Skip to comments.China's Hard-Money History(back to their gold and silver roots)
Posted on 06/26/2011 7:12:08 PM PDT by sickoflibs
Until recent centuries, the Chinese people were disconnected from places in the world such as Europe and Africa. China was either unknown or considered very distant from Europe and Africa; few ships attempted to explore that far. Most Chinese people were not familiar with Western civilization, just as few in the West were familiar with Chinese civilization. In fact, the word "China" in Chinese is Zhong Guo, meaning "center" (Zhong) and "nation/land" (Guo). Chinese people believed that their land was the center of the world, not out of arrogance, but rather out of unawareness of the rest of the world. (In fact, other civilizations had a similar conception, as seen in the word "Mediterranean" whose etymological root is medius, meaning "sea in the middle of the earth.")
Trade and commerce between the Chinese and the people of Europe was very minimal until the 1600s. But despite being relatively isolated from each other, the people of these two far-off lands all adopted identical ways for conducting commerce they used gold and silver as the preferred medium of exchange. Most importantly, gold and silver did not circulate throughout China by edict of the emperor or some central authority. The Chinese chose gold as their money because gold and silver have moneyish characteristics. They are already generally desirable and acceptable in exchange, divisible into small quantities without losing pro rata share of value, durable for long periods of time, impossible to counterfeit, and portable, for which quality they have a high value per unit of weight. It was for these same reasons that people of Europe, Africa, India, and most of the world also voluntarily used gold and silver as their primary monetary units.
In order to adequately analyze Chinese history and its relationship to money, it is important to understand the language system. The Chinese writing system dates back thousands of years and is embedded in the culture. This great land, approximately the size of the United States, consists of numerous ethnic groups with hundreds of disparate spoken languages and dialects. Everyone, however, shares the same system of writing.
Within this complex system of interwoven strokes, characters, and subcharacters also lies enormous overlap amongst characters, some of which represent two, three, four or five meanings. In fact, the most widely circulated English to Chinese dictionary in Taiwan (Far East 3000) describes the Chinese character 金 (Jin) as having the meanings "gold," "golden," "metals," and "money." This Chinese character, which has existed for thousands of years and is deeply rooted in the Chinese language and culture, also appears as a subcharacter for other words/characters in the Chinese language: cash (現金); coin (錢幣，鑄幣); silver (銀); amount (金額); banknote (鈔票); treasury (金庫); wallet (錢包); wealth (錢財); and bank (銀行).
As the language system evolved over thousands of years, new words and variations of words formed. As with almost all languages, there was no central authority that dictated or orchestrated the formation or evolution of the language. The Chinese system spread through spontaneous order. Similarly, people in different towns using different languages with different belief systems and different traditions all adopted the same written system, and they all spontaneously adopted gold and silver as the preferred medium of exchange. There is no greater evidence for the amount of importance that the Chinese placed on gold than the written language system itself.
So deeply rooted in the culture were gold and silver that the Chinese people upheld a metallic currency longer than all Western nations, even though their currency was consistently destroyed, manipulated and confiscated by governments up until the 1940s, when they ultimately reverted to paper. In fact, a major factor for the runaway inflation that took place at the very end of Cheng Kai Shek's rule in the 1930s was triggered by the silver coins that had been soaked off the Chinese market. The silver was brought over to the United States under President Franklin Delano Roosevelt's "Silver Purchase Act." The ensuing paper currency system was untenable and led to widespread economic instability that undermined Shek's legitimacy as ruler and caused many of his supporters to shift allegiance to Mao Ze Dong and the Communist Party.
In a manner similar to most Western political leaders of the 20th century, Chinese Communist Party (CCP) Chairman Mao Ze Dong also used his power to deprive people from choosing their own currency. Chairman Mao was an ardent proponent of a Marxist/communist state where no capital exists and no property is privately owned. On inception as leader of the CCP, one of the first items on his agenda was to vicariously debauch the currency by debauching the language system itself.
In 1952, Chairman Mao pushed forward his initiative to completely transform China's written system.. Although many parts of the modern world still use the traditional Chinese written system, throughout the 1950s Mao pushed very hard to implement his new simplified Chinese written system. The ostensible objective of this transformation was to create a system easier to learn and use. Proponents of the new system believed that the traditional system was too complex, time-consuming, and antiquated. Western writing systems were perceived as faster and more convenient to use in everyday life.
After the government-imposed transformation was completed, the two writing systems remained quite similar, but many characters and subcharacters (or particles) were reconfigured to the point that many modern-day Chinese citizens cannot discern the origins of the characters. For example, the character 幾 (a few) was transformed to 几. The CCP also demanded that the particle for "gold" (金) that exists as part of countless different words and characters be mutated to a completely different structure. The original character consisted of eight brush strokes and became simplified to a character of five brush strokes, as seen in the modern-day common word for money 錢 changed to 钱 another instance of money being destroyed by government force.
After 25 years in power, Mao Ze Dong left his position as CCP chairman, but he did make sure that his memory would remain by leaving behind statues, memorials, and his face on the middle of the 100元 (yuan) bill, as many kings and political leaders have done all throughout history. Control over citizens' money has always been the most sought-after power of kings, emperors and tyrants.
However, the Chinese people have not completely forgotten about the importance of gold as part of their culture. In recent years, the Chinese have emerged as the world leader for gold mining. Also, in May, "the World Gold Council said in a quarterly report that Chinese buyers overtook Indians as the globe's biggest purchasers of gold in the first three months of this year. Despite producing nearly 351 metric tons of the metal in 2010, China's gold demand last year hit 700 tons, meaning the country may continue to absorb bullion imports."
Since the Chinese economy began to move away from communism in 1979, they have also witnessed a period of unparalleled economic growth. Although far from a purely free-market economy, the Chinese have begun to enjoy some of the benefits of their new economic model. Specifically, they are allowed to own property, which is something that was antithetical to the CCP agenda under Mao. As part of this new privilege, Chinese citizens have rushed to buy hard assets such as homes and cars. Gold and silver are also desirable to Chinese citizens, as witnessed by recent activity in the market, but the government still prints and circulates paper money emblazoned with the face of none other than Mao Ze Dong.
Government-controlled paper money is anathema to a truly free market. Paper money has been manipulated by governments and emperors across the globe all throughout history. Over the past few centuries, central banks have secretly imposed a hidden tax on their citizens by printing paper money and destroying the savings of the paper holders. As the Chinese people continue to covet gold and embrace other aspects of free-market capitalism, they should revert back to their deeply rooted history by allowing precious metals to circulate more freely throughout the economy and reject the paper notes imposed upon them by the Chinese Communist Party.
If you realize both parties in Washington think that our money is theirs and you trust them to do the wrong thing, this list is for you.
If you think there is a Santa Claus that has some magic easy cure for the economy; someone who is going to get elected in Washington and fix everything just by cutting your taxes, investing (more government spending) a few trillion more we don't have and will never have, and who will just command some countries to lower their prices and others to raise their prices all to suit your best interests, then this list is not for you.
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The Austrian Economics Schools Commandments plus :From : link
1) You cannot spend your way out of a recession
2) You cannot regulate the economy into oblivion and expect it to function
3) You cannot tax people and businesses to the point of near slavery and expect them to keep producing
4) You cannot create an abundance of money out of thin air without making all that paper worthless
5) The government cannot make up for rising unemployment by just hiring all the out of work people to be bureaucrats or send them unemployment checks forever
6) You cannot live beyond your means indefinitely
7) The economy must actually produce something others are willing to buy
8) Every government bureaucrat should keep the following motto in mind when attempting to influence the economy: First, do no harm!
9) Central bank-supported fractional reserve banking is an economically distorting, ethically questionable activity. In particular, no government should ever do anything to save any bank from the full consequences of a bank run, no matter what the short-term consequences.
10) Gold is Gods money.
1) Businesses don't hire workers just because of demand for products or services, they hire because it makes them money. Sorry to have to state the obvious.
2) Government spending without taxing is still redistribution
3) Taking one man's money and giving it to another is not a job.
4) Paul Krugman and Bernake have been wrong about everything, as well as the other best and brightest Keynesian's who have been fixing our economy for over a decade.
5) Republicans in the minority (esp out of the White House) act like Republicans, in the majority they act like Democrats .
Equity bubble rules:
1)If something goes up too fast, it is going down faster,
2) By the time it looks like everybody is getting rich, its too late, stay out!
3) To get rich you have to get in early start of recovery and get out at the first really 'bad' news, and ignore the experts that claim that they will stop the next crash(our buddy Bernake.).
4) Don't invest money you will probably need, or worse money you don't really have.
“...the word “China” in Chinese is Zhong Guo, meaning “center” (Zhong) and “nation/land” (Guo). Chinese people believed that their land was the center of the world, not out of arrogance, but rather out of unawareness of the rest of the world.”
While the article makes some interesting points, this comment underscores the author’s naive grasp of the Chinese and their culture. The Chinese are arrogant, racist, and wildly ethnocentric. Those who don’t understand this don’t have much contact with the Chinese in China and almost certainly don’t speak and read Mandarin.
But who would take them?
They may as well be Palestinians!
They sure make good neighbors when they move here.
I have noted a huge difference between them and the Koreans who did mass immigration to the East coast. The PRC Chinese go out of their way to learn English and become friends and fit in even though they have a nationalistic pride about China. They try to ward off their kids from the bad part of US culture. They actually raise their kids.
The Koreans tend to clan together and act like this is South Korea. And unlike the Chinese the Koreans kids ironically just adopt the US garbage MTV culture.At least what I have seen in Maryland, and not all Koreans.
The Chinese [and Vietnamese] in the US are losing their children to the culture also. I have spent many years in (weekend) Chinese school with my sons observing this.
Chinese that come to the US are not typical of the average Chinese.
Nothing ethnocentric about it at all.
Mediterranean means "sea surrounded by land." Which it indisputably is.
The Book “The Power of Gold” a history of metals as means of trade, says that virtually all the gold brought from the America’s to Spain ended up in China.
There was circulation, but Gold and silver were valued by Chinese as savings, to be held as a store of wealth. The trade goods purchased by the Europeans had no lasting value and the gold wealth of America is not to be found anywhere in Spain or Europe....... it was spent
I saw a number of Chinese (married couples) send their kids back to China for a few years so they are not completely raised in the USA.
Speaking of arrogant, how about China not allowing single adults or same sex couples adopt Chinese kids? Look at New York State now. I bet lots of Americans see that as arrogant.
I dated a woman from China (PRC) who came here in in mid 90s and there was a conservative quality to her that reminded me of my grandmother. My grandmother was a young adult 25-35 in the great depression (in NYC) raising my Mom and she grew up on a small farm and remembered going hungry at at night as a child. Both her and this chinese women talked like it was a sin to waste food, completely at odds with modern day America. They both believe in (traditional opposite sex )married parents.
Thanks for the ping.