At the morning meeting, the Ministry of foreign affairs and the Ministry of foreign trade presented the agenda of the day on the issue of a unified currency after the formation of the world financial and Trade Organization.
The whole morning will be used to solve this problem, which is also a problem of great concern to everyone.
If the Empire forces each member state to take out a certain amount of gold as a risk reserve for issuing a joint currency, some small countries may face some big problems.
The fluctuation of currency exchange rate of small countries in the foreign exchange market is very common. It can be said that this is a very normal phenomenon. There are two reasons for this situation.
First, if the country''s currency is issued based on national credit, any economic decision or even a change in a stock may drive the performance of the currency in the foreign exchange market.
The country is small, the system is not perfect, and the economic structure is single. Once the enterprises that occupy the leading position in the economic field have some business problems, it may be just a business failure. For example, if they fail to complete the expected profit plan, they can drive the economy of the whole country to show huge fluctuations, and then affect the performance of the currency in the foreign exchange market.
Moreover, the credit monetary system often appears in large countries, which is difficult to see in small countries. If you have to ask why, it can only be said that small countries are too disturbed in national credit and international issues and do not have the ability to resist risks. Therefore, it is not appropriate for smaller countries to adopt the credit system.
The diplomatic dynamics of neighboring countries, even the slightest diplomatic dynamics, may cause the people and even the capital market of the whole world to reassess the beliefs of this small country. Even some diplomatic problems are not aimed at this small country, they may also cause a chain reaction.
The constantly volatile exchange rate is definitely not a good thing for a country''s financial economy. It is easy to have disputes and problems in international settlement. Therefore, small countries tend to issue currencies in a certain proportion based on precious metals, such as gold as a risk reserve.
In the second case, the issue of currency is based on precious metal reserves. It is easy to specify how much currency can be exchanged for an ounce of precious metal with strict and accurate figures, and determine the currency exchange rate indirectly.
Money itself does not have any value. It is only a special commodity for small-scale circulation, but it will become different when it has a relationship with gold.
Precious metals such as gold are common hard currency all over the world, so pegging the price of gold for exchange rate comparison can reduce the sharp fluctuations caused by financial problems.
However, it is not necessarily true. For example, a large country suddenly began to sell gold for some reasons, which will lead to a rapid decline in gold prices.
Another example is the discovery of a gold mine with huge reserves. Even if the mine is abroad, the world gold price plummeted, together with small countries with very good development momentum, the currency exchange rate plummeted and foreign trade suffered serious losses.
However, this situation is obviously much better than the first situation. The world can not find gold mines with huge reserves that can affect the world every day.
Even if found, it may not be mined. The role of buried gold will not be immediately reflected in the financial market before it is turned into golden bricks and sent to the bank.
But if the Yaoxing Empire needs everyone to take out part of the gold reserves in proportion, these small countries will really suffer.
Obviously, it is a good thing, but it has become a bad thing. The reduction of gold reserves means the reduction of the potential value of money, which will affect export trade.
This is like having 100 grams of gold at home and issuing 100 yuan as a risk reserve. Now 50 grams of gold have been taken away, which also means that only half of the gold used to fight risk is left, so the actual value of the issued 100 yuan is only half.
One dollar can only be equal to the past 50 cents. There is no doubt that it is a huge impact on the economy of the whole country. The money in people''s pockets is suddenly worthless. There may be civil strife or even civil war in some places.
Most of the morning meeting was devoted to discussing whether it was necessary to issue a joint currency and what changes would be brought to Member States after the issuance of a joint currency.
Although these participants are either national leaders, rulers or high-level representatives of the country, at such a critical moment, they do not agree with their own opinions according to other people''s heads.
In fact, among these countries, there are not countries in favor of issuing a joint currency. Of course, these people have their own plans.
The prince of the colt Empire agreed to issue a joint currency in order to solve the problem of the domestic financial structure.
They are in the transition period between feudalism and modern society. The great Pharaoh wants to promote the colt Empire to quickly complete the system transformation and keep up with the international power Yaoxing empire under the condition of ensuring that his power is not threatened.
But this is certainly not clear in one sentence or two. In the colt Empire, people in many areas still use gold coins as important currencies for circulation, and they are not interested in the paper currency issued by the royal family.
This led to the failure of paper currency from the early stage of issuance, which was very bad and inconvenient for the royal family to control the domestic financial order, so that in a fairly feudal country, the status of businessmen was about to catch up with the nobility, which was an international joke.
If the establishment and issuance of joint currency can be promoted, according to ifto and international settlement, businessmen in the colt Empire must use joint currency for international trade settlement.
Then the question arises, how to obtain the joint currency?
Of course, we should use paper money to obtain it, so how can we obtain paper money? It''s very simple to exchange gold coins!
This can quickly gather a large amount of gold from the people. At the same time, the currency issuance right held by the royal family can bring more voice to the royal family in the financial field, which is of great help to the colt royal family to stabilize its power status.
Most of the other countries that support joint currency issuance have their own ideas and consider them from the standpoint of their own interests.
As for those who do not advocate the issuance of joint currency, they are basically small countries that do not have the ability to resist international financial and trade risks. Some people even think that the issuance of joint currency is likely to be a conspiracy of the Empire.
Once their domestic gold reserves are insufficient, the domestic currency is likely to be gradually eliminated by the joint currency. Finally, the joint currency is not only the international settlement currency, but also the main currency in circulation in their country.
If Yaoxing Empire plans any more terrible conspiracy, it can directly destroy their financial order, destroy their economic construction and plunder their country''s wealth.
After arguing all morning, no result was found. Finally, when it was about to have a lunch break, the imperial foreign minister put forward a proposal.
"In view of the fact that the opinions of all of you cannot be completely unified at present, we can propose another relatively mild way to use Imperial Star yuan as the international settlement currency. You can discuss it during the lunch break, and we will continue to discuss this issue in the afternoon..."