Darkstone Code

Chapter 1057 - 1055

The future vision described by Lynch captivates Mr. Truman a bit; he hopes the Federation is a powerful nation, and he even hopes to become one of its Presidents!

Indeed, he hasn’t told anyone about this thought; he’s always kept it deep in his heart.

When the President faces the oppression of capital and can only choose to compromise, he knows that relying on others forever will mean the Federation’s political system will never evolve.

Some longstanding social issues will remain unchanged forever.

The best way to change this situation is to conduct a reform, a change, and he must control the supreme power of the nation!

Otherwise... just like last time, those capitalists have countless ways to make him bow down.

He swallowed a gulp, feeling a bit "thirsty," thirsty for the future, for the vision described by Lynch, and for power!

"But we can’t make people from other countries print New Federal Sol; they won’t do it unless we turn them into our part."

At this moment, he didn’t hide his more radical ideas; soldiers are always like this, more radical in some aspects.

The first education they receive is to tell them that whoever has the bigger fist should be listened to.

If someone is disobedient, hit them until they obey.

Lynch shook his head, "As long as they use Federation Sol, we can achieve this goal."

"Why would they use Federation Sol?" Mr. Truman asked quickly.

Lynch replied equally swiftly, "Because we can push Federation Sol to become an international settlement currency."

"You can propose to the President and Congress to make Federation Sol the settlement currency of international trade."

"And right now, we have a great opportunity!"

Mr. Truman seemed to already know what Lynch was talking about, "You mean military sales?"

Lynch nodded, "Yes, but that’s only one part of it. Military sales will include a clause in negotiations that outward military sales from the Federation only accept Federation Sol payments, rejecting other currencies’ payments, and it will be like that in the future."

"Increasing the weight of Federation Sol in the international currency market is only beneficial to us, without any drawbacks."

Mr. Truman understands this principle; when everyone uses Federation Sol, a random policy adjustment could affect the entire world.

But he also has a question, "Why should others use our currency? They can completely exchange some when they need."

"Because Federation Sol is more stable..." Lynch paused here, then directed the topic elsewhere, "Are you aware of the recent fluctuations in the precious metals market?"

Mr. Truman nodded, "Yes, I know, they say the price of silver has increased many times over."

Lynch nodded again, providing a more accurate number, "It’s over ten times!"

"Before silver went up, every country had the habit of reserving gold, and before this, most of the world implemented the gold standard system..."

The term gold standard is known to Mr. Truman; he’s somewhat familiar with it, and he knows it roughly refers to a system where currency is linked to gold, such as Gold Coin.

In some places, especially in terms of coins, there is gold in the material — a bit, a circle, or mostly made of gold.

Before paper money appeared, there was such a phenomenon in Federation’s currency, with at least some gold found starting from a nickel.

Gold was a pinhead-sized star in the upper middle position on the back of the coin.

Up to a one-dollar coin, there is a circle of pure gold on the outer side of the coin’s front.

If someone finds the gold on the coin missing during a transaction, they can refuse to accept it and report it.

Some places simply use silver or gold for minting coins; of course, the currency they mint is quite thin, the thinnest is barely thicker than a sheet of paper.

Until the advent of paper money.

In fact, today’s paper money is not entirely credit currency because the Federation’s paper money system is based on another gold standard-based monetary system.

It’s not a pure gold standard because there is no visible and measurable gold in the paper money.

But people can use paper money to directly cash in the corresponding gold at banks, so at the beginning of paper money’s birth, it was also called "Gold Certificate" or "Gold Exchange Certificate."

Because having money means they can exchange it for gold, many times these "bills" are only seen by people as a proof to redeem gold.

Even today, it’s like this; people can’t just directly "redeem" gold from banks, but also can "exchange" gold at some jewelry stores using bills.

No one questions the value of these bills because they’ve moved beyond mere "credit"; they’ve become a manifestation of wealth’s multiple forms.

People have never doubted the currency in their hands!

"...even now, each country’s currency is more or less connected to gold."

"Gold is constantly appreciating, and the purchasing power of currency is continuously increasing, of course, this is under the condition of no additional issuance."

"Now there are new precious metals in the market challenging gold’s status, which is actually not a good thing for the currency systems of various countries."

"The gold currency system that people have established over decades and centuries is collapsing. Once silver replaces gold, do you know what will happen?"

Mr. Truman shook his head, "I don’t know, I’m not specialized in this."

"The entire world’s monetary order will collapse, exchange rates will be in chaos, some countries may insist on maintaining the relationship between gold and the current currency, and some countries may try to implement a dual-track system, locking silver and gold respectively with old or new currencies."

"No matter what they do, exchange rates in international trade will be confusing, and you won’t be able to settle exchange rates between two countries with different references normally."

"If at this time, a currency can stand stably..."

Lynch smiled softly, "What do you think they will do?"

Mr. Truman slowly realized the peculiarity of what Lynch was saying, "If it were me, I would find a way to peg the currency I use to some extent against this stable currency in terms of exchange rate, or at least establish a closer relationship."

"But if the price of gold collapses, we should also be greatly affected, why wouldn’t the Federation Sol be in turmoil?"

Lynch’s smile became peculiar, he pulled out a cigarette, bent his head to fold it, opened the pack, took out one and put it in his mouth, lit it...

After the crisp, long sound of a "ding," he closed the lighter lid, and as he lifted his head, a cloud of smoke was exhaled from his mouth.

Through the smoke, Mr. Truman saw a... sarcastic smile, "Because victory will be on our side."

Mr. Truman seemed to not quite understand, he patiently looked at Lynch.

"It’s actually quite simple, science, technology, military equipment, these can all serve as guarantees for the stability of the Federation Sol’s exchange rate, and we will re-establish an international monetary system centered around gold."

"Technology and productivity, these are the most critical forces we can present!"

"Now, people buy a bullet from the Federation, assume it requires twenty-five cents of Federation Sol."

"When ’disaster’ strikes, if they still need twenty-five cents of Federation Sol to buy a bullet, they will realize the stability of the Federation Sol!"

Mr. Truman seemed to somewhat understand, but also seemed to understand nothing, "Because we only accept settlements in Federation Sol?"

Lynch nodded, then shook his head, "The chaos won’t last long. If we snipe the silver market, raise gold again, and stabilize the gold price, establishing a more accurate exchange system."

"When people see the Federation Sol’s risk resistance capacity and our control over the world economy, what will they do?"

"They will increase their foreign exchange reserves of Federation Sol, which is what we hope for. The more they store, the easier it is for us to control the global economy."

Mr. Truman interrupted Lynch slightly, "Like how we dealt with Nagariel!"

"Yes!"

Mr. Truman seriously contemplated this matter, actually speaking, it wasn’t as simple as Lynch made it sound; there were many complex situations involved.

But this didn’t stop him from seriously considering the matter.

"So... what relation does this have to what you initially mentioned?" Mr. Truman asked, "What does this have to do with us making money?"

Lynch took a puff of smoke, crossed his legs, turned slightly, and exhaled the smoke teasingly, "Because I plan to snipe silver!"

"And before that, I plan to first attack gold, letting gold crash first. The crash in gold will cause capital from various countries, even governments, to adjust their gold reserves to mitigate risk."

"And this will also disrupt dramatic changes in the exchange rate of their national currencies on the international market. When people focus more on silver..."

Lynch chuckled a few times, "We can buy cheap gold on one hand and snipe silver on the other, letting both silver and gold, the two rulers of world currency value for many years, lose their function in a short time!"

"Currencies that use these two precious metals as actual value references... will be completely in disarray!"

"From what I understand, more than ninety percent of countries in the world use these two precious metals as a guarantee of currency value!"

Mr. Truman remained silent for a long time after listening, and Lynch did not urge him.

After about seven or eight minutes, Mr. Truman also lit a cigarette, "Actually, in the end, you still intend to make money, right?"

Lynch smiled and pointed at him, "You can’t be fooled, and at the same time, I’m a patriot!"

Short selling gold, then short selling silver, and even buying some gold when prices are low, Lynch is sure to make a lot of money.

Moreover, the Federation will foot the bill for his actions, which is the key.

But Mr. Truman can’t refuse this request, because it’s too tempting.

He won’t oppose anything beneficial to the country and the people.