This scheme only took 60 years to fall apart. How many times has this been tried? It always falls apart because it's too easy to add another 0 onto a paper note.
Somehow it is all about faith "full faith and credit" ......And credit and credit. The citizens of Zimbabwe are smarted than Americans. Because they gave up their faith in the paper.
Could it be that our paper is derived by a system so complicated, by design, that folks don't have the information to lose faith?
Notice how the Kahn confiscated all gold and silver, but paid for it with paper. This already happened once here. I never thought to compare a Mongol Emperor to a US president in such a tangible way.
Kublai promoted economic growth by rebuilding the Grand Canal, repairing public buildings, and extending highways. However, his domestic policy included some aspects of the old Mongol living traditions, and as his reign continued, these traditions would clash increasingly frequently with traditional Chinese economic and social culture. Kublai decreed that partner merchants of the Mongols should be subject to taxes in 1263 and set up the Office of Market Taxes to supervise them in 1268. After the Mongol conquest of the Song, the merchants expanded their operations to the South China Sea and the Indian Ocean. In 1286, maritime trade was put under the Office of Market Taxes. The main source of revenue of the government was the monopoly of salt production.[63]
The Mongol administration had issued paper currencies from 1227 on.[64][65] In August 1260, Kublai created the first unified paper currency called Chao; bills were circulated throughout the Yuan domain with no expiration date. To guard against devaluation, the currency was convertible with silver and gold, and the government accepted tax payments in paper currency. In 1273, Kublai issued a new series of state sponsored bills to finance his conquest of the Song, although eventually a lack of fiscal discipline and inflation turned this move into an economic disaster. It was required to pay only in the form of paper money. To ensure its use, Kublai's government confiscated gold and silver from private citizens and foreign merchants, but traders received government-issued notes in exchange. Kublai Khan is considered to be the first fiat money maker. The paper bills made collecting taxes and administering the empire much easier and reduced the cost of transporting coins.[66] In 1287, Kublai's minister Sangha created a new currency, Zhiyuan Chao, to deal with a budget shortfall.[67] It was non-convertible and denominated in copper cash. Later Gaykhatu of the Ilkhanate attempted to adopt the system in Persia and the Middle East, which was a complete failure, and shortly afterwards he was assassinated.
