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Text Chapter 543 The shearers are coming!

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    The news that the National Economic Conference was held in Chongqing and that the president, vice president and prime minister went to the southwest for inspections made businessmen with a keen sense of smell smell something strange.

    The benchmark silver price on the Shanghai Bulk Futures Exchange, which had remained unchanged for several years, began to fall, from 1 yuan to 20 grams to 1 yuan to 22 grams.

    The depreciation of silver actually did not exceed market expectations, and currency reform is far from as complicated as imagined. From the earliest implementation of RMB banknotes in Southwest China in 1912, to the stop of minting silver coins after national unification in 2014 and the stop of foreign banks issuing currency at will, the RMB  The Yuan status has actually been determined.  The demand for currency circulation increased sharply under the economic stimulus of the European War. The influx of large amounts of gold and silver also gave the Ministry of Finance and the Central Bank sufficient reserves to ensure an adequate supply of currency, causing a sharp increase in the circulation rate of the RMB.

    The thorny problem is that no one knows how much silver there is in the country. The total amount accumulated over hundreds of years must be extremely staggering. In addition, the late Qing government was unable to effectively control the import and export of silver. A large amount of Mexican silver was circulating in China. European and American businessmen were frantically grabbing silver.  , also making the market more chaotic.  The Ministry of Finance itself can¡¯t figure out this figure. One says it¡¯s about 25,000 tons (a total of 800 million taels, silver trading is 16 taels), another says it¡¯s about 32,000 tons, and even more, it¡¯s an astonishing figure of more than 80,000 tons!  Even based on the smallest figure, calculated at the exchange rate of 1.5 yuan per tael (31 grams per tael), 1.3 billion currency hedges will be issued to fully recover it.  However, there is a backlog of gold and silver currency. A lot of silver will not flow into the market but will be stored as a hedging precious metal. If the amount of silver flooding into the market after the currency reform ends up exceeding expectations, the result of a large increase in currency will be inflation  

    On the contrary, silver cannot be allowed to stay in the market. No matter what the currency reform is, it is impossible to directly separate gold and silver from currency. It is nothing more than replacing gold and silver with currency, but its value must be reflected in gold and silver. If any  If a huge amount of silver is scattered on the market, it will cause a massive outflow of silver.  Eventually there was deflation, and then factories and companies eventually went bankrupt due to lack of liquidity.

    This is a double-edged sword. The solution is to withdraw as much gold and silver from the market as possible, and then fix the gold and silver in the hands of the central bank in the form of debt tokens!  This is what Wall Street did after World War I and World War II.  The inflation that should have occurred after the large inflow of gold and silver was locked up by bonds, causing gold and silver to stay in the United States for a long time.

    Wall Street, which took the first step, certainly knows the benefits of doing so, but they obviously don¡¯t want China to get the benefits easily. Even though silver is worth less than gold, it is also a precious metal that makes capitalists jealous.  And their confidence is that they control 51% of Shanghai's silver reserves!  30% of the total amount of silver in the Republic of China is in their hands!

    China can redeem them, but it has to pay a small price So Hangel raised his glass and touched it lightly with Mr. William Hamill, General Manager of Far East of Swire Pacific: "Mr. William  .Thank you for your support."

    Swire & Co., Ltd. is a British giant entrenched in the Far East. Its holdings include HSBC Bank and a series of large consortiums. It once monopolized China's tea and raw silk trade. In order to help the British government crack down on China, it implemented weak policies and promoted tea in Sri Lanka and India.  Planting will fundamentally cut off China¡¯s largest foreign exchange earnings.  They also supported the Japanese raw silk industry and used Japanese raw silk to suppress the Chinese raw silk market. They not only made huge profits but also almost destroyed Chinese raw silk.  Japan also received a large amount of foreign exchange, ensuring the supply of funds for national reforms after the Meiji Restoration.

    So if we really want to trace the source, Taikoo Matheson is inseparable from the Sino-Japanese War of Sino-Japanese War and the Gengzi Year Incidents.  It was not until 1914 that the tariffs were gradually recovered by Yang Qiu.  The outbreak of the European War and other factors led to the decline of foreigners.  Raw silk was monopolized by China and the United States, and tea was challenged by local Chinese businessmen. In the end, in order to obtain sufficient liquidity, a number of high-quality assets such as Yangtze River Yingshang Shipyard and HSBC Shipping Company had to be sold to China, making the dominance of the Far East business community increasingly imperiled.

    After the war, the British economy stagnated. Chinese tariffs and concessions were abolished one after another. In addition, countries began to raise tariff barriers and restrict gold and silver from leaving the country. Swire Pacific, which had swept across Asia in the past few decades, was suddenly on pins and needles.  In particular, the eager attention of Wall Street in the United States and local Chinese companies made directors of foreign banks smell the smell of decline.  Unwilling to accept defeat, the directors sent William Hamill to regroup.

    But this is not easy.

    After the Shanghai Communique, people of insight in various countries realized that China was no longer a feudal and inferior semi-colony.  With the gradual improvement of social reforms and industrial and commercial economic policies, a China integrating into mainstream society is rising. It is almost impossible to recreate the prosperity of the past.  Therefore, William immediately modified his strategy after arriving and gradually shifted his main business to Southeast Asia and India.  But what he didn't expect was that Wall Street found him because Wall Street discovered a big opportunity.  Need help from British silver in the Far East.

    The Silver War!

    This is the name William Hamill gave to this plan.  Since the Ministry of Finance of the Republic of China withdrew tariffs in 1916Later, the outflow of gold and silver was restricted, so if you wanted to take away large amounts of silver, you would have to go to war.  Of course, Wall Street will not be stupid enough to start a war over silver. If it is gold, it is still worth taking the risk.  Therefore, the method they adopted was very simple, which was to flood the Shanghai bulk trading market with massive amounts of silver. They took advantage of the fact that all walks of life in China were worried about the currency reform and were selling off silver, so they frantically purchased silver and raised the price to hoard it.

    Why do they need so much gold and silver if they can¡¯t take it out of the country?  In fact, it is very simple. The current currency reforms of various countries actually use the amount of national gold and silver reserves to stabilize the currency value. Therefore, it is impossible for Yang Qiu to let such a large amount of gold and silver remain in the hands of British and American banks, otherwise his own currency will be seriously threatened. Ultimately,  The unlucky ones are the bond, futures and stock markets, and even the real economy will suffer from severe inflation or deflation due to the lack of gold and silver protection.

    This is a commonly used method in Europe and the United States, and Wall Street is even more proficient in this process.  Countless experiences in manipulating South America allowed them to quickly discover business opportunities in currency reform, just like they did in controlling Mexico and South America.  Although Yang Qiu has strong political skills, is quite innovative in industrial and commercial development, and is extremely talented in the military, he has nothing to offer in the currency-based finance system. This makes Wall Street who have been studying him a lot.  Finally found the opportunity.

    Once the plan begins, the Chinese government, which wants to stabilize the market, must use its silver reserves to restrain prices from rising. However, both sides have about the same amount of silver, so if they want to win, they must use their foreign exchange reserves, which may even force them to use their gold reserves!  Judging from experience, either Yang Qiu opens the money printing press without restrictions and uses massive amounts of currency to snatch back silver at sky-high prices, leading to severe inflation, or he suspends currency reform or closes the market and terminates all free exchange businesses.

    This is unimaginable. If this happens, it means that all China¡¯s economic reforms in the past eight years have been in vain.

    This is a huge business opportunity. The Chinese market, with its rapidly increasing wealth, is enough to shear its sheep once.  The only thing that makes William curious is that it is said that Hangel and Yang Qiu have a good personal relationship. Isn't he afraid of offending Yang Qiu and causing the deterioration of Sino-US relations?  Hangel pushed up his gold-rimmed glasses slightly and slowly raised the corners of his mouth: "Yang is a good man, but I must serve my employer, and I believe that with his wisdom, he should know how to choose, because China  .Need us.¡±

    William nodded.  They have heard about the recent investigations by the Ministry of Finance of China and have a general understanding of the data.  Both the scale and the total volume are surprising, but there is one thing that is very bad.  That is, although the Chengcheng Act and the immigration movement increased the per capita field area and provided food and clothing for most people, the scale of the small-scale peasant economy in the short term actually expanded rather than decreased.

    This is not Yang Qiu¡¯s mistake, but the right choice.  Because what he inherited was the illusion that the Qing Dynasty had the third largest economy in the world, half of the population was in extreme poverty, and 90% of the population was illiterate. The first solution for any politician to solve when he comes to power is the people's food, clothing and illiteracy rate. Otherwise, his government will have no credibility.  Not any support.  What's more, if he wants to engage in industrialization and urbanization, it must be based on food, clothing, and universal education. Especially after the urban and industrial population increases rapidly, it becomes even more necessary to ensure adequate food supply, otherwise it will be the end of the recent Japanese riots.  .

    This can be seen from China¡¯s bulk import list last year.  In 1920, China's top import was grain, with a total of 3.3 million tons of various grains imported from the United States for storage and to curb grain price increases, followed by 2.7 million tons of crude steel and 1 million tons of crude oil, and the remainder was complete sets of industrial equipment.  This shows that Yang Qiu also knows where his shortcomings are.  The problem of low agricultural efficiency cannot be changed overnight. The Chengcheng Bill has indeed stimulated farmers' enthusiasm for growing grain.  However, the bill was not introduced until 2016, and it was not compulsorily implemented nationwide until the end of 2018. According to natural laws, it will take until 2021 for grain production to explode. This will also require the stimulation of grain seeds, machinery, and chemical fertilizers.  So if you give him enough time, as the recovered land gradually integrates, the population dilutes and expands, and the use of mechanical farming and chemical fertilizers increases, this gap will slowly be filled.

    In addition, Yang Qiu is also inseparable from the help of Britain and the United States in industrial and national construction. Although China has been engaged in construction for 8 years and its total industrial volume has accounted for 5% of the world, most of them are low-end industries and high-end manufacturing.  The industry is always in the stage of being imitated or simply non-existent.  No one would think that being able to design better weapons means having high-end manufacturing. This requires a lot of talent input, so Yang Qiu cannot do without American technology to help him solve important engineering, chemical, petroleum, large hydropower station and other projects.

    So qualified politicians will know how to choose.

    When the wine glasses collided again, the situation in the Shanghai Bulk Futures Exchange suddenly changed, and the price of silver, which had been falling every day, suddenly soared.  By May 9, the exchange rate had increased from 22 grams to 1 yuan to 18 grams.

    The silver crisis breaks out!

    ?.

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