Chapter 752: Squeezing the Francs
Chapter 735: Squeezing the Franc
The whole European world was stunned by the tawdry maneuvers of the Berlin government.
For the bourgeoisie to come to, is even more a blow to the head. Prussia can play like this, other countries can naturally follow suit, this is simply a sword hanging over everyone’s head.
The public opinion was in an uproar, but it was all to no avail. Since it dared to overturn the table, the Berlin government naturally will not be afraid of being scolded.
Prussia’s approach, not only the domestic capitalists lost a lot of money, overseas investors are also wailing.
Since the news spread, the number of people in Frankfurt who want to jump off the building has increased a lot more.
Including the little-known Flores, who was hesitating to go to the rooftop because of a mistake in information and accidentally took over.
Fortunately, after the end of the Russo-Prussian War, the stock of any Prussian company has fallen to the bottom and is itself in a hedge.
As long as there is no stupid run to go long, take over is also a low take over, the loss is not too serious.
The Berlin government only confiscated the shares of the criminals, and theoretically, the shares held by overseas investors were still valid.
This is also the main reason why the powers did not interfere, the Berlin government’s tactics, although a little too radical, after all, still dealing with internal affairs.
The most crucial thing is that it has already created an established fact, and interfering would only make things more troublesome and increase everyone’s losses.
As long as the business is still running, the stock has value. It’s just that the change of the majority shareholder to the Berlin government has muddied the investment outlook.
……
Vienna Palace
“Your Majesty, the situation has changed. What Prussia is doing is likely to set off a chain reaction. If the French follow suit, it will be difficult for our plan to succeed.” Finance Minister Karl said worriedly
The sudden change in the situation was also a huge blow to the plan of shorting the franc that Britain and Austria had conspired.
Prussia can overturn the table, the French can do the same. Perhaps the Paris government dares not learn all, just come to a financial control, it is enough for everyone to suffer.
Franz shook his head: ”This is not the same, the Berlin government was forced to have no choice, there is no way back but to let go.
The volume of France where to put, we at most will suppress the value of the franc, incidentally make a profit, can not take their lives, the Paris government will not be so extreme.
If the Parisian government does impose financial controls, it will be a great favor to us. Prussia is a good example, the value of the mark has completely collapsed.
Maybe we’ll lose money on this speculation, but the franc’s exit from the international market will more than make up for our share of the losses.”
England, France and Austria have been fighting for monetary hegemony for some years. Although France was out, the franc still held a significant share of the international market.
In the era of the gold standard, the larger the economy, the greater the demand for gold.
France’s economic volume is very large, but the gold production is very limited, can not meet the growing demand, the issue of the franc’s reserves have always been insufficient, the financial market there is a security risk.
In recent years, the international lobbyists are often patronized. Just the scale are not very big, even if some gains, but also can not shake the status of the franc.
Interests move people’s hearts, speculators have tasted the sweetness, naturally want to earn to the greater interests.
This time the British and Austrian capital to join hands, seemingly Franz in the secret promotion, in fact, this is only a lead. Even without this trigger, it will still happen sooner or later.
Of course, this lead is still very important, without the government’s participation, even if the capitalists act, they will not have such a large scale.
Essentially, the French were suppressed by Britain and Austria, or because they moved the cheese of both countries.
The Paris government’s African development program was too hateful. In recent years the textile industry in France has developed rapidly and has seized a lot of the British market.
Originally let the British meat pain, African development program and put the cotton planting in the first place, this let John Bull how can tolerate?
In the planting of cotton at the same time, the French African development program, but also ready to promote new agricultural technology in North Africa, expanding the area of agricultural products, which in turn moved the Austrian cheese.
This background, if not by the British and Austrian suppression, only problematic.
In contrast, the competition for the international market share of the franc, is still considered secondary, is mainly interested in the financial community.
After a short pause, Franz added: “The program has progressed to this point, and it is no longer possible to withdraw just because you want to.
Continue to follow the plan, increase the dumping efforts on France, and deplete their foreign exchange reserves as much as possible.”
……
What came to pass came to pass, and under the influence of the special policy of the Berlin government, on November 11, 1881, the Berlin Stock Exchange just opened with a crash.
The waist is considered to be a good performance, many stocks are left with only two or three folds, the market value of some stocks, and even less than ten percent of the original.
The net worth of certain companies was several times higher than their market capitalization, a typical market value inversion.
This is a normal phenomenon, assets are not equal to cash. During a stock market crash, asset shrinkage is inevitable. In order to raise funds to tide over the difficult times, tearful sale of not too many.
With the development of free trade, the economic ties between countries are getting closer and closer. If Prussia has a stock market crash, no other country should be spared.
The first to be hit is naturally Frankfurt and London. The former held on for less than three days and collapsed; the latter also supported for less than five days and followed in the footsteps.
Pandora’s Box was opened, the stock market crash soon spread to the entire European continent, the stock markets of all countries are wailing.
Less than a week, Vienna’s stock market fell ten percent, hitting a five-year low.
Britain and Austria have broken out the stock market crash, France naturally can not be an exception.
Paris, angry stockholders directly set fire to the stock exchange, but fortunately the staff arrived in time to extinguish the fire.
Versailles Palace, Napoleon IV has not slowed down from the stock market crash, the Minister of Economy Elsa hurried in.
“Your Majesty, it’s a big deal. Hundreds of banks, including the Bank of Paris, the Bank of France, and the Bank of the Empire, have been subjected to a run at the same time, and the situation is very critical.
Many people are holding deposit certificates and designating their requests to exchange for pounds and guilders, and our foreign exchange reserves are decreasing drastically.
It is certain that someone wants to short the franc. The run is only the beginning, and the enemy will launch an attack later.”
Hearing the bad news, Napoleon IV instantly came up with a word in his mind – “financial turmoil”, paused for a moment to hastily ask: “Do you know who is manipulating it?”
Economy minister Elsa replied: “Participants are very many, the world’s top-ranking banks, securities companies, almost all appeared, roughly can judge the main force is the Anglo-Australian capital.
The enemy’s power is very strong, according to the intelligence we have gathered, preliminary estimates, they may hold 3 billion to 5 billion francs in their hands.”
“Three to five billion francs” may seem to be nothing to a large country like France, and it is only one year’s revenue of the French government.
However, this is cash not an asset. Financial markets, such a huge sum of money can completely pry tens of billions of international capital, impact on the French financial markets.
Napoleon IV was shocked and said, “The enemy has raised so much money, is it that our financial sector knows nothing about it?”
Because the shields and pounds are international settlement currency, Britain and Austria’s foreign exchange reserves are relatively low, simply can not come up with so many francs.
The total amount of francs in circulation in the market internationally is actually just a few billion. This meant that the funds to initiate the run could only come from within France.
Minister of Economy Elsa replied in a low voice, “Some time ago, a few big banks in the country, issued large loans overseas, which were all ordinary business projects, and did not attract much attention.”
This is the system decided, the bank to issue loans is the freedom of others, the French government simply has no right to interfere.
Since it can’t control it, it naturally doesn’t pay attention to it. Anyway, the profit and loss is the bank’s own responsibility, no need for the government to pay for it.
Napoleon IV wanted to say something, knowing that this run on the bank, there are domestic consortia involved, he can not do anything about it.
If not for the recent move of the Berlin government scared the bourgeoisie, now shorting the franc army, absolutely no less than the figure of French capital.
Now that people are stealthy, they are already very much giving face to the government. We can’t let everyone not make money, can we?
After contemplating for a while, Napoleon IV asked, “How are you going to deal with this crisis?”
Minister of Economy Elsa: “Unlike in the past, this time the enemy is coming in strong, and definitely won’t just come to take advantage of a little.
……”
(End of chapter)