Military Scrip 2

"Exactly."

Paul looked at Irene and said, "Then money would lose its value. We can call this phenomenon inflation. The word 'currency' refers to money used as a medium of exchange in social and economic activities. As the name suggests, it expands like a bubble, but its quality—that is, the corresponding material wealth in society—doesn't increase."

"Conversely, if the Lord of Light manifested again and reduced the number of gold coins in human society to five, then each gold coin would be worth two loaves of bread, twice as much as before. With less money circulating in society, this phenomenon could be called deflation."

Paul's explanation made the two sisters nod repeatedly, but Catherine still couldn't help asking, "But what does this have to do with what we were discussing at the beginning?"

What about the "immature idea" Paul had mentioned at the start?

"All right, all right. I'm getting to it now. Be patient. Don't rush."

Paul smiled. His explanation just now had carried a hint of showing off, and before he knew it, he had said rather more than intended.

"The materials used to make money can't be things found everywhere or obtained with ease, such as water, soil, or stones. Otherwise, everyone could effortlessly manufacture a Credit Voucher, and the inflation I just mentioned would appear immediately."

"As for precious metals like gold, silver, and copper, they're difficult to refine and scarce in quantity, but not so rare that ordinary people can hardly ever see them. This ideal combination of qualities makes them excellent materials for making coins."

"Now, I have a proposition: Coins made from precious metals are inherently deflationary."

Catherine and Irene exchanged a glance and asked in confusion, "Inherently deflationary? According to what you just said, does that mean the total amount of metal