Chapter 107 - Medieval Monetary System

After hearing the innkeeper’s words, Richard nodded, thought for a moment, and then asked, “In the Jade Kingdom, is the exchange ratio between gold coins and silver coins fixed? What is the rate?”“Yes, the exchange ratio is fixed,” the innkeeper said, making a very frightened face. “A standard gold coin can be exchanged for twenty silver coins. The officials don’t allow people to change this casually, or else you’d end up in prison.”

Then, he quickly glanced around, and after ensuring that there were no suspicious persons nearby, he leaned closer to Richard and whispered, “Of course, on the black market, the price of gold coins is actually higher. They can be exchanged for more than thirty silver coins, sometimes even close to forty. That’s why many people don’t like paying with gold coins. I wouldn’t want to take your gold coins either, as I’m afraid you’d be at a loss.”

As he spoke, the innkeeper’s eyes shone brightly, seizing every opportunity to promote business, and added, “If you, the guest, have many gold coins, I can recommend a place where you can exchange them for silver coins. It’s safe and the price is fair.”

“Uh.” Richard nodded and did not respond to the innkeeper’s offer, but he understood the currency system that the Jade Kingdom was following.

According to the innkeeper, the Jade Kingdom was applying the Gold and Silver Bimetallic System.

This system usually arose due to the backwardness in science and technology and insufficient gold mining output, requiring silver to supplement the currency market. Thus, both gold and silver were used as primary materials for minting coins; gold coins and silver coins both possessed unlimited legal tender power, and could be freely minted, circulated, exchanged, exported, and imported.

This was the most common system in the Medieval period.

Generally speaking, under this Gold and Silver Bimetallic System, there are several subordinate subsystems.

For example, the Parallel Standard System: an item simultaneously has a gold coin price and a silver coin price, and the prices between gold and silver can fluctuate, leading to rapid changes in the item’s price, which is not conducive to societal development.

Another example is the Dual Standard System, which is what the Jade Kingdom currently practices: the exchange ratio between gold coins and silver coins is determined by official legislation or other compulsory measures, forbidding ordinary people from altering it, which helps stabilize commodity prices.

The Dual Standard System is more superior to the Parallel Standard System, but it inevitably retains its backwardness, its significant drawback being the “bad money drives out good” phenomenon.

This is due to the official fixed rate between gold coins and silver coins, which won’t change for a long time. However, in the market, the prices between gold and silver often fluctuate; discovering a new gold or silver mine could lead to the appreciation or depreciation of gold and silver.

Under such circumstances, when the actual value of gold increases, people would melt down the more valuable gold coins (“good money”) into gold and then sell this gold to obtain silver coins (“bad money”) for usage. According to Jade Kingdom’s regulations, one gold coin can be exchanged for 20 silver coins, but melting gold into gold could fetch at least over 40 silver coins in price. Therefore, in the innkeeper’s disclosure, the black market could offer close to 40 silver coins for one gold coin.

Melting gold for silver is illegal, but those on the black market clearly aren’t afraid. After all, just as on modern Earth, a philosopher named Marx said, capitalists will risk everything for a 50% profit, trample all laws for a 100% profit, and even risk hanging for a 300% profit.

For profit, people on the black market bravely gather a large amount of gold coins to melt and sell, earning enormous profits.

If Richard wished, he could do this too, and perhaps even do it better.

Richard could amass a vast fortune within the bounds of personal safety and potentially crash the entire economy of the Jade Kingdom.

After all, viewing a world similar to the Medieval era with the eyes of the future, especially in economic terms, it’s incredibly fragile, like a baby. Only with the development of a gold-only standard will there be some measure of safety.

However, Richard did not wish to do so. He had not accumulated wealth in this way in the Blue Lion Kingdom either. In his view, as long as he could obtain enough wealth to meet his own needs, that was sufficient. It was truly unnecessary to devote excessive energy to this.

Amassing great wealth does not bring progress; science and knowledge do.

Indeed, earning a vast fortune could be used to establish a large organization, helping oneself develop technology and expand knowledge.

However, the larger the organization, the more they wanted massive profits, which meant larger initial investments and maintenance costs, not to mention all the instability in between.

Establishing an organization in the early stages of exploring the world could be, more often than not, a loss-making endeavor. If one really needed to establish an organization, it would be best to do so after achieving some results in world exploration.

While Richard thought this, the innkeeper had already turned around and called out to a lad, “Lester, help this guest pick a room and take his luggage up.”

“Ah, yes,” a young boy of about twelve or thirteen with freckles and brown hair, dressed in grey linen, quickly ran over. He nodded to the innkeeper, signaling that he understood, immediately went to pick up the suitcase by Pandora’s side.

He heaved it with all his might, and then… he couldn’t lift it.

Huh?!

The freckled boy was startled and looked fearfully at the innkeeper, worried about being scolded. Finding that he wasn’t noticed, he gathered all his strength and tried again to lift the suitcase.

“Ah—”

The boy’s voice came from deep within his throat as his face turned red from strain, barely lifting the suitcase a sliver off the ground.

At that moment, the freckled boy felt so aggrieved that he almost wanted to cry: why was this suitcase so heavy?

What he didn’t know was that Richard, after obtaining the Iron Ring, had not opted to store everything within it; he had even taken some items out of the Ring and transferred them into the suitcase.

Richard never intended to use the Iron Ring solely as a spatial item; he was always ready to utilize its other developed functions—”Absolute Defense of Space Transfer,” “Absolute Cutting of Space Scissors,” “Absolute Spatial Precision.”

Moreover, carrying an empty suitcase or not carrying one but continuously taking a multitude of things out would easily arouse suspicion—it was better not to expose the capabilities of space items.

Lastly, with Pandora accompanying him, a heavy suitcase wasn’t actually a burden.

Because of these reasons, Richard’s suitcase was very heavy, and it would continue to be so.

The freckled boy remained unaware of these facts and was deeply disheartened.

Having exhausted all his strength and with no choice but to put the suitcase back on the ground, he felt utterly embarrassed, not daring to look at the innkeeper, Richard, or Pandora.

Pandora, however, strangely glanced at the boy and gently picked up the suitcase, walking off to one side.

The boy’s eyes widened, and he hurriedly ran to lead the way.

Richard seemed to remember something then, and turning to the innkeeper, he handed over a silver coin and a letter, saying, “There’s something I need help with—could you send someone to deliver a letter? It’s within Aijin City; the address is on the envelope. Just deliver it, and the silver coin is for the trouble.”

“Sure, guest, that won’t be a problem,” the innkeeper immediately agreed after checking the address on the envelope and seeing it was nothing dangerous.

Richard nodded, turned, and followed the lad upstairs to choose a room.