Once the currency of the Xixia people was replaced, there would be no commercial banks in Xixia to do foreign exchange conversion, and there would be no central bank for overall control, so there would be no restrictions on the Song Dynasty's printing of money.

How to explain this?

For example, Yingjiang wants to print one billion to Rabbit to buy things, but Yingjiang's money cannot be consumed directly within Rabbit. It must be converted into Rabbit coins, and this exchange is completed by a commercial bank.

Commercial banks then take the foreign exchange to the central bank for equal exchange, and the central bank exercises overall control over the foreign exchange.

But here comes the question, does Yingjiang want to print as many copies as it wants?

no!

Yingjiang's money must be invested in Rabbit. Rabbit said that I only accept an investment of 100 million, and Yingjiang cannot get in the other 900 million.

This is the basic model of exchange control.

In fact, the opening of Rabbit means the entry of foreign capital.

It's just that foreign capital cannot enter unscrupulously, and there is a general manager there to make adjustments based on national conditions.

If Eagle Sauce invests one billion, and one day it earns 100 billion, and if it wants to withdraw all 100 billion, it must convert it into Eagle Sauce coins and then withdraw it. It will go to the bank to exchange it.

After the exchange, the bank has an extra 100 billion rabbit coins in its hands, and the market has lost 100 billion rabbit coins. The bank must find a way to slowly release this 100 billion to the market, otherwise it will affect the economy.

The eagle sauce came again next time, and had a bigger appetite. After making a profit, he left again, and the rabbit replenished again.

This is Yingjiang using investment to expand the bubble, and finally forcing the opponent to depreciate, then buying the goods at a low price, waiting for the price to rise before selling, and finally exchanging money and leaving, destroying the other party's economy, and making a lot of money for himself.

Small countries can easily be killed.

However, the Song Dynasty and Xixia in the 12th century did not have such complex international trade and intermediary institutions.

So, to put it simply, it was much easier for the Song Dynasty to conquer Xixia than it was for Yingjiang to conquer other countries.

Unless Xixia establishes its own central bank to issue its own currency, and then controls the foreign exchange of Song Dynasty banknotes, and Xixia has a strong industrial structure to adjust.

That is also possible. One day after Xixia realizes the magical power of currency from the currency war, it may be established. But will Xixia still exist at that time?

Zhao Ding became confused again: "Then how can we control the imperial court to collect 25,000 guan and only use 5,000 guan?"

Zhao Ning smiled and said: "Doesn't this require a bank?"

Zhao Ding was shocked suddenly, stood up suddenly, and worshiped: "Listen to the official's words, I will be enlightened!"

Naturally, there was a concept of finance in ancient times, especially in the Song Dynasty.

But this was not the case in ancient times.

"I do have one more question."

"anymore question?"

"What if the Xixia people came to Song Dynasty to exchange their banknotes for copper coins?"

Zhao Guanjia said: "Give it to them."

"give them?"

"Xixia is a small country. Even if the whole country comes to exchange copper coins, how much can be exchanged? They have exchanged it, and it is only for use in Xixia. How big is the domestic trade demand of Xixia? How many copper coins are needed?" Zhao Ning shook his head.

He smiled and said, "As long as the Song Dynasty can provide cheaper tea, silk, and ceramics, and trade with the Song Dynasty requires payment of banknotes, why do the Xixia people leave in exchange for so many copper coins?"

Zhao Ning really said this and Zhao Ding was speechless.

Everything is determined by supply and demand. The Xixia people exchanged a lot of copper coins for the return, which was heavy and unsafe. Exhibition?

In fact, before the world war, the international common currency was "pound".

Why?

Is the pound also linked to gold or oil?

No!

Because Britain's production capacity is strong enough and its economic strength is strong enough.

Before the so-called Bretton System and the Petroleum System came out, what affected the status of currency was the economic strength of a country in advance of military self-protection.

For example, the Eastern Continent in the 12th century.

Why everyone uses Song Dynasty copper coins? In addition to their excellent manufacturing, there is another reason: the Song Dynasty had developed commerce.

If you don’t believe that you asked Japan to mint copper coins of the same quality, do you think the Kingdom of Jin wants to use Japanese copper coins?

After all, the Jin Kingdom also had a need to buy tea from the Song Dynasty. They used Japanese copper coins, but the Song Dynasty did not accept them.

Zhao Ding paused and then said: "Then the bank will not..."

"Yes, the bank will be a vital government office in the future, and its role will be no less than that of the Privy Council or the Military and Political Council."

Zhao Ding sighed: "So, we need to monitor the amount of banknotes flowing into Xixia?"

"Yes, it is necessary to monitor. Song Xia transactions are carried out in the market. Relevant officials have account records and will back them up to the bank. Local banks will control the amount of banknotes in the region based on the amount of banknotes flowing into the mutual market."

"Will there be officials making false accounts or committing corruption?"

"Yes, but that's not what the bank should worry about. That's a matter that should be dealt with by the Provincial Yuan, the Audit Yuan and the Yamen of the Ministry of Justice."

After hearing this, Zhao Ding finally fully understood the true value of the bank's current existence.

It is by no means as simple as issuing and handing over banknotes.

Zhao Ding sighed in his heart, it seems that what our official family has to do is bigger than imagined.

If the strategy of handing over cash to Xixia was successful, wouldn't it also be applicable to the Jin Kingdom?

Zhao Ding finally asked doubtfully: "Are Xixia people willing to pay money?"

"Then it depends on whether we can win this battle."

Zhao Ding said: "I understand."

"Once the Battle of Yinzhou is over, if the Song Dynasty wins, I want you to meet the Xixia envoy in person and negotiate with Xixia on this matter. This matter is related to the Qingchang and Qingbai Salt transactions, and is also closely related to the bank. I need you to be in the Taifu

We should provide intermediary coordination between the temple and the bank to ensure the connection between the bank and commerce, and conduct timely control over banknotes."

"I accept the decree."

Zhao Ning sighed in his heart, looking forward to the battle of Yinzhou this time.

If Yinzhou is defeated, the financial structure he built based on this era will be tested on Xixia.

If it works, we can find a way to use it in the Kingdom of Jin.

However, the Kingdom of Jin is different from Xixia, in terms of size and strength, and may need to use different methods.

On April 15, Li Qianshun arrived in Xiazhou.

He inspected Xixia's ace cavalry and infantry Tie Yaozi and Bubazi in Xiazhou. On that day, Xixia's elite marched eastward to Shizhou.

250,000 Xia troops gathered in Shizhou, known to the outside world as a 400,000-strong army.

As for Yinzhou, as of April 15, a total of 30,000 people from Yanyan Road had been transferred to Yinzhou, and the total food supply had reached 20,000 shi.

On April 16, 15,000 troops of Li Yongqi, the commander-in-chief of the Dingbian Army, had arrived in Yinzhou first.

The Song Dynasty began to build new cities crazily in Yinzhou.

Not only in Yinzhou, but also in the south of Yinzhou and within a hundred miles of Mizhi Village, cities and towns were built one after another, connecting Suide and Yan'an Prefecture.

The Song Dynasty had an advantage that neither Xixia nor the Jin Kingdom had: sophisticated organizational management capabilities and construction capabilities.
Chapter completed!