Reincarnated as Nikolai II

Chapter 273: The Union of Broken Bones (7)

They say happiness comes not simply from material satisfaction, but from comparative advantage over others.

“The prices have risen again? How are ordinary people supposed to survive?”

“Salaries aren’t increasing, but everything in the world is getting more expensive. Isn’t this too much?”

“Holding onto money means losing value, but investing in stocks is scary. And gold isn’t easily purchased by individuals. How exactly are ordinary people supposed to build assets?”

The Russian Empire wasn’t experiencing a good economy either.

The cost of living was rising, while salaries were decreasing.

Though not as severe as in the United States, stocks continued their downward trend, and newspapers regularly featured companies going bankrupt.

However, if there was one clear difference: 𝗳𝚛𝗲𝕖𝕨𝕖𝗯𝚗𝚘𝕧𝕖𝗹.𝗰𝗼𝕞

“It’s grease on their bellies. The Prime Minister warned against expansion for three years straight, but they expanded with loans?”

“Are you struggling for just a day or two? The economy has been bad for five years already, right? Why act like it’s something new?”

“If there are no jobs, can’t you just do manual labor?”

At least in Russia, hope existed.

Unlike other countries, Russia hadn’t fallen from a great height without a parachute.

The hope that although things are difficult now, if we just wait a little longer, as always, this country will be fine.

Additionally, the fact that the country wasn’t just sitting idly by watching this recession, but was creating visible changes with roads, irrigation channels, and railways, soothed the public.

Crucially, for the people to rise up in anger over their lowered standard of living…

[Impoverished New World, Economic Output -40%]

[Solid Ruble, Dollar and Pound Becoming Worthless]

[Young People, Apply to the Non-Commissioned Officer School!]

Other countries were failing to an embarrassing degree.

‘W-well, at least we can do manual labor, right?’

‘At least we haven’t heard about banks failing… so our deposits should be safe, right?’

With all the major powers adhering to forced deflation policies for the past three years, unemployment rates couldn’t possibly improve.

In contrast, the Imperial government printed vast amounts of money while maintaining the gold standard.

Despite prohibiting gold conversion and blocking gold outflows, how could they freely conduct monetary policy while maintaining the gold standard?

This was possible because:

First, the government was absorbing as much money as they were printing.

“Short-term bonds, please give me short-term bonds!”

“Short-term bonds are already closed. Only 20-year long-term bonds are left, shall I give you those instead?”

“Ten thousand rubles, right now!”

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“If you provide a bank check, I’ll put you on the purchase waiting list.”

Second, there was an entity to support the declining credit that came with the decline of capitalism.

Typically, all paper money of this era would have a “Backed by Gold” mark and phrase written on it, or a golden “Gold Certificated” stamp.

However, the Russian Imperial government, while restricting the basic elements of the gold standard such as prohibiting gold conversion, private gold transactions, and gold outflows, added this phrase to the new bills:

That phrase, written in both English and Russian.

What does this mean?

“Oh, so the new bills aren’t backed by gold, but the collateral is the Empire itself?”

“I suppose… that’s right?”

“What’s this, then the new bills and old bills are the same?”

To other countries, it might just seem like the imperial family guaranteeing its value, but to the people of this country who hadn’t escaped from Tsarism, it sounded like “the Empire itself is collateral.”

With the Imperial government directly controlling gold, there was no possibility of silver or gold flowing in one direction, as happened with 18th century England and the Qing Dynasty.

And what that meant was:

“Print, print like crazy!”

“Print as many bonds as you print money! They sell well as soon as they’re released to the market anyway! No, just release them abroad too!”

“Open your mouth. Here comes the interest rate cut?”

This meant the government became invincible in monetary policy.

People living in the 21st century might think, “If national debt increases, isn’t it fine as long as growth keeps up?”

But to scholars of this era who hadn’t escaped from classical economics, this was logical destruction, simply a miracle.

“Damn… the ruble still doesn’t collapse? There’s no inflation when interest rates are crawling at 1%? Does this make any sense?”

“They talked about the invisible hand! Adam Smith said the hand isn’t visible in the currency market either! Anyone can see the Russian government’s hand manipulating the market!”

“What’s financial crime? Damn, this is exchange rate manipulation and stock price manipulation.”

Regardless of what others were saying, the Russian government targeted its own public with its policies.

“What? Gold is leaking through the black market? Money is flowing overseas due to the domestic-foreign currency value gap? Then print more money!”

“Public policy is leftist policy? Our Prime Minister is the head of the Conservative Party?”

While England abandoned the gold standard last year after being shocked by an outflow of 2.5 million pounds of gold per day.

Similarly, while even the United States was performing CPR on dying banks with government bailouts due to bank runs and gold outflows.

“All kinds of bills? Parliamentary passage? Presidential and Prime Ministerial political positions and consequent vetoes? Who has time to waste on such things?”

“Ah, this is an imperial decree. Disobedience is followed by death.”

“Everyone’s tried the agricultural purchase system and fixed price system before, right? You’ve experienced the rationing economy during the previous Prime Minister’s era? Now, let’s deal with inflation. Now.”

No one could stop Stolypin, who had even solidified his political position.

==

Was it while working as a governor after the Great Depression hit?

I’ve pondered this question at some point.

Taking one hit to the solar plexus versus taking multiple slaps to the face.

If the total force is the same, which would hurt more?

It depends on how many slaps you take, but for an adult male, a single hit to a vital point could be fatal.

On the other hand, while slaps to the face are unpleasant, if taken separately, they might just result in some blood in your mouth and perhaps the loss of a molar or two.