Chapter 875 Counterattack on the shorts
"A new gold exchange application of 9.6 million francs was added within 5 days?" Joseph frowned slightly and looked at Lafitte, "Please tell me in detail."
"Yes, Your Highness." The manager of the Bank of France owed, "These customers have different identities, but they all refused alternative exchange methods. The amount was at least 300,000 francs.
"The exchange was mainly concentrated in the Bank of Paris. Since yesterday, banks in Lance and Orleans have also received exchange applications. "
Brien added: "There are also a lot of rumors in the financial market, saying that 'the French Reserve Bank's gold reserves are exhausted' or 'the government will soon terminate the banknote exchange gold business'.
"The news is not widely spread among the people at present, but there are still cases where citizens are queuing up to exchange gold in banks."
Joseph asked Brian again: "What is the 'not convertible limit' of the franc at present?"
"Not convertible limit" is a special financial term, meaning that the banknotes issued by the state exceed the gold reserves.
Brien immediately said: "58 million francs, your highness."
From France's current market size and economic situation, the amount of over-issuance is completely within the safe range.
Joseph nodded thinking and said, "It seems that someone is maliciously shorting francs. Mr. Lafitte, how much gold stock is there in the Paris Bank of France?"
"There is 740,000 ounces left, Your Highness."
After saying that, Lafitte saw the prince frowning, he hurriedly added, "It is about 70 million francs."
Joseph couldn't help but show a solemn look on his face.
According to the current exchange rate, gold reserves will be empty within one month.
Moreover, this kind of thing can never develop linearly. The less gold the bank stocks, the more serious the run will be.
In addition, someone maliciously spreads rumors, it may not take long to exchange tens of millions of francs of gold in one day.
Once the bank's gold reserves are exhausted, it will immediately trigger a currency and economic crisis.
Brien and Rafit looked at each other and suggested, "Your Highness, in order to ensure the financial stability of Paris, do you need to transport some gold from other places?"
Joseph shook his head immediately.
Paris reserves gold worth 70 million francs, and under normal trade activities, paper money and gold flow slowly is certainly enough.
If a large amount of gold is withdrawn in order to deal with malicious short selling, it will inevitably seriously affect the foreign trade of various regions, especially border provinces - doing business with Ottomans, Russia and other countries, and they still have to rely on gold.
Brian changed another method: "Then expand the scope of the 'remote transportation clause', such as reducing the startup limit to 100 francs.
"Or increase the large exchange fee to 2%..."
Banks to exchange large gold with paper money for handling fees. Currently, 0.8% of the fee is required for more than 5,000 francs. In an era of inefficiency in banks, all countries operate in this way.
Joseph said flatly: "No, this will only increase market panic."
What is the most important thing in financial games?
Confidence!
As long as the market has confidence, even a broken stone will continue to pour in.
On the contrary, once market confidence collapses, no matter how healthy your financial system is, it will be crushed by a run.
Brian said anxiously: "Your Highness, according to the current trend, if you do not take measures, you will definitely cause a big mess..."
Joseph tapped the armrest of the chair with his fingers, quickly recalling various financial sniper war cases in his mind, and then suddenly relaxed his eyebrows.
What are you panic?
The fundamentals of the French economy are not a big problem. In this case, there are many cards to play.
Those countries that experienced economic crises in later generations could survive for several years by relying on flashbacks and maneuvers. Even if the situation in France really becomes serious, you can just copy a few tricks and slowly recover from fiscal revenue and war dividends.
He immediately looked at Brian and said, "Confidence. First of all, give the market sufficient confidence."
"Why do you mean?"
"Reverse the measures you just said." Joseph smiled, "Reduce the usage rate of the 'remote transportation clause', and even if it is enabled, try to deliver gold within 15 days.
"The large redemption fee was reduced to 0.7%, and the wind was released, and the bank said that after business improvement, the operational efficiency of the statutory bank may reduce the handling fee to 0.5% in the future. ”
Brian and Lafitte both stared at shock.
If this happens, the gold reserves that could have lasted for one month may be gone in 20 days.
Joseph completely ignored the expressions of the two people and continued to "hit" their nerves:
"And, this large-scale short selling behavior is definitely not enough based on the "ammunition" in the hands of the initiator. Therefore, there will definitely be a lot of short selling in the market.
"We still operate in the reverse direction, selling long francs in large quantities, and shorting gold! ”
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If the short seller wants to break through the French Reserve's gold reserves of more than 70 million francs, he must prepare at least 60 million francs of banknotes as "ammunition".
As such a large amount of funds, not to mention private capital, even a national-level dealer will struggle.
So they usually only prepare some ammunition, such as 30 million francs, and then use this money to incite the market to follow the trend.
Once the trend forms, private speculative capital will follow up.
The dealer's 30 million will have several times the effect.
The easiest way for those speculative capitals to make profits is to borrow a large amount of franc banknotes, then exchange them for gold, wait for the franc to collapse and start depreciating, and then exchange gold for francs to repay them to creditors.
For example, someone now borrowed 1 million francs of banknotes and bought 300 kilograms of gold to store it.
After the banknote depreciates, 300 kilograms of gold can be exchanged for 5 million francs.
He took out 1 million of the money and paid back the debt, and paid up to tens of thousands of interest, making nearly 4 million in vain!
Of course, the premise that all this can be true is that the franc will collapse.
If it doesn't collapse, then the interest the short party has to pay will be deadly - don't underestimate the interest of more than 100,000 yuan. It's a huge sum of money if you don't make any money!
So how can speculative capital not dare to follow the trend?
It's very simple, just let them not see the possibility of the franc collapse.
Many classic examples of "short-multiple war" in later generations started with forced long in the reverse direction. In comparison, the financial war in the 18th century was still as simple as a baby.
Once a long trend is formed, the short side will soon lose terrible losses.
Brian said nervously: "Your Highness, if the situation does not improve, it will put the national finances in crisis..."
Joseph raised his hand and interrupted him: "Please believe me, at most half a month, the person who exchanges gold will disappear.
"And I have a powerful guarantee method available. "
After Joseph and the two financial officers discussed the plan to long francs in detail, they thought of another thing:
"So, next we need to find out who is behind this malicious redemption incident.
"Emang, please let Mr. Fouche come to see me. ”
(This chapter ends)