Falsifying history is good business

Chapter 23: Medieval-style financial warfare

The falling polar bear attracted countless vultures to circle over Europe. These vultures came not only from Muggles, but also from the wizarding world.

Gringotts in the UK is one of them.

Just as the British wizarding world and the Muggle world have always had a close relationship, the widespread chaos brought about by the collapse of the Soviet Muggle regime also affected the local wizarding world through a chain reaction.

At the beginning, a few wizards from Muggle families participated in the underground currency exchange black market, because their magic could protect the property safety of themselves and their relatives and friends on the edge of the law. Although this behavior clearly violated the Statute of Secrecy, who would care about the law when they were starving?

Later, some clever wizards discovered that it seemed possible to expand the foreign exchange business from Muggle currency to wizarding currency.

People who are at the end of their rope are often very courageous and dare to do what they think of. Before long, a black interest chain was formed from the Soviet Muggle Bank to the underground foreign exchange black market and then to the Soviet Gringotts.

In order to maintain this chain of interests, wizards in the Soviet Union and Eastern Europe have even used the Imperius Curse on Muggles more than once; as for the number of times they have used the Oblivion Charm in violation of regulations, it has been countless.

Due to geographical barriers, Gringotts in the UK did not learn of the existence of this profit chain until mid-1991 by chance, and immediately discovered the huge profits contained therein.

Although the Soviet magic world also has a goblin-run bank called Gringotts, they have no direct affiliation with Gringotts in Western Europe and the United States. Therefore, the British Gringotts elders did not feel guilty about cheating their Eastern counterparts.

The British goblins immediately intervened in this profit chain and invested large sums of money to expand the "scale of operations".

They paid a large number of Soviet Muggles and wizards to act as their agents, and used various means including bribery to exchange foreign currency from Soviet Muggle banks, and then used the difference between the black market and official exchange rates to earn several or even dozens of times the profit.

Of course, for Gringotts, which is based in the wizarding world, holding a large amount of Muggle currency is of no use at all. Therefore, the last step in the profit chain requires wizard agents to take Muggle currency to the local wizard bank to exchange gold Galleons.

The whole plan was full of the simple and crude characteristics of medieval banking, but the profits were really lucrative. After deducting the 10% to 15% commission paid to the agent, Gringotts could get about five times the profit for each completion of such a process.

With proper arrangements, this process could be repeated at least three times a month; the biggest restriction during this period came from the increasingly stringent foreign exchange exchange review by the Soviet officials and the Soviet people's rigid holiday system - banks did not conduct large-scale business on Saturdays, Sundays and holidays.

By the time Lin You officially inherited Earl Goff, this meat-cutting business had been operating stably for more than three months.

But as the old saying goes, if you walk too much at night, you will always encounter ghosts; the Soviet magic world did not fall into complete chaos like their Muggle regime. When they discovered the large-scale and unreasonable loss of gold galleons, their response was also full of medieval simplicity and crudeness.

Gringotts in the Soviet Union directly closed the window for exchanging Muggle currency for gold Galleons.

The impact of this policy on Soviet wizards is unknown, but it dealt a heavy blow to Gringotts in Britain.

To make matters worse, Gringotts in the UK was also severely screwed by its own employees.

When the business of selling meat was first implemented, due to the natural characteristics of the goblins, the people they sent out at every link and every position hoped to make a small fortune by riding on the wind. The goblins in charge of the actual operation made full use of their personal connections and raised a sum of private funds equivalent to about 80% of the official funds of Gringotts in the UK, and invested in the Soviet foreign exchange black market.

Therefore, when the Soviet Union launched a counterattack and closed the exchange window, the front-line goblin salesmen faced a very short escape window and "naturally" prioritized saving their own private investments. The result...

The British Gringotts officials did not suffer any losses; if calculated based on Muggle currency, the money paid back by the salesmen was nearly a hundred times the original cost.

But the question is - you spend a lot of gold Galleons to engage in financial speculation, and then take back a lot of Muggle currency and call it profit? What use do the goblins have with such a large amount of Muggle currency?

"According to the trade volume between the wizarding world and the Muggle world over the years, this amount of money can be consumed in about eight to ten years," Lin You analyzed seriously, "Of course, the premise is that the wizarding world will not export even a copper knut of goods to the Muggle world in the next eight to ten years."

The wizarding world does rely on the Muggle world for many materials in their daily lives, but the problem is that the size of the wizarding world's population limits the demand for materials; there is simply no basis for the two sides to expand trade.

Lacibi's face almost turned into a bitter gourd.

The money in the bank must flow in order to make money; if such a large amount of dead money is kept in hand, it would be an unbearable loss even for eight weeks, let alone eight years. Not to mention that this financial speculation is also full of various forms of illegal behavior.

Rather than calling these Muggle currencies profits, they are more like evidence of guilt.

"We desperately need your help," Lacibe said with a grimace.

"I can't do anything. I can neither turn Muggle currency into gold Galleons nor increase the trade demand between the two sides out of thin air." Lin You teased, "Why don't you ask your compatriots in America for help?"

"They want us to go bankrupt," Lacibe said angrily.

Lin You burst out laughing.

Although the goblins in America also opened a bank under the name of Gringotts, the two sides had long been on different sides; the struggles and contradictions between them were roughly similar to the competition between Wall Street and London in the Muggle world for the status of international financial center in the first half of this century.

The difference is that Wall Street in the Muggle world successfully replaced London as the world's largest financial center by relying on the United States' victory in World War II; while in the wizarding world, because Dumbledore defeated Grindelwald, Britain has long maintained its leading position in the wizarding world.

Even the rampage of the second generation Dark Lord did not completely change this situation.

"How can I help you?" Lin You encouraged with a smile, "Why don't you go find those salesmen who made technical mistakes? Their behavior is selfish and at least a serious dereliction of duty. Shouldn't they pay for Gringotts' losses?"

Lacibi looked embarrassed: "You know, sometimes, as a mature leader, we can't completely blame our subordinates for not following the rules and regulations. Moreover, when it comes to rules and regulations, they actually..."

"I'm not interested in the rules and regulations within Gringotts." Lin You interrupted the goblin elder again, "As far as I'm concerned, the superiors are unwilling to follow the rules with their subordinates only under one circumstance - the superiors themselves break the rules. You also have a share of those private investments, right, Elder Lacibe?"

"Ah, ah... When you say that, really, I... I'm sorry, I'm really ashamed." The goblin elder not only sweated profusely, but also began to stutter when speaking.

Lin You sneered: "We have wasted a lot of time, why not be honest. Elder Lacibee, you took more than two months to come to me, which means you have no other way; it's the end of the year now, and Gringotts also needs to settle accounts, right?"

Lacibi wiped the cold sweat off his face, having almost collapsed from Lin You's continuous sudden attacks;
"Can you please help us use this money to buy gold on the Muggle market?"

　First update

　　
　
(End of this chapter)