The second volume is full of glory and splendor in the capital, and the spirit is full of vitality in the foggy city. Chapter 248: Water for the Foot (Part 1)
Subtitle of this chapter: Should I drink the waste water?
“All roads lead to Xinxiang.”
When the economists from the American Economic Association heard this, they couldn't help but look longing on their faces.
In order to make Daxinxiang a true capitalist heart as soon as possible, our Master Yuan has also worked hard.
"Excuse me, what I wanted to say is..." Dr. Holland raised his hand and said, "Dr. Yuan, you still haven't answered the question of how to restore the international monetary settlement system."
The ancient people of Seres did not deceive me. They were neither poisonous nor bald, neither bald nor poisonous.
Yuan Yan suddenly cursed inwardly. This bald guy is indeed the vanguard of American imperialism bullying the people of Santo Domingo and Puerto Rico. He's so damn vicious. This isn't going to end, is it?
On the other side, Professor John Bates Clark now liked Dr. Seres more and more. This was because he saw the bright prospects of the North American marginalist school in , which made him feel very happy.
He is indeed one of my generation!
Moreover, he cares so much about the future of the United States of America and the free world. He is truly a "capitalist running dog made of special materials"... that loyal dog.
This guy definitely has a future!
He was thinking about inviting Dr. Neo Yuan to be a lecturer at Columbia University or something...
When this is mentioned, some people will definitely bring up racial discrimination, but in history, there were many Serbs who held teaching positions in higher education institutions in the United States and Europe in the 1920s and 1930s.
The most recent one is Mr. Zhao Yuanren, the "Father of Chinese Linguistics" mentioned earlier. He is about to go to Harvard University to serve as a lecturer in philosophy and Chinese.
A distant example is Ms. Chien-Shiung Wu, the "Mother of the Atomic Bomb." In 1944, she became a lecturer at Princeton University before she became a citizen, and she also participated in the Manhattan Project in the same year.
When he heard someone was making things difficult for him, he couldn't stand it anymore.
So he frowned, coughed, and said to the half-bald man: "Jacob, I think..."
"Professor Clark, please wait a moment." However, our Master Yuan interrupted him and sighed, "Since Dr. Holland is so concerned about the gold standard, I actually have some immature ideas. I just want to take this opportunity and occasion to put them forward for your reference..."
"Huff...Huff...Huff..." Our Master Yuan took three puffs of his cigarette and said quietly, "Gentlemen, before I even started learning economics, I had a question: precious metals like gold and silver can't be eaten or worn, so what makes them so 'valuable'?"
"Once I started reading some economics, I realized Marx was right: money is not naturally gold, but gold is naturally money. Ultimately, the value of gold is given by us humans."
"But as I delved deeper into economics, I discovered that gold had three major flaws as a currency: First, it doesn't generate interest."
In fact, after 1980 on the original timeline, gold has been short-term bullish and long-term bearish.
The reason is simple: gold itself doesn't generate interest. Holding zero-interest gold is less effective than holding bonds that offer rising interest rates. Furthermore, central banks have costs associated with storing large amounts of gold, making it far less convenient than holding bonds on their books.
"Secondly, the supply of gold is very rigid. If we strictly follow the gold standard to issue currency, we humans will always be in the dilemma of deflation."
The gold reserves are really too small. It was okay in the pre-industrial era, but the economic development speed in the industrial era is simply not something that can be kept up with by gold mining.
So, to put it bluntly, the gold standard is a kind of inertia in human economic activities, or you can say a kind of laziness.
"And the third point..." Yuan Yan took a deep breath and said, "Gold has very little practical value."
Seeing some people's puzzled expressions, he immediately explained, "The impractical gold standard is not conducive to the globalization of capital!"
"oh!"
As soon as Master Yuan said this, all the economists present understood.
You know, gold is not a necessity for human beings .
Although gold, as a "natural currency", is very suitable as a tool for international settlement, if an economic entity does not need to conduct international settlement, it does not necessarily need impractical precious metals, nor does it necessarily need a currency based on precious metals.
So does such an economic entity exist? Of course it does.
In front was the Qing Dynasty, and in the back was the CMEA.
To help the Qing Dynasty join the advanced capitalist globalization system, British imperialism sent warships from thousands of miles away to launch the First Opium War. Then, the Qing Dynasty was honored to globalize, even its territory was "globalized," and the Chinese people could experience the customs of various countries without having to travel abroad.
To get CMEA member states to join the universal capitalist globalization system, American imperialism waged a relentless Cold War for decades. Then, with great honor, CMEA became globalized. Even its citizens were "globalized," primarily its women.
The members of the American Economic Association understood what Dr. Yuan meant, but they immediately thought of a question...
Many people stood up at the same time and asked in unison: "Dr. Yuan, what do you think can replace gold?"
Of course, some people snorted coldly and said, "Dr. Yuan, I guess you don't know what can replace gold."
See? This is the limitation of the times.
A hundred years later, even middle school students can answer this question, but economists a hundred years ago did not know the answer..
"Gentlemen, please take a seat." He turned his head and smiled at the half-bald man. "Dr. Holland, I do have an answer. But..."
"Why do I say this is an immature idea? Because I think it's still a little early for what I'm currently convinced of to become as valuable as gold."
"Although its known reserves are enormous, its unknown reserves are likely even greater, fully capable of keeping up with the increasingly rapid economic development of the world in the future..."
"Although it is very practical, and with the advancement of technology, its practicality will become even higher..."
"Although its practicality is increasing, so there is a possibility of appreciation..."
"But, but, but, if it is to be used as a global currency standard, there are still some obstacles!"
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