"Let the Bullets Fly" version: Leeks in the middle

In the previous video " Let the Bullets Fly : A Classic Case of Cutting Leeks " , it was said that hoarding is the usual method of speculative businessmen , and the government will inevitably crack down on speculation to restore market order , but at that time in the Republic of China period , the Republic of China government and the army were participating in speculation for a greater degree of profit, and at the same time , they were constantly staged " big fish eat small fish, small fish eat shrimp and rice " drama , and the huge number of people at the bottom has been unable to get rid of the fate of being exploited by various interest classes.

In the Republican period, all kinds of harsh taxes and miscellaneous taxes aside, the National Government blindly followed the Western pursuit of modernization, barely built up a weak industrial base, the production of primary industrial products can only rely on internal digestion, and in order to resist the needs of foreign military materials need real money and silver, or rare industrial raw materials, agriculture is able to export cash crops can be exchanged.

Then the first is currency reform, the introduction of legal tender and empowerment, requiring the precious metals circulating in the market to be converted into legal tender, and the collected precious metals can be bought and bought on the international market.

Second, weak fiscal revenues could not meet military expenditures everywhere, and there was a lot of corruption in the military.

In addition, the planting of cash crops will inevitably reduce the scale of grain production, the people are hungry is the norm, the harsh taxes and miscellaneous taxes have caused the people to lose their enthusiasm for labor, the national government's fiscal revenue will inevitably not be able to support the huge financial expenditure, and it will not be able to alleviate the imbalance between revenue and expenditure after various clever names, and the remaining practice is to print money.

Printing money is not omnipotent, even if it is changed for a banknote (gold coupon), as long as the formula is not changed, inflation cannot be avoided, the more printed, the more serious inflation, when the banknote becomes a gross ticket, the price of the necessities of survival - food - will be in the sky, and all kinds of administrative and military systems will be paralyzed.

We look back at the sinking of legal tender, the turbulent environment made it impossible to upgrade industry, the national government relied on the government power to exchange grain from the people through the price scissors difference, and profited from power, which would form a path dependence, and the thankless behavior of upgrading industrial capacity was almost scorned by everyone in the national government at that time.

When the Nationalist government purchases military supplies, it must also suffer from the scissors difference of the other side's high-grade industrial products. Since banknotes cannot be printed endlessly, how much is appropriate?

Theoretical circles recognize that paper money must have a "heavy anchor" to maintain the stability of the currency value, but to some extent this is only the experience of western commercial societies after abandoning the use of gold and silver as currency, and China has issued paper money "Jiaozi" as early as the Song Dynasty, and the Ming Dynasty issued paper money "Daming Bao Banknote", and although this also has a certain correspondence with the physical object, the people do not have a strong exchange demand, because the unified state power has stopped the work of a strong credit guarantee. —— Dong Xiaodan, Wen Tiejun: "To Attach"

The National Government has not been able to effectively complete the unification of the country, but blindly imitate the West to develop a modern economy, the issuance of paper money first with precious metals as an anchor, and later with foreign exchange (US dollars) as an anchor, with the consumption of precious metals and foreign exchange reduced, even if it does not continue to print money, the depreciation of paper money is inevitable, not to mention that in order to make up for the fiscal deficit, the printing speed is rising steadily.

Depreciation means inflation, then private capital will have the behavior of "derealization to virtuality", that is, speculation.

Imagine that the profit rate of industry is fixed and has a ceiling, and the profit rate cannot run the inflation rate, that is, the more production, the more losses.

So the funds will leave the industry, turn to speculation, and engage in hoarding. On the one hand, the reduction of supply by industry will also decrease, and on the other hand, the main commodities circulating in the market will be hoarded up and further reduced, because they are all necessities, then the prices of these commodities will face a more serious shortage of supply and demand and rise sharply.

If the government comes forward to provide relief and sell goods at low prices, most of them will still fall into the hands of speculative merchants, because the people have limited disposable funds. Moreover, the officials of the National Government also went down to do business at the same time, and the malpractice for personal gain made it impossible for the National Government to concentrate its efforts on suppressing speculation, and finally the corruption and incompetence of the collusion between the government and businessmen destroyed the credibility of the National Government.

Here we must pay attention to the fact that the financial power of speculative businessmen is enormous, even if the national government has no corrupt behavior, if there is no nearly unlimited materials to lock the market of floating funds, then the government's selling behavior stops, the market's pricing power will fall into the hands of speculative businessmen.

So what is a near-infinite supply?

Speculation mainly focuses on the speculation of white rice, white noodles, and white yarn, because these are indispensable to the people's livelihood, these materials rely on the people's production, but also from the hands of the people, which requires strong mobilization ability and government power.

In addition, speculation is mainly concentrated in large cities, and to combat speculation, it is necessary to concentrate materials from scattered rural areas in a short period of time and transport them to the vicinity of large cities for a long time.

Strategy is also important when dealing with speculation.

Selling at a low price can be said to be "going against the trend" when prices are rising, and it is difficult to collapse in one blow when speculators are in a hurry, and the amount of materials thrown out must be large enough.

Therefore, the practice of "going with the flow" is adopted, gradually increasing the price of grain and cotton materials, inducing speculators to focus on the material reserves of grain and cotton, and speculators will certainly use loans when killing red eyes, thus locking up the upstream capital in the market.

After absorbing a certain amount of free money, it will start to sell at a low price.

Similarly, the cost of capital will force speculators to throw out their inventories when they can't eat, thereby stabilizing prices.

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