Chapter 1425: 1331: Imported Inflation

Capítulo 1425: Chapter 1331: Imported Inflation

Bertier continued to report on military affairs: “Regent Frederick guaranteed at least three ships of our ‘goods’ every week. The first batch of supplies should have arrived in Gdansk a few days ago, mainly military uniforms and gunpowder.”

Joseph knew that among the three armies encircling Russia, only Poland was relatively strong, so France’s support mainly targeted the Polish Army.

Considering that Prussia would surely not want to see Poland grow stronger, relying on them to transport supplies to Poland would likely encounter deliberate delays.

So he sought help from Denmark to mix military supplies with merchant ships headed for Gdansk. After Prussia’s surrender, the “Gdańsk Corridor” was reopened, and thanks to its mature transportation system built over centuries, it could sustain Poland’s logistics consumption.

Poland’s own grain was very abundant, plus the military funds and ammunition provided by France; given their blood feud with Russia, even if it would take decades of fighting, they would not retreat.

Although the Persian Army’s combat strength was generally average, they held geographical advantages and could carry out logistical supplies at very low costs, thus engaging in a war of attrition with Russia.

As for the Ottoman Empire, the best choice would be to engage Russia near the Danube River, but Salem III worried this might lead Austria to intervene—it’s very close to Wallachia—and wanted to take advantage of the Persians drawing Russian attention to sneak into the western territories of Georgia.

“Very well.” Joseph nodded, “Now the British will have a headache.”

“British?” The Chief of Staff was momentarily puzzled, then continued, “Yes, Your Highness, the Russians indeed might seek assistance from England, but given England’s current financial situation, they will likely just dismiss them casually.”

Joseph smiled and said, “No, I mean regarding finance.”

…

Ten Downing Street.

William Pitt Junior frowned at the report in his hand and addressed the Bank of England’s governor, Sir Watkin, “Such high interest rates, and only 850,000 pounds were sold?”

It’s been a month and a half since a major interest hike on British national debt, yet the sales situation hadn’t picked up.

According to the plan, 5 million pounds of national debt must be sold by year-end, with another similar amount to be added in the first quarter of the coming year to ensure domestic fiscal stability.

And now it’s already close to the end of November.

Sir Watkin shrugged helplessly, “You’re aware, recent grain prices have skyrocketed, leading potatoes to follow suit.”

“What does this have to do with national debt…”

William Pitt Junior stopped midway, suddenly realizing.

Big investors have turned to speculate on grains for quick returns. Meanwhile, ordinary people worry about affording meals, leaving them hesitant to buy national debt.

“Damn French people!” He slapped the desk angrily.

Right after the British debt interest rate hike, the erstwhile crucial wheat seller, Algiers, suddenly announced that they would cease selling wheat to England. It’s pretty obvious that the French Government was behind this.

Soon, Poland signed some “long agreement price” with France, diverting most grain exports there.

Upon these news reaching London, the wheat prices in England soared by 15%, continuing to rise.

Previously, William Pitt Junior was only concerned about bread subsidies for big cities but now realized that this would also hinder national debt sales.

He firmly clenched his cane, nodding, “Alright, seems we must import large quantities of grain from Russia.”

“Even potatoes, Prime Minister,” Sir Watkin suggested.

Though Russia’s distance meant higher transportation costs, domestic grain prices had far exceeded these costs in England.

After discussing strategies to boost debt sales, Sir Watkin took his leave.

William Pitt Junior picked up his pen to write a letter to the ambassador in Russia, asking him to discuss bulk purchase pricing with the Russians, when Earl James Harris, Trade Committee Chair, rushed in: “Prime Minister, there’s big trouble in the Oresund Strait.”

William Pitt Junior gestured to the chair, “No need to hurry, take your time.”

“The Danish said they discovered Russian merchant ships smuggling weapons to Norway and have started strictly restricting Russian ship passages through the strait!”

William Pitt Junior frowned deeply.

Although Norway always had hints of independence, Russia had no reason to meddle there—it would only benefit the Swedes.

“How long will they hold?”

“I heard Frederick just dispatched someone to Saint Petersburg for negotiations, which might take around two months.”

William Pitt Junior’s frown grew deeper, hurriedly instructing, “Immediately head to Copenhagen with Lord Hawkesburg. Oh, have a detachment fleet from the North Sea Fleet accompany you.”

At least 70% of merchant ships departing Russia from the Baltic Sea made stops at British ports, carrying timber, flax, oil, rope, and other essential items for Britain, impacting industries from shipbuilding to glass and dyeing.

But William Pitt Junior believed that as long as the Foreign Minister intimidated the Danish with a fleet, the Oresund Strait would soon open.

However, within a week, Lord Hawkesburg sent updates saying the Danish were deeply angered, threatening to go to war with Russia to uncover the truth.

By then, news about Russian merchant ships unable to dock had reached London.

Originally, such events wouldn’t stir significant market fluctuations, but the recent grain price hike turned the British into startled birds, initially elevating flax prices by 10%, followed by whale oil and furs.

Of course, Joseph had planted “white gloves” in Britain early on, to start high-priced purchases of these items once word spread, inciting market panic.

This maneuver wouldn’t waste funds and might even turn a profit—correctly timed sales amid rising prices generate profit.

William Pitt Junior began sourcing goods to stabilize prices while increasing diplomatic pressure on Denmark, though he overlooked the rapid inflation affecting Britain due to these events.

Indeed, this era lacked systematic inflation assessment, as the government wouldn’t calculate inflation proactively, usually waiting until its effects were clearly seen to take action.

For ordinary British people, the year’s end months felt like everything kept rising in price, except salaries.

For Sir Watkin, not only were national debts stagnant, but even bank deposits also saw continual decrease—

People found their money increasingly insufficient, leaving no surplus for savings.