Reincarnated as a boss tyrant in the game
#120 - Subprime debt
"During this time, I sold a staggering 670,000 catties of refined salt, and the average price reached 2 silver coins per catty, which brought me an astonishing 67 million gold coins in profit," Soren said with a smug smile, beginning to meticulously review the accounts.
"After the refined salt workshop resumed production, I decisively carried out the first short selling operation, secretly repurchasing 400,000 catties of refined salt. At that time, the unit price was only 1.7 silver coins, and I invested a total of 34 million gold coins. Then, when the market price soared, I decisively sold it off, earning 16 million gold coins in one fell swoop!"
He paused and continued, "Later, when the Pruitt family was clearing out and selling off, I seized the second opportunity to short sell. Although the Crodo family bought up a lot, I still steadily earned 5 million gold coins from this short selling."
This book is first published on 𝚝 𝚠 𝚔 𝕒 𝚗 . 𝕔 𝕠 𝕞 on the entire network.
Soren smiled triumphantly and said, "Moreover, during the short selling period, I joined forces with other families. After dividing some benefits, I myself earned another 21.2 million gold coins."
"In summary!" Soren said, stroking the accounts with satisfaction, "After deducting all expenses, we made a net profit of 103 million gold coins!"
Elizabeth and Gustav looked at Soren in astonishment.
"So much? This result is truly amazing!" Elizabeth exclaimed. Even though she was from the royal family and money was never an issue for her, this number still shocked her.
She asked doubtfully, "However, based on the total amount of refined salt circulating in the market, there shouldn't theoretically be such a large profit margin. How exactly did you do it?"
"The circulation of goods is like the circulation of blood, injecting a continuous stream of vitality into the economic system. Let me tell you a story," Soren said娓娓道来: "Imagine a nobleman from the Northern Lands, who comes to the Imperial Capital with 100 gold coins to attend the grand Ten-Year Noble Ceremony. He chooses a tavern to stay in, handing the 100 gold coins to the owner."
"The tavern owner takes the gold coins and immediately enters the bustling market, using these gold coins to purchase a large quantity of fresh ingredients to ensure the tavern's daily supply. The market vendors then use these gold coins to settle the payment for knives with the blacksmith shop. The owner of the blacksmith shop then uses this money to hire brave adventurers to delve into the mines in search of precious minerals. Finally, these adventurers use their earned rewards to pay off their lodging fees at the tavern. And when that Northern nobleman leaves dissatisfied, he takes back his 100 gold coins, and everything seems to return to the starting point."
As Soren told the story, Horns' eyes widened, and Gustav and Elizabeth were even more astonished and speechless.
"These 100 gold coins are like a gracefully dancing dancer, elegantly spinning on the stage, dancing with everyone. She satisfies everyone's needs, yet returns to the origin unscathed. This is the magic of currency circulation, silently bringing wealth and opportunities to countless people." As Soren's voice fell, Horns had already understood the mystery. And Elizabeth and Gustav, although still somewhat confused, were filled with unspeakable shock.
Looking at the different reactions of the three, Soren smiled slightly and continued, "In fact, what this story shows is not just the circulation of currency. More importantly, it reveals that everyone in economic activity is working to meet the needs of others, while also meeting their own needs. This is a mutually beneficial and common development process."
Horns took a deep breath and exclaimed, "His Seventh Highness's insights in the economic field far surpass those of this old minister. This must be the best gift God has given to His Majesty."
Gustav laughed heartily.
Elizabeth asked curiously, "Soren, in this story, what economic roles do the nobleman, tavern owner, merchant, blacksmith, and adventurer represent respectively?"
Soren respectfully explained, "The nobleman represents the consumer, who drives the economy through consumption; the tavern owner and the merchant are the providers of goods and services, who earn revenue by meeting consumer needs; the blacksmith represents the producer, who creates value by manufacturing goods; and the adventurer symbolizes the investor and entrepreneur, who bear risks and seek greater returns."
Gustav stroked his chin and said thoughtfully, "Then you haven't said why you were able to earn so much money?"
Soren's mouth twitched. Well, the cheap Imperial Father didn't understand a word.
Empress Elizabeth demonstrated her unique diplomatic wisdom. She deftly changed the subject, knowing that some things were more suitable to be analyzed in detail to Gustav in private. So, she chose to leave those complex explanations for the evening, and now, she was guiding the direction of the conversation in another way.
"We can probably understand the previous part, but what kind of charm does the Crodo family possess that allows them to borrow such a huge amount of funds?" Elizabeth asked curiously, and her question obviously aroused the interest of everyone present.
Soren took over the conversation with a meaningful smile, "This involves another level of issue, which is economic leverage." He began to explain how economic leverage plays a role in financial affairs and how a relatively small initial investment can leverage a huge cash flow.
Empress Elizabeth and the others listened with great interest, and the magical effect of economic leverage gradually became clear in their minds. The Crodo family used this financial means,
borrowing a large amount of funds with a smaller mortgage or guarantee, thereby achieving their economic goals.
"So economic leverage cannot be played with. If it collapses, not only oneself, but even the entire family, or even the country, may collapse with it," Soren said finally.
This time, Gustav understood and nodded in agreement.
Soren and Horns left. As soon as they left the Holy Emblem Palace, Gustav couldn't wait to open the wooden box that Soren had sent. Since Horns was there just now, he didn't want to ask Soren how much money he was going to give, so now he could just count it.
Thinking of this, Gustav was a little excited. It had been a long time since he had come into contact with so much money.
When he opened the wooden box, he was dumbfounded.
Not only Gustav, but even Empress Elizabeth was no exception, and finally couldn't help but laugh.
The wooden box was full of IOUs and debt certificates. This was the world's first transfer of subprime debt. The imperial nobles' mutual loans, IOUs, and debt certificates were taken out as real money during the refined salt trade, and most of them ended up in Soren's hands.
Soren counted and found that he only received more than 32 million gold coins, with an additional 71 million in claims, which he gave to the cheap Imperial Father, after all, no one dared to default on the Emperor's debts.
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