Make France Great Again-Chapter 928 - 919: The Art of Cutting Losses
Achille Fould carefully read the newspaper according to the instructions of Jerome Bonaparte.
As time passed, Achille Fould’s expression gradually became grave.
When Achille Fould raised his head, Jerome Bonaparte smiled and asked, "Fould, what have you noticed?"
"Your Majesty!" Achille Fould replied to Jerome Bonaparte, "Are you suggesting that the United States of America might face the same kind of economic crisis that the Kingdom of Britain experienced (such as the British railroad crisis of 1846)?"
"Exactly!" Jerome Bonaparte nodded to Achille Fould and then continued, "However, your summary is not comprehensive enough!
This crisis, like the one experienced by the Kingdom of Britain, will become a crisis that spreads throughout Europe!"
"This..." Achille Fould expressed surprise, not understanding why Emperor Jerome Bonaparte would make such a conclusion: "Your Majesty, that seems impossible!
The United States of America is not the Kingdom of Britain; its economic interactions with us (referring to all of Europe) are not that extensive!" 𝐟𝚛𝕖𝚎𝕨𝗲𝐛𝚗𝐨𝐯𝐞𝕝.𝐜𝗼𝗺
At this time, economic exchanges between the United States of America and Europe were mostly in grain and cotton.
Of course, this did not include the Russian Empire.
"Indeed, the United States of America’s economic interactions with Europe are not extensive, but..." Jerome Bonaparte gestured at the newspaper, "the Kingdom of Britain’s investments in America are considerable!"
Achille Fould was instantly enlightened by Jerome Bonaparte, immediately understanding his implication, "Your Majesty, you mean that the railway crisis in the United States of America is likely to affect the Kingdom of Britain, which would then impact all of Europe!"
"Exactly!" Jerome Bonaparte nodded to Achille Fould, "Consider nearly 33,000 kilometers of railroad! How can the United States of America have so much cast iron and steel plates, let alone so much money?
Aren’t these all covered by British steelworks and banks!
Once the railroad industry of the United States of America falls into decline, the banks that have tasted the bitterness of the railroad frenzy might be the first to want to flee!
As long as one bank panics, the rest will invariably retreat together."
Jerome Bonaparte’s words reminded Achille Fould of the banking crisis that occurred in France several years ago (the crisis of 1848), a crisis that directly led to the downfall of a kingdom and a republic.
The Emperor ascended to power by leveraging that banking crisis.
"Your Majesty, you mean that the banking industry in the United States of America will tighten!" Achille Fould asked Jerome Bonaparte.
"Tighten?" Jerome Bonaparte shook his head at Achille Fould, "No! Fould, you underestimate the size of the bubble created by 33,000 kilometers of railway!
I dare say that once this bubble bursts, the entire American banking sector will face a collapse!
In order to survive, their banks will definitely make the same choices we made in 1848!
However, this will only postpone the end of their lifespan!"
The confident expression on Jerome Bonaparte’s face made Achille Fould fully believe in his words.
Since becoming Minister of Finance, he had never seen His Majesty the Emperor make a misjudgment on major matters.
Achille Fould continued to listen to Jerome Bonaparte’s remarks, "Once the banking sector of the United States of America collapses, their investor, the Kingdom of Britain, will naturally also be affected!
American railroad bonds and stocks in the Kingdom of Britain will inevitably plummet, and those British banks that can’t escape will also bring the disaster back to their homeland.
I ask you, under such circumstances, how can the Kingdom of Britain minimize its losses!"
"By transferring the crisis to the whole of Europe!" Achille Fould blurted out.
"Exactly!" Jerome Bonaparte displayed a satisfied expression, "Only by making the whole of Europe bear this disaster can their domestic situation be alleviated!
Speaking of Europe, there is no better place to transfer the crisis than the German Region!"
Currently, the German Region is not as fragmented as the Holy Roman Empire, but there are still many principalities and free cities.
The Kingdom of Britain easily transfers the crisis to the German Region by simply withdrawing some of its capital from Frankfurt, causing panic among banks in the Frankfurt Region, and then exploiting the panic to reap benefits, thus smoothly transferring the crisis.
Because Frankfurt is the financial center of the entire German Region, it holds a crucial position.
The crisis faced by Frankfurt will inevitably spread throughout the German Region, causing panic across all of Germany.
If the French Empire had no investments in the German Region, then Jerome Bonaparte would naturally be happy to see the German Region harvested by the Kingdom of Britain, and might even participate in the reaping himself.
Unfortunately, the French Empire has invested many francs to win over Wurttemberg, Baden, and Austria.
Apart from the Austrian Empire recovering some of its capital, Wurttemberg Kingdom and Baden Duchy are both in stages where there’s no foreseeable return on investment.
The Kingdom of Britain’s reaping from the German Region will inevitably result in the loss of assets for the French Empire, further causing turmoil in the French Empire’s economic domain.
As of now, the French Empire’s overseas investments have already reached 1.2 billion francs.
Among them, investments in the German Region already account for one-third.
Although 400 million francs won’t critically harm the French Empire, it is enough to make France suffer significantly.
Moreover, the economic turmoil leading to political instability will turn those originally supporting the Empire into those who resent it.
This is why Jerome Bonaparte was hoping for the arrival of the United States of America’s economic crisis at the end of 1855.
If the economic crisis erupted at the end of 1855, Jerome Bonaparte could still use the economic pain caused by war to fool the French people.
Having just enjoyed the glory of the victorious nation, the French people would endure the pain with pride, and by the time they realized it, the French Empire would be flourishing once again.
However, the economic recovery in 1856 allowed the French Empire’s citizens to once again enjoy the dividends of the Empire’s development.
During this period, the Empire’s citizens had absolutely no awareness of the need to guard against an economic crisis.
Faced with a sudden economic crisis, they would naturally direct their anger toward the Imperial Government.
Thinking of this, Jerome Bonaparte’s expression became exceptionally serious, "Foul, we must prepare to prevent rather than remedy the crisis!"
"Your Majesty, should we now proactively shrink some investments!" Achille Fuld said to Jerome Bonaparte.
"Which investments are you referring to?" Jerome Bonaparte asked.
"Investments from the Bank of France and Industrial Bank in the railway bonds of the Kingdom of Prussia and Austrian Empire, investments in the Austrian Empire’s national bonds, and investments in the railway bonds of the Sardinian Kingdom..." Achille Fuld reported earnestly to Jerome Bonaparte.
After pondering for a moment, Jerome Bonaparte said to Achille Fuld, "Reduce holdings in the railway bonds of the Kingdom of Prussia, Austrian Empire, and Sardinian Kingdom as soon as possible!"
"What if the Austrian Empire inquires further..." Achille Fuld asked Jerome Bonaparte.
"I’ll take responsibility for Richard’s side!" Jerome Bonaparte told Achille Fuld, "Also! When reducing holdings of Austrian Empire’s bonds, make sure the actions are not too drastic!
We must not become the culprits who devastate the Austrian Empire’s railway market, and we don’t need to have such concerns for the Kingdom of Prussia!
Just withdraw funds directly and cash out!
Also, contact Cavour for Sardinia and let him accept the Sardinian railway!
Hasn’t he always wanted to reclaim the Sardinian railway rights!
I’m giving him this opportunity!"
"Understood!" Achille Fuld nodded in response to Jerome Bonaparte.
"Also, pay some attention to the major banks domestically! Investigate where they are losing money!
If the loss is clear, the Bank of France should compensate them!
If they can’t be compensated, allow the Bank of France to reorganize them!
Tell the board of the Bank of France not to fear losing money!
If an economic crisis arrives, their losses will be even greater!" Jerome Bonaparte continued to instruct Achille Fuld.
A bank’s financial collapse is not necessarily frightening for a country, but the timing of its collapse is.
If the bank is in a period of economic prosperity, then the bank’s collapse after it occurs won’t be too enormous.
At most, it would only affect the deposits of tens of thousands of people.
But if a bank collapses during an economic downturn, it could be like a domino effect, igniting other banks that originally didn’t have significant problems.
By then, the entire country would face economic turmoil.
Investigating the status of major banks during economic periods domestically, though it cannot effectively prevent economic crises, can slightly reduce the likelihood of an economic crisis.
"Your Majesty, some members within the Bank of France might not comprehend your painstaking efforts!" Achille Fuld replied to Jerome Bonaparte.
"Hmmph!" Jerome Bonaparte snorted coldly, glancing sideways at Achille Fuld.
