I Am the Crown Prince in France - Chapter 881

#881 – Reverse operation (asking for monthly ticket)

Chapter 877: Reverse Operation (Seeking Monthly Tickets)

[Note: Explaining the concepts of "shorting" and "going long" that appear in the text, to prevent everyone from being confused.

"Shorting" refers to using various operations to suppress the value of your target. For example, to short the Franc, you can massively sell Francs to buy gold on the market, while desperately promoting negative news. When people see so many people not wanting Francs, coupled with rumors, they will believe that the Franc is really worthless, causing the amount of gold that the Franc can be exchanged for to become less and less.

"Going long" is the opposite, desperately using gold to exchange for Francs, people will think that the Franc is a scarce commodity, thus becoming more and more valuable. (The above word count was added after the chapter was released and will not be included in the subscription)]

Joseph touched the corner of the report with his finger, lost in thought.

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He originally thought that this incident was a speculative adventure by some ethnic capital tycoons—historically, they had done similar things to the British pound, attacking Britain's gold reserves in the early 19th century, causing fluctuations in the pound and making huge profits from it.

He didn't expect that it was a financial war initiated by the British.

If this is the case, the previous countermeasures may have to be adjusted.

Fouché said aside: "Your Highness, perhaps we can activate wartime regulations to freeze those funds as 'destructive funds from enemy countries.'"

Joseph pondered and shook his head:

"No, the market doesn't care whether it's British money or Württemberg money. People will only reduce their trust in the Franc because our country refuses to exchange Francs for gold.

"Besides, there is a lot of French money in it, and it is difficult for you to distinguish it."

Now is the high-speed rising period of the Franc's expansion, especially for large-scale deployment in the Italian states.

Even if the governments of the Italian countries have promised to accept the Franc, if the market loses confidence in the Franc, private trade will spontaneously exclude the Franc.

How much money is there in government-to-government transactions?

Just like those German states, after more than a year, they still have 60% to 80% of their Francs unspent.

To a large extent, it is because the German people are accustomed to using florins, thalers, and other currencies for transactions.

Opening up private trade is the key.

While the two were talking, Eman led Brienne and Laffitte in.

After Joseph waited for the two to salute, he immediately handed them the intelligence agency's investigation report:

"That's the situation. Next, we need to make targeted adjustments."

Brienne nodded. The amount of funds that the British can use must be very huge. If, as His Royal Highness the Crown Prince had instructed before, they were to go all out to go long on the Franc, the French treasury might not be able to compete with the British.

"Your Highness, we can try to activate wartime regulations…"

Joseph immediately supported his forehead. His important ministers really had the same idea.

He thought for a while and said: "Archbishop Brienne, from now on, we will short the Franc together."

"What?!"

Everyone in the room was shocked.

The British are now trying to undermine French finances by shorting the Franc. Is His Highness preparing to defect to the enemy?

"Then, officials from the Banque de France and the financial system, through private channels, 'accidentally' reveal the news that our country's gold reserves are very tight.

"In addition, let some influential nobles, such as Count Mirabeau, or even the Count of Provence, send their men to secretly exchange gold at the Banque de France, inadvertently being seen by some people."

These operations he said were too abnormal, but instead made Brienne and others calm down, waiting for the Crown Prince's explanation.

Anyway, there were too many cases of His Highness engaging in various bizarre operations and finally reversing the situation against his opponents. They were already used to it.

Joseph continued:

"By the way, we also need to give the people some 'hints', such as inviting citizens to visit the bank's vault, accidentally revealing flaws, and so on.

"Once the market begins to firmly believe that 'there is a problem with the Franc', it will be our turn to take action."

He looked at Fouché: "The intelligence agency must contact the British who are shorting the Franc in Paris as soon as possible, at least to be able to contact their subordinates.

"The more dangerous the Franc is, the more eager the British will be to completely defeat us.

"And the Franc 'ammunition' in their hands is bound to be insufficient—according to your investigation, they only have less than 30 million banknotes. There may be other channels, but the total amount will not exceed 40 million.

"At this time, they will try every means to raise more banknotes to attack our gold reserves."

Brienne's eyes lit up immediately, and he continued: "The British will take the initiative to contact the traitors who provide them with funds. Mr. Fouché, arrest those people immediately!"

Joseph sighed and shook his head: "No, Mr. Fouché will arrange for some people to impersonate speculators or directors of small banks, providing the British with banknote loans at very high interest rates."

This time, Brienne and others could no longer hold back: "Your Highness, I'm afraid this won't work!"

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"Your Highness, the British will definitely take all these banknotes to exchange for gold…"

"Our gold reserves will definitely not be able to hold on…"

Joseph smiled and said: "Don't be nervous, everyone. It is safe only if the development of the situation is under our control.

"First of all, the intelligence agency must do everything possible to prevent domestic capital from following suit and exchanging gold. You can secretly warn them, or even use special means to temporarily prevent them from mobilizing funds."

Brienne said: "For example, let the tax bureau repeatedly check their accounts."

"That's right." Joseph nodded, "As for the citizens' run on the bank, we can reduce the impact by reducing the number of bank counters and reducing the efficiency of bank employees.

"In short, we must concentrate the funds consumed by shorting on the British as much as possible."

Brienne said nervously: "Your Highness, what if our gold reserves are really exhausted?"

Joseph held out two fingers:

"First, let the countries of Northern Italy prepare to exchange gold and silver coins for Francs in large quantities when we need them. The Italian states are very wealthy, and it is not a problem for them to swallow 40 to 50 million Francs together.

"Secondly, the Paris Futures Exchange will announce that it will no longer accept gold coins for the purchase of cane sugar."

Everyone in the room immediately fell into deep thought. After a while, Laffitte was the first to react and said excitedly: "If I didn't know Your Highness's age, I would definitely think you were an expert who has been in the financial industry for decades!

"The Italian states buying Francs can greatly boost the market's confidence in the Franc, while replenishing our gold coin reserves.

"And if gold coins cannot be used to buy cane sugar, they can only be purchased with Francs. This further strengthens the credit of the Franc, and also increases the market's demand for the Franc.

"Under continuous going long on the Franc, the situation of following suit and selling Francs for gold will disappear quickly. No matter how many banknotes the British have in their hands, they cannot exhaust our gold reserves."

Brienne nodded in agreement: "Unless they can raise more than 100 million Francs. But the channels for providing them with loans are under our control, and we will definitely not let them get so much…"

Laffitte continued: "As long as they cannot exhaust our gold, they will have to pay high interest rates later!"

That is an annual interest rate as high as 25% or more.

Fouché suddenly spoke up: "Your Highness, what if the Italian states are unwilling to help us?"