The Human Emperor (1-200)

C173: The Sage Emperor's Verdict!

Sun Qian came prepared. He carried brush and paper on him, and a servant beside him was holding a tray with inkslab and water. All that was left was for him to jot down Wang Chong’s explanations.

An indescribable feeling welled up within Wang Chong as he looked at Sun Qian.

The matter regarding the jinyuan note was a problem that he brought up at the very end of the memorial he sent to the Sage Emperor. Wang Chong had noticed the issue when he was buying the Hyderabad ores from Ablonodan and Arloja. Huge transactions consisting of several hundred thousand gold taels were conducted on a fairly common basis, and that weighed more than ten thousand jin.

(~5000kg)

Even though it didn’t take up too much space due to the compact size of the gold ingots, it was still inconvenient to carry around.

This made massive cross-border transactions extremely difficult.

Not only so, based on his future knowledge, Wang Chong noticed a potential problem in using gold as a currency.

Gold was a limited resource.

If the rate of gold mining was unable to keep up with the development of the economy, it could severely restrict its growth. In other words, it was possible for Great Tang to run short of ‘money’ in circulation. Based on Wang Chong’s knowledge from another time-space continuum, when dynasties run out of sufficient gold and silver, they would choose to mine and produce copper coins to make up for the deficiency.

Due to the fluctuating quantities of gold, silver, and copper coins in circulation, the currency exchange rate would be highly unstable. A silver tael might be worth a hundred copper coin in one day, but the very next, it might fetch a hundred and ten, a hundred and twenty, or perhaps even more.

This caused instability in the society.

In some dynasties, the royal court had even, to Wang Chong’s incredulity, entrusted the minting of coins to private organisations.

The problem regarding currency wasn’t just limited to the Central Plains, it was a universal one. In the world where Wang Chong was born in, even the powerful ‘Uncle Sam’ had no choice but to rally the entire world to establish the Bretton Woods system.

(A part of the Bretton-Woods agreement was to tie one’s currency to the value of gold)

Eventually, they even went further to remove gold as part of the currency.

The main reason for that was because the gold standard currency would severely limit one’s potential economic growth.

Even a country as powerful as ‘Uncle Sam’ was restricted by the gold standard as well, lest to say, other countries.

The Central Plains was currently at the peak of its strength, and Great Tang was prosperous and affluent. However, after coming into contact with the commercial world and dealing with huge quantities of gold, Wang Chong had acutely sensed a lurking threat hidden beneath the calm surface of the country.

This was also the reason why he brought up the issue of ‘currency’ in the memorial.

During the initial implementation phase of the jinyuan note, the value of the jinyuan note will be tied to gold. At the same time, the royal court would use its credibility to assure the population of its value, and stations will be set up to facilitate the exchange between gold taels and jinyuan notes.

Then, after gradually building trust in the currency, Great Tang would further propagate the use of jinyuan note.

When the jinyuan note finally grows strong enough to become an individual currency, measures would be taken to slowly weaken the ties between jinyuan note and gold. Eventually, when everyone was used to the jinyuan note, the royal court would be able to ban the trading of jinyuan note for gold.