Chapter 968: 876: Reverse Operation

Chapter 968: Chapter 876: Reverse Operation

Joseph gently traced the edge of the report with his fingers, lost in thought.

He initially thought that the incident was an adventurous speculation by those lineage capital magnates—their historical actions were similar against British Pounds, attacking Britain’s gold reserves in the early 19th century, profiting tremendously from fluctuations in the British Pound.

Unexpectedly, it was initiated by the British.

If that’s the case, then the previous countermeasures might need to be adjusted.

Fouche suggested from the side, “Your Highness, perhaps we can invoke wartime regulations to freeze those funds as ‘enemy destructive capital.'”

Joseph shook his head thoughtfully:

“No, the market doesn’t care whether it’s British money or Wurttemberg money. People will just lose confidence in the franc due to our refusal to exchange francs for gold.

“Furthermore, a lot of it is French money, and it’s difficult to distinguish.”

Currently, the franc is in a period of rapid expansion, especially in widespread adoption by the Italian States.

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

Inter-governmental financial exchanges account for very little money.

Like the German states, after more than a year, they still have 60% to 80% of francs untouched.

Largely because German civil transactions habitually use florins, thalers, and other currencies.

Promoting private trade is the focus.

As they talked, Eman brought in Brian and Lafitte.

Joseph greeted the two, and immediately handed them the Intelligence Bureau’s investigation report:

“That’s the situation. Next, we need to adjust accordingly.”

Brian nodded. The British must have a massive amount of funds available. If according to Crown Prince’s previous instructions we go all out in backing the franc, France’s finances might not stand a chance against the British.

“Your Highness, we can try to enact wartime regulations…”

Joseph immediately rubbed his forehead, realizing his advisors were indeed thinking alike.

He considered for a moment, and said, “Archbishop Brienne, from now on, we’ll follow along and short the franc.”

“What?!”

Everyone in the room was shocked.

The British aim to bankrupt French finances through shorting the franc; is His Highness preparing to defect?

No, France belongs to him; even if someone defects, he certainly wouldn’t.

Lafitte cautiously said, “Your Highness, you mean ‘going long,’ right?”

“No, shorting the franc,” Joseph said firmly. “Publicly, the government continues its previous stance, including lowering gold exchange fees and declaring via newspapers that the Bank of France Reserve has abundant gold reserves.

“Then, officials from the Bank of France Reserve and the financial system secretly leak news through private channels that our gold reserves are very tight.

“Additionally, have influential nobles, such as Count Mirabeau, even the Count of Provence, send their subordinates to quietly exchange gold at the Bank of France Reserve, inadvertently seen by some.”

These actions were too unexpected, calming Brian and the others, waiting for Crown Prince’s explanation.

After all, His Highness has previously executed countless bewildering maneuvers resulting in decisive victories over opponents, so they were already accustomed.

Joseph continued:

“Also, give civilians some ‘hints,’ like inviting citizens to tour bank vaults, inadvertently revealing flaws.”

“Once the market starts believing ‘something’s wrong with the franc,’ it’s time for us to act.”

He looked at Fouche: “The Intelligence Bureau needs to quickly establish contact with the British operating to short the franc in Paris, at least reaching their lower-level operatives.

“The more dangerous the franc, the more eager the British are to completely defeat us.

“And their ‘ammunition’ in francs must be insufficient—according to your investigation, they only have less than 30 million banknotes. There may be other channels, but the total won’t exceed 40 million.

“At this point, they’ll try all means to gather more banknotes to attack our gold reserves.”

Brian’s eyes lit up, he continued, “The British would actively reach out to the internal traitors providing funds, Mr. Fouche immediately arrests them!”

Joseph sighed, shaking his head, “No, Mr. Fouche will arrange some people to impersonate speculators or small bank directors, offering them high-interest banknote loans.”

Brian and the others couldn’t help but protest: “Your Highness, this might not work!”

“Your Highness, the British will definitely use those banknotes entirely to exchange for gold…”

“Our gold reserves definitely won’t hold out…”

Joseph smiled, “Everyone, don’t be nervous. The situation is safe if development remains under our control.

“Firstly, the Intelligence Bureau should eliminate domestic capital following trends to exchange gold as much as possible. You can secretly warn or use special means to temporarily prevent them from mobilizing funds.”

Brian said, “For instance, have the tax office repeatedly audit accounts.”

“Exactly,” Joseph nodded, “As for civilian withdrawals, reducing bank counters and lowering bank employee efficiency to mitigate effects.”

“In short, focus the funds consumed by shorting exclusively on the British.”

Brian said nervously, “Your Highness, what if our gold reserves are truly exhausted?”

Joseph raised two fingers:

“Firstly, prepare the Northern Italian countries to exchange gold and silver coins for francs in large quantities when needed. The Italian States are very wealthy, consuming forty to fifty million francs combined is not a problem.”

“Secondly, have the Paris Futures Exchange announce they will no longer accept gold coins for purchasing sugar.”

Everyone in the room fell into deep thought. After a moment, Lafitte reacted first, enthusiastically saying, “If I didn’t know Your Highness’s age, I would have thought you were a financial expert with decades of experience!

“Italian countries buying francs can greatly boost market confidence in francs while supplementing our gold reserves.

“And if gold coins cannot purchase sugar, only francs can be used for it. This further strengthens franc credibility while increasing the amount held by people.

“Under the continuous backing of the franc, the trend-following of selling francs for gold disappears, making it impossible for the British to exhaust our gold reserves even with a lot of banknotes.”

Brian nodded, saying, “Unless they can raise more than 100 million francs. But the loan channels are under our control, they’ll certainly not acquire that much…”

Lafitte continued, “As long as they can’t exhaust our gold, they’ll face high interest payments afterward!”

That could be as high as 25% or more annual interest.

Fouche suddenly spoke up, “Your Highness, what if the Italian States are unwilling to help us?”