I saw this idea a while back, but perhaps Tiera could change to a flat currency at a certain time, and have people exchange their crowns for it before a certain deadline where crowns won’t be accepted as Tierras currency, and sell off those crowns, though I guess it depends how much money those metals can be sold for. Anyhow, a flat currency would be useful either way, though it wouldn’t be easy going against Takara and Kians interests, If it cannot be done then perhaps we can simply “threaten” to do it unless Takara and/or Kian throws us a bone or few, though it could bite us in the ass if they are not interested in having good relations with Tiera.
The thing is, how commodity backed currencies work is that you pick a good like gold, usually you decide the weight and all that for how much gold is in your currency.
So 1 Tierran crown is worth x ounces of gold. So if it’s like 85% gold and it weighs 8 ounces, the value of the currency is decided that way.
With Fiat currency $1 is $1 because the government says it is.
So in order to do a currency buy back- the government would need to give everyone the amount of money it would take for the value to offset which is a lot of money.
Just curious… Outside of finding massive silver deposits in Mexico, how in the Infinite Sea world could a country get an over/under supply of gold or silver. There is probably a great deal of gold/silver currency in circulation and not in banks.
Would there be any appreciable advantage/disadvantage (if switching to fiat money) to simply decreeing that a crown is worth 1c, without changing the coin?
I feel like I’m missing something obvious, but most of what I know of messing with the currency’s value is rather earlier than 1800.
That’s pretty much a given, it would be foolish to not pay back the citizens of a country on the brink of a depression, stealing all the money of the Tierran that exchanged owns would be a good way to start a rebellion, but anyhow I don’t see how that’s a problem if the government makes a massive purchase of some sort of metal thats worth like 10 cents, you could purchase a crapload of them for simply 1 crown alone.
Okay so Tierra has banknotes, which is what will make this process easier. Because of the banknotes the next thing to do would be to standardise the denominations of the bills.
For example 1, 5, 10, 20, 50, 100 and so on. The problem is that unless @Cataphrak can clarify is the composition of the Tierran currency namely is it 90% silver for a Tower and 75% for a Gryphon and the weight of the coin since they should have a standardised weight for each coun respectively. The way a gold backed banknote works is similiar to a modern fiat note except what they do is when someone turns in the note to a bank and ask for its value in gold or silver, they are issued gold and silver from the bank vault worth the amount of the bill.
To change it to a Fiat currency, you remove the whole getting the commodity in exchange for the bill while also ensuring that you maintain control over the silver and gold bulion that your nation holds and would use to back your currency.
That sounds spontaneously simple to do in terms of “The currency is now worth X. Any questions, talk to the Grenadiers.” and complex at getting the obvious responses to that calmed down.
Find more in Kian or Takara or under the ocean as their technology improves would be one way. Another possibility is increase scarcity because of technological or cultural changes. Gold or silver become in fashion for clothing or jewelry in a country that produces it like Takara for one. Some bane-oriented tech, gold as a conductor for example, is developed in a gold producing country for another. Inherently a commodity based currency are subject to commodity economic forces. That is generally speaking not good for something being used as a medium of exchange.
Honestly, the big evil Aetorian banker is smiling because they probably hold all the bullion and loan it out to smaller banks around Tierra. The problem is when these banks loan out the money and the farmers can’t pay them back because the price of wheat is too low and they can’t buy anything and the banks start to lose their money and collapse, the farmers lose their homes, and the bigger banks start to collapse and next thing you know we are sitting on top of a depression and crying.
Then the currency gets reduded to being nothing and we can’t pay our national creditors back and they repo the whole country as collateral.
Kian: “All according to plan.”
Someone help me my economy broke and I don’t know how to fix it.
Kian walks in
“Oh that’s tragic let me help you…”
Takara walks in
Antar walks in
“Bar the door before the M’hidiyossi show up.”
We owe the most money to Kian and you can bet that they will leverage every bit of that.
Namely the fact our banks are probably still functioning because of Kian bank loans.
Yes, but Takara has the advantage of superior military force, while Antar has the advantage of being the main reason had to go into debt in the first place.
They have the advantage of a superior navy. If the Kian can station one of their armies on Tierran soil we will be far more of a headache than anticipated, same if they leverage the use of one of our ports to station a detachment of their boats.
A centralised economy means a centralised state, in a way which might well mean the king wiping his ass on the Oath at Montjoy.
I feel like Edwin made far too many promises.
I get that securing loyalty and uniting the kingdom is extremely important, but he really backed the future generations into a corner.
I’m not sure I’d really criticize Edwin for that. The idea that the king should be the supreme power and the dukes (or equivalent titles) nothing more than his lieutenants has rarely been a smooth progression for any country.
I mean, I love centralization, but I’m saying this as someone with good things to say about the Byzantine period of the Roman Empire. Looking at Western-Central Europe, I don’t think Tierra is that terrible for a young kingdom.
I think a relatively common theme throughout history is leaders making compromises and decisions that benefit the nation in their time, only to cause new crises for their descendants further down the line.
It’s hard to blame Edwin for lacking the foresight necessary to stave off problems 100 years down the line while still securing his grip on power in a very unstable and heady time. They may be a pain in the ass now that Tierra is a relatively established kingdom, but it was vital to forging said kingdom in the first place.
But some of the policies he used to ensure his own rise to the top (letting people purchase commissions in order to get Aetorians into positions of power) should have been a clear bad idea at the time.
I understand why he had to make many of those promises, all I’m saying is that he should have had more foresight. I don’t expect him to predict every problem, I just expect him to be a bit more careful and rational. When he came up with the various branches of government, it’s like he just sat down and said: “Alright, the Intendancy will cover anything I haven’t already thought of”, which then turned out to be a great deal given their various responsibilities.