Sarah grinned like a Cheshire cat when she noticed his expression. "No, you've read it at least partially wrong," she said. "Neither I nor my parents attempted to exert any influence on David. It wouldn't have worked anyway. You've forgotten that I am the CFO of OPM. While we do want to avoid the collapse of the guilder, David wouldn't have put OPM resources into it unless it was a good risk."
"So what do you know? What makes it a good risk?"
"We're gambling," David answered. "Did you know that Brent Partow is a student of military history, and his brother Caleb even more of one?" This was a total bluff. Brent Partow had been interested in all things military for about a month after the Ring of Fire. David had no real idea how deep Brent's older brother's interest went.
"You don't think Don Fernando can take Amsterdam, do you?"
"No, we don't. If he takes Amsterdam at all, it certainly won't happen very quickly. Unfortunately, that may not matter that much. The issue with the bank money is going to be availability, not silver, which will hurt you as much as us." David had dealt with Prince Karl before and knew that the prince was bright, capable and conscientious, but he had a weakness, one that David was prepared to use. Karl believed in taking care of number one, and he preferred to assume everyone else felt the same way. David was pretty sure that Karl wasn't truly incapable of non-self-centered acts, but his bias did color his vision a bit.
"So, I ask again, why?" Karl wasn't thrown off that easily.
Sarah came to the rescue. "Why did you? If Don Fernando doesn't win quickly, you're looking at having that money tied up in Amsterdam behind siege lines. That's going to make it rather harder to get to than the HRE gilders you traded for them. Unless something is done, they are going to lose more and more value. The trade through Amsterdam will die. It will take years to grow back elsewhere. Why did you buy guilders?"
Karl discovered suddenly that he was sitting in one of the chairs in the conference room. He must have sat down, he was clearly seated. He just didn't remember moving. He had had several reasons for buying guilders. First, he figured that with his connections, they were worth more to him than to a German merchant. He had also wanted to bring up the price of the Holy Roman Empire guilder in the Grantville market, largely because that's what much of his money was. He had some financial obligations that were best handled in bank money, or would have been, before the siege.
The real reason, though, was that he had seen a bargain and gotten carried away. He had been buying, David started buying and, well, face it… he had been caught up in the moment. He didn't really need that much bank money. At this point, that didn't matter much. If he, or David, started selling, the guilder would collapse in the Grantville market. Karl was so stunned that he didn't notice that David never answered his question.
"Well, it's stopped for now, Tony," Coleman Walker said on the phone that night to Tony Adducci.
"You think it will hold?"
"I'm not sure. The way I heard it, David Bartley and that prince from the HRE were cooperating to corner the market in Dutch guilders. I'm starting to wonder if we got took."
"The way I got it from Fletcher Wendell is that Prince Karl was trying to get Wisselbank notes because he figured that Don Fernando would honor them for him even if he wouldn't for a bunch of Dutch merchants. He is an allied prince, after all, or at least his uncles are. David saw an opportunity to make it look like they were trying to sew up the market and took it," Tony defended David. "So how much is the bank out?"
"Nothing yet," Tony could hear the dissatisfaction in Coleman's voice. "The Bartley boy pointed out that if he just acted as an agent for the bank there would be another run as soon as the word got out. To make it work, the guilders would have to appear on the OPM books. So he proposed that we give OPM a low interest loan and a guarantee to buy the guilders at cost. He got Franz Kunze to go along with it. We probably should have gone to Herr Kunze in the first place. Anyway, for now, OPM is sitting on the guilders and the bank is just showing a loan. We won't have a loss on the books till the loan comes due and we have to take Amsterdam's waste paper at cost."
"That's great, isn't it? From what I hear, Frederik Hendrik figures that he can hold. We may come out of this all right."
"Maybe, but the longer the siege goes on the worse it's going to get."
Tony was convinced that Coleman Walker made pessimism into an art form. "The dollar has been going up against the guilder right along. By the time the siege is over, confidence in the guilder could be so low that they won't be worth what the Bartley boy paid for them during today's panic. The only way that we could prevent that from happening would be to increase the number of American dollars. We could probably manage that, but while the dollar has deflated over the last two years there has been inflation in German currencies to compensate."
"You've mentioned that before, Coleman," Tony Adducci agreed, while thinking Over and over again, you've mentioned it.
"Why would the up-timers want to save the guilder? It makes no sense. If the guilder collapses their American dollars will be worth more and they will be richer," Josef Gandelmo, Prince Karl's tutor, wondered aloud later that evening. A little more than a year earlier, Karl had called Richelieu a dotard in this room. Josef looked at financial matters in terms of what they accomplished. What David had done was stop the Dutch guilder from collapsing. To Josef, that probably meant that David had meant to prevent the Dutch guilder from collapsing. The question became: why a strong guilder? It seemed to him to be to the up-timers' disadvantage.
"It does make sense in a way, Josef. Remember the lecture series we attended. One was about exchange rates. Having an overpriced currency can price you out of the export market. High value money makes import cheaper but export more difficult. If most of your spending is local, you want a low value currency because the people you buying from are using the same money, so the lower the value of your money, the less you're paying.
"If you're buying more stuff from far away, then you want a high value so that less of your money buys more of theirs. The up-timers have been running a trade surplus since the day they arrived. They apparently wish to keep doing so. Wait…" Karl had apparently just realized what Josef was getting at. "Do you think that David was trying to prop up the Dutch guilder?"
"It seems so. He certainly, with your help, managed to do so," Josef offered. "Now you've provided a reason for it."
"No. If he had gotten a personal loan, then that would be a possibility, but to use OPM funds? I don't think so." Karl shook his head. "Some of the up-timers are fanatical about their reputations, you know, and David more than most. Fiduciary responsibility and all that, they take it very seriously. If David used OPM funds to save the guilder at the expense of the fund stockholders, it would destroy his reputation." Karl paused in thought. "Could he have some arrangement that protected the stockholders?"
"That's possible. If he does, then we should not bandy it about. OPM has a bit over half a million Dutch guilders. As of now, Your Highness, we have more invested in saving the Dutch guilder than OPM does. Almost twice as much."
Karl and Josef paused to listen to the evening news on the up-time radio. Radio, in Karl's opinion, was a marvelous thing, as important to him as indoor plumbing, frankly. The nightly news program helped him project what might or might not happen in the surrounding area, keep up with events, and determine where to place his investments. He was shocked, though, to hear his own name mentioned.
"This is Hans Gunter, reporting for Voice of America. Today was an interesting day in the money market here in Grantville. With the siege closing in around Amsterdam, the famed bank money of Amsterdam started what at first appeared to be a fatal plunge. Then Prince Karl Eusebius von Liechtenstein and Master David Bartley unaccountably began buying. The Wisselbank money finished the day at an impressive $47.50 to the dollar. The market is asking itself: what do these two young men know? We have with us tonight Karl Gottlieb, of the Street.