First, about the formation and extinction of legal tender.
Affected by the economic crisis in capitalist countries, currency wars began among countries, and the price of silver rose. The implementation of the silver standard in China led to a large loss of silver and serious economic losses. With the support of British and American governments, the National Government began a new round of monetary system reform. 10.3, 1935 165438 The Ministry of Finance issued an announcement announcing the implementation of the legal tender system nationwide.
This currency reform has completely decoupled China's currency from silver, which has played a positive role in stabilizing the domestic economy.
However, during War of Resistance against Japanese Aggression and the War of Liberation, the Kuomintang government adopted an inflation policy, and the legal tender depreciated sharply.
Someone once counted the purchasing power of Fiat at 100 yuan: 1937 for two cows, 1946 for two eggs, 1946 for the sixth bar of soap, 1947 for a briquette, and 1948 for five.
With the change of the war situation, it is necessary to solve the problems of many versions, complex types, different price comparisons and inconvenient conversion of currencies in various liberated areas and unify the currencies in various liberated areas. 1948 12 1 year, the first set of RMB printed and issued by the newly established People's Bank of China became the legal tender in the liberated areas, which accelerated the legal tender's entry into the economic field and stopped its use in the liberated areas and even in New China.
Second, the value of money.
The value of money generally refers to the time value of money, that is, the added value of money after a certain period of investment and reinvestment, also known as the time value of funds.
Benjamin Frank said: Qian Shengqian, the money generated will generate more money. This is the essence of the time value of money and the best understanding of the value of money. The concept of Timevalueofmoney holds that the currency currently owned is more valuable than the currency of the same amount received in the future, because the currency currently owned can be invested and compound interest. Even with the influence of inflation, as long as there are investment opportunities, the present value of money must be greater than its future value.