Crusade against the Pope

Chapter 286 Banks and Treasury Bonds

If the Palestinian region is not allowed to enter a period of relative peace, the decline of trade routes is an inevitable result.

But the appearance of Garys reversed the situation and brought a glimmer of life to the dying kingdom.

Not only did he resist Saladin's attack, but he also brought in more profitable goods, making the interests of his family and the kingdom more closely bound together.

In order to strengthen the relationship between his family and the kingdom, he has been looking for a husband for his granddaughter, the jewel in his family.

At first, he set his sights on the Paladin next to Garys. After all, if those people happened to say one more word, it actually meant an advantage and being one step ahead.

But the Palatine group seems to be firmly celibate and about doctrinal choice.

Delfino naturally gave up the idea and started looking for other people.

The final result was that hard work paid off. Conrad was selected by him and was completely involved in the politics of the kingdom as a representative of the Venetians.

Such a relationship means that he can get information one step faster, or even several steps faster, than others.

After all, no matter how hard you try to collect information, it can't be better than a word from the rule maker.

"So, between banks and government bonds, how should we choose?" Delfino whispered to himself.

As an important investor in the kingdom, Delfino is naturally qualified to know some information that ordinary people should not know.

In order to support the kingdom's finances and ensure a large-scale counterattack against Saladin, Gairis and his colleagues planned to set up an institution to raise funds and make additional investments.

This institution is called a bank.

It took Delfino a long time to figure out that a bank was a business that dealt in currency, presided over currency exchange, and used depositors' money to lend while protecting their property.

Even though such a business had never really made huge profits before, he was aware of the huge profits involved.

To put it bluntly, the Jews are still using their own money to lend to others, while banks are using depositors' money to lend to others. In Delfino's view, this behavior is almost like getting something for nothing.

As for currency exchange, it is also a highly profitable business these days. The currencies circulating between countries and regions are not the same. Even if they are both gold coins, some may weigh over 4g, while others may only weigh 3g. The difference in gold content is even more unpredictable. If you are not a businessman specializing in this industry, it is difficult to understand the ins and outs of it.

If integrating these main businesses into one industry still cannot make a lot of money, then Delfino can't think of any other industry that can make him rich.

The thing about national debt is actually easy to understand.

Unlike the situation in the Eastern Central Plains dynasties, Europe has had a tradition or practice of monarchs borrowing money since ancient times.

After all, according to the Central Plains dynasty, all under heaven belongs to the king, and all within the four seas are the king's subjects.

The whole world belongs to the emperor, so if the emperor goes to borrow money, it will be a question of the supremacy of imperial power, and secondly, no one can guarantee for the court at all.

Moreover, the risk of recovering the principal of loans in China is significantly higher than in Europe, so almost any loan is accompanied by high interest rates.

Even for some people, lending money is not intended to recover the principal, but to gain more.

But it was different in Europe. It was normal for the monarch to be short of money, and it was also common for the monarch to borrow money from others in order to support the continuation of the war.

Although European monarchs also had the problem of defaulting on their debts, relatively speaking, they would not do such things as killing the goose that lays the golden eggs too often in order to be able to borrow money again next time.

In most cases, even bankruptcy or default will be exchanged for other business privileges.

Of course, the main reason may be that there are too many countries in Europe, and the authority of the monarch will be restricted by other classes and monarchs, making it easy for merchants to make profits.

Therefore, for the monarch, the interest rate is relatively not that high.

So Delfino could actually understand the national debt, after all, land bonds had been issued once before.

It is also clear that the current situation of the Kingdom of Jerusalem is very good and there is basically no risk of defaulting on debts, but the problem is that the interest rate of this national debt is too low.

The annual interest rate of 20-year government bonds is 5%, a number that would make people scramble for it in the future. For Delfino, it felt like he was being robbed.

The annual interest rate of 30-year national debt is only 6.66%, and the national debt of the Kingdom of Jerusalem is simple interest, with no compound interest.

In other words, if you buy the bearer bonds of the Kingdom of Jerusalem, assuming everything goes well and there is no reverse repurchase or early repayment by the state, it means that in addition to paying the entire principal in one lump sum after 20 years, you will also receive interest equal to the principal over the next 20 years.

For a 30-year treasury bond, in addition to paying the principal in one lump sum after 30 years, you will also receive interest twice the principal in installments.

Although this return on investment seems quite real, when combined with the time required, it makes people hesitate.

In this era, twenty years is a generation, and thirty years is half a lifetime. In this chaotic world, people always focus on the present. Once they start to look far ahead, they are likely to suffer various losses.

And even if it is lost in the future, is a 20- or 30-year national debt really profitable?

You have to know that 2025 years before 30 was 1995. What were the income and price levels in 1995? What will the income and price levels be in 2025?

Of course, today's society still is and will be for a long time the physical currency of precious metals, or at least paper currency based on gold and silver. Compared with the inflation rate in the future market, it is normal for prices to remain unchanged for decades, so there is no need to worry about not keeping up with inflation.

Since Delfino believed that the interest rate of government bonds was too low, it meant that if he wanted to buy a large amount of government bonds...

"We need other compensation. Bank shares are actually pretty good." Delfino made up his mind and planned to have a good talk with Garys before the news was published in the newspaper.

……

Delfino was not the only one to get the news, but he was indeed the first one to come and discuss bank and government bond matters.

When the news about government bonds and banks leaked out at the same time, almost all smart businessmen understood the purchase of government bonds as a token of their loyalty to the banking industry.

This misunderstanding is a bit ridiculous, but it can be considered a blessing in disguise.

If the maritime merchants still hope to improve their relationship with the kingdom by purchasing national debts, then ordinary people are almost completely indifferent to national debts.

After all, this batch of bonds is meaningless to many people in terms of returns.

But that doesn’t mean that no one bought it. Loyal people like Giannis and other citizens who trust the cult also bought it to the best of their ability.

For them, it is not a matter of greed for that little bit of interest, but rather a hope to help the church and the country move forward.

For them, they have already shared weal and woe with the Second Kingdom.

In a sense, the act of buying national debt is indeed supporting the Kingdom of Jerusalem and helping the Kingdom to overcome the current difficulties. However, in addition to the sea merchants and Giannis who bought national debt, there are two other people who attracted attention in this national debt transaction.

One of them was naturally Isabella, who used almost all of her private property to buy government bonds.

The other one was Iraklius.

As a well-known leader of the opposition party, Iraqi Prime Minister did not hesitate to invest a large amount of money to buy bonds in this treasury bond issuance, which was really unexpected.

For this reason, many people even took the initiative to find him and ask what was going on.

After all, does this Iraklio still want to be the leader of the opposition?
How can you not only surrender verbally but also surrender physically?
It would be a sin to waste these silver coins on the kingdom!
You have to know that at their level, the one who owes the debt is the boss. How can the lender compete with the monarch?

In response, Irakluo immediately slapped him twice.

"Confused! Confused!"

"You're always thinking about the little gains in front of you. Can you really accomplish anything like this? Can you even go on the offensive?!"

"Do you really think we're going to dethrone Queen Isabella?"

"That woman Sibilla is extremely stupid. Balian and the others didn't say they would force her to abdicate."

"Do you understand the four words 'fight but not break'?"

"If you don't understand, just find a rope and hang yourself!"

"What is our purpose? To correct the original intention and uphold the orthodox royal family!"

Then Iraklo analyzed the pros and cons and argued for an answer.

If the kingdom really lost, Saladin would obviously not allow them to remain as lords, and they might not even have a chance to survive.

As for Europe? There is no such place for them.

Only if the kingdom wins can they survive and live a prosperous life.

If they pay the money now, the kingdom will have to acknowledge their kindness no matter what, and at least it won't embarrass them too much.

After all, the country is really short of money.

What do they oppose?
Is it really the kingdom itself? Is it really the reform?
Do not!
What they object to is that the kingdom is not governed by them, and that the benefits of reform do not go into their pockets.

But if the kingdom is gone, then they really have nowhere to go.

Only as long as the country still exists and they and their influence still exists can they slowly seek to make a comeback.

These words were spoken with such sincerity that many people with weak brains opened their wallets and exchanged them for large denominations of government bonds.

Of course, what they didn't know was that as soon as he sent them away, Irakliu wiped the sweat from his forehead.

In this way, the distribution of treasury bonds on his side is completed, and he can report to Garys later.

At present, Tyre's various reforms, coupled with the maintenance of tens of thousands of troops, are truly not enough to cover the expenses.

Tariffs alone, or production in state-owned workshops, could not cover the expenses.

It is unknown how long this wave of national debt can last. As far as Iraklius himself knows, if the war is not ended in 1190, there will be another wave of large-scale borrowing.

I just don’t know who will be able to squeeze out the funds to lend money to the kingdom at that time.

After sighing again, Iraklius took out a beautifully printed treasury bond from his desk.

It says 100 plus a symbol for the dinar, which means that Iraklius is holding a bond with a principal value of 100 dinars.

Such a light piece of paper cost him nearly a pound of Iraqi gold. It really makes people sigh that the Prophet could have robbed it, but he still had to pay interest.

After all, no matter how beautifully the paper is printed, that light and fluttering feeling is impossible to disappear.

Iraklius felt uncomfortable when he thought about how he had spent thousands of dinars just to exchange for a dozen pieces of paper.

Compared to such light paper, he still prefers to regard gold coins and gems as symbols of wealth. At the very least, the silver tableware and candlesticks in the church are actually not bad.

Speaking of the church, I don't know how long I can remain as the Patriarch...

……

Time passed little by little, cadres were recruited, the army was regrouped, large amounts of funds were raised, and everything was ready.

On the other side, in the city of Jerusalem, in the Assak Mosque, Saladin calculated the troops available, the number of artillery pieces, and the routes for transporting supplies.

Saladin was actually not a man who was good at warfare. Compared with on-the-spot command, he was more accustomed to starting from the overall situation.

If you can accumulate tens of thousands of troops, you will never take risky actions. If you can provoke internal unrest among the enemy, you will not resort to military tactics.

If the Leper King had to gamble in order to survive in a desperate situation, then Saladin tended to take the easy way out.

In the eyes of later generations, the confrontation between the Leper King and Saladin was like a competition of who would live longer. The Leper King died in 1186 and Saladin died in 1193, a difference of seven years between the two.

The two fought several times, with both wins and losses.

Saladin suffered a great defeat in the Battle of Montgisard, and the Leper King was almost captured in the Battle of Jacob's Crossing. Overall, Baldwin won more games.

This made Saladin quite fearful.

It can be said that the military conflict between the two put Saladin in a dangerous place. If the Leper King had Baldwin V, who was not a very suitable heir, then Saladin could be said to have no stable heir at all.

The inheritance law of Muslims at this time was quite brutal, whether compared with the Eastern system of primogeniture or the European feudal law.

Historically, after the death of Saladin, there were three civil wars. The first civil war among the various sons of the Ayyubid dynasty directly tore apart the Ayyubid dynasty.

From this perspective, the Leper King was more courageous in facing death than Saladin, because after his death, the Kingdom of Jerusalem could still be unified, but once the Ayyubid dynasty collapsed, it would be difficult to say how things would develop after his death.

(End of this chapter)