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"Minister Xu, our country is also short of copper. Although large copper mines have been discovered in Yanran Mountain and Nanhuazhou, due to their remote locations, the mining costs are relatively high and they are still insufficient to meet domestic demand."
"What Sima Ge Lao said is true. However, even if Persia is allowed to maintain its copper market, with its two flagship products, cotton fabrics and carpets, suffering a huge impact, and my country's huge trade surplus with Persia, a large amount of Persian gold and silver will flow to our Qin. Before long, it will be enough to cause a shortage of gold and silver in Persia."
Qin Mu nodded and said: "Even if it is not for the purpose of impacting Persia's carpet industry, it is necessary for our country to develop this industry to increase the income of people in remote areas.
In order to impact Persia more quickly, we need to remove some barriers in the trade agreement. Otherwise, Persia will set up trade barriers and impose heavy taxes on specific commodities. Then it will be difficult for the Qin Dynasty to increase its trade surplus.
After the Persian envoys arrive, we must pay special attention to this aspect in the trade agreement negotiations. We must take a long-term view and make the agreement as detailed and comprehensive as possible to prevent them from setting up trade barriers in the future. Otherwise, I am afraid that my Great Qin will have to launch another expedition. "
"Your Majesty, rest assured. I will ask the scholars from the Department of Commerce to discuss this matter and submit the detailed regulations as soon as possible."
"Ah, very good."
Persia used silver coins as its currency. As long as it continued to expand its trade surplus and allowed a large amount of gold and silver in its country to flow into Daqin, there would inevitably be a shortage of money in Persia, that is, deflation.
Severe deflation will cause a continuous decline in commodity prices. The continuous decline in prices will cause losses to debtors, which will in turn affect production and investment. At the same time, it will reduce producers' profits or even cause losses, which will lead to a reduction in production or even a stoppage of production.
The reduction in production investment will lead to increased unemployment and reduced people’s income, exacerbating the shortage of total demand and forming a vicious circle.
This will lead to a recession in all industries. A large number of people will be unemployed and have no way to make a living. Social contradictions will inevitably intensify, and eventually lead to political turmoil.
The economic base determines the superstructure. If a country wants to become strong, it absolutely cannot do without the support of the economic base. The Qin Dynasty has the ability to influence the Safavid economy, so there is really no need to launch an attack for the time being.
Qin Mu suddenly remembered something, beckoned the eunuch to bring a book, and then said: "This is a book about the Ottoman Dynasty that the Hanlin Academy has just translated. I took a look. There is an article in it by an Ottoman scholar analyzing the current situation facing the Ottoman Empire. Ministers may wish to take some time to read it.
In his article, he mentioned that since the Renaissance and the Age of Discovery, Europeans have had a global perspective. Their armed merchant ships sailed across the world and controlled major shipping routes and important ports around the world.
This would have a serious consequence. Originally, goods from the Far East and India were mainly shipped to Egypt via the Red Sea, then transported to the Mediterranean via the Suez region of Egypt controlled by the Ottoman Empire and then sold to European countries.
The Ottoman Empire actually became a wholesaler of goods from the East and the West. In this process, the Ottomans could get several times the profit by reselling them. The rolling source of wealth ensured the prosperity of the Ottoman Empire.
But now the situation has changed. Europeans have opened up a new route. Goods from the East and the West go from India via the Cape of Good Hope and along the west coast of Africa to Europe. Bulk goods rarely go through the Red Sea to land in the Suez area.
As a result, the Ottomans were replaced as wholesalers of goods from the East and the West by the Europeans. After the Europeans shipped the goods back, they sold them to Middle Eastern countries including the Ottoman Empire, earning four or five times the profit.
Due to the loss of trade control, the Europeans took away the huge profits that belonged to the Ottomans. In addition to losing the huge profits from resale, the Ottomans had to pay several times higher prices to buy goods from Europeans. This caused a large amount of gold and silver in the Middle East to flow to Europe, which led to a money shortage.
The Ottoman Empire also used silver coins as its currency, but it did not produce much silver domestically. The emergence of a money shortage severely hit the economy of the Ottoman Empire. Annual revenue dropped sharply, and the treasury deficit became increasingly serious. In the absence of an influx of silver, the Ottoman Empire could only deal with the problem of money shortage by devaluing its own currency.
Once the currency depreciates, it will inevitably lead to inflation. In the past few decades, the inflation rate in the Ottoman Empire has reached an alarming level. The average price has increased fourfold and the price of food has increased nearly fifteen times.
The Sultan could only issue decrees to forcibly prohibit price increases. The entire Middle East region was facing the problem of inflation. The Ottoman Empire forcibly suppressed domestic prices, which led to rampant smuggling trade;
A large number of goods are smuggled abroad, causing domestic goods to become even more scarce, and price inflation will become more serious. It will enter an uncontrollable vicious cycle, and finally the entire social system will collapse.
This Ottoman scholar was very aware of these problems, so he submitted a memorial to the Ottoman Sultan, suggesting that the naval forces be vigorously developed in the Gulf of Aden, on the southern side of the Arabian Peninsula, at the entrance to the Red Sea.
The purpose was to control the maritime trade route, allow goods from the East and the West to flow back to the Red Sea trade route, and regain control of the trade route. This would fundamentally solve the Ottoman domestic fiscal deficit and money shortage problems.
I don't know what you think after hearing this, but I was deeply shocked after reading it. First, I was amazed that the Ottomans had such a broad-minded scholar. Second, the influence of the control of trade routes on a country is shocking. Third, the impact of currency issues on a country is so serious.
There are too many things in this book that are worth learning from and studying carefully. Therefore, I hope that every minister can read this book carefully. Only by clarifying the interests involved can we avoid repeating the same mistakes when formulating national policies today. "
"Yes, Your Majesty."
The ministers present had stern expressions. Perhaps because of the geographical location, Qin did not need to worry too much about these Ottoman problems, but there were indeed many things worth taking warning from.
So will China face similar problems? You may think that China has silk, porcelain, and tea, which are enough to maintain a trade surplus and not worry about the problem of money shortage.
Indeed, this understanding is correct.
But in fact, China has been plagued by money shortages repeatedly in history, mainly due to the court's policies or because of numbness.
For example, the Ming Dynasty's maritime ban policy made silver expensive and copper cheap in China. People usually used copper coins, but they had to exchange copper coins for silver to pay taxes. Silver was expensive and copper was cheap, which meant that people had to pay a lot more taxes. People all over the world suffered greatly.
Another example is the Qing Dynasty. Before 1800, the whole society was relatively stable. However, due to the opium smuggling trade, a large amount of silver flowed out of China, leading to a serious silver shortage in the country.
It is no exaggeration to say that the decline of the Qing Dynasty started from this.
Why did Lin Zexu want to ban opium so strongly? It was because the shortage of money had caused serious domestic conflicts. If things continued like this, his country would collapse without anyone fighting.
The ice is three feet thick, and it didn't freeze overnight. These problems are not very obvious at the beginning, but they will make you feel the pain after accumulation over time. By then, the problem is often already very serious.
Therefore, those in power must have a deep understanding and a far-sighted vision to discover these problems early, formulate targeted policies to guide them, and eliminate the problems in the bud.
The admiral thought for a moment and said, "Your Majesty, no wonder the ocean-going fleet reported that there are signs of strengthening naval construction on the Arabian Peninsula controlled by the Ottomans. In this case, it is necessary for our Great Qin to respond in advance. Now that Li Ding has declared war on the Ottomans and the Persians have sent envoys to seek peace, why not send the ocean-going fleet to the Arabian Peninsula and destroy the Ottoman navy."
Qin Mu pondered and said, "I believe you ministers have a deeper understanding of the importance of maritime trade routes. Please see, from the Red Sea through the Suez region to the Mediterranean Sea, although it takes more than a hundred miles of land, it is actually much more economical to take this route than to go through Xizhou. The problem lies in how to control the Red Sea and the Suez region. Only by controlling these areas can we control this most important trade route in the world."
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ps: Dear friends, here is the second update, please vote for me! The second half of the month is coming, please vote for me! (To be continued..)
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