I'm the Dauphin in France

Chapter 877 Reverse Operation (asking for monthly ticket)

[Note: Let me explain the concepts of "short selling" and "long selling" in this article to prevent you from being confused.

The so-called short selling refers to using various operations to suppress the value of one's target. For example, if you short the franc, you can sell a lot of francs in the market to buy gold, and at the same time spread the word. People see why so many people don't want francs, and coupled with rumors, they will conclude that the franc is really worthless, resulting in less and less gold that can be exchanged for francs.

Going long is the opposite, desperately exchanging gold for francs, people will think that francs are scarce, and thus become more and more valuable. (The above word count is added after the chapter is published and will not be counted in the subscription)]

Joseph fingered the corner of the report, lost in thought.

He originally thought that this incident was a speculative adventure by capital tycoons of certain ethnic groups - historically they had done something similar to the pound, attacking Britain's gold reserves in the early 19th century, causing the pound to fluctuate and making huge profits from it.

Unexpectedly, it was the British who initiated the financial war.

If this is the case, previous response measures may need to be adjusted.

Fouché said, "Your Highness, perhaps we can activate the wartime regulations and freeze the money as 'enemy destructive funds'."

Joseph thought and shook his head:

"No, the market doesn't care whether you have English or Württemberg money, people will only lose confidence in the franc because our country refuses to exchange it for gold.

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

Now is the period of rapid expansion of the franc, especially to be rolled out on a large scale in the Italian states.

Even though Italian governments have pledged to accept the franc, if the market loses confidence in the franc, private trade will spontaneously exclude the franc.

How much money is transferred between governments?
Just like the German states, after more than a year, they still had 60% to 80% of their francs unspent.

This is largely because the German people are accustomed to trading in currencies such as florin and thaler.

The key is to open up private trade.

While the two were talking, Emmanuel brought in Brian and Lafitte.

After the two of them exchanged greetings, Joseph immediately handed them the Intelligence Bureau's investigation report:
"This is the situation. Next, we need to make targeted adjustments."

Brian nodded. The amount of funds that the UK could mobilize must be huge. If the French government follows the instructions of His Royal Highness the Crown Prince and goes all out to buy the franc, the French finances may not be able to compete with the British.

"Your Highness, we can try to activate the wartime regulations..."

Joseph immediately held his forehead with his hand, thinking that these important ministers of his really had the same idea.

He thought for a moment and said, "Archbishop Briand, from now on, let's short the franc together."

"what?!"

Everyone in the room was horrified.

The British now want to destroy the French finances by shorting the franc. Your Highness, are you preparing to surrender to the enemy?

That's not right. France belongs to him, and he cannot surrender to anyone who surrenders to the enemy.

Lafitte said carefully, "Your Highness, you meant to say 'long'?"

"No, short the franc." Joseph said firmly, "The government's public stance continues to maintain its previous stance, including lowering the gold exchange fee and announcing in newspapers that the French Reserve Bank has sufficient gold reserves.

"Then, officials from the French central bank and the financial system 'accidentally' leaked the news that our country's gold reserves were very tight through private channels.

"In addition, let some influential nobles, such as Count Mirabeau or even Count Provence, send their men to the Bank of France to exchange gold secretly, so that they can be seen by some people inadvertently."

What he said was so abnormal that Brian and the others calmed down and waited for the Crown Prince's explanation.

Anyway, there were many cases in the past where His Highness had done all kinds of incredible things and finally killed his opponent in one fell swoop. They were used to it. Joseph continued:

“By the way, we also need to give the public some ‘hints’, such as inviting citizens to visit the bank’s vault in case of unexpected flaws.

"Once the market starts to believe that there is something wrong with the franc, it will be time for us to take action."

He looked at Fouché and said, “The Intelligence Agency must get in touch with the British who are shorting the franc in Paris as soon as possible, or at least get in touch with their subordinates.

“The more dangerous the franc, the more anxious the British will be to crush us once and for all.

"And they must have insufficient franc 'ammunition' in their hands - according to your investigation, they have less than 3 million banknotes. There may be other channels, but the total amount will not exceed 4 million.

"At this point they will try to raise more paper money to attack our gold reserves."

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

Joseph sighed and shook his head, “No, Mr. Fouché will arrange for some people to pretend to be speculators or directors of small banks to provide paper money loans to the British at very high interest rates.”

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

"Your Highness, the British will definitely exchange all these banknotes for gold..."

"Our gold reserves will definitely not last..."

Joseph smiled and said, "Don't be nervous. The situation is under our control, so we are safe.

"First, the Intelligence Bureau must do its best 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."

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

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

"In short, the funds consumed by short selling should be concentrated on the British as much as possible."

Brian asked nervously, "Your Highness, what if our gold reserves are really exhausted?"

Joseph held up two fingers:

"First, let the northern Italian states prepare to exchange large amounts of gold and silver coins for francs when we need them. The Italian states are very wealthy, and it is no problem for them to consume 40 to 50 million francs in total.

"Second, the Paris Futures Exchange announced that it would no longer accept gold coins for the purchase of sugar."

The people in the room immediately fell into deep thought. After a moment, Lafitte was the first to react and said excitedly: "If I didn't know your age, I would have thought you were an expert in the financial industry for decades!

“The purchase of francs by Italian countries can significantly boost market confidence in the franc and at the same time replenish our gold coin reserves.

“If sugar cane cannot be purchased with gold coins, it can only be purchased with francs. This further strengthens the credit of the franc and also increases the market demand for francs.

"With continuous long positions in francs, the trend of selling francs for gold will soon disappear. No matter how much paper money the British have, they can never exhaust our gold reserves."

Brian nodded and said, "Unless they can raise more than 1 million francs. But the channels for lending to them are under our control, and we will never let them get so much..."

Lafitte continued: "As long as they can't use up our gold, they will have to pay high interest later!"

That’s an annual interest rate of over 25%.

Fouché suddenly said, "Your Highness, what should we do if the Italian states are unwilling to help us?"

(End of this chapter)