Hauptman Cartel Future

He may be a pauper by now , after Oyster Bay he probably only has 1 trillion Dollars left.

George J. Smith wrote:He may be a pauper by now , after Oyster Bay he probably only has 1 trillion Dollars left.

Yeah, with the Blackbird yards gone, Honor probably took a great hit herself. Of course, she still has Skydomes Ltd. while he is still dealing with the effects of Lacoon 1.

pappilon wrote:

George J. Smith wrote:He may be a pauper by now , after Oyster Bay he probably only has 1 trillion Dollars left.

Yeah, with the Blackbird yards gone, Honor probably took a great hit herself. Of course, she still has Skydomes Ltd. while he is still dealing with the effects of Lacoon 1.

I would also expect that the Manticorian and Grayson governments would extend exceedingly generous loans possibly even at negative intrest or even outright gifts to such well established naval construction companies as part of the general post OB recovery spending.

Silverwall wrote:I would also expect that the Manticorian and Grayson governments would extend exceedingly generous loans possibly even at negative intrest or even outright gifts to such well established naval construction companies as part of the general post OB recovery spending.

Considering that they are attempting to replace infrastructure worth one or more decades worth of Gross System Product you could ask exactly where the money for that comes from.

It's like the US government deciding on issuing $200 trillion in 20 year infrastructure bonds next week. Considering that the tax revenue for the entire 2017 US (local, state and federal) was about $6.25 trillion, and we are running a multi-billion deficit every year, would you consider that this is a safe investment for your entire retirement savings?

kzt wrote:Considering that they are attempting to replace infrastructure worth one or more decades worth of Gross System Product you could ask exactly where the money for that comes from.

It's like the US government deciding on issuing $200 trillion in 20 year infrastructure bonds next week. Considering that the tax revenue for the entire 2017 US (local, state and federal) was about $6.25 trillion, and we are running a multi-billion deficit every year, would you consider that this is a safe investment for your entire retirement savings?

That gets into macroeconomics, where the benefit of fiat currency and monetary policies allowed controlled inflation based on the rates of those bonds. Also the benefits of other governments who want to divest their own funds.

In the real world such bonds get issued all the time and its often a manner of risk management. And its a matter of Debt to GDP ratio as well as a relative risk. Eg. I'm a banker in the neutral republic of neutral, I'm looking at a bond from Manticore, which normally has great credit, a good long term economy, and due to very risk averse practices and their wormhole junction a very low debt to GDP ratio.

In peace time, those bonds would be amazing as a safe bet, since Manticore has always paid off debt. Manticore could get away with a low interest rate.

Now in wartime, it's a bit more complicated. I have to think about what happens if they lose. Are they going to be taken over whole and have a new government that repudiates debt? Are they going to be absorbed? Will the final government after it all shakes out still recognize our debt?

So if I'm a neutral banker looking at Manticore war bonds, I'm either going to want a much higher interest rate, or I want evidence of success. Eg. Victories sell war bonds.

Plus, Manticore has a very large and wealthy population who may be convinced to buy war bonds with a low interest rate as a patriotic donation. Suend Honor and Nimitz to some events where they wave and read a speech about war bonds. Get Sir Horace Harkness, PMV, to re-enact his brave escape in a war bond rally.

Combine this with Haven and Beowulf providing additional aid and markets for bonds, and it makes a bigger internal market.

For comparison, during WW2, the US sold about as many bonds as the entire GDP of the country. During WW1 the US raised about 30 times the pre-war federal budget.

There is also the matter that Manticorans have been investing outside their star nation since the WJ began generating huge trade surpluses. Had they not invested abroad, their economy would have experienced massive inflation until they did begin to invest abroad.

How many years of increasing WJ investment earning modest returns? 2-2.5 centuries? Let's see, 2 centuries of investing say 5% of the GSP associated with the WJ earning 4.5% compounded annually is a tidy bit even if 20% of the contribution in any given year is lost. Let's assume that 200 years ago WJ associated activity represented 20% of Manticore's GSP. Further assume that WJ economic activity grew at 1.75% compounded annually and the rest of the economy grew at 1%. At the end of 200 years WJ contribution to GSP is 52% with the rest of the economy contributing 48% and the total amount invested from the 5% of WJ proceeds is 159 times the current SEM GSP just prior to the Yawata strike.

Liquidating those assets to reinvest in the SEM will go a long way to financing its domestic infrastructure needs. This quick analysis would suggest there is a surplus of wealth available to be liquidated and invested into domestic infrastructure. Also, liquidating amounts in excess of the needed infrastructure investment will cause serious problems for the League when those League assets are sold. The SEM has almost half if not more of one year's Core Worlds GSP in accumulated wealth. Securities markets in the SL are likely much, much larger than those holding, but the SEM holdings are large enough to hose over every regional market they wish to divest from.

They were in a war to the knife with Haven and were jacking up tax rates to the the point where they were running into serious opposition. Do you REALLY think they had access to decades worth of GSP squirreled away that they were saving for a rainy day? Do you think that High Ridge wouldn't have spent it?

kzt wrote:They were in a war to the knife with Haven and were jacking up tax rates to the the point where they were running into serious opposition. Do you REALLY think they had access to decades worth of GSP squirreled away that they were saving for a rainy day? Do you think that High Ridge wouldn't have spent it?

What I calculated was the PRIVATE wealth invested OUTSIDE the star kingdom available to be liquidated and reinvested. So yes, I do believe they have those sources of PRIVATE wealth to liquidate and re-invest.

PeterZ wrote:What I calculated was the PRIVATE wealth invested OUTSIDE the star kingdom available to be liquidated and reinvested. So yes, I do believe they have those sources of PRIVATE wealth to liquidate and re-invest.

Given that 80% of the population and over 95% of the wealth of humanity is in a star nation that the SEM is at war with where is this supposed to be squirreled away? I understand that it was pretty hard for an US or UK citizen liquidate their Messerschmitt AG stock in January 1942. Do you really think the notoriously rapacious SL bureaucrats won’t take advantage of the situation? Not to mention that the SEM seems to think that trading with the enemy is a big deal.

kzt wrote:

PeterZ wrote:What I calculated was the PRIVATE wealth invested OUTSIDE the star kingdom available to be liquidated and reinvested. So yes, I do believe they have those sources of PRIVATE wealth to liquidate and re-invest.

Given that 80% of the population and over 95% of the wealth of humanity is in a star nation that the SEM is at war with where is this supposed to be squirreled away? I understand that it was pretty hard for an US or UK citizen liquidate their Messerschmitt AG stock in January 1942. Do you really think the notoriously rapacious SL bureaucrats won’t take advantage of the situation? Not to mention that the SEM seems to think that trading with the enemy is a big deal.

Some of it is probably in Beowulf and co. But I also suspect a lot of it is locked up out of their reach.

Regardless Manticore isn't rebuilding its infrastructure on its own. Haven and Beowulf are helping. I think the Andermani are too. I doubt Haven or the Andermani are doing it out of the goodness of their hearts though. In fact, I bet the Andermani see this as the greatest investment opportunity ever! Manticore doesn't actually need to pay to rebuild their infrastructure if they let other people pay.

The downside to not paying is that all those juicy capital profits won't be going to your citizenry. Sorry Hauptman and Honor. The upside though is the trade/investment ties will help glue the Grand Alliance together. If your retirement fund is Manticorian ship yards you are a lot less likely to want to invade!