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Chapter 773 - 773 48 Debt Crisis_1

773: Chapter 48, Debt Crisis_1 773: Chapter 48, Debt Crisis_1 Somehow, a rumor started spreading across the Continent of Aslante, that the Moxi Duchy was going bankrupt and the Alpha Kingdom was defaulting on its debt.

Nearly at the same time, lots of people started selling bonds from both nations.

Even high-yield bonds that came with a premium were suddenly offered at a tearful firesale.

As panic set in, more and more people believed the rumors.

The more the price of the bonds plummeted, the fewer people were willing to take them over.

With some cunning individuals leading the way, countless bondholders started demanding that the two governments repay their debts ahead of schedule.

Caesar IV’s hair started falling out in chunks as he read the reports sent back by envoys stationed all over the world.

Before he ascended to the throne, he craved absolute power.

Only after he sat on it did he realize how hard it is to be a king.

If he dealt with everything himself, he was exhausted.

But if he delegated power to those beneath him, he feared the power drift away.

“These are reports from different regions.

If not handled properly, our bonds on the international market will face a major crunch,” he said.

“The reason I have gathered everyone here today is to discuss how to avoid a bond crunch.”

While he spoke, Caesar IV distributed a thick stack of documents in his hand to everyone present.

The content was basically the same— reports from different regions just with minor variations.

Looking at just one was enough.

After a quick scan, the faces of everyone present grew grim.

Clearly, the situation was more severe than what Caesar IV had outlined.

“Your Majesty, I’m afraid we cannot stop the wave of bond exchanges.

Such rumors spreading in all parts of the continent at the same time clearly indicate the work of someone behind the scenes,” Duke Newfoundland said with a bitter face.

“The enemy is well prepared.

We can’t just get out and offer some explanation to defuse this situation.

Right now, we have to prepare for the worst and try our best to prevent the kingdom from going bankrupt during the wave of bond redemptions.”

Without a doubt, the bankruptcy he referred to was a bankruptcy of the government’s credibility, not financial bankruptcy.

If a massive wave of bond redemptions broke out, the only thing Alpha Kingdom could do would be – lay low.

Without money, there was not much that could be done.

Even if they were to sell everything they had, they still wouldn’t raise enough funds within a short period.

The domestic nobles couldn’t be counted on either.

The minor nobles were already poor, major nobles were still focused on preparing for war.

It was impossible for them to spare their last resources to fill the kingdom’s deficit.

If they knew they couldn’t repay the money, then they might as well just default on these debts.

The Alpha Kingdom’s finances would immediately recover.

The benefits were obvious, but the consequences were also terrifying.

If there was a problem in the future, they would certainly not be able to borrow money again.

Even more troublesome would be the loss of national credibility, which would affect their diplomatic efforts.

The wrath of the bondholders was also a big problem.

Those who had money to buy war bonds weren’t small fry.

Large nobles transferred the risk: the small and medium nobility didn’t get the memo and instead of getting out, they ended up as leftover-receivers.

These nobles were part of the ruling class, at least at the local level.

They wielded a certain degree of influence.

The resentment of one or two wasn’t anything threatening, but a group of resentful people could influence the political stance of their respective nations.

“Is there really no solution?”

Caesar IV asked unwillingly.

“Your Majesty, the total debt of the kingdom amounts to over 96 million gold coins.

This includes loans between countries and the bonds we have issued,” said Marquis Delgado.

“Of this, our domestic debt is around 36 million.

We don’t have to worry too much about this part for now.

The nobles won’t be foolish enough to stab us in the back at such a time.

The international debt issue needs to be resolved, though.

If our transaction with the Black Forest Kingdom is successful as expected, we could probably reduce our debt by 16 to 18 million gold coins.

Agreeing to the optimistic estimate, let’s calculate with a debt of 42 million gold coins.

War bonds account for around 30 million gold coins of this.

Under normal circumstances, not all of these 30 million gold coins in bonds would be redeemed at once.

But this time, it’s clear that someone is manipulating things from behind the scenes and we cannot judge according to normal economic rules.

If things go badly, even the war bonds circulating within the kingdom could be moved out and appear in the redemption surge.

How much cash we need to prepare doesn’t just depend on us.

It also depends on the neighboring Moxi Duchy.

If they can withstand the impact, faith can be transmitted and we can quell the storm by preparing eight million Gold Coins.

But the people of Moxi have long been borrowing new debts to repay old ones.

I’m afraid they’ll fall as soon as the redemption surge erupts.

When panic sets in, even if we prepare 30 million Gold Coins, we might not be able to withstand the shock.

Worse still, other governments might seize this opportunity to stab us in the back and demand payment of debts.

Figures don’t lie, Marquise Delgado’s words completely extinguished Caesar IV’s hope.

Eight million gold coins, we could somehow scrape together.

Thirty million gold coins, don’t even think about it.

Alpha Kingdom simply doesn’t have that kind of finance.

Perhaps realizing his words were too harsh, Marquise Delgado hesitated for a moment and added,

“Your Majesty, there are ways to deal with this, but the repercussions are severe, so much so that it may lead to more harm than good.

If we quietly allow Dante Kingdom and the South Coast Kingdom to push north and annex Earl Grint Country and Earl Nardal Country, we can probably get away with repaying around ten million Gold Coins less.

If we move further and silently allow the Frank people to annex Ouprus Kingdom, allow Iberia Kingdom to annex Avarat Kingdom, allow the Clergy to invade Turan Kingdom…

If we satisfy the ambitions of all the countries on the continent, then our debt issue, won’t be a problem anymore.”

There’s no question about it.

Their debt issue would cease to exist; it would all just turn into a national defense issue.

In less than ten years, the Continent of Aslante would transition into an era of “Heroes vying for supremacy.” With good luck, Alpha Kingdom might become one of the hegemonic countries.

If luck’s not on their side, they could simply collapse halfway.

“Marquis Delgado, you’re oversimplifying things.

Forget about the aftermath of doing it this way, the kingdom’s consent isn’t as valuable as you think it is,” rebuked Duke Newfoundland.

“Although our influence is strong in the Northern Continent, in other regions of the continent, it’s not the same.”

Unless they openly support us, we may have a small hope, but even that isn’t promising.

When compared to a conditional support, everyone would prefer to eliminate a rival first.”

Count Francis spoke gravely.

Only those engaged in diplomacy would truly understand how unfavorable the international landscape is for the Alpha Kingdom right now.

This debt crisis might seem like someone’s strategic plan, but isn’t it the result of a conspiracy among countries?

If there weren’t the silent acquiescence of several major countries, who would have the capability to initiate such an action across the entire continent!

…

Compared to the struggles of the Alpha Kingdom, the Moxi Duchy, which is also deeply mired in the debt crisis, presents quite a different scene.

In the royal garden, King George was leisurely brewing tea and chatting with lords and ministers, showing no signs of tension.

“Have you figured out who the target is?”

King George asked calmly.

After a series of clandestine manipulations, the Moxi Duchy has already covertly settled most of the debt by “trading inheritance knowledge and special cultivation resources against debts.”

The current run-on-the-banks is just a spectacle intentionally staged to divert people’s attention.

After all, their trade has violated the unspoken rules of the present.

The conversion of theoretical knowledge into actual power takes time, and the minor nobility involved in the trade are more eager to keep it a secret than the Moxi Duchy.

Should news of this leak, while the Moxi Duchy will undoubtedly be subjected to suppression from all sides, these traders will be facing a disaster.

Had it not been for the discovery of someone scheming in the dark, King George, who was content to be a spectator, wouldn’t have bothered to intervene amidst these conflicts.

“Your Majesty, all direct leads have been cut off.

However, according to the nobles who traded with us, the mysterious person who approached them might be from the Clergy.

Based on various data analysis, their main target is the Alpha Kingdom, and we are just their pawns in hitting the Alpha people.

These people had plotted to ruin Duchy’s financial state by triggering a debt crisis, in order to incite a large-scale panic and set off a debt bomb in the Alpha Kingdom.

Little did they anticipate that the Duchy has already resolved its debt issues.

Even if they were to ignite a surge now, it would be a wasted effort.

The Duchy’s fiscal state won’t collapse, so the faith in the Alpha Kingdom will not falter.

After all, from a public perspective, the financial status of the Alpha Kingdom is significantly stronger than ours!” Count Reynato gloated.

Apparently, even without solid evidence, he already believed that the Clergy was behind these events.

Regardless of the reason, Count Reynato felt no goodwill towards the Clergy, who wanted to push them into the abyss.

Unable to provoke the monstrous Clergy, seeing them fail in their schemes also brought a sense of enjoyment.

“So it is indeed the Clergy!

I wonder what the Alpha Kingdom has done to make the Clergy hate them to the bone to the extent of making such a big move.

If my guess is correct, this time they went all out to suppress the price of bonds to compensate for their losses in the hundreds of thousands of gold coins.

However, this is also good.

With the Clergy causing trouble for the Alpha Kingdom, our alliance between the two countries will only cement further.

The three major Central Kingdoms are itching for action, the move to the north is unstoppable, the Duchy needs time to recover, and now requires the Alpha people to hold the front.

Send the information to Caesar IV.

Also, inform him that the Duchy is all in one heart at the moment, and all the nobles will unite to face the crisis, and it won’t be so easily defeated.”

King George said, frowning.

No grain, no meal.

Watching an opportunity come by, George had to curtail his ambitions due to the inadequate strength of the Moxi Duchy.

…

In the Mountain Domain, Hudson was happily welcoming the opening of navigation in the canal and imagining the economic boom in his domain, when he received a punch in the face.

The tumultuous debt crisis swept to the Alpha Kingdom, and it seemed as though the whole world knew this news overnight.

Anyone with any political acumen would understand what one would need to face once a financial panic arises.

The bonds in hand becoming worthless is one thing, but the main thing is the political and economic impact.

Hudson didn’t even want to think about the political crisis anymore.

Let the King and the ministers worry about the falling sky.

But the economic problem is unavoidable.

The Prairie Seven Kingdoms’ market, which took so much effort to break into, might be closed directly, and even if it can be retained, the price to be paid will not be small.

Next, the ocean strategy will have to be readjusted.

For the time being, forget about international trade for the next few years, and focus on domestic trade instead!

Such is the hardship of the emerging nobility.

A slight rustling wind can cause a major impact.

FF it were the deeply-rooted, established nobility, they definitely would not be so flustered.

Take the Dalton family as an example.

They deal in international trade just like anyone else, but they aren’t afraid of such turmoil.

To Hudson’s knowledge, they have established partners in many countries across the continent.

There are numerous intermarriages between them, so an interest community has been established a long time ago.

Political upheavals hardly affect them, even if two countries go to war, it does not deter them from continuing their businesses.

…

“Count, Mr.

Jose has entered the domain.

Because he is travelling with family, he is expected to arrive at the Manor House in five days.”

Tom’s words lifted a considerable amount of worry from Hudson’s face.

After such long and meticulous planning, he was finally successful in poaching talent.