Holy Roman Empire

"Welcome everyone to Austria Economic Online, I’m your host Boni.

Today let’s talk about a topic that concerns us all—gold.

As we all know, gold is wealth, the ’Divine Shield’ that we use daily is issued based on a gold standard. It can be said that gold is closely related to our lives; no one can do without it.

In the last month, the Vienna Gold Trading Market has seen gold prices rise by seven percent, hitting a two-year high.

We now connect with Professor Brigitte Foss, an economist who will interpret the impact of the gold price increase for us."

"Beep beep beep..."

Host: "Hello Professor Brigitte Foss, can you hear me?"

...

Brigitte Foss: "I can hear you."

Host: "Professor Brigitte Foss, the recent rise in gold prices has everyone very concerned.

Could you discuss the impact of rising gold prices on the global economy?"

Brigitte Foss: "Certainly, host."

"We all know that gold is a precious metal, typically used directly as currency or as a standard, and its price has always been stable, with little fluctuation.

The seven percent increase in gold prices over the past month can be said to be both unexpected and expected.

You might say that this statement contradicts itself and doesn’t make logical sense, but in fact, it’s not contradictory at all.

It’s unexpected because gold, as a currency and standard, has an immutable value; under normal circumstances, even if fluctuations occur, they shouldn’t be this significant.

However, besides being a currency, gold is also a commodity. Since it is a commodity, its price is determined by the market, and a short-term increase is a normal phenomenon."

"Looking beyond its role as a currency, if we analyze gold purely as a commodity, the reasons for the price increase become clear.

The rise in gold prices at the Vienna Gold Trading Market is not an isolated case. Almost at the same time, gold prices also rose proportionally at the London Gold Trading Market.

The direct cause of this price increase was due to an announcement two months ago by more than a dozen mining giants, including the South African Mining Group and the UK Doss Mining Group, to perform equipment maintenance, which reduced gold production capacity.

This decision directly led to a reduction of 20 tons in the amount of gold circulating on the global gold market last month, creating a supply shortfall that naturally drove prices up.

Equipment maintenance is temporary, and the mining giants need to make money; it won’t be long before production capacity is restored.

Whether gold prices can immediately return to normal levels, however, is uncertain. As time progresses, the gold standard has become the mainstream of the era.

In recent years, the global economy has developed rapidly, and the demand for currency has also increased day by day.

The demand for gold as the standard has likewise been on the rise. However, the amount of gold mined has not increased at the same pace.

In order to meet the currency demand in the market, countries continue to leverage, and while the nominal exchange rate with gold has not changed, the risk of currency devaluation has already emerged.

This recent rise in the exchange price of gold and currencies of various countries includes these factors, as well as inflation caused by excessive currency issuance by nations.

We don’t need to worry about this aspect; the exchange value of the Divine Shield and gold remains stable.

Here I would advise everyone, if not urgently necessary, it’s best not to hold large amounts of foreign exchange.

Because no one knows when the money in your hand might become worthless.

From the current situation, several European countries have already experienced a de facto devaluation of their currencies. If these countries do not stop the irresponsible issuance of currency, it will eventually lead to disaster."

Host: "Professor Brigitte Foss, you just mentioned certain countries’ gold reserves being insufficient, leading to inflation.

So how should these countries deal with such a situation?"

Brigitte Foss: "The simplest method would be to adopt New Bimetallism.

Don’t misunderstand, the New Bimetallism I’m suggesting is not the traditional gold and silver standard but a more advanced Secondary Bimetallism.

For most countries, gold can’t be gathered in a short period. If they still want to maintain the gold standard, then what should they do?

After research, I’ve found that adopting New Bimetallism can perfectly solve this problem."

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Simply put, it is to use reliable international currency backed by credit in place of gold to act as the standard for issuing currency.

This is equivalent to using one portion of gold to act as the standard twice, issuing two portions of currency, while ensuring normal redemption. I call this method ’New Bimetallism’."

…

Without knowing when it started, Franz also developed the habit of listening to broadcasts, although he knew it was all boasting.

The so-called rise in gold prices was actually the Anglo-Austrian two countries, gold-producing nations, artificially manipulating gold prices to mount a blockade against other countries’ currencies.

As for the so-called gold production capacity, isn’t it up to the gold mining countries to decide?

In order to enhance their own currency competitiveness, the Anglo-Austrian two countries have been controlling gold exports, creating trouble for their competitors on purpose.

For countries on the gold standard, not having enough gold reserves spells doom.

The demand for currency in the market won’t decrease just because there’s an insufficient gold reserve; inevitably, everyone must increase the leverage on currency issuance.

This is what the Anglo-Austrian two countries want to see: the higher the leverage, the greater the risk. It isn’t obvious during good economic times, but any adversity could lead to an immediate collapse, with no resilience to risk at all.

The Anglo-Austrian two countries are fiercely competing for currency hegemony, but that doesn’t stop them from joining hands to control the gold pricing, first striking at other competitors.

One could say that from the beginning, the gold standard was a huge pitfall set by the British for the rest of the world. This pitfall was an open strategy, and even knowing the risks, everyone had to jump in.

No matter what, gold is still relatively stable. Even though it can be manipulated, it can’t be overdone! If it gets out of hand, it would affect the interests of the Anglo-Austrian two countries as well.

It’s not that no country has tried to escape this pitfall, but in the end, all have failed. It has been proven that countries playing with the silver standard ended up in even worse shape.

Headed into the latter half of the 19th century, silver has been in a consistent state of devaluation, with fluctuations far greater than those of gold.

As gold standard nations, the Anglo-Austrian two countries would stabilize gold prices for their own interests. The so-called market fluctuations are simply obstacles set against other countries’ currencies.

The magnitude of these fluctuations is typically only a few points and doesn’t last. Generally, after a few months, the market will return to normal.

Simply put, as long as governments buy into gold, its price immediately rises. Once they stop buying, the market soon returns to normal.

The rise is also targeted; there isn’t such an issue when purchasing with British Pounds or Divine Shield.

If you want to import gold, you can’t avoid tariffs, but if you directly use Divine Shield or British Pounds as standard currency, you can achieve the same goal and save on the tariffs for purchasing gold.

At its core, this is a means of promoting currency hegemony, albeit more subtly.

…

After listening to a segment of the broadcast, Franz hung up the phone and said, "Frederick, go inquire about the progress on wireless radio development. This kind of interesting news should be shared with the entire world."

Before the invention of wireless radio, there was no way to talk about wireless broadcasting. Franz was listening to wired broadcasting, a technology that came with the birth of the telephone.

In simple terms, it is linking many telephone lines together to a single source of information.

This fancy technology naturally wasn’t something ordinary people could enjoy. To listen to broadcasts, one needed at least a telephone and to pay a hefty broadcasting fee.

As of now, less than twenty cities around the world have access to broadcasting, and there are even fewer than fifty thousand subscribers.

Austria was at the forefront of the industrial revolution, and its start in broadcasting was relatively early. Vienna has over five thousand paying users, making it the city with the highest broadcast coverage in the world.

This number is nearly at its limit. To raise the broadcasting coverage, wireless broadcasting would need to come into existence.

Given the limited listening audience, it was impossible for broadcast programs to be varied and colorful. Apart from news, there were only popular current event commentaries, occasionally interspersed with a few songs or jokes, passing as entertainment programs.

The only advantage might be the absence of advertisements, not because broadcasting companies don’t want to make money from them but because there are too few users to bring significant revenue.

Moreover, the current customers are high-end users who are not lacking in funds; what they want is premium service.

Frederick shrugged his shoulders and replied, "No need, Father, I just visited yesterday. The progress is quite slow; the transmission distance is still capped at twelve hundred yards (approximately 1097 meters), and there can’t be any obstacles in between."

There was nothing that could be done; after all, Franz’s memory wasn’t good. He had completely forgotten the principles of wireless radio; now everything depended on scientists’ free play.

"Twelve hundred yards," this distance was far from Franz’s expectations. It was barely suitable even for walkie-talkies, let alone wireless telegraphs.

Franz sighed, "Then let it be, let them experiment slowly. Scientific research is all about luck; rushing won’t help."

These words were spoken to Frederick but were also a reminder to himself.

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