Why does a house hold its value?Take a look at the underlying logic from “Beihai currency”
Beijing Zhang Ge, the real estate industry for 20 years, know the industry, I do not do the so-called “expert”, only 20 years of actual combat experience to help you answer questions.More than 10 years ago, there was an article on the Internet that exploded. It had no name, because the original article was just a post on Tianya.The content is written during the Anti-Japanese War “Shandong currency” development course, a time very popular.I read it at the time, and I thought it was mediocre.It is not the lack of knowledge of the author, but too much attention to readability, which makes the writing like a novel, causing a confusion of years and events.But it doesn’t matter. If it’s a paper, no one will read it, even I don’t like it.Today, someone asked me why the house can keep its value, and suddenly I remembered this article. It seems that I can learn from it, from the style to the content, and I can probably explain why the real estate can resist inflation in a popular way.First, Shandong currency, in fact, the more popular name is “Beihai currency”, which belongs to a kind of “anti-currency”.Anti currency is the currency issued by various bases under the leadership of the Communist Party of China during the War of Resistance against Japanese Aggression. It is collectively referred to in many forms, but the currency value is not unified.Beihai coin is issued by Beihai Bank in Shandong province. It has the largest circulation, the most stable value and the best reputation among the anti-coins.As a result, Beihai Bank became one of the forerunners of the People’s Bank of China, which merged with two other banks in 1948 to form China’s central bank system.What is money first?The textbook says “general equivalent,” but that’s not the whole story.But this is an academic category, too serious, we don’t need to discuss, just know that it is a medium between the exchange of goods, is the general equivalent.The thing for which all goods can be exchanged is money.What was the origin of money?The popular term now comes from “ious,” or bonds.You have five horses and want six sheep in exchange, but I have no sheep, so I will give you a shell as proof of debt.Once I have six sheep, you can exchange them for shells.But if Lao Wang next door approves of the shells, he can give you six sheep to exchange the shells, and then wait for them to be exchanged from me.So what’s the logic behind this bond?Is the consensus.Everyone agrees that this thing can be exchanged for something, and behind the consensus is credit, everyone agrees that this thing is valuable and has credit.In fact, everything can be used as money, as long as there is a consensus that it is credible.Therefore, in Chinese history, there were shells, silk, salt, white cloth, rice, white flour, pepper, spices, tobacco and other physical currency.In other countries, there is a wide variety of everything. Some islands even take big stones as currency. After World War II, Germany takes cigarettes as currency, and it is common in prisons.More standard than real money is metal money, gold, silver and copper, also known as precious metals or heavy metal money.This and the real money have a common feature, that is, the value is the money itself, without “reserves”.Gold, silver and copper themselves are also real objects, which can be used to cast goods, taking into account the two attributes.Because it is easy to carry and divide, it is easier to determine the quality of the finished product, so it has become the standard currency.As Marx said, gold and silver are not by nature money, but money is by nature gold and silver.Paper money was first invented in China, which was the “jiaozi” of the Northern Song Dynasty. At that time, Europe was still in the dark Middle Ages and pure barbarians.After that, China’s Southern Song, Mongol Yuan and Ming dynasties were dominated by paper money.In the late Ming dynasty, American silver flowed into China, which became the main currency.In the late Qing Dynasty and early Republic of China, it was Yuan Datou, or silver.But by 1933, the Kuomintang and the Communist parties almost simultaneously adopted paper money, which was called “legal currency” in the Republic and “Red Army currency” in the Central Soviet Area.(In the past, various local powers had paper money, but the issue was very chaotic.) Third, the question comes, how did money evolve so, from physical objects to the final paper money?Even now there’s nothing, just the numbers in the account. Why?In fact, it is very simple, is to super hair, in order to get more money to spend.Physical currency cannot method exceed hair, a pack of smoke is a pack of smoke, at most from inside lane dot tobacco come out just.Bad money is poor quality, but hard to manipulate at the national level.Metal money can be overissued.This thing is from the beginning of the weight as a unit, such as the Qin Half two, Han Five baht, until the Sui and Tang Tongbao copper coins.”Money” itself is a unit of weight, the so-called excess hair is to reduce weight, reduce the cost of raw materials.Or even worse, inflate the value of the currency directly, spending it as much as 10 yuan per dollar.All the dynasties did this. The more wars were fought, the more ruthless they were. Or when the rulers were short of money, they used the super money to plunder the wealth of the people.This has nothing to do with the emperor’s virtue.Including the so-called love of the people like liu Bei Zhuge Liang, in shu issued “straight hundred” big money, that is, 1 dollar of steel beng is not worth 100, a lot of people.Do you understand what seigniorage is?In fact, it is super hair, deliberately devalue the currency, to seize the wealth of the people.Of course, this can also be said to stimulate the economy, is good for the common people, the province put money at home retted.But it is not easy to overissue metal coins.Because metal, after all, is valuable in its own right.If the government issues too much money, people will hoard the full value of the currency, and only spend the virtual value of the currency, which is “bad money to drive out good money.”They even melted down the money and made it into something, waiting for it to rise in value.This will lead to insufficient currency circulation in the market, deflation, and seriously affect economic operation and development.The reason why all countries later adopted paper money is because it is so easy to use, just add zero, say whatever, save a lot of cost.In a word, the biggest advantage of issuing paper money is to be able to unlimited super hair, can moral integrity without lower limit, and make money and can impose seigniorage without upper limit.Of course, any economy that is not insanely poor will exercise restraint.Otherwise this money really become waste paper, even waste paper is not as good as, no one wants, no matter how much hair is useless.Therefore, in peace time, each country’s paper money is gold and silver as reserves, dare not go too far.Sterling held its international position for 200 years by being backed by gold until the first World War, when the gold standard was abolished, ran out of options.After World War II, the United States established the Bretton Woods system, or with gold as reserves, until 1971 Nixon announced the decoupling of gold, the currencies of all countries really entered the era of credit standard.Four, said so much before entering the topic, that is, “Beihai currency” (Shandong currency) cattle where?The bull was there. The Communist Party had no gold or silver and was penniless.However, it is an absolute miracle that the currency remained stable despite this situation.Before beihai coin was issued, Shandong was mainly based on the “legal tender” banknotes of the Kuomintang government.But the denomination of legal currency is relatively large, the smallest are a dime, no cents, so each place issued its own subsidiary currency.Then there are the local “people’s livelihood vote”, and various forces also issued their own notes, or exchange coupons, it is more chaotic.In particular, the outbreak of the War of Resistance against Japan, the Japanese aggressors in the occupied area forced to use counterfeit banknotes to get legal currency, and then let the traitors businessmen to the base to buy all kinds of materials.At the same time, the KMT also increased the circulation of legal currency, resulting in the rapid devaluation of legal currency, shandong people suffered a significant loss.Things and materials were the Japanese aggressors set away, leaving more and more worthless legal currency.In the end, even a sack of money can not buy a bag of rice.In that case, the CCP will have to issue its own currency.At that time, shandong base not only did not have too much gold and silver reserves, but also did not have printing presses or paper to print paper money.However, in this case, after several twists and turns, beihai Bank was finally established at the end of 1938 and began to issue the famous Beihai coin.In the online article mentioned at the beginning, the description of Shandong currency (Beihai currency) seems to be very brave under the leadership of Director Xue.But this is the author’s spring and autumn style, deliberately missing the time line, as if the people in the base had won the economic war from the beginning.If the war had been so easy, it wouldn’t have lasted eight years.The reality is that beihai currency was not the main currency in circulation in Shandong until 1942.The reason is very simple, the Japanese aggressors to The purpose of China’s invasion is to grab money grab resources, that if someone dares to fight for the market with them, that fight life also have to hit ah.Therefore, shortly after beihai Currency was issued, the Japanese aggressors attacked Ye County where the base was located on a large scale.The North Sea Bank was forced to close and move with the troops.It was not until the end of 1939 that the Beihai Bank was re-established and began to issue beihai coins again.But after all, this is the war, with the Japanese aggressors not only to fight economic war, but also to fight weapons at the same time.So the bank switched addresses several times and struggled to grow.And Shandong is not only the Japanese aggressors, there are bandits harassment, also interfered with the operation of the bank.One of the biggest was Liu Hei Qi, which even forced banks to relocate.During this period, fiat currency was still the mainstream currency, and Beihai currency could only circulate in the base area intermittently, occupying a limited market.The Pacific War began in late 1941 when Japan attacked Pearl Harbor.The Japanese aggressors were forced to cancel the operation of going to Europe and America for foreign exchange with fiat money, so they turned to base areas again to buy various materials.At this time, that is, in 1942, Director Xue Muqiao came to Shandong, responsible for economic work.Because he was in the New Fourth Army, after the Southern Anhui Incident transferred.At this time, Shandong base area has been expanded, and the conditions for strengthening beihai currency are gradually mature.Director Xue was an economic prodigy who taught himself economics in kuomintang prisons as a young man.He argued that the value of money should be determined by the amount of money issued, not by the value of gold behind it.However, this view also has a premise, is that the money must have enough credit, not rely on gold to maintain value.In times of war, gold may not hold its value, let alone reserves.So, this point of view is not wrong, but its use conditions are more harsh.However, in the issuance of Beihai coins, it is true that there is no gold as a reserve, Director Xue can verify his point of view.Five, at the beginning of the Beihai currency is not prepared for gold, can be said to be poor, there is no way.But then I realized it wasn’t really that helpful.Since the area under the control of the base areas is mainly rural, farmers generally conduct small transactions and do not need gold at all, and even if prepared, they cannot afford to exchange it.This is completely different from the big cities, Shanghai has accumulated a huge amount of local wealth, without the backing of gold, it would be a minute to run out of bankruptcy.But the country is different, so long as there is credit, can flow without gold.But since it is a currency, its value must be guaranteed.Therefore, Director Xue proposed his unique plan, that is, to use the demand for commodities as reserves, while using commodity prices to adjust the money supply.This is absolutely pioneering, pure credit money, whereas the West basically entered the credit standard era after the abolition of the gold standard in 1971.How do you use commodities as reserves?In fact, it is the regular warehouse mode of grain storage, namely, low grain prices to buy, drive up grain prices.When grain is expensive, it is sold to keep prices down.But it wasn’t just grain. Shandong had two other necessities at that time: salt and cooking oil.At that time, there were two main policies in the base area. The first was the opportunity to expand the base area. Legal tender and other banknotes were completely banned, and beihai currency became the only currency in circulation.This is not difficult to carry out, the devaluation of legal currency is too serious, ordinary people do not like to use.The so-called bad money drives out good money only when we have to use it. Now that we can no longer use it, we just throw it away.From 1942 onwards, the legal tender withdrew from most of Shandong.After that, it is necessary to strictly control the production and marketing channels of various major commodities, so as to accurately estimate the circulation of the market and issue currency on the basis of this.In addition, it makes adjustments to sell or buy commodities according to market prices at any time to ensure the stability of the currency.After 1943, the shandong base simply controlled the purchase and sale of grain, salt and edible oil. In other words, the government only controlled the commodities that could affect the stability of the currency.In other words, grain, salt and oil are the necessities of life. If we master the production and sale of these necessities, we can control the stability of the currency as long as we do not issue excessive money.And the essentials are the ones that hold their value the most.Why can the grain salt oil maintain its value at that time?Because production is small, demand is the norm.And these products are produced in Shandong, under their own control, can adjust shipments at any time.Therefore, it is difficult for these rigid goods not to maintain their value.Although beihai currency has no gold reserves, it achieves a stable value because it controls the supply of commodities to regulate the circulation of currency.Around 1945, Beihai currency reached its peak. It was circulated throughout Shandong province, and even used by merchants from other provinces, in order not to depreciate.Six, also don’t know I said clear have not.The country wants to issue money, actually the fundamental purpose is to exceed hair.But any economy in its right mind would not overshoot if it could, only slightly raise the CPI to stimulate the economy.As ordinary people, if you want to preserve your value, you need to find something you need.In the past it was very simple, basically grain salt and other commodities.But in modern times, the huge amount of money and high production make these necessities no longer applicable.I can’t think of any other commodity that can absorb money in large quantities and be recognized as a good for demand, except the ordinary house in a big city.So in my opinion, the mature plate in the city of general housing, perhaps the most value-preserving goods.For reference only.Just buy a house can get rich era past, only choose the right house, avoid pit, can enjoy asset appreciation bonus!I am Beijing zhang elder brother, add attention after the private letter can ask me questions.