The Bank of France, which sixteen years ago could raise 45 billion gold francs in a very short ti, is now facing the risk of collapse due to the issuance of an additional 300 million francs in paper currency.
No matter how you think about it, it’s an impossible scenario.
The only possibility is that Count Algou himself does not want to see the reserves stored in the Bank of France diluted.
After all, even if only a small portion of people convert their paper currency into gold, it would still be a significant amount.
Count Algou is very afraid that the paper currency will beco worthless like the Certificates of the revolutionary governnt due to the governnt’s excessive issuance.
The Great French Revolution impacted not only French politicians but also so of the old banker families.
The bankers who experienced the Great Revolution saw their forefathers change into conservative financial rest adherents after witnessing the revolutionary governnt’s uncontrollable use of radical monetary policies that led to massive inflation; thus, the bankers born around the revolution rejected all radical strategies, wishing only to establish a sustainably profitable institution.
For the bankers who can’t even tolerate Saint-Simonism, Jero Bonaparte’s diminished version of Keynesianism is simply destroying a country!
Jero Bonaparte even believed that if he himself were not the emperor, such a theory could never be implented by the Bank of France.
To say the least, Count Algou has shown enough respect for Jero Bonaparte by enduring for so long before confronting him.
"Indeed! Your Majesty, 300 million francs is the limit that France can bear! If it continues, prices will face a significant rise, and the market will also be thrown into chaos!" Count Algou said to Jero Bonaparte.
Jero Bonaparte contemplated for a mont, then shrugged and said, "Count Algou, what do you think we should do now?"
Hearing Jero Bonaparte’s inquiry, Count Algou thought the emperor accepted his suggestion, and he hurried to reveal his "life-saving recipe": "Your Majesty, I suggest that we imdiately stop issuing new currency from now on, cut unnecessary governnt expenses, and cancel the subsidies for agriculture... Only in this way can we prevent malicious inflation and bring our economy back to its healthy values."
As soon as Count Algou finished speaking, Jero Bonaparte widened his eyes and looked at Count Algou.
"Your Majesty, did I say sothing wrong?" Count Algou looked at Jero Bonaparte in confusion, not understanding why the emperor looked at him with such an expression.
Wrong? Are you trying to ruin ?
At this mont, Jero Bonaparte scread inwardly.
Jero Bonaparte was all too familiar with Count Algou’s "cure" for economic inflation.
This thod of restraint has an elegant na in later generations, known as "shock therapy."
Any country that has applied shock therapy has invariably fallen into chaos for so ti, and the scale of this chaos is dependent on the depth of market economy.
For a country like France, which has yet to establish a unified large market (including the UK at this ti, the majority of countries had not established a unified large market.), using "shock therapy" is tantamount to suicide.
Jero Bonaparte did not know whether the French market could withstand Count Algou’s life-saving redy, but he was certain that his seat couldn’t bear it.
Jero Bonaparte was certain that once he stopped issuing currency and cut governnt project expenditures, what awaited him would be deflation.
Deflation would lead to massive unemploynt, and the angry Parisians might not wait for Count Algou’s control asures and would drag him to the Tuileries Palace and directly onto the Gallows!
"Count Algou, do you know what you are saying?" Jero Bonaparte’s tone beca stern as he said, "Your actions will lead to massive unemploynt across France! The angry Parisians will drag us both directly to the Gallows!"
"No... no! Your Majesty, I’ve calculated that as long as we..." Count Algou wanted to explain to Jero Bonaparte that his policy would not result in mass unemploynt.
"Calculate? If economic problems could be solved by simple calculations, then the world’s most knowledgeable economists should be mathematicians!" Jero Bonaparte said to Count Algou with a stern face, "You just said that inflation causes unrest, then I ask you, won’t deflation cause unrest? {Jero Bonaparte paused and shook his head} No, it will cause even more widespread unrest!"
"Your Majesty, the bank no longer has sufficient reserves! If it continues, the Bank of France is very likely to..." Count Algou responded to Jero Bonaparte.
"Reserves? I thought the Bank of France already has sufficient British bonds in reserve? Just have the British bank offer a discount!" Jero Bonaparte told Count Algou, "And haven’t you, along with the Bank of England, been targeting the gold held by the United States and Russia? Are you telling it failed?"
"Your Majesty, just a few days ago the Bank of England raised the discount rate on bills from 4.5% to 5.5%! If we were to redeem the English bills now, we’d incur massive losses!!" Count Algou responded to Jero Bonaparte.
"From 4.5% to 5.5%!" Jero Bonaparte could not help but raise his voice, "Why doesn’t the Bank of England just rob us?"
For a bank like the Bank of France, which holds a significant amount of the Bank of England’s debt, every percentage point increase in the discount rate ans that a large sum of money is swallowed by the Bank of England!
The increase by 10 percentage points by England in one go is simply determined to prevent the Bank of France from redeeming.
"Your Majesty, in fact, this is faster than robbery!" Count Algou answered Jero Bonaparte.
"Don’t worry! I will personally intervene in this matter!" Jero Bonaparte responded to Count Algou, "By the way, you still haven’t told how the effort to target the gold market of the United States and Russia is going?"
"Your Majesty, we are currently still locked in a standoff with the Bank of England and the two countries, the United States and Russia, and it is estimated that it will take another six months to settle the matter! Because of this, the bank’s reserves are flowing into the market like water." Count Algou subtly expressed his dissatisfaction to Jero Bonaparte.
"Alright! I understand what you an!" Jero Bonaparte nodded, stood up, walked to the window, and looked at the setting sun, slowly saying, "Count Algou!"
"Your Majesty!" Count Algou hurriedly responded.
"Do you know why I chose this place as our conversation venue?" Jero Bonaparte turned around, backed by the window, with a false smile.
Count Algou shook his head, not understanding why Jero Bonaparte went out of his way to summon him to the Elysee Palace for a discussion.
Clearly, the Tuileries Palace is a very suitable eting place.
"Five years ago!" Jero Bonaparte extended five fingers, pointed to the room in front of him, and said to Count Algou, "We t in this room at that ti, and you were more energetic than you are now!"
As Jero Bonaparte finished speaking, a feeling of ominous foreboding swept over Count Algou.
Your Majesty wouldn’t want...
"Your Majesty, I certainly rember back then you..." Count Algou attempted to play the emotional card with Jero Bonaparte.
"Oh! Five years have gone by in a blink!" Jero Bonaparte sighed and pointed to Count Algou, saying, "We have both grown old!"
As soon as Jero Bonaparte’s words fell, Count Algou felt a rush of dizziness.
If he had not been sitting on the sofa at that mont, he might have already collapsed to the ground in a stupor.
For Count Algou, His Majesty the Emperor’s aning could not be clearer.
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