Chapter 1478: Golden Power

The plan proposed by Xu Zhengping quickly aroused strong repercussions among the emerging elites in Wukelan. Obviously, if this plan can be implemented, the families that participated in the investment of the central bank in Wukelan will inevitably become the entire future. The most powerful group of people in Wu Kelan, because this group of people has the most fundamental economic lifeline of the country. In the future, they can use their financial privileges such as currency issuance rights and interest rate adjustment rights to easily lie at home and absorb the entire country. Blood!
More importantly, if you have this right, you will also have control over the future of the Uklan country. Who does not know that in this so-called "Western-style democracy" country, "golden power" is the most important right. "President" is nothing more than a wage earner serving "Golden Power"!
With this understanding, Xu Zhengping, who was the proponent of this plan, and Guo Zhaode, the helm of the well-known "Red Flag Capital" financial business, soon became the guests of these emerging powers. After all, these people have just started the Soviet Russia plan. Coming out of the economic system, the game of the international financial market is basically still in a state of ignorance. Having such a good opportunity to make friends, of course, has great appeal to them.
Among these dignitaries, Guo Zhaode and Xu Zhengping quickly selected the target. The former Director of the Economic Planning Department of the Uklan Branch of the Agricultural Bank of Soviet Russia and the current Deputy Governor of the Uklan Agricultural Bank Victor Andrei Jevich Yushchenko became the object of deliberate friendship between the two men, and after several tentative contacts, they finally had a very deep and detailed secret meeting.
It should be said that Yushchenko is a very active person. After receiving the promise from the "Black Sea International Commercial Bank", he immediately launched a series of social activities and quickly gained enough support. So far , President Kravchuk could not violate the "public opinion" and appointed him as the governor of the Uklan Central Bank and was responsible for the issuance of the Uklan currency "hryvnia".
The "hryvnia" issuance method almost completely copied the US dollar issuance method: First, the Uklan Ministry of Finance will issue treasury bonds after approval by Congress, because the Treasury Department actually represents the Uklan government, and the national debt The essence is borrowing money, so the meaning of the issuance of national bonds by the Ministry of Finance is that the Uklan government borrows money from the public and promises to repay the principal and interest when they are due.
The issuance of this national debt is based on the actual total national tax revenue in Uklan and the collateral. Because the government naturally has the power to collect taxes, this tax is the future income of the Uklan government from a financial perspective. National debt is the Uklan borrowing money from the society with future income as collateral.
Next, the Ministry of Finance mortgages the issued national bonds to the Uklan Central Bank. The central bank will print currency and purchase these national bonds accordingly. After receiving these currencies, the Ministry of Finance will perform various government responsibilities, such as infrastructure construction and national defense. Education, medical care, etc., these money are circulated through commercial banks and various other channels.
This is a system that has matured and operated for decades in the United States. In this system, the government can only obtain currency through the issuance of national debt. In other words, it is impossible for the government to pay off its debts.
why?
Because the government needs to implement the various responsibilities entrusted to him by the law, such as infrastructure construction, national defense, education, medical care, public security, etc., and these all require money, and the money must be borrowed. Once the government intends to reduce the fiscal deficit, it means that the government is in social welfare. If the investment in other areas is reduced, then the feasibility of passing in Congress will be reduced.
On the other hand, because only the issuance of bonds can make money, the Ministry of Finance must be thinking of issuing more treasury bonds in order to have more money on hand. However, the issuance of treasury bonds must be approved by Congress, and Congress itself is publicly elected. It is composed of people, so it is necessary to implement a process of "procedural justice" agreed by the majority, which is relatively fair.
Under this currency issuance mechanism, after the Ministry of Finance gets the money, the money is actually not its assets but its liabilities. It needs to pay back taxes slowly in the future, which also gives the government the opportunity to try to issue national debt in exchange for currency. Impulse sets a layer of binding force.
On the surface, this mature currency issuance method is good, at least on the surface it has a considerable degree of restraint on the possibility of hyperinflation caused by a very small number of people using their power to abuse money, but it is a pity that everyone knows Yes, no matter how good the system is, it needs people to implement it...
"Black Sea International Commercial Bank" can be regarded as the big winner of this action. With the invested equity of securities equivalent to 10% of the nominal value of all the original state-owned enterprises in Uklan, it became the largest shareholder of Uklan Central Bank. It is also the largest reserve bank, with check clearing, currency issuance, recovery of damaged currencies in circulation, management and issuance of discount loans to commercial banks, evaluation of proposed financial mergers and bank-related applications for expansion of business, acting as business and The intermediary of the national currency settlement and reserve system, the inspection of bank holding companies, the collection of data on the operating conditions of various local industries, and the provision of data and reference opinions for the economic operation of the Uklan national economy have become a leader in the Uklan banking industry. .
The success of the enterprise will naturally also increase the number of people who work in the enterprise. In addition to continuing to serve as the president of the "Black Sea International Commercial Bank", Vinogradov smugly accepted another position-the first deputy of the Uklan Central Bank. President, First Vice Chairman of the National Currency and Reserve Committee.
Soon after taking over these positions, he solemnly proposed a proposal: how to repay the country's foreign debts of up to 7 billion U.S. dollars.
According to the repayment agreement signed that year, Uklan must pay up to 7% of the annual interest on these foreign debts. The interest alone will have to repay US$490 million each year. Adding the amortization of the principal, at least US$1 billion must be repaid a year!
For a country with such a large area and a large population of Uklan, the debt repayment amount of $1 billion a year is actually not high, but this is a good time.
Ukelan is a heavy industry and military industrial center planned by the former Soviet Union. It has deep accumulation in steel, coal, shipbuilding, aviation, metal materials, and other fields. Unfortunately, these things are based on the former Soviet Russia’s large industrial cycle. And under the supporting system, that is to say, without this big cycle system, Wukelan cannot design and manufacture complete products on its own.
But now, this industrial cycle and supporting system no longer exists!
In other words, Wu Kelan's seemingly powerful industrial heritage can hardly function normally!
Let’s take the simplest example: the former Soviet Union was a big producer of oil and natural gas. Although its mining costs were slightly higher, it was better than rich in reserves. However, these oil and gas resources were mainly concentrated in Siberia and now belong to Rakshasa. All, the reserves in Uklan are pitifully small and completely insufficient for the country's needs.
This is dying. As we all know, oil is the blood of modern industry, and natural gas is an energy source related to the national economy and people's livelihood. Without these two things, the modern industrial system cannot function at all.
Then you can only buy.
Of these two things, the most convenient and nearest seller is naturally Raksha.
Well, although the relationship with the Federal Republic of Rakshasa is not good, people are still willing to sell things. It's just that, now it is not the kind of plan allocated in the pre-Soviet period. You have to pay.
According to international practice, you have to give dollars.