Chapter 5 The Opium Trade: Armageddon for the Gold and Silver Standards

Before the British started a large-scale opium trade with China, China had a clear advantage in international trade.China's tea, porcelain and silk constitute an export "iron triangle" that breaks through the barriers of the world market.The real scene of the Chinese market at that time was: the export of tea along the coast of Fujian brought unprecedented prosperity to the local economy; due to its market monopoly in production and processing, Wuyi Mountain became a sacred place for tea merchants from all over the world; in the middle and lower reaches of the Yangtze River, silk and Cotton is the most important handicraft product. Hundreds of thousands of silk cotton producers and textile professionals have created high-quality and competitively priced commodities, which are unrivaled in the world market; in the Pearl River Delta region, the Jingdezhen-Guangzhou industry has formed chain, continuously sending luxury porcelain into the magnificent living rooms of European royal families and nobles. At the end of the 19th century, the British Hurd, who was in charge of the General Tax Department of the Chinese Customs, said in his "China Experience Records": "China has the best food in the world-rice; the best drink-tea; the best clothes- Cotton, silk and furs. They don't have to buy a penny elsewhere."

From the 16th century to the beginning of the 19th century, the degree of marketization and the development of the currency economy in China for nearly 400 years far surpassed that of Europe.As a result, 48,000 tons of the 133,000 tons of silver discovered by Europe from the Americas were eventually transported to China by Europeans.The basic structure of international trade is that China created a major part of the world’s trade commodities, and the West plundered a major part of the world’s resources. In the process of silver flowing from the West to the East, Chinese commodities also flowed westward.

The continuous flow of silver to the East caused a serious imbalance in the world's financial balance. Due to the long-term net export of silver to China, by the end of the 17th century, there was a shortage of silver in Europe, and there was a general decline in prices, and at the same time trade began to shrink. From 1649 to 1694, the average annual circulation of silver in Europe decreased sharply, more than 50% less than the average annual circulation from 1558 to 1649, while the gold circulation increased by nearly 50%. The reduction of silver is a matter of course, but how can gold increase?

It turns out that at the beginning of the 17th century, the price ratio of gold and silver in Guangzhou, China was 1:5.5 to 1:7, while the ratio in Britain was 1:16. Sending silver to China can not only exchange for a large number of high-profit commodities, but also make use of gold and silver. Compare the price difference of more than 1 times, and exchange cheap silver for expensive gold in China, Japan and India.Even John Locke once complained: "I've been told that they (East India Company) import (gold) from certain parts of India and get at least 50% more profit...but the real wealth of England is buried in the Indian Ocean , now is the time for people to speak frankly the truth, why on earth we are facing a silver shortage unheard of in this age." [9] When gold flooded into England in large quantities, the bankers bribed the "1666 Liberty" through huge bribes. Birth Certificate of the Mint Act.This bill is essentially an important turning point in the history of currency. It "changed the world's monetary system, and its specific effect was to abolish the king's monopoly on currency issuance" [10].The act gave anyone the right to take gold bullion to the mint and demand that legal gold coins be minted free of charge.

This act fundamentally favored the interests of bullion bankers and merchant capitalists, who would have de facto control over the money supply.With large stakes in physical gold in their hands, they will be able to dictate the money supply in their favor.When they are creditors, they reduce currency minting and create a deflationary effect, which increases the gold content of their claims; when they are debtors, they increase the money supply and use inflation to write off their debts.This is the first time that the West has essentially transferred the right to issue money that belongs to the government to private individuals.Since then, the legal basis for the right of private central banks to issue money has been laid, and the door has been opened to control the distribution of wealth by controlling the money supply of a country and the whole world.

At this time, Rothschild's famous saying suddenly sounded in my ears: "As long as I control the currency issuance of a country, I don't care who makes the laws." [11] In the eyes of bankers, controlling currency is A great struggle to control the issuance and distribution of money is to control wealth, resources and all of humanity.If you want to control the world, you must first conquer money; if you want to conquer money, you must first conquer gold; if you want to conquer gold, you must first conquer silver. Just as European silver came to the east, it was accompanied by Asian gold going west.This ebbs and flows, and the final result is that Britain is hoarding gold, while China is absorbing silver.The crux of the problem is whether gold or silver will eventually become the dominant currency in the world. This will be a major watershed that will affect the rise and fall of the East and the West in the next few hundred years!

Since the Industrial Revolution, the national power of the British Empire has increased unprecedentedly, and the conditions for establishing a gold-based currency were fully met in 1717.Although it was only in 1816 that the United Kingdom legally completed the final establishment of the gold standard, the United Kingdom had been under the de facto gold standard for the previous 100 years. For the bankers of the British Empire, the highest strategic goal is to take London as the world financial center and gold as the world currency standard. The British Empire exports sterling credits to the world through the Bank of England and turns major European and American countries into a gold standard. The core members turn the marginal countries of the world into the subsidiary areas of the pound, use war and violence to maintain the operation of this system, use currency to maximize control and mobilize global resources, and finally complete the control of the world's wealth and all mankind!

In order to establish the world currency hegemony of the gold pound, the silver currency country must first be defeated.The biggest, and most difficult to get a hold of, is China. After years of attempts, international bankers finally chose opium as a weapon against China's silver standard. The institution responsible for implementing this strategy is the East India Company.