I'm the Dauphin in France

Chapter 1331 Imported Inflation
Berthier continued his military briefing: "Regent Frederick has assured us that at least three ships of our 'cargo' will be dispatched every week. The first batch of supplies should have arrived in Gdansk a few days ago, mainly uniforms and gunpowder."

Joseph knew that of the three armies attacking Russia, only Poland was relatively capable of fighting, so France's support was mainly aimed at the Polish army.

Given that Prussia certainly wouldn't want to see Poland become stronger, if they relied on transporting supplies to Poland by land, they would likely encounter deliberate delays.

So he sought help from Denmark to smuggle military supplies onto merchant ships bound for Gdansk. After Prussia's surrender, the Gdansk Corridor had been reopened, and its well-established transportation system, built up over centuries, was sufficient to sustain Poland's logistical needs.

Poland has plenty of food, and with the military funding and weapons provided by France, given their blood feud with Russia, they would not back down even if the war lasted for more than a decade.

While the Persian army was not particularly strong in combat, it had a geographical advantage, allowing it to maintain logistical support at a very low cost and wage a war of attrition against Russia.

As for the Ottomans, the best option was actually to fight Russia in the Danube region, but Selim III was worried that this would lead to Austrian intervention—this area is very close to Wallachia—and he wanted to take advantage of the fact that the Persians were drawing the Russian army's attention to seize territory in western Georgia.

“Very good.” Joseph nodded. “The British are going to have a headache now.”

“Britain?” The Chief of the General Staff paused for a moment, then continued, “Yes, Your Highness, the Russians will indeed seek assistance from Britain, but given Britain’s current financial situation, they will most likely just send them away casually.”

Joseph smiled and said, "No, I meant finance."

……

10 Downing Street.

Looking at the report in his hand, Little Pete frowned and said to Sir Watkins, the Governor of the Bank of England, "With such high interest rates, you only sold £85 worth of goods?"

A month and a half has passed since the UK government bond interest rate hike, but bond sales have remained sluggish.

According to the plan, £5 million of government bonds need to be sold before the end of the year, and another £5 million will need to be sold in the first quarter of next year in order to ensure domestic fiscal stability.

And now it's almost the end of November.

Watkins said helplessly, "You know, grain prices have recently surged, which has also driven up potato prices."

"What does this have to do with national debt...?"

Little Pete only said half a sentence before he immediately realized what was going on.

Large investors are all investing in grain stocks, as the returns are quick. Meanwhile, ordinary people are worried about not being able to afford food; who would dare buy government bonds?
"Damn Frenchmen!" he slammed his fist on the table in frustration.

Just after the UK raised interest rates on its government bonds, Algiers, previously the most important wheat seller, suddenly announced that it would no longer sell wheat to the UK. It's obvious that the French government was behind this.

Poland then signed a "long-term contract" with France, exporting most of its grain to France.

After these two pieces of news reached London, grain prices in the UK surged by 15% and are still rising.

Previously, Pete was only worried about bread subsidies in big cities, but now he realizes that this will also hurt Treasury bond sales.

He gripped his cane tightly and nodded. "Well, it seems we'll have to import a lot of grain from Russia." "We could even buy some potatoes, Your Excellency," Sir Watkins suggested.

Russia is too far away, so the shipping costs are relatively high, and Britain is usually unwilling to buy Russian grain. However, the price of grain in Britain now far exceeds the shipping cost.

After discussing the matter of promoting the sale of government bonds for a while, Sir Watkins took his leave.

Little Pitt picked up his pen and began writing a letter to the Minister to Russia, asking him to negotiate the price of a large purchase with the Russians in advance. Just then, Earl James Harris, Chairman of the Trade Commission, rushed in: "Your Excellency, there's a big problem in the Øresund Strait."

Little Pete gestured to the chair: "Please don't rush, speak slowly."

"The Danes say they have discovered Russian merchant ships smuggling weapons into Norway and have begun to strictly restrict Russian ships from passing through the straits!"

Little Pete frowned immediately.

Although there has always been a tendency toward independence in Norway, Russia has absolutely no need to interfere in its affairs—stirring up trouble in Norway would only benefit the Swedes.

"How long did they say it would take before they would release us?"

"I heard that Frederick just sent people to St. Petersburg to negotiate, which will likely take about two months."

Little Pete's brow furrowed even deeper, and he hurriedly ordered, "You and Lord Hawkesburg must go to Copenhagen immediately. Oh, and have a task force from the North Sea Fleet accompany you."

At least 70% of Russian merchant ships leaving the Baltic Sea docked at British ports, carrying goods that were very important to Britain, such as timber, flax, oil, and rope. Without these goods, Britain's industries, from shipbuilding to glass and dyeing, would be greatly affected.

However, Peter Jr. believed that as long as the Foreign Minister led the fleet to scare the Danes, the Øresund Strait should be cleared soon.

However, he never expected that a week later Lord Hawkesburg would send back a message saying that the Danes were furious and threatened to go to war with Russia to find out the truth.

Meanwhile, news that Russian merchant ships were unable to reach port had already reached London.

Normally, such events wouldn't cause much market fluctuation, but the previous surge in grain prices seemed to have made the British extremely nervous. First, the price of flax rose by 10%, and then whale oil and fur followed suit.

Of course, Joseph had arranged for a "white glove" in Britain beforehand, so that once he heard the news, he would start buying up these goods at high prices, thus causing market panic.

Moreover, this operation will not waste funds, and if done well, it can even make a profit – as prices continue to rise, as long as the selling point is chosen well, a profit can be made.

Pitt Jr. was busy finding sources of goods to stabilize prices and increasing diplomatic pressure on Denmark, completely unaware that, under the influence of this series of events, the inflation rate in Britain was rising rapidly.

Well, in reality, there was no systematic inflation assessment method in this era, and the government did not specifically calculate inflation. Usually, the British Treasury would only realize that it was necessary to intervene when the impact of inflation became clear.

For the average Briton, the feeling at the end of the year is that everything is getting more expensive except for wages.

Sir Watkins discovered that not only were government bonds difficult to sell, but the number of people depositing money in banks was also steadily decreasing.

With people running out of money, who has any spare cash to save?
(End of this chapter)