Palace of Vienna
Franz's wedding had been officially put on the agenda. On this issue, it was not up to him to decide. More than 50 million people of the new Holy Roman Empire were looking forward to it.
An auspicious day had to be chosen. If the day was not good, with dark clouds and heavy rain, wouldn't it tell everyone that God did not like this couple?
If it was an ordinary family, they would also sigh at their bad luck. If it was a fanatic, the wedding might be canceled. If it was the royal family, needless to say, it would be a huge political scandal.
Although the influence of theocracy had been greatly reduced, this feudal superstition was still prevalent in conservative Austria.
After a group of priests, who were both theologians and meteorologists, the auspicious day was finally set on March 12, 1855.
The preparations had already begun, and Franz had to occasionally ask about it to show that he attached importance to this marriage.
Marriage was a good thing, especially with someone he liked. Well, Franz admitted that his feelings for Princess Helen were average, but for an emperor, being able to marry a wife he did not dislike was considered a blessing.
Franz's good mood did not last long, and something bad happened.
"Your Majesty, our plan to buy gold has failed. The price of gold on the international market has skyrocketed by 20%. If we continue to buy, it will be too much of a loss.
After our investigation, we found that the price of gold on the international market was single-handedly planned by the British. The purpose is to prevent us from buying gold, "the finance minister said with a tired face.
It could be seen that he had not slept well for a long time.
At the critical moment of the currency reform, the British raised the price of gold to prevent Austria from buying. It was obvious that they had bad intentions. After this happened, the finance minister who led the currency reform was under pressure.
Franz frowned. Under normal circumstances, the British had no reason to obstruct the currency reform of the new Holy Roman Empire. The increase of members of the gold standard system was also good for them.
"Have you found out the purpose of the British doing this?"
Franz asked. He did not believe that the British did this for profit. If it was just to raise the price of gold and make a profit, then it would be fine to slow down the price.
As long as the increase was not too big, in order to increase the gold reserves, the Government of Vienna would accept it.
With such a huge difference, only an idiot would continue to buy it.
Forcibly raising the price of gold did not come without a price. Regardless of whether the capitalists who speculated on the price of gold could make a profit, after gold appreciated, the British Pound Sterling, which was linked to gold, also appreciated.
This was equivalent to the appreciation of the British pound sterling by 20%. With such a large increase, the cost of British industrial and commercial products would naturally increase significantly, and it would be difficult to maintain competitiveness in international trade.
Could it be that the British capitalists were tired of living and were ready to play themselves to death?
From the beginning to the end, Franz never thought that this was planned by the Government of London. Doing so was equivalent to sacrificing eight hundred men to kill one thousand enemies. Who would do something that harmed others without benefiting oneself?
Carr replied awkwardly, "It's said that it's to prevent us from purchasing gold, so that we can't raise enough gold as reserves."
He didn't believe it himself. Austria was also an old empire, and it still had its own heritage. If the government was willing to pay the price, it could raise gold reserves in the country.
As long as the government's credibility was high enough and it was recognized by the market, even if the gold reserves were slightly insufficient, it could still complete the gold standard reform.
In the end, the issuance of paper money still depended on the government's credibility. The Russians were a negative example. They didn't worry about not having enough reserves, but the paper rubles they issued before were still not bought.
The British couldn't directly destroy the market's confidence in the new Holy Roman Empire, right? If they had this ability, they would have used it to threaten the Government of Vienna during the Near East War.
Franz sneered and said, "Continue to investigate. If you can't buy gold, then forget it. Anyway, we're already prepared. The gold for the currency reform is barely enough.
The remaining gap isn't big. At worst, we can exchange it with countries that use gold and silver. The British have the ability to raise the price of gold in the European market, but I don't believe they have the ability to raise the price of gold worldwide.
But we still have to continue to buy gold and let the British continue to maintain the high price of gold. Let's see how long they can last! "
Lack of information was the biggest drawback of this era. In areas with poor information, the price of gold and silver remained the same.
To raise the global gold price, unless the British maintain the high price of gold for a few years, many areas outside of Europe would not be able to react.
If the British really did this, Franz would laugh. At worst, the gold standard reform would be delayed for a few years. This wasn't urgent, and a year later or a year earlier wouldn't be fatal.
It was just that he didn't know if the British industry and commerce could withstand it. Because of the increase in the value of the currency, the production costs would increase, and it was bound to greatly reduce the international competitiveness of British products.
Of course, in this era, the profits of overseas trade were relatively high. Franz believed that the capitalists took such a big risk to carry out ocean trade, and there would still be a 20% profit margin.
Not raising the price to maintain the competitiveness of the goods was still possible. However, the profits from the trade in Europe might not be that high.
Even if the British were the world's number one industrial country, it didn't mean that they had the advantage in every field. These industries couldn't take this blow.
Franz even had the idea of raising the pound to hit the British industry and commerce, but he instantly extinguished the idea.
With Austria's capital, if they really played a head-on game with the British in the financial market, the probability of losing was almost 99%.
The Granville Cabinet was dumbfounded. They were the ones who raised the price of gold, but they didn't plan to raise it by so much at once!
According to the original plan, they only raised a few points to make the Government of Vienna retreat and accept their conditions. They didn't plan to let the price of gold soar so much.
Unfortunately, they ignored that there was another group in this world — speculators.
The British domestic capital was too abundant for a day or two. Now, the rapid economic growth of the United States and Austria couldn't be separated from the help of British capital.
This time, the government raised the price of gold, and it was pursued by everyone, so it rose slowly. The price of gold and silver rose rapidly, and then went out of control.
There were only two paths in front of the Government of London. Either they immediately sold a batch of gold to calm the price storm in the capital market, or they devalued the silver. If the price of silver fell, then the current high exchange rate would be normal.
One of the reasons why gold was so popular now was the new Holy Roman Empire's gold standard reform.
Once the Government of Vienna completed the currency reform, the new Holy Roman Empire would certainly not hold so much silver. This silver would flow into the market, and it would inevitably cause the price of silver to fall.
Speculators had a keen eye. Through the most basic information in their hands, they judged that the price of silver would fall in the future and began to act.
To some extent, even if the Government of London didn't do anything, this situation would still happen. The rise of the exchange rate of gold and silver was the general trend.
This decision was not easy to make, as it would affect everything else.
If they sold gold to calm the storm and stabilize the value of the pound, then the plan to prevent the Government of Vienna from buying gold would fail. In the future, if they wanted to pull the new Holy Roman Empire into their pound – gold system, they would have to pay a greater price.
Of course, it wasn't without gains. The Government of London would make a profit from this operation, which could make up for their wounded hearts.
Devaluing silver also had to consider the consequences. The most direct was the devaluation of the currency of the silver-standard countries. The economic impact was that the exports of these countries would become more competitive.
This would affect the exports of industrial and commercial products in the United Kingdom, which in turn would affect the British economy.
Prime Minister Granville asked anxiously, "What is the plan of the Ministry of Finance to calm this storm?"
Without any hesitation, George Gray, the Chancellor of the Exchequer, gave the answer. "Prime Minister, the best way now is to sell the gold we bought and let the market return to normal.
This is the approach that has the least impact on the domestic economy. Since we bought it at a low price, we can still make a profit by selling it now.
And it must be fast. Now that the Government of Vienna still hasn't given up the plan to buy gold, this is simply stimulating the nerves of the speculators.
They are likely to have discovered our plan and are now deliberately acting as if they are determined to win, just to see us make a fool of ourselves.
If we drag this on for too long, more speculators will join in. At that time, it will be difficult for us to calm this storm. "
The gold purchased by the government and the reserves issued by the currency were two completely different concepts. They were even carried out by two different systems.
In the era of the gold standard, the government couldn't take it for granted to reduce or increase the reserves. These had to be carried out according to actual needs.
The Government of London had already felt the consequences of acting rashly. A wrong signal would trigger a swarm of speculators, and the end result would be disastrous.
After all, gold was a hard currency. In many people's view, it wouldn't depreciate much at all. Even if they lost it, they wouldn't lose much.
After hesitating again and again, Prime Minister Granville made a decision. "No matter what, we must first calm the gold storm and stabilize the value of the pound.
The Ministry of Finance will immediately start selling gold and communicate with the domestic consortiums. We need their help! "
Despite knowing that it would cost a lot, Prime Minister Granville still chose to seek help from the consortiums. Otherwise, it would be difficult for the Government of London to calm the storm in a short period of time.
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