This example of flour and gold is theoretically not accurate, because strictly speaking, the total supply of money is also related to the rate of currency circulation.

However, it roughly illustrates the final collapse of the gold standard on Earth:

That is, with the development of the economy, once the global total gold production cannot keep up with the economic growth rate, gold will appreciate irreversibly, thereby encouraging everyone to hoard gold instead of creating wealth, which will create negative incentives for those who work and positive incentives for those who hoard gold.

Workers will find that they have worked hard to make flour for half a day, and as a result, they have made wedding dresses for the people who stock up on gold.

Since that's the case, who still works to create value? Wouldn't it be better for everyone to go back to speculate in gold!

In this case, the outbreak of an economic crisis is the inevitable result.

The Bretton Woods system is a transitional monetary system that studies humans and does not increase gold reserves, and issuance of as many "pseudo-gold" as possible.

Under the traditional gold standard system, since each banknote represents a certain weight of gold behind it, the total amount of global banknote is locked by the total global gold reserves.

Under the Bretton Woods system, only US dollars and gold are pegged at a price of 35 US dollars per ounce, while other currencies only need to be pegged to US dollars. In this way, the anchor of currencies in other countries is no longer gold, but US dollars. In this way, the total amount of currencies in the world successfully broke through the limit of gold reserves, temporarily resusciting a life for the gold standard.

But everything in the Bretton Woods system is based on the strong credit of the US dollar and the huge trade surplus of the US imperialists after World War II.

While the United States and Imperial China maintain a trade surplus, countries do not care whether they hold US dollars or gold, as long as they can buy goods from the United States normally. Once the United States and Imperial China cannot maintain a long-term trade surplus, the credit of the US dollar will be severely damaged, which will cause central banks in other countries to panic about the credit of the US dollar, resulting in central banks of various countries requiring the United States to repay gold at a rate of 35 USD/ounce.

However, due to long-term economic development and trade circulation needs, the global total currency has long exceeded the US imperial gold reserves, and the US imperial will inevitably be unable to repay in full, which has caused crazy stampede by the central banks of other countries. Among them, France under the leadership of Charles de Gaulle was the fastest.

In the end, the Bretton Woods system completely disintegrated and the US dollar became the US dollar, which was also an inevitable result.

But this world of cultivation is different. The mainstream currency in the world of cultivation is spirit stone. This is a unique existence with the superposition of three attributes of luxury goods, ordinary consumer goods, and general equivalents. It is somewhat similar to the grain-based system that has existed briefly on the earth.

But there are at least two differences between the grain standard and the spirit stone standard:

The first point is that grain storage is inconvenient and has a shelf life.

From the perspective of accounting, since grain has a shelf life, this leads to the continuous impairment of the wealth (grain) represented by the banknotes, and credit will collapse quickly.

In terms of reserve costs, if the central bank issues paper money with grain as the anchor, it will inevitably require the reserve of grain inventory that matches the total economic volume. However, the unit weight of grain is extremely low, which leads to the central bank that needs to reserve astronomical grain in the warehouse in order to fully repay the issuance of paper money, and pay astronomical storage costs.

Therefore, only in an era when productivity is extremely backward and industry and commerce have almost no development can the grain standard rise temporarily. Under normal economic environment, especially in industrial countries, the rate of self-destruction of the grain standard will be amazing.

In many time travel novels, the protagonists are engaged in industrialization while promoting the grain standard, and their degree of nonsense is comparable to that of the Zimbabwe Central Bank.

Spirit stones are more like gold in this regard, with extremely high unit value, low storage cost, and no shelf life limit, so they will not be impaired over time.

Second, the demand for food as a consumer product is limited.

No matter how much one can eat a person, it is impossible to eat 100 bowls of rice in one meal. However, for cultivators, the value of spirit stones lies in the spiritual energy it contains, and the more spiritual energy, the better.

In this world, there is no situation where there is too much spiritual energy to be used up. Master Zhu mentioned that cultivators in the middle stage of Qi refining cannot fly in the air with their own strength, but they can do it with the help of spirit stones. Tian Xiaopang even said that Ma Tianyi, the most powerful person in Jiuzhou, can even ascend directly in the sun as long as he has enough spirit stones in his hand.

In terms of economics, spirit stones are a strange consumer product with no diminishing marginal utility, and they will never be too many. Therefore, the spirit stone is a more special monetary system that has never appeared on the earth before.

But no matter what, cultivators regard spiritual stone as currency, which naturally has a big problem, and it is no wonder that the spiritual stone financial crisis has exploded one after another.

On the contrary, before the second Heavenly Dao Crisis, this simple spiritual stone-based financial system could actually operate for hundreds of thousands of years. This is the real unscientific place.

Lu Yang even suspected that this so-called way of heaven is likely to be an intelligent spirit stone manufacturing machine with central bank functions, which can automatically adjust the supply of spirit stones according to the needs of the cultivation world.

Maybe it was precisely because of this intelligent spirit stone that the machine was damaged that the spirit stone's original disintegration eventually led to the disintegration of the spirit stone!

Now Lu Yang has too little information, and most of the money system for cultivating the truth are still in the guessing stage.

In particular, the hypothesis "Tiandao = intelligent spirit stone printing machine; the second Tiandao crisis = intelligent spirit stone printing machine failure" also has an unexplained important loophole:

That is, the spirit stone has consumption attributes!

If "Tiandao" is an intelligent spiritual stone printing machine, the more spiritual stones are supplied, the more spiritual stones it will induce more spiritual stone consumption, and the final result will be a shortage of spiritual stones.

Therefore, the so-called spirit stone principle is born to be a disabled monetary system similar to the "three-body" problem and has no stable solution.

Lu Yang couldn't help but complain. I don't know if these cultivators were ignorant and insisted on using spirit stones as currency!

This is as ridiculous as the people on earth use crude oil as currency.

This kind of monetary system with many loopholes is theoretically impossible to operate stably for hundreds of thousands of years. However, in fact, it has actually done it, and problems have only occurred in recent thousands of years, which has made Lu Yang puzzled.

When Xiao Huang was unaware of it, Lu Yang also lacked more detailed information and could not further understand the essence of Bo Nanke's "Jiuzhou Monetary Alliance System".

There was no way, Lu Yang asked Xiao Huang another question in the voice of "No Nameless Ancestor": "After Bo Nanke's death, who has the deepest research on spiritual stone monetary science in this world?"

Xiao Huang thought for a while and said, "It should be Li Rui, the senior elder of the Wuliang Sword Sect in the early stage of the Nascent Soul stage. He was Bo Nanke's personal disciple back then, and should have good spiritual stone monetary knowledge... In addition, Zhu, the Luoxia Sect's surname also mentioned yesterday that Ma Tianyi, the head of the Wuliang Sword Sect, was also Bo Nanke's personal disciple back then. However, after Bo Nanke's ascension failed, Ma Tianyi felt that the study of the World Sect had gone wrong and no longer cared about the matter of the World Sect. Although he handed over all the power of the World Sect to the two Supreme Elders, Li Rui and Luo Shen, in terms of spiritual stone monetary research, Ma Tianyi's own level should be no less than Li Rui."

When Xiao Huang talked with Wuming Ancestor, he could be said to be very casual. He also called his name to the senior masters of Wuliang Sword Sect and pointed out the country. Master Zhu could only put a code name "Zhu" in his mouth...
Chapter completed!