Ten Trillion gold or silver marks?

So hoarding that gold doesn't help anyone. Putting as much of that gold effectively in play as quickly as possible is the immediate goal.

Except you don't want to turn Charis into Spain.

Hoarding it to some extent (and concealing the value of the lode) is vital to prevent spiralling inflation and gold rushes anywhere plausible rumours of the stuff arise.
At the moment Charis has a really good thing going, with growth based on human skills and ingenuity, and industrial might. They don't actually *need* gold, except inasmuch as the Crown might occasionally need something to keep the budget in the black until a proper financial sector can be up and running. Unlike necessary resources (finding more iron deposits would be a positive boon, look at Delthak after all!), gold comes with all the potential pitfalls of big resource finds, and few of the upsides.

The only justification I can see for using as much of the gold as quickly as possible would be to deliberately cause economic dislocation, on the expectation that Charis and Siddarmark would weather it better than the Temple Lands and Harchong...but I don't see that as being acceptable to the side that is generally trying to minimise and prevent harm to civilians, so that doesn't really fly either.

Incognitia wrote:

So hoarding that gold doesn't help anyone. Putting as much of that gold effectively in play as quickly as possible is the immediate goal.

Except you don't want to turn Charis into Spain.

Hoarding it to some extent (and concealing the value of the lode) is vital to prevent spiralling inflation and gold rushes anywhere plausible rumours of the stuff arise.
At the moment Charis has a really good thing going, with growth based on human skills and ingenuity, and industrial might. They don't actually *need* gold, except inasmuch as the Crown might occasionally need something to keep the budget in the black until a proper financial sector can be up and running. Unlike necessary resources (finding more iron deposits would be a positive boon, look at Delthak after all!), gold comes with all the potential pitfalls of big resource finds, and few of the upsides.

The only justification I can see for using as much of the gold as quickly as possible would be to deliberately cause economic dislocation, on the expectation that Charis and Siddarmark would weather it better than the Temple Lands and Harchong...but I don't see that as being acceptable to the side that is generally trying to minimise and prevent harm to civilians, so that doesn't really fly either.

Spain never used their gold for increased production. They simply allowed the gold to increase the demand without increasing the amount of goods and services available for puchase. Contrast that with the boom and bust cycle of the American expansion between the Revolutionary War and the ACW as well as the Reconstruction to WWI. The US had massive amounts of gold injected into its economy during both these periods. That injected gold did not cause crippling inflation because the US was also expending their production capacity. The added currency simply allowed more people to participate in the growing economy.

Charis could expand their currency beyond their ability to increase production and cause serious problems. I doubt that will happen. They will expand the amount of currency available commensurate with their ability to invest that currency in increased production. As I said, effective injection of as much gold as possible as quickly as possible. The gold will not increase wealth, but increase the number people who can engage in economic transactions. Wealth will be created as people produce goods and services deemed worthy of purchase.

Peter Z wrote


Spain never used their gold for increased production. They simply allowed the gold to increase the demand without increasing the amount of goods and services available for purchase. Contrast that with the boom and bust cycle of the American expansion between the Revolutionary War and the ACW as well as the Reconstruction to WWI. The US had massive amounts of gold injected into its economy during both these periods. That injected gold did not cause crippling inflation because the US was also expending their production capacity. The added currency simply allowed more people to participate in the growing economy.

Charis could expand their currency beyond their ability to increase production and cause serious problems. I doubt that will happen. They will expand the amount of currency available commensurate with their ability to invest that currency in increased production. As I said, effective injection of as much gold as possible as quickly as possible. The gold will not increase wealth, but increase the number people who can engage in economic transactions. Wealth will be created as people produce goods and services deemed worthy of purchase.[/quote]

Couple of things-
1)Spain used a lot of that money for soldiers. Charis will too.
2)The gold discoveries in the US were made and controlled by private individuals who then spent it on "stuff" that had to be made by someone. That "stuff" wasn't usually consumed (wasted-destroyed-lost)in a war. In most cases this treasure increased non governmental economic transactions- a good thing, as you point out.

The Spanish did use such gold as reached them for increased production. They just had the production someplace else, and bought what foreigners built. This left them with a weak economy.

tootall wrote:Peter Z wrote


Spain never used their gold for increased production. They simply allowed the gold to increase the demand without increasing the amount of goods and services available for purchase. Contrast that with the boom and bust cycle of the American expansion between the Revolutionary War and the ACW as well as the Reconstruction to WWI. The US had massive amounts of gold injected into its economy during both these periods. That injected gold did not cause crippling inflation because the US was also expending their production capacity. The added currency simply allowed more people to participate in the growing economy.

Charis could expand their currency beyond their ability to increase production and cause serious problems. I doubt that will happen. They will expand the amount of currency available commensurate with their ability to invest that currency in increased production. As I said, effective injection of as much gold as possible as quickly as possible. The gold will not increase wealth, but increase the number people who can engage in economic transactions. Wealth will be created as people produce goods and services deemed worthy of purchase.

Couple of things-
1)Spain used a lot of that money for soldiers. Charis will too.
2)The gold discoveries in the US were made and controlled by private individuals who then spent it on "stuff" that had to be made by someone. That "stuff" wasn't usually consumed (wasted-destroyed-lost)in a war. In most cases this treasure increased non governmental economic transactions- a good thing, as you point out.[/quote]

PeterZ wrote:Charis could expand their currency beyond their ability to increase production and cause serious problems. I doubt that will happen. They will expand the amount of currency available commensurate with their ability to invest that currency in increased production. As I said, effective injection of as much gold as possible as quickly as possible. The gold will not increase wealth, but increase the number people who can engage in economic transactions. Wealth will be created as people produce goods and services deemed worthy of purchase.

The only thing I would note is that for probably close to half of Charis's population a full silver mark would be a lot of money to have at one time. Most transactions would be conducted with the various denominations of coppers (bronze coins), this would be day to day things like Newspapers, needles, or daily groceries. Thus while the lode of silver and gold will be very usefull in keeping the governments books balanced, what Charis will really need are industrial ores like malachite (a copper ore)

Copper will become more valuable as industry increases. Using copper for currency will simply increase already high demand in industry. Better to accept some inflation if it means almost everyone has enough silver and gold to engage in economic activity. Granted that large price increases will cause dislocations. Those dislocations will force people into other occupations that are more in demand.

To tide the least lucky, there is always the CoC or Siddermark Reformed Church to ease the transition. Those organizations should be flush with tithes.

Castenea wrote:

PeterZ wrote:Charis could expand their currency beyond their ability to increase production and cause serious problems. I doubt that will happen. They will expand the amount of currency available commensurate with their ability to invest that currency in increased production. As I said, effective injection of as much gold as possible as quickly as possible. The gold will not increase wealth, but increase the number people who can engage in economic transactions. Wealth will be created as people produce goods and services deemed worthy of purchase.

The only thing I would note is that for probably close to half of Charis's population a full silver mark would be a lot of money to have at one time. Most transactions would be conducted with the various denominations of coppers (bronze coins), this would be day to day things like Newspapers, needles, or daily groceries. Thus while the lode of silver and gold will be very usefull in keeping the governments books balanced, what Charis will really need are industrial ores like malachite (a copper ore)

This has already been addressed in the book, Charis is planning on using the gold and sliver to back loans, not turn into currency

HOw advanced is artificially producing gemstones? gem stones have long been used for smuggling and blackmarket purchasing.
If they could control the gem market, they would have alot of influence, and if the stones are devalued then gold and silver just become so much more important.

Hi Castenea,

Allow me to disagree, if you will.

RFC's post from almost exactly a year ago indicated 5 'coppers' were equal to a silver, and 20 silver equaled a gold mark throughout almost all of Safehold; one hundred coppers making a gold mark, there being no other 'copper' or brass coin denominations.

So we evidently already have a lot of gold and silver in circulation, which shouldn't be too surprising given the centuries of mining under rigid but placid CoGA control before considering all the precious metals mined under the direct control of the archangels, that Shan-wei did tell them about.

We know Charis paid 3-4 times the average in taxes as the rest of Safehold, or at least 5% of the pre-war CoGA tithes despite it small population, and given the Glacierheart miners considered a mark a day a poor but honest wage, it appears the average annual wage earned is at least 300 marks for the rest of Safehold, with Charis over a thousand or more before the economic expansion over the last six years may have increased its economy by up to 50%, ie at only a 7% average annual increase.

We don't know if that's silver or gold, but silver seems way too low, and I suspect references to marks are intended to mean gold marks, at least from now on and retroactively in the past; ie the 300,000 marks to build a war galleon etc.

Adequate copper mines seem to be the next bottleneck that Nahrmahn and OWL need to address, like Butte or Bingham, though bounties offered by the crown might work or at least as cover.

L

Castenea wrote:

PeterZ wrote:Charis could expand their currency beyond their ability to increase production and cause serious problems. I doubt that will happen. They will expand the amount of currency available commensurate with their ability to invest that currency in increased production. As I said, effective injection of as much gold as possible as quickly as possible. The gold will not increase wealth, but increase the number people who can engage in economic transactions. Wealth will be created as people produce goods and services deemed worthy of purchase.

The only thing I would note is that for probably close to half of Charis's population a full silver mark would be a lot of money to have at one time. Most transactions would be conducted with the various denominations of coppers (bronze coins), this would be day to day things like Newspapers, needles, or daily groceries. Thus while the lode of silver and gold will be very usefull in keeping the governments books balanced, what Charis will really need are industrial ores like malachite (a copper ore)

Hi PeterZ,

While there is and will always be some economic dislocation, the care already being sought for the farmers, the 'soft landing' indicate the state will do its best to mitigate them.

I've posted in the past how the state could easily have borrowed from the CoC since Maikel couldn't and can't spend all of the 20% tithes the CoC has been getting, at least for a while, given the church infrastructure of churches, schools, and hospitals already in place.

I expect Underhill to start reducing taxes, slowly at first until a sufficient reserve has been received to cover possible emergencies, then paying debts as quietly as possible, thus letting the private sector then make new investments as they see fit, while ensuring the Crown's fiscal reputation is very sound.

The sum of 500 million marks for the first year, roughly 200 tons of silver and 125 tons of gold, approximately 2 tons per day from June 17th, ought to be sufficient over last year's income and expenses, while keeping speculation on the size of the strike low.

Keep in mind a troy ounce may be almost 10% bigger than avoirdupois, but at 22 carats etc or ~90% alloy, its back to the avoirdupois ounce size.

Eventually, spreading the amount spent around, throughout the empire as well as allies, ought to muddy if not obscure just how much is being spent for quite some time, including some quiet outright gifts to Siddarmark [which will insist on debts to its banks being paid as part of any treaties with its enemies].

The crown might consider becoming a silent or quiet pardner in several if not most major empire banks [as I've suggested for the CoC previously], as well as the best foreign, working through them to make the investments required while avoiding being too obvious, until the financial sector is big enough to handle greater changes.

L

PeterZ wrote:Copper will become more valuable as industry increases. Using copper for currency will simply increase already high demand in industry. Better to accept some inflation if it means almost everyone has enough silver and gold to engage in economic activity. Granted that large price increases will cause dislocations. Those dislocations will force people into other occupations that are more in demand.

To tide the least lucky, there is always the CoC or Siddermark Reformed Church to ease the transition. Those organizations should be flush with tithes.

Castenea wrote:*quote="PeterZ"*
Charis could expand their currency beyond their ability to increase production and cause serious problems. I doubt that will happen. They will expand the amount of currency available commensurate with their ability to invest that currency in increased production. As I said, effective injection of as much gold as possible as quickly as possible. The gold will not increase wealth, but increase the number people who can engage in economic transactions. Wealth will be created as people produce goods and services deemed worthy of purchase.*quote*
The only thing I would note is that for probably close to half of Charis's population a full silver mark would be a lot of money to have at one time. Most transactions would be conducted with the various denominations of coppers (bronze coins), this would be day to day things like Newspapers, needles, or daily groceries. Thus while the lode of silver and gold will be very usefull in keeping the governments books balanced, what Charis will really need are industrial ores like malachite (a copper ore)