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The death of the Republic of China fiat money

When it comes to the birth of the Republic of Ch forexcashbackprofitcalculatora fiat money, it is impossible not to mention the United States in 1934, the introduction of the "Silver Purchase Act" at cashback forex time, China still uses the traditional metal cashbackforexprofitcalculator, cashback forex profit calculator it is this ancient form of currency, so that China escaped the economic panic that swept through all the gold standard countries of the world in the 1930s originally, at this time, China, the Northern Expedition has been successful, the new life movement is gradually launched After the implementation of the U.S. Silver Purchase Act, the international price of silver immediately soared three to four times, which cashbackforexpipcalculator equal to the exchange rate of the Chinese currency against the U.S. dollar for China, which directly used silver as its currency. At this time, the only commodity that China could export was silver, and the massive outflow of Chinese silver caused a tightening of the Chinese currency, a shortage of money, a failure of business turnover, a fall in prices, and a panic in the economy. The fiat currency was pegged to the U.S. dollar, and the Chinese government deposited $12,000,000 into a bank in New York. At the time, it was not easy to judge the merits of this reform, but when we look back today, it was probably more prudent to suspend the abandonment of the silver standard under the system at that time because, just one year later, the war against Japan broke out and the Nationalist government was immediately dragged into a deficit financial quagmire by the huge military expenditure, and the economic growth of a few years ago vanished into thin air, although it was proposed at that time that this was an opportunity to reform the military system and solve the Although some people proposed to use this opportunity to reform the military system and solve the common practice of the army taking empty pay and the prevalence of corruption, in order to reduce the burden of military expenditure, but it was impossible to implement the only way the National Government could solve the problem was through bank advances, which actually means increasing the amount of fiat currency issued. In the early days of the war, the government was still wary of hyperinflation. Under the leadership of Kong Xiangxi, attempts were made to curb it through the sale of public bonds, taxation and monopolization of consumer goods, and even the introduction of measures to curb consumption. In September 1945, the national government announced that the exchange ratio between French currency and the Chinese reserve notes issued by the fallen areas was 1:200. This punitive measure was completely contrary to the laws of economics and caused a large number of French currency lenders to flock to Shanghai to buy them, resulting in soaring prices and the accumulation of wealth by numerous officials who received them. In the following March 1946, the national government locked the exchange rate between the French currency and the U.S. dollar at 2020:1, making the value of the French currency overvalued by more than 60%, resulting in a sharp increase in imports and a sharp decrease in exports and a rapid deterioration in the balance of payments. By this time, although the sale of gold to try to ease inflation, but the effect is the opposite from March 1946, the Central Bank will be a large number of gold inventory at market prices, to February 1947, a total of 3.53 million taels of gold sold, accounting for 60% of the inventory of gold, the recovery of French currency 998.9 billion, but the same period the issue of French currency has increased by 324.83 billion yuan gold sales The price of gold skyrocketed, and a huge amount of lending money flowed to gold, making people even more distrustful of the French currency, and the whole market was in chaos. The heavy industry in the eastern provinces had been completely controlled by the Chinese Communist Party, and the contrast in power between the two sides had changed profoundly. In fairness, the National Government was fully aware of the dangers of inflation and had insisted on raising and selling public debt to solve the crisis in the early days of the war, and Kong Xiangxi had publicly stated in 1938: The financial position during wartime was very different from the usual…… the method of raising money was not to raise additional taxes or To hold new taxes; additional paper money; raise domestic and foreign debt three ends to increase taxes, because the coastal ports for the enemy blockade, the expansion of the war zone …… not to mention the further increase in the burden; to increase the issue of paper money, it is sufficient to start the inflation of inflation, disrupting the financial, no more than this; so to cope with this huge wartime expenditure, it can be for the injection and avoid the burden of uneven, the end is to raise debt but to The only thing that can be done is to follow the example of the ancient empires, which can only be solved by issuing new money. One yuan is equal to 0.22217 centimeters of pure gold, the total amount of the issue is limited to 2 billion yuan and at the same time, it is stipulated that private individuals are not allowed to hold gold, silver and foreign exchange, the deadline for collection, after the confiscation of all; the national prices of goods and services should be frozen at the level before August 19, 1948. At this time, the National Government may have finally realized the role of commercial supply on inflation and announced on September 9, 1948, the "Supplementary Points for the Implementation of the Measures to Suppress Hoarding of Important Daily Goods", which stipulated that the finished products and goods stored by factories and firms around the world, if not supplied to the market as far as possible or exceeded the price limit of August 19, to At the same time, Chiang also stipulated in Shanghai that even if the stores were out of stock, they were not allowed to close down. If they secretly raised prices, they would be confiscated and sealed. The government was to sacrifice the Republic of China to protect Western Europe, while at this time the speed of issuance of gold yuan notes, but in the fantasy of accelerating, inflation soon reappeared this use of administrative means to forcefully intervene in the market, will certainly be punished by the market first black market rampant, and then the Yangzi case in front of Kong Ling Kan defeated, Chiang suddenly from the hero of the tiger to swat flies hero, leaving in disgrace at this time the currency reform has failed, the The momentum has gone today, we will know from an economic point of view, the decision of inflation, in addition to the number of issues, the main thing is the supply of goods, but unfortunately, the war environment in which China is located, as well as production capacity, I am afraid that this task can not be accomplished lament the Republic of China, as today, can not start the real estate market, the people in the hands of the money swept away, thus solving inflation Author nbsp;