Bank Of Charis

There has been some speculation about what to do with the ten trillion dollars of Gold reserves that are found in the first deposit in Silverlode.

I suspect that however it is used a lot of it will directly or indirectly support breaking the temples strangle hold on Safehold.

If that is the case I wonder if some sort of cross between a US federal bank, world bank, and IMF will be founded. This bank could be called the "Bank of Charis."

After all imagine if Britain in 1860 found ten trillion of Gold reserves!

I could imagine poor countries like Sodar the border states and Delfarhk been prime candidates for low interest loans subsidies etc.

These loans would give Charis "soft power" options as well as its Navy having "hard power" options in the (cold war?) peace that will soon happen.

The temples stranglehold on the mainland finance will be broken not by war soldiers and fighting but by suited bankers offering low interest compassionate loans to people desperate to break the cycle of poverty and governments bankrupted by the current war.

I believe the Bank of Charis should remain firmly under the control of the House of Ahrmahk. The Emperors and Empresses of the Empire of Charis will give up authority over much of their authority to Parliament. If they keep control over the armed forces and monetary policy, they maintain a solid check against the legislature.

Also, since the House of Ahrmahk has such a massive reserve of bullion, they have an incentive to maintain a strict gold standard once paper currency becomes more popular. Having a central bank that can print money backed by nothing is a recipe for too many troubles.

PeterZ wrote:I believe the Bank of Charis should remain firmly under the control of the House of Ahrmahk. The Emperors and Empresses of the Empire of Charis will give up authority over much of their authority to Parliament. If they keep control over the armed forces and monetary policy, they maintain a solid check against the legislature.

Also, since the House of Ahrmahk has such a massive reserve of bullion, they have an incentive to maintain a strict gold standard once paper currency becomes more popular. Having a central bank that can print money backed by nothing is a recipe for too many troubles.

I'm not sure paper money is going to be all that popular any time soon, not with the Temple issuing so many IOUs that it can't pay that those IOUs have practically BECOME a form of paper money. Backed by Inquisitorial fiat no less (ie, "Refusing to accept this promissory note as payment is heresy!").

Under ordinary circumstances, establishing a Bank of Charis would be a very good idea, but since Charis is locked in a life or death struggle with the Temple, it would not work.
The "Bank of Charis" could loan money to the princedoms and kingdoms in the Empire OK, but if it were to make a loan to some kingdom still controlled by the CoGA it would be the same as swearing an oath of allegiance to the EoC; since the EoC is under the interdict, the group of four would say that the obligation to repay the loan is invalid, and would not allow the recipient of the loan to repay it. They would just take the money and laugh at Charis.
Philip Stanley

PeterZ wrote:Also, since the House of Ahrmahk has such a massive reserve of bullion, they have an incentive to maintain a strict gold standard once paper currency becomes more popular. Having a central bank that can print money backed by nothing is a recipe for too many troubles.

This is an important point, the gold doesn't belong to Charis, but rather the House of Ahrmahk.

evilauthor wrote:I'm not sure paper money is going to be all that popular any time soon, not with the Temple issuing so many IOUs that it can't pay that those IOUs have practically BECOME a form of paper money. Backed by Inquisitorial fiat no less (ie, "Refusing to accept this promissory note as payment is heresy!").

The reason people have problems with the IOUs that the Church is handing is that it's the Church that's handing them out.

Philip Stanley wrote:Under ordinary circumstances, establishing a Bank of Charis would be a very good idea, but since Charis is locked in a life or death struggle with the Temple, it would not work.
The "Bank of Charis" could loan money to the princedoms and kingdoms in the Empire OK, but if it were to make a loan to some kingdom still controlled by the CoGA it would be the same as swearing an oath of allegiance to the EoC; since the EoC is under the interdict, the group of four would say that the obligation to repay the loan is invalid, and would not allow the recipient of the loan to repay it. They would just take the money and laugh at Charis.
Philip Stanley

Hi Philip

I'm thinking after the current war.. (as said in my post)
I think there will still be a majority of the mainland that will be TLs yet trading with Charis as one of the conditions for having peace will be a free (ish) trading for Charis ships.

But yes when round two of the fighting starts (presuming there will be a round two) all debts to Charis will be of course revoked by TLS.

But in the meantime the lending would start to undermine the church control.

While having essentially an infinite amount of money available (compared to the current productive capacity of Safehold) seems nice, I would be very cautious about establishing a unitary "Bank of Charis".

Several people have alluded to the danger of inflation (as happened to Phillip II of Spain), as well as the destabilizing effects that it could have on other economies outside of the Empire (there have been several threads on this topic).

I would point out that in the age of "Free Banking", prior to the establishment of central banks, inflation was not a problem, and economic "events" like crashes, recessions and depressions tended to be rather short and sharp shocks, usually caused by the overextending of credit. Since the advent of central banks, recessions have become painful, grinding events, money has been massively devalued and depressions become existential threats, as well as long lasting (the worst years of the Great Depression were the Capital Strike of 1937-8, when business and people refused to invest due to the constantly changing rules and regulations the New Dealers were imposing. This was almost 10 years after the Crash. In the Free Banking era, the Depression would be long over).

For more in depth discussion read The Forgotten Man: A New History of the Great Depression by Amity Shlaes.

The other issue is that since the deposit is owned by the Royal Family, rather than by the Parliament, there is effectively no check on Royal power. Charles 1 discovered that Parliament really did have the power in the land since they could levy and collect taxes, and he did not have an independent source of wealth to offset that. This became clear when Parliament could continue to raise and equip troops and go through the learning process to create the New Model Army and raise a cadre of leaders, while the Cavaliers gradually ran out of men and equipment. If there were a rematch in the Empire, (perhaps in a generation or two) Parliament simply could not raise enough revenue or buy enough resources to compete with a mountain of silver and gold...