CHAPTER 557: CHAPTER 548 PARTING WAYS_2

The Bank of France, which sixteen years ago could raise 45 billion gold francs in a very short time, is now facing the risk of collapse due to the issuance of an additional 300 million francs in paper currency.

No matter how you think about it, it’s an impossible scenario.

The only possibility is that Count Algou himself does not want to see the reserves stored in the Bank of France diluted.

After all, even if only a small portion of people convert their paper currency into gold, it would still be a significant amount.

Count Algou is very afraid that the paper currency will become worthless like the Certificates of the revolutionary government due to the government’s excessive issuance.

The Great French Revolution impacted not only French politicians but also some of the old banker families.

The bankers who experienced the Great Revolution saw their forefathers change into conservative financial rest adherents after witnessing the revolutionary government’s uncontrollable use of radical monetary policies that led to massive inflation; thus, the bankers born around the revolution rejected all radical strategies, wishing only to establish a sustainably profitable institution.

For the bankers who can’t even tolerate Saint-Simonism, Jerome Bonaparte’s diminished version of Keynesianism is simply destroying a country!

Jerome Bonaparte even believed that if he himself were not the emperor, such a theory could never be implemented by the Bank of France.

To say the least, Count Algou has shown enough respect for Jerome Bonaparte by enduring for so long before confronting him.

"Indeed! Your Majesty, 300 million francs is the limit that France can bear! If it continues, prices will face a significant rise, and the market will also be thrown into chaos!" Count Algou said to Jerome Bonaparte.

Jerome Bonaparte contemplated for a moment, then shrugged and said, "Count Algou, what do you think we should do now?"

Hearing Jerome Bonaparte’s inquiry, Count Algou thought the emperor accepted his suggestion, and he hurried to reveal his "life-saving recipe": "Your Majesty, I suggest that we immediately stop issuing new currency from now on, cut unnecessary government expenses, and cancel the subsidies for agriculture... Only in this way can we prevent malicious inflation and bring our economy back to its healthy values."

As soon as Count Algou finished speaking, Jerome Bonaparte widened his eyes and looked at Count Algou.

"Your Majesty, did I say something wrong?" Count Algou looked at Jerome Bonaparte in confusion, not understanding why the emperor looked at him with such an expression.

Wrong? Are you trying to ruin me?

At this moment, Jerome Bonaparte screamed inwardly.

Jerome Bonaparte was all too familiar with Count Algou’s "cure" for economic inflation.

This method of restraint has an elegant name in later generations, known as "shock therapy."

Any country that has applied shock therapy has invariably fallen into chaos for some time, and the scale of this chaos is dependent on the depth of market economy.

For a country like France, which has yet to establish a unified large market (including the UK at this time, the majority of countries had not established a unified large market.), using "shock therapy" is tantamount to suicide.

Jerome Bonaparte did not know whether the French market could withstand Count Algou’s life-saving remedy, but he was certain that his seat couldn’t bear it.

Jerome Bonaparte was certain that once he stopped issuing currency and cut government project expenditures, what awaited him would be deflation.

Deflation would lead to massive unemployment, and the angry Parisians might not wait for Count Algou’s control measures and would drag him to the Tuileries Palace and directly onto the Gallows!

"Count Algou, do you know what you are saying?" Jerome Bonaparte’s tone became stern as he said, "Your actions will lead to massive unemployment across France! The angry Parisians will drag us both directly to the Gallows!"

"No... no! Your Majesty, I’ve calculated that as long as we..." Count Algou wanted to explain to Jerome Bonaparte that his policy would not result in mass unemployment.

"Calculate? If economic problems could be solved by simple calculations, then the world’s most knowledgeable economists should be mathematicians!" Jerome Bonaparte said to Count Algou with a stern face, "You just said that inflation causes unrest, then I ask you, won’t deflation cause unrest? {Jerome Bonaparte paused and shook his head} No, it will cause even more widespread unrest!"

"Your Majesty, the bank no longer has sufficient reserves! If it continues, the Bank of France is very likely to..." Count Algou responded to Jerome Bonaparte.

"Reserves? I thought the Bank of France already has sufficient British bonds in reserve? Just have the British bank offer a discount!" Jerome Bonaparte told Count Algou, "And haven’t you, along with the Bank of England, been targeting the gold held by the United States and Russia? Are you telling me it failed?"

"Your Majesty, just a few days ago the Bank of England raised the discount rate on bills from 4.5% to 5.5%! If we were to redeem the English bills now, we’d incur massive losses!!" Count Algou responded to Jerome Bonaparte.

"From 4.5% to 5.5%!" Jerome Bonaparte could not help but raise his voice, "Why doesn’t the Bank of England just rob us?"

For a bank like the Bank of France, which holds a significant amount of the Bank of England’s debt, every percentage point increase in the discount rate means that a large sum of money is swallowed by the Bank of England!

The increase by 10 percentage points by England in one go is simply determined to prevent the Bank of France from redeeming.

"Your Majesty, in fact, this is faster than robbery!" Count Algou answered Jerome Bonaparte.

"Don’t worry! I will personally intervene in this matter!" Jerome Bonaparte responded to Count Algou, "By the way, you still haven’t told me how the effort to target the gold market of the United States and Russia is going?"

"Your Majesty, we are currently still locked in a standoff with the Bank of England and the two countries, the United States and Russia, and it is estimated that it will take another six months to settle the matter! Because of this, the bank’s reserves are flowing into the market like water." Count Algou subtly expressed his dissatisfaction to Jerome Bonaparte.

"Alright! I understand what you mean!" Jerome Bonaparte nodded, stood up, walked to the window, and looked at the setting sun, slowly saying, "Count Algou!"

"Your Majesty!" Count Algou hurriedly responded.

"Do you know why I chose this place as our conversation venue?" Jerome Bonaparte turned around, backed by the window, with a false smile.

Count Algou shook his head, not understanding why Jerome Bonaparte went out of his way to summon him to the Elysee Palace for a discussion.

Clearly, the Tuileries Palace is a very suitable meeting place.

"Five years ago!" Jerome Bonaparte extended five fingers, pointed to the room in front of him, and said to Count Algou, "We met in this room at that time, and you were more energetic than you are now!"

As Jerome Bonaparte finished speaking, a feeling of ominous foreboding swept over Count Algou.

Your Majesty wouldn’t want...

"Your Majesty, I certainly remember back then you..." Count Algou attempted to play the emotional card with Jerome Bonaparte.

"Oh! Five years have gone by in a blink!" Jerome Bonaparte sighed and pointed to Count Algou, saying, "We have both grown old!"

As soon as Jerome Bonaparte’s words fell, Count Algou felt a rush of dizziness.

If he had not been sitting on the sofa at that moment, he might have already collapsed to the ground in a stupor.

For Count Algou, His Majesty the Emperor’s meaning could not be clearer.