Chapter 22: National Credit and Personal Credit

The two walked through the restaurant's main doors and stepped into the mall's grand hall.

Xiao Sizi's brows knitted tightly.

The educational foundation of a Great Tang princess gave her an extremely keen sense of the concept of "money." Look for books at Tiantian Kan Xiaoshuo, ttkk. tw, super powerful.

"Numbers? Intangible numbers, how can they be spent as money?"

She stopped, looked up, and refuted, "Money and silk must be real gold and silver, must be cloth and silk."

"Only when held in the hand with weight will the world acknowledge them."

"If it is merely a string of empty characters, why would merchants be willing to sell you white rice and meat?"

Above the Sky Screen, Xiao Sizi's refutation was also the roar in the hearts of all Ministry of Revenue officials and emperors across the ages.

Great Tang, Taiji Palace.

The Minister of Revenue knelt on the golden bricks, so anxious he kept slapping his thigh.

"Your Highness the Princess asks a good question!" The Minister's beard trembled wildly, "People of the later generations are simply absurd!"

"Copper coins are heavy, and transport costs are high; this is a difficulty known throughout the world."

"But if copper and iron are abolished and intangible numbers are used as money, the world will surely fall into great chaos!"

Li Shimin stood with his hands behind his back. "Without the exchange of real gold and silver, relying solely on a 'beep' sound, merchants willingly hand over their goods."

"Behind this, there must be an extremely terrifying power supporting such trust."

Ming Dynasty, Hongwu timeline.

Zhu Yuanzhang could no longer sit still.

He jumped down from the dragon throne and paced back and forth in the hall.

In the early days of the founding of the Ming Dynasty, there was a severe shortage of copper.

To solve the military expenses and the emptiness of the National Treasury, he directly ordered the printing of "Great Ming Treasure Notes."

That was a piece of mulberry paper printed with characters.

He had thought that as long as the Emperor issued an edict, paper could be spent as money.

And the result?

The common people simply did not recognize it!

The common people still used silver and copper coins to exchange for grain in private.

The Great Ming Treasure Notes depreciated rapidly, could not buy a dou of rice, and completely turned into waste paper.

"Intangible numbers... are even more empty by ten thousand li than our Treasure Notes!"

"On what basis can he make the world recognize this string of empty characters? On what basis!"

Inside the mall's grand hall, the air conditioning blew.

Lin Xuan, seeing Xiao Sizi's face full of defiance, pulled her to a nearby rest bench and sat down.

"You think money must be a physical object, right?"

Xiao Sizi nodded: "Gold and silver are naturally money. This is the Way of Heaven."

"Wrong." Lin Xuan refuted mercilessly, "Gold and silver cannot be eaten or worn; in essence, they are worthless."

"Everyone recognizes them because they are scarce and hard to dig up."

He pointed to the marble floor tiles beneath his feet.

"The essence of money is an IOU."

Xiao Sizi froze: "An IOU?"

"Yes, you take a sheep and exchange it for a piece of gold."

"This piece of gold is an IOU issued to you by the world."

"Holding it, you can at any time go to others to exchange it back for equivalent grain and cloth."

Lin Xuan spoke at a slow pace, beginning to deconstruct the underlying logic of ancient finance.

"Since it is an IOU, does it make a difference whether it is written in gold and silver, on paper, or as numbers in this Mobile Phone?"

Xiao Sizi's mind spun rapidly, grasping the core flaw.

"There is a huge difference!" She raised her voice, "Gold and silver cannot be counterfeited! If numbers are used as IOUs, the person in charge of the numbers can simply add a few strokes at will; wouldn't that allow them to plunder the world's wealth out of thin air?"

"If the common people fear the numbers will become invalid, who would still be willing to accept them?"

Lin Xuan snapped his fingers.

"You hit the nail on the head. What prevents number counterfeiting and guarantees that numbers can always be exchanged for meat?"

Lin Xuan pointed to the ceiling.

"It relies on National Credit."

"The state machinery guarantees that this string of numbers will never be over-issued."

"The state uses absolute military force, absolute laws, and absolutely sufficient material reserves to guarantee it to 1.4 billion people."

"As long as this number is in your Mobile Phone, you can go to the ends of the earth and exchange it for whatever you want."

Lin Xuan looked at the little girl's shocked eyes.

"Once credit is established, numbers are money."

"Once credit collapses, even if your Great Tang casts the most exquisite copper coins, on the day the dynasty changes, they will be a pile of useless scrap copper and iron."

Ming Dynasty, Fengtian Hall.

Zhu Yuanzhang, as if struck by lightning, stood frozen in the hall, Lin Xuan's words "Once credit collapses, money is waste paper" echoing repeatedly in his mind.

Why did the Great Ming Treasure Notes turn into waste paper?

Because whenever Zhu Yuanzhang lacked money, he simply printed it!

There was no backing those paper notes with equivalent amounts of grain, salt, or iron.

He overdrawn the Ming Dynasty's national credit to forcibly plunder the people's wealth.

"We were wrong..." Zhu Yuanzhang closed his eyes as a line of murky tears rolled down, "We thought the Emperor's edict was credit itself—what nonsense!"

"The paper in the common people's hands cannot be exchanged for grain; the Emperor's edict isn't even fit to wipe one's buttocks!"

He looked at the Minister of Revenue with murderous intent.

"Issue an edict! Effective immediately, seal the printing plates of the Treasure Note Bureau."

"Without solid gold, silver, or grain in the National Treasury as a foundation, anyone daring to print even one extra Treasure Note shall be executed on the spot!"

The Minister of Revenue prostrated himself on the ground, weeping bitterly: "Your Majesty is wise; the Ming Dynasty's currency system is saved!"

Great Tang, Ganludian.

Li Shimin stood before the imperial desk, cold sweat dripping down his back.

Yesterday, seeing the convenience of food delivery, he had been tempted to emulate Emperor Wu of Han by issuing "White Deer Skin Currency," creating a Great Tang version of paper money to solve the loss issues in transporting copper coins.

Lin Xuan's words had directly poured a bucket of ice water over his head.

"National credit..." Li Shimin took a deep breath, "The current strength of the Great Tang and the trust the Great Tang people have in the court are not yet sufficient to support such a grand feat of creating money out of thin air."

"If we forcibly implement paper contracts, within three years, the Great Tang's commerce will surely collapse, and the entire world will rise in rebellion."

He looked at Fang Xuanling, his tone resolute.

"The matter of currency reform is indefinitely postponed!"

"The foundation of the Great Tang is still too thin to tolerate even a trace of emptiness."

"For us to honestly open copper mines and cast enough coins!"

On a bench in the shopping mall.

Xiao Sizi was digesting this grand concept of "national credit."

"Lin Xuan, what if a common person acts shamelessly?"

She raised another question, "For instance, if he borrows this string of numbers from a money house, buys a shop, and then refuses to admit the debt afterward."

"The numbers are formless and bodiless; how can the money house punish him?"

Lin Xuan smiled, took out his Mobile Phone, and shook it.

"This brings us to the other side of this system: personal credit."

"In our place, everyone's identity is recorded in a system as vast as a heavenly net."

"If you borrow money from a bank and don't repay it, or if you deceive people in business."

"Once a court rules that you are untrustworthy, a mark will be stamped on you called 'Dishonest Judgment Debtor,' commonly known as a 'Lao Lai'."

Xiao Sizi listened intently: "Stamped with a mark, and then dragged away to be beheaded?"

Lin Xuan twitched the corner of his mouth, "Uh... don't keep saying 'beheaded' all the time; that's too bloody for this society."

"We don't kill people, but it's more unbearable than killing."

"Once you become a Lao Lai, for the rest of your life, you cannot buy a High-speed Railway ticket or take a plane."

"You cannot stay in good hotels, and even your children cannot attend good schools."

"Once the system locks you down, you cannot move an inch within this country."

"Your money will be forcibly deducted to repay debts, and you become a primitive person completely abandoned by modern civilization."