenue has not exceeded 100 billion.

This is to release water.

Zhang Jiaao understood in an instant.Yan Huiqing next to him said nervously, "Will that cause serious inflation?"

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"Will it cause serious inflation?"

Yan Huiqing asked cautiously.

Yan Huiqing has been in charge of Shanghai for six years, and he has seen the inflation situation in these years with his own eyes.As the most developed city in China, Shanghai has more serious inflation than other places.If inflation in other places is 1.5, then it becomes [-] in Shanghai.Therefore, Yan Huiqing felt the deepest.

Just look at food prices.In recent years, China has had a bumper harvest of grain. Although the population is increasing, the grain is actually increasing.At present, food is still very abundant.Coupled with the government's deliberate suppression of food prices.According to the past, food prices should drop.But food prices in China have been rising over the years.In the year of 10, the price of grain in China was only about 8 yuan per load. Later, under the Beiyang government, as long as the political situation was slightly stable, the price of grain would not increase.There was even a period of time when the price dropped to 9 yuan or 14 yuan per load.But what is the price of grain now? The price of a load has risen to 15 yuan, and sometimes the price has risen to 50 yuan a load in Shanghai.Food prices have risen by [-]% compared to the Xinhai year, and there is only one reason, and that is inflation.

If the price of grain does not rise accordingly, the government will not be able to earn much money from the monopoly of grain purchases.In order to earn more money, food prices can only rise along with inflation.

But what about wages?

Wage increases have been very limited in recent years.Especially after the Ministry of the Interior formulated the salary plan for government employees, the salary of government employees has stopped rising for several years.Even in Shanghai, the wages of Shanghai factory workers have slowly begun to exceed those of government workers.

It's just that the salaries of government employees are relatively high at the beginning of the period, so they can survive until now.If the government floods the currency and there is serious inflation again, the problem will become very serious.

If the price of grain exceeds 20 yuan per load, it will be difficult for many workers to support a family by themselves.

"meeting."

Wang Yongjiang nodded.

He said with certainty: "As long as there is large-scale construction and large-scale investment, it will inevitably be accompanied by inflation. This is unavoidable. As long as the economy develops, inflation cannot be prevented. Once we use our gold reserves, the whole country will The doubling of money supply will definitely cause national inflation. This is an inevitable thing.”

"Then how will Prime Minister Wang respond?"

Yan Huiqing immediately asked.

The problem of inflation can be big or small. If it is dealt with properly, it will be of great benefit to the economy.However, if it is not handled properly, hyperinflation will occur and the economy will collapse.