Chapter 704: Debt Abduction

  Chapter 688 – Debt Kidnapping

Watching the Russians gain the upper hand on the battlefield, the Berlin government, which had prepared for this, was still able to stay calm, and the gold masters in the back couldn’t sit still first.

“The one who owes money is the master.” This saying is used here, perhaps a little exaggerated. But the essence has not changed, once the Pupo Federation lost the war, the debtors will be very difficult to ask for money.

The “collateral” promised in advance by the Berlin government depended on the willingness of the Russians to recognize it.

According to the tsarist government’s usual style of behavior, pretending not to see the possibility of up to 80 percent, the remaining 20 percent is to see, but also will not recognize.

In order to win the battlefield, the Berlin government was trying its best to raise debts, and had signed many kinds of secret contracts.

If the Pupo Federation is finished, I don’t know how many financial institutions that lent out debt will follow. The consortium wanted to transfer their losses, and a financial crisis was essential.

Not only would the financial institutions be out of luck, but the real industry wouldn’t be much better. Many companies seem to have made a fortune in the war, but in reality, many of them are just profits on the books, with a whole lot of tail payments in arrears.

There’s no way around it, delinquent tail payments are the biggest persistent problem in business distribution, and they run through almost every aspect of the capitalist market economy. This is a difficult problem that all production-type enterprises, have to face.

No one knows how long this war will last, much less how much it will cost. In order to support it for a longer period of time, the Berlin government will naturally have to spend as little money as possible.

It didn’t matter if the “debt” was large, or if the interest rate was high, that was a happy worry. Only if they win the war will they have to think about these problems.

After the outbreak of the Russo-Prussian War, the export prices of all strategic materials in Europe rose sharply.

Nominally, enjoying this wave of rising commodity prices dividends, enterprises are making huge profits; in fact, the Berlin government only paid part of the payment, many even only paid a deposit, the rest of the production costs need to be capitalists first advance.

The Berlin government is rich, the bank account is still lying inside a lot, well-informed people have heard about it.

Only those who purchased supplies were on deposit, and it was usually when the next batch of goods was purchased that the payment for the previous batch was settled.

Looking at the high profits, the capitalists naturally would not refuse. Many economically weak enterprises had to take out bank loans in order to make advances.

In a way, the PBF has kidnapped the British economy through debt, and both sides are losing everything.

“We all know the risks, but we can’t beat the benefits. The fact that the Commonwealth had already won a Russo-Prussian war and that the London newspapers were constantly disparaging the Russians increased everyone’s confidence.

All this changed after the Battle of Smolensk, when everyone suddenly realized: “The Russian Empire is still the same European gendarmerie, and the PBF seems to be out of pocket”.

This can’t be done, all have invested so much, no matter what, we can’t let the Pupo Federation be finished! If the Berlin government were to go down, everyone would go down with it.

Capitalists do not want to see the end of the PBF, the London government also does not want to see the end of the PBF. It is not easy to support a pawn, so lost, no one wants to see.

For a while the pressure on Prime Minister Benjamin increased, and the interest groups in the country demanded that the government take action to avoid the worst.

Putting down the document in his hand, Benjamin asked incredulously, “The situation has gotten so serious that Britain was actually kidnapped by Prussian barbarians?”

The strong contempt between his eyebrows was enough to prove how bad his mood was, the relationship between Britain and Prussia has always been very good, under normal circumstances he would not use such insulting words as “barbarians”.

Chancellor of the Exchequer Garfield: “It’s worse than that. I suspect that even if the Commonwealth wins the war, they may not be able to pay back the debt.

Putting aside the outstanding balance of supplies, they have at least paid a portion of the money, and as long as the companies aren’t too greedy, it’s basically enough to cover the cost of production, so even if they do lose the money, they won’t be able to lose much.

The trouble was the loans and bonds, once the Pupo Federation lost the war, almost all of the collateral was unprotected.

The gold they took out was not enough to pay off one-tenth of the debt. Even if they added all the overseas assets of the people of the Pupo Federation, they wouldn’t be able to fill the hole.

In the case of incomplete statistics, we even found cases of multiple collateralized borrowing, especially the borrowing agreements that the Berlin government signed privately with financial institutions, and the multiple collateralization situation was very serious.

The debt owed to us by the Pupo Federation is far more than just this 180 million pounds on the surface, the real figure is perhaps 200 million, or perhaps 300 million, and no one but the Berlin government knows.”

These days Britain’s financial controls are lax, and financial institutions issue loans privately, which the London government has no control over.

Bond sales were even more chaotic, it was not uncommon to report a million on the surface and actually issue three to five million.

In this all rely on artificial supervision era, to accurately count these data is too difficult, as long as there is no problem, the British government will not ask.

As long as there are no problems, the British government will not be concerned. If there are problems, the British government will not be concerned. Financial problems, small problems will not be exposed at all, once the big problems are exposed organization is not far from bankruptcy.

“Bankruptcy” is the best tool to avoid responsibility, the government can at most catch a few scapegoats, and more often than not, even the scapegoats can not be found.

Berlin government’s specific debt figures, Prime Minister Benjamin has not bothered to look into it, it does not make any sense.

In terms of investment, this investment is already a junk asset, timely stop loss is the best choice.

Unfortunately, that’s not going to happen. No one wants to see their money go down the drain, and the London government must be responsible for the aftermath.

In the original time and space, Britain and France used this trick to successfully pull the Americans onto the chariot, and now, although it has not come to that, it still gives Prime Minister Benjamin a million headaches.

“Damn barbarians, how did they suddenly become so sinister!” Prime Minister Benjamin complained

“No, are these situations just against us, or all the countries?”

This question was crucial, if all the countries were kidnapped by the debt of the Pupo Federation, then the problem would no longer be a problem.

Finance Minister Garfield shook his head, “Unfortunately, Prime Minister. Other countries have similar problems, but the numbers involved are small.

It’s possible that adding up the debt that the Pupo Federation owes to all the other countries would be less than a third of ours.

Aside from us, the second most indebted country of the Pupo Federation would be the French, then the German Federal Empire, and the rest of the countries are negligible.

The Berlin government does not yet have the capacity to borrow money all over the world.”

Upon hearing this news, Benjamin nearly gasped, swearing it was the worst news he had heard all year.

The main reason for this situation was still the fact that the British were too rich and there was a large amount of idle money in the private sector; the second was the London government’s foreign policy. Without the government’s support, private financial institutions wouldn’t be so keen.

People took it for granted that the government would not let the PBF lose the war. In that case, what was there to worry about, did the Berlin government dare to renege on its debt?

Other countries are different, not everyone is optimistic about the Pupo Confederation, and not everyone has the backing to secure the debt.

For example: the Austrian domestic financial community would not lend money to the Pupo Confederation for a very real reason – the Vienna government was supporting the Russians.

By the political influence, everyone is not optimistic about the Pupo Federation, naturally no one will lend money to them.

Not to mention the small European countries, not to mention whether the money can be guaranteed to be recovered, the key is that they do not have much in their pockets ah!

Against this background, it’s not surprising that France became the second largest debtor and the German Confederation became the third largest debtor. Who let you have money in your pockets and good relations with the Berlin government?

Benjamin asked indisputably, “What about the Russian Empire? Don’t tell me that the Czarist government also borrowed a large sum of money from us!”

Garfield nodded helplessly, “Unfortunately, Mr. Prime Minister. The Czarist government does owe us a large sum of money, certainly not as much as the Pupo Federation, about fifty to sixty million pounds.

A large portion of this was borrowed before the war, which can also be counted as advances for importing Russian agricultural products, and some of it is the balance owed for purchasing supplies after the outbreak of the war.

We made a general inventory of the foreign debts of the Russians, and there was no surprise that their largest debtor nation was Austria, and that the total debt should not be less than that which we had lent to the Pupo Confederation.

Most of it was in loans, and a small amount in bonds, and very little of it in final payments for procured supplies. Because the Czarist government has had a precedent of reneging on its debts, most Austrian firms demand a present settlement.”

It seemed that the news was too heavy, and after a pause of a few moments’ effort, Prime Minister Benjamin slowed down.

“This is the worst possible situation. We can’t watch the Puppo Confederation lose, and the Vienna government can’t watch the Russians lose, this war isn’t just about Puppo and Russia anymore!”

An Anglo-Austrian confrontation, or perhaps a proxy war between Britain and Austria through Prussia and Russia. Either way, the end is not promising.

Especially now that the PuBo Federation was at the bottom of the battlefield, it was even more passive for Britain. Trying to turn the tables on the Pupo Federation would require too great a price to pay.

Foreign Minister Edward: ”The situation is not that bad, in fact, the one who was kidnapped by the debt is mainly us, Austria still retains the initiative.

The Russians’ loan from Austria only involves a few big banks and has the territory as collateral, even though the valuation is a bit high, as long as it can be cashed in, they won’t lose their money.

As things stand, I don’t think the Czarist government is in a position to default. Instead, we’re in big trouble, with hundreds of thousands, if not millions, of people involved in the same debt.”

It’s impossible not to have a headache, lending money to two families at the same time may seem like a great sight, but it’s actually a pain in the ass. No matter who wins or loses, there will be a debt default, it’s just a matter of how much.

Favorable London government can not control the financial sector, bankers invest according to their own interests, the national interest is not in their consideration.

If they can successfully recover the debt, it is only a matter of time, once there is a debt default, these consortiums will be able to escape from their shells, and offer the omnipotent “bankruptcy” method.

Of course, there are also those who are not smart, or slow to react, did not transfer the risk in time, and played themselves to death.

Fortunately, the Russians are not good credit, willing to lend them money less capitalists, otherwise the London government will have to experience what is the real dilemma.

Chancellor of the Exchequer Garfield shook his head: ”I don’t think it makes any difference, even if the government in Vienna had more options, they couldn’t have let the Popo Federation win the war.

They would even be happy to use us to weaken the Russians a bit and clear a major obstacle to their unification of the German region.

Imagine a more ideal situation where the Popo Confederation is defeated and disintegrated, the Russian Empire is devastated, and our economy is hit hard by debt defaults?

From the point of view of the beneficiaries, I have reason to believe that the Austrian government orchestrated the current situation.

Of course, it could also be France, but I don’t think that little brat, Napoleon IV, has that kind of power.”

……

(End of chapter)