Chapter 48: The Money Game (Part 2)
"Exactly. If my shop encounters further problems, I'll come back to you to borrow again. As long as the people who earned my ten thousand gold dragons eventually deposit them back into the Iron Bank, this game can loop indefinitely." Egger flashed a sly smile. "With ten thousand gold dragons, one can accomplish tasks that require twenty, thirty, or even forty thousand. Only one situation can break this cycle: if too much money is lost in circulation or flows out of Braavos and fails to return in time. Now, do you understand why the Iron Bank is so aggressive about collecting debts after lending to King Robert?"
"Because the money Robert spends doesn't return to the Iron Bank; it's being hoarded at home by Westerosi!" Tyrion nearly slapped his thigh in revelation; finally, there was something easy to grasp. "That's the so-called... what was it? A 'break in the capital chain'!"
"Precisely." As expected of Tyrion, he was quick to apply what he learned. "Now, the money the Iron Bank has lent out actually far exceeds the wealth held in its vaults—or even all of Braavos. Repaying the total principal at once is something they neither consider nor could actually achieve. Can you truly say the Iron Bank is swindling people?"
Am I actually being convinced? Tyrion's eyes widened, though he was still somewhat reluctant. "But you are an ordinary man, after all. You aren't a noble, nor a wealthy magnate..."
"I am the Night's Watch Supply Officer, Recruiter for King's Landing and the Crownlands, Head of Dragonglass Mining, and Image Ambassador. I have official commissions—the ones you helped me get, remember? Not to mention I now have the certificate issued by the Hand. If I borrow in the name of the Night's Watch, Commander Mormont couldn't disown it even if he wanted to." Egger's smile grew more triumphant; he suddenly felt that his status as a Crow wasn't so bad after all. "What defines a scam? If I took the money and fled across the Narrow Sea, that's a scam. If I botched the operation and couldn't pay it back, you could call it a scam. But if everything goes smoothly and every person who lent me money can withdraw their principal plus interest whenever they need it, can it still be called a scam?"
"Is it not? At best, it's just a very sophisticated scam, isn't it?"
"Sigh... imagine if a Westerosi wanted to open such a shop; he would need twenty thousand gold dragons that truly existed and belonged to him. But without the shop, I can never earn that much, and without earning that much, I can't open the shop... In this link-by-link predicament, Westeros has remained stagnant for thousands of years." Egger continued, "If this is a scam, then the world I come from—" He nearly slipped up and quickly corrected himself, "our entire society, is built upon this 'scam.' Yet a society built on such a scam has developed political, economic, cultural, and technological levels far beyond those of Westeros. What is your take on that?"
"This—"
"Not only that, but where I come from, they play the money game at a level higher than Braavos." Egger continued to drop heavy bombshells. "The money the Iron Bank lends is all physical gold and silver, so after several cycles, it must slow its pace to ensure the gold in the vault is sufficient to prevent accidents. Thus, for every gold coin in its vault, it can at most create two or three non-existent coins to invest in markets, build armies and cities, or earn interest through loans. But our banks are different; they do not lend out physical gold and silver. Instead, they issue written certifications, which we call paper currency or 'banknotes.' They declare in the name of the Bank that the holder of this paper owns ten thousand gold dragons in the vault. The brilliant part is—the holder can use that paper directly as ten thousand gold dragons... Thus, for every single coin in a bank vault, they dare to fabricate over a dozen non-existent coins and let that fictional wealth flow into the market to build the nation. One can see the difference in efficiency at a glance. Braavos is indeed powerful, but our society is a thousand times stronger. If not for the endless Sunset Sea between us, the time it would take for a army to occupy Westeros, Essos, and all of Sothoryos would merely be a question of how long the troops need to march."
"A piece of paper representing ten thousand gold dragons?"
"It's an exaggeration, just an analogy."
"How is that possible? By your logic, the banks play such a huge game that if even a tenth of the people took those papers to the bank to exchange for gold, the scam would be exposed!"
"Forget a tenth; in reality, no one goes to withdraw gold. Because in the eyes of the people, banknotes and gold coins are already the same thing." This was a bit difficult to explain, and Egger took a moment before speaking cautiously. "Playing the money game produces a magical result—even if the 'hen' we fabricated is fake, the 'eggs' she lays are real. We used non-existent coins to prosper society, mobilize people's initiative, and improve productivity, which in turn built houses and armies, and produced countless grain, clothes, and toys... Finally, the value of the goods owned by the people far exceeded the value of the gold and silver coins in the banks or even the entire continent. At this stage, using precious metal currency for transactions becomes unrealistic; the people have completely abandoned ancient currency and instead view banknotes as the reality of money."
"Treating paper as money?"
"Exactly. This is the final stage of the money game. At this point, the 'scam' you perceive is already part of the framework and rules by which society operates; it will not collapse under any circumstances." What Egger didn't tell him was that in the true final stage, money would just be a number on a ledger, and even banknotes wouldn't be necessary.
"The hen is fake, but the eggs she lays are real... The hen is fake, but the eggs she lays are real..."
Over the past two months, Egger had taken every opportunity to tell Tyrion stories of his society. These stories were basically modern technology masked and transplanted to another location—nine parts truth and one part fiction, with almost no flaws. Consequently, the dwarf no longer doubted the existence, power, and wealth. Thus, the cleverest Lannister in the world fell into Egger's narrative, murmuring the latter's words like a fool, his usual silver tongue completely gone.
"The stage of fabricating 'hens' to lay eggs is still far off; what I plan to do now is simply borrow a hen to lay eggs." Egger finished his story; it was time to see the results. "Since even the act of fabricating ten times the amount of gold can be a good thing for social development, how is it an unpardonable crime for me to borrow money in the name of the Night's Watch, use that money truly for the Watch's affairs, and guarantee the timely repayment of principal and interest?"
"Let me think; it's a bit of a mess in here."
"Think as long as you like; it's still early before I need to report back." Egger stood up. "I have other things to do today. We'll talk about fundraising when I return. Tyrion, you saved my life when I was in peril; that debt can never truly be repaid. I swear by the New Gods and the Old that I will never cheat you. But have you ever wondered? As a dwarf, if you only read books and cultivate your mind, when will it be your turn to contribute to your family? When will you get the chance to prove yourself to Lord Tywin?"
These words had a way of poking a sore spot. If their relationship weren't so close, it could have been seen as overstepping, but Egger was counting on Tyrion being a gentleman. What is a gentleman? Even if offended, he does not lose his reason or harbor a grudge—and this touched the deepest desire in Tyrion's heart.
"My suggestion is to try opening the first bank in Westeros. I could never achieve this with my status as a Night's Watchman, but with the Lannister family's vast capital and the reputation that 'a Lannister always pays his debts,' you would easily be the most successful pioneer if you have the inclination. If you consider it and decide it's not feasible, we'll let the matter drop. You can lend me eighty or a hundred gold dragons at the end as interest for the first round of loans, and all subsequent operations and risks will be mine alone. But if you decide to try, then not only can you participate in this fundraising from the start, but when you're ready to formally establish a bank in the future, I will do my utmost to provide help and counsel. Shall we agree to that?"
"Fine. I'll look into it and give you an answer."
"Good. Now, I'm off to the Red Keep." Their talk had taken some time; the morning was already gone. Egger walked toward the door, suddenly remembering something. "I almost forgot. The money game we just spoke of already has a specific name. There is no equivalent word in Westeros, so I've decided to combine the words for gold and flow to name it—'Finance'."
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