The Prime Minister's Mansion is a six-story brick and stone building, not very majestic. It is said that when the founding of the country, in order to reflect the people-friendly image of the elected cabinet, the Prime Minister did not live in the forbidden area like the emperor, but played the people-friendly card. Although there were red brick and cement walls, through the iron fence gate, citizens could see people coming and going from afar. Seeing these officials busy and rushing, there was no gong to open the road and avoid the signs to guide the way, the citizens felt a little more kind and inexplicably felt a little at ease.

After all, there are people who are busy with national affairs.

Zheng Yu sat in the main seat, looking at the civil servants and officials of the imperial central government present, with a faint smile on his face and a hot heart. Who is this? This is the one who always wants to control traffic and idlers to retreat, but now he has to put on a humble attitude in front of him and talk to him softly.

What does it mean to be cool?

"A few are the stewards of the empire." Zheng Yu knew that the emperor hated the people who were playing tricks the most, so he always asked his ministers to report as simple as possible. He is now following the example and learning from his adoptive father in everything, so he naturally went straight to the point. "Financial is the blood of war. The national war is imminent, and the military supplies case cannot be settled for a long time. This is a fatal matter. This time, I was sent by Your Majesty to mediate the matter. I also asked several seniors to tell you everything and make a decision as soon as possible."

Everyone looked at each other and nodded in one go.

"Your Highness, it's not that we don't know the general situation. It's really hard to recover from the national finances." It was Prime Minister Liu Dingyi who spoke. "If you fight this battle without restrictions, the government's credit that has been working hard for many years will collapse. At that time, inflation soars, officials and people have no livelihoods, and complaints are everywhere, which is the real way to shake the foundation of the country."

Zheng Yu looked at the veteran of the Baath Party who studied in Oxford in his early years, served as the emperor's trusted secretary, and served as foreign minister, Minister of Culture and Education, and has been in charge of the cabinet five years ago and has been famous for his calmness and sophistication. His face also became a little solemn.

Liu Dingyi had long lost the calmness and prime minister's demeanor at yesterday's cocktail party, and his anxiety was beyond words. It seemed that he had been a little anxious recently by the pressure from the military and Congress. I think the financial situation is really not optimistic.

"Everyone, that's what we said. Let's talk about everything today." Zheng Yu looked around everyone, "I came here to solve the problem this time. So please tell me. The finances are a bit difficult, but after a year of going to the country, what is the current situation, especially the financial difficulties, how will it come back to the financial situation? I really need to ask for advice."

Liu Dingyi looked at the young man's earnest face and nodded: "That means has grown all the expenses of the empire in the early years. In fact, it is mainly maintained by issuing bonds. The people who purchase bonds are mainly from the overseas Chinese community in the South China Sea, Your Majesty, and some overseas consortiums, especially Jewish consortiums. His Majesty's money is Jewish funds he exchanged in his personal name with the sovereignty of the Hue Autonomous Region. In addition, most of the industries at that time were paid by His Majesty and the Empress, and then attracted some private funds and part of the government's funds. Therefore, His Majesty has always supplemented the various expenses of the government."

"In this way, the government's debts rose very quickly, especially to His Majesty's debts. Later, His Majesty exempted many of the government's debts free of charge to reduce government financing costs, and began to collect business tax and value-added tax in the production process. In the trade process, some tariff sovereignty was regained with the UK and France. In addition, the rapid economic development of the jurisdiction area expanded, fiscal revenue also quickly increased. In 1893, before the Sino-Japanese War of 1895, the Nanyang government's foreign debt was about 80 million pounds, the domestic debt was about 90 million pounds, the fiscal revenue was about 260 million pounds, and the deficit was about 30 million pounds that year. However, in the Sino-Japanese War of 1895, the government's foreign debt increased to 120 million pounds, and the domestic debt was 130 million pounds, and the north was ruined. China's tax revenue in two years was only 300 million pounds."

"After unifying the country, the government expenditure was even greater. The construction of railways and highways, renovation of canals and water conservancy, repairing schools, promoting compulsory education, and reorganizing the army. The money was spent like flowing water. Government debts expanded rapidly. In the second year of China, the national fiscal expenditure had reached one and a half times the normal fiscal revenue. Fortunately, during the Sino-Japanese War of 1894-1895, a large number of bannermen's assets were confiscated. After revising the agreement with Britain, Britain returned the frozen Qing nobles and royal families to the empire to return the funds stolen from the treasury and private sectors. Through fiscal reorganization, the assets were sold, including auctioning some land, residences and even cultural relics. The national finance finally barely survived."

"However, it cannot last long with these funds. In China, the government once again experienced a deficit, and various expenses could not be reduced. But Russia began an economic crisis, and soon spread to France and Germany, which invested the most in Russia, and then Britain, and further affected Japan and my country. Within the government, some people advocated fundamental reforms, which triggered heated debates and even rebellions... I took over as Prime Minister, and in accordance with His Majesty's order, suspended the free exchange of paper money and gold, relaxed monetary policy, and the government further expanded debt and increased investment, and reduced taxes for enterprises. On the one hand, lowered domestic interest rates, and on the other hand, increased the coupons of government bonds. With large purchases of surplus capital in Europe and the United States, relying on government spending, it finally drove both domestic supply and demand. In addition, military orders, the empire's economy rose."

"However, after this battle, the empire's foreign debt has reached 330 million pounds, and the domestic debt has reached 560 million GBP. This is not counting the 350 million GBP local bonds, the central government has to pay 100 million GBP every year. After the issuance of the government bonds, the empire's foreign debt reached 450 million GBP. With domestic debt and low-interest loans, the government has to pay nearly 200 million GBP every year, which is equivalent to 15% of the country's fiscal revenue. The reason for preparing so much funds is not to compromise with the military, but the government must prepare for the future."

Liu Dingyi coughed a few times, refused the handkerchief handed over by his secretary, just took a sip of tea, gasped for a few seconds and said, "Fortunately, the war has not started yet, so the interest rate is not high. If the war is deadlocked or even unfavorable, the interest rate will probably have to roll upwards, so this time the cabinet is surplus. But in this way, in addition to yesterday's results, if another 300 million treasury bonds is issued, the interest rate of the government's government bonds alone will exceed 200 million every year. The government is already full of deficits and cannot support it. In this way, I am afraid that the government's credit will be lost. Once the government cannot raise funds, the imperial economy will collapse immediately."

Zheng Yu was originally a finance student and had been working on credit in banks. He was very sensitive to currency. However, he was not very shocked after hearing this. Compared with the United States in later generations, even China, Japan and many European countries, the current scale of the Chinese Empire's government bonds is not very high in his opinion. In later generations, the scale of the government's government bonds has exceeded the total GDP of the country. Of course, there is a little more deficit, and the proportion of government fiscal revenue cannot be compared with the powerful government in previous lives, but it is not going to collapse, right?

He was a little suspicious of Liu Dingyi. What this person said was enough to prove that he was not an outsider in the economy, and even many ideas, such as breeding and industrial development, government credit, financial role, etc. In Zheng Yu's opinion, in this era, I'm afraid that the government credit would collapse.

Zheng Yu looked at the central bank governor Ma Xinyu, the finance minister Tang Shaoyi, the finance minister Li Dengyun, and the central bank deputy governor Sun Duosen, and the hearts of the central bank, and the hearts of the hearts were also confused. These people all nodded solemnly. Zheng Yu knew that these people were all technocrats who studied abroad and had been practicing, capable and enlightened for a long time, and were the top students in the imperial finance and economic circles. Although Zheng Yu was confident that he had financial knowledge and historical experience far beyond the limitations of this era, he would never dare to look down on these temporary choices.

He recalled history and finally understood his problem. In fact, in his previous life, he really used money printing and large-scale national debt to create a credit bubble, or after the abolition of the Bretton Woods system in the 1970s, and the US dollar was decoupled from gold. Since then, large-scale banknotes have spread around the world, and the tide of banknotes flooded the world with national credit as guarantee. Wherever they went, inflation soared. Once the tide receded, only a mess left behind. Therefore, the debt ratio of the country in that era could not be trapped under the current international situation where the gold standard was absolutely dominant. In the past life, it seemed that it was just a dangerous debt ratio, but by this era, it was already crazy.

But the United States in his previous life relied on political, economic, scientific and technological culture, and most importantly, military advantages, semi-forced other countries to purchase US bonds and pay protection fees in disguise. But China in this era is just a rising country that has just risen, and is surrounded by hostile powers vigilantly. Its own survival is still facing a test. How can we solve the credit problem of this country?

Zheng Yu was a little embarrassed.

Before coming, he was full of confidence and felt that as a top financial student a hundred years later and had been working in banking for many years, he was not able to grasp the problems of this type of financial currency? He was not prepared to do it, but it was basically superficial. He just thought that he could finally talk about his own business, and he could make a shocking statement, and the tiger's body was shocked. Unexpectedly...

"In fact, in recent years, the government has only relied on His Majesty's credit, royal industry subsidies and support from Jewish consortiums, otherwise the interest rate of the government bonds would have already flown up." Finance Minister Tang Shaoyi said, "The current national fiscal revenue, in addition to tariffs, is 73% in taxes and local governments, 73% in taxes, central government and local governments. Last year, our fiscal deficit reached 1.4 billion Huayuan, equivalent to 1.4 billion Huayuan, equivalent to 1.5 billion Huayuan, and military expenditure alone spent 600 million Huayuan, which exceeded half of the total budget. This is not considered the large-scale transportation line construction for combat readiness. The large-scale mobilization started at the end of last year, and the size of the army was doubled. If we fight this battle, the country really cannot support it."

Although Zheng Yu knew that the other party was telling the truth, he was still a little angry: "Minister Tang, according to what you said, we shouldn't have fought this battle. Anyway, the outcome is uncertain, and even if we win, the country will go bankrupt. So why bother to fight?"

Tang Shaoyi's face turned a little red, and his eyebrows raised was about to speak. Liu Dingyi coughed lightly: "Your Highness, what Minister Tang said was a bit tactful, but he had no intention of opposing national war. This battle was a battle for a strong country, and it was not our country's initiative to provoke. It was because Russia and Japan were so vicious that they wanted to commit violence against our country. The empire had to fight for self-defense. We still understand these principles. Today, we are brave enough to judge the situation and consider the national strength to avoid the country's injury. Even if we win, we will still lose."

Zheng Yu thought for a moment and asked, "How is the country's currency issuance?"

Several people looked at each other, and the Governor of the People's Bank of China Ma Xinyu said: "The total number of Huayuan banknotes and coins issued in China is about 3.2 billion Huayuan, and the total deposits of domestic banks are about 9.4 billion Huayuan."

"If my figure is correct, my country's current banknote issuance reserves, including gold and hard currency, plus the 30 million pounds that His Majesty is about to transfer, the 10 million pounds from this fundraising is about 430 million pounds, equivalent to 3.1 billion Chinese yuan." Zheng Yu said, "That is, my country's current fiat currency issuance has received sufficient hard currency support. In theory, it can enable free exchange of precious metals, and any attack on Chinese yuan credit will not be successful."

Ma Xinyu was slightly surprised and nodded: "Your Highness is very much."

"The reserve requirement ratio of the empire has increased to 25%. Theoretically, if our country's base currency fully exerts leverage, it can generate 12 billion Chinese yuan in deposits." Zheng Yu continued, "Compared with current deposits, there is still 2.6 billion in credit leverage."

Everyone looked at each other and nodded slowly.

"Your Highness, in theory, this is true. However, if banks continue to relax their monetary policy, domestic inflation may continue to increase." Ma Xinyu said, "Although we do not recognize it to the outside world, according to the real sampling data of the Bureau of Statistics, the domestic consumer price index has risen by 10% compared with the same period last year, and it is still increasing."

"What is the reason?" Zheng Yu stared at Ma Xinyu, "Is it just caused by the bank's relaxation of money?"
Chapter completed!