Chapter 95 Currency "Spring and Autumn and Warring States" era is coming

All activities in human society are nothing more than two things, one is to create wealth, and the other is to distribute wealth.The efficiency of wealth creation and the balance of wealth distribution determine the trajectory of civilization development.Without the creation of wealth, there will be no distribution of wealth. If the real economy centered on labor, production, technology, natural resources and trade is mainly responsible for creating wealth, then there are two forms of wealth distribution: one is based on currency, credit, fiscal taxation, financial instruments and financial markets. The other is a violent distribution system formed by war, plunder, fraud and colonization.

From a large country to a small individual, there are two channels for owning wealth. One is to create it through one's own labor, and the other is to share it through the distribution system.A strong country and a harmonious society must seek a stable balance point in the game rule setting of wealth creation and distribution. In the final analysis, wealth is the organized and efficient use of natural resources by human beings. Through the process of labor, various products and services that meet the ultimate needs of society are created. It is labor that integrates various static elements in a dynamic process. Together and form the ultimate wealth, so labor is the source of wealth.

Labor keeps people in good living and working habits; labor makes people's excitement center around how to reduce production costs, use advanced technology, improve production efficiency, and thus produce more products; labor makes people maintain and continuously improve the creation of wealth Ability.In fact, the creativity of wealth is far more important than the possession of wealth itself. From the 16th to the 17th century, the powerful Spanish Empire once owned 18,000 tons of silver and more than 200 tons of gold, accounting for 80% of the world's total gold and silver, which can be described as the world's richest.The whole world is working for Spain.When a country has so much wealth, the wealth itself will corrode the country's ability to create wealth.

In 1545, Spanish manufacturers had a backlog of orders from the New World for six years.Under the protection of a strong military force, these overseas orders can only be produced by Spain, and high profits are at your fingertips. Spain's huge wealth has made its manufacturers lose the desire and pressure to endure hardships and engage in arduous production activities .As a result, a large number of subcontract manufacturing contracts began. The British textile industry, the Dutch shipyards, the Italian farms, and the fishing boats in Northern Europe all worked at full capacity to engage in hard and dirty labor production.

Spanish manufacturers put their own trademarks on the final products and exported them to other countries, forming the earliest OEM and outsourcing production mode.As a consequence, the industrious and brave British strive for excellence in labor, extensively use advanced technology and brand-new production organization models, improve production efficiency, and strengthen their own wealth creativity, and eventually they will sit on huge wealth, spend extravagantly, and recklessly Expansion, shrinking production, financial bankruptcy and unemployment, the Spanish Empire was dethroned from the throne of world hegemony.

At the end of the 19th century and the beginning of the 20th century, the British Empire, which started out as a manufacturing industry, achieved global maritime military and financial hegemony and reached a sphere of influence unprecedented in history.In Africa, Britain's sphere of influence includes most of the African continent, as many as 21 countries surrendered to the British Empire, and a large amount of raw materials and natural resources were at the disposal of Britain; Some areas hold the source of oil in the Middle East; in Asia, Britain rules a large area from India (including Pakistan), Malaysia (including Singapore) to Myanmar and Hong Kong, China, and its huge human resources, natural resources and strategic arteries are all taken The United Kingdom controls; in Oceania, Australia, New Zealand and other Commonwealth dependent countries are backed by industrial raw materials; in the Americas, Canada, Guyana, Jamaica, Bahamas, etc. provide the British Empire with endless strategic supplies ranging from naval bases to natural resources.

As the global hegemon, the British Empire once again faced the same choice as the Spanish Empire. Should it continue to create wealth through its own hard and steadfast labor, or use military and financial hegemony to "share" the fruits of labor of others?Wealth itself once again corrodes wealth creativity.Wealthy Britons were tired of boring and hard work, and began to invest in the United States on a large scale, exporting industrial production technology, letting Americans do the hard work and tiring work, and enjoying the huge return on investment themselves, and started the revolution of rentier capitalism. "good life".At this time, the United Kingdom determines the cost of capital in the world, monopolizes the price of world resources, controls the flow of global orders, divides the needs of the world market, and protects trade and shipping channels.These five strategic commanding heights firmly hold the throat of the United States, and the United States will always be the global production workshop of the British Empire, and the shareholders who control the production workshop are still British capital.In a word, the UK positions itself as the organizer of the global market, while the US is merely the producer.As long as there is no large-scale war that overturns the entire world structure, Britain does not have to worry about the United States trying to "usurp power".

As a result, the two world wars completely threw the British Empire's dream of "the sun never sets" into the museum of history. There are always surprising similarities in history. The huge wealth creativity formed by the "American Empire" through 200 years of hard work is being eroded by its own easy wealth. In 1971, when Nixon announced the decoupling of the U.S. dollar from gold, the United States had a huge wealth hegemony that Spain and the United Kingdom could not even imagine. This is the issuance of U.S. dollars!When Spain had wealth, it had to travel across the oceans to open up territories to plunder gold and silver; the British Empire also had to invest with "honest pounds" in order to obtain the privilege of rentiers; , can easily obtain abundant and cheap natural resources and labor products from all over the world.This unprecedented wealth hegemony has an irresistible temptation. It makes all honest labor superfluous. It stimulates the unprecedented expansion of the greedy game of wealth. It subverts the spiritual system of the Puritans who founded the United States. It has destroyed the industrial foundation of the United States as a powerful country, it has exacerbated the polarization of the rich and the poor worldwide, and it has become the real source of the 2008 global financial crisis!

Many people think that the current problems in the United States are just technical problems. The American system has a strong self-correction ability. Just like the various crises that have occurred in the history of the United States, the United States will eventually survive successfully.In fact, the crisis in the United States is not an institutional crisis, but a more serious crisis, that is, the entire country is gradually corroded by huge and easy-to-obtain wealth, thus losing its enthusiasm for hard work, and the creativity of wealth has been irreversibly damaged. harm.The long and widening trade deficit that began in 1971 has shown inexorably that Americans produce less and less that can be exchanged with other countries, with the staggering global seigniorage revenues and huge The investment income made the United States continue to export its domestic industries, which is no different from the behavior of Spain and the United Kingdom back then.While obtaining high profits, it has disintegrated the wealth creation ability of the people of the country.

In the United States in the 1950s to 1960s, scientists and engineers were the most respected by society; in the 1970s to 1980s, they were doctors and lawyers; since the 1990s, they were Wall Street financiers.If an outstanding college student earns far more on Wall Street than as a scientist or engineer, who else in this society is willing to do hard research work and boring factory life?Can America export doctors, financiers and lawyers to other countries?Maybe, with expensive medicines, shoddy financial products and protracted legal services for claims. When the lead is washed away, the whole world suddenly finds that the United States, which once had a huge carrot and a big stick, now only has a bare stick, and there may be 57 trillion US dollars in various liabilities, and 100 trillion US dollars. China's medical insurance and social security funds are potentially short-lived, and these difficult-to-pay debts have formed a huge "debt barrier lake".The whole world will eventually ask: How can a US$14 trillion economy repay these huge debts that are more than 10 times larger?What's more, the rate of increase in the interest rate of these debts is much higher than the rate of economic growth.

As Niall Ferguson, a professor at Harvard University, pointed out in the December 2009 cover article "The Decline of the Empire" of the US "Newsweek": historical experience shows that when 20% of a country's fiscal revenue is used to pay the principal and interest of debt, The country's finances will face a serious crisis. Spain: From 1557 to 1696, the heavy debt burden led to 14 national debt defaults; France: In 1788, on the eve of the French Revolution, 62% of fiscal revenue was used to pay debt principal and interest; Ottoman Empire: In 1875, 50% of government fiscal revenue was used The British Empire on the eve of World War II: 44% of fiscal revenue was used to pay the principal and interest of debts. These once mighty empires eventually fell under the cross of excessive debt.What Causes Excessive Indebtedness?In the final analysis, it is the decline of wealth creation and the rise of the cost of maintaining the empire. The easier it is for a country to obtain wealth, the less enthusiastic it is to create wealth through hard work. Huge wealth corrodes the creativity of wealth. This may be the dialectic of history. By 2035, the U.S. national debt will reach 200% of GDP.At that time, the proportion of US fiscal revenue used to pay debt principal and interest will be as high as 46%. This is the situation faced by Britain in 1939!It was then that the British Empire began to decline. As the US debt problem worsens, the dollar will eventually decline.As the US dollar "Zhou Tianzi" gradually becomes ill in the future, it will inevitably be accompanied by the era of the rise of the "Spring and Autumn Five Hegemons" and the "Warring States Seven Heroes".A world-wide battle for currency hegemony will gradually kick off in the next quarter of a century.