King of The Wall

2021-01-06

Chapter 47 The Game of Money (Part 1)
"God, I have to explain what I didn't say before. Apologies." Igor waved his hand, "Let's start again, I'm going to use a game to explain the feasibility and merits of my plan, you know the Iron Vault."

"Of course."

"How does it work?"

"To pool the surplus money of the residents of Braavos and lend it to those who need it." Tyrion came back to his senses, adding: "But it doesn't have anything to do with you. Again, it's run by the rulers of Braavos, not individuals."

"True, but we'll discuss the differences at the end, for now, let's role-play how it works Yes." Igor put away the two certificates on the table, took out a Silver Coin, and put it on the table in front of Tyrion: "I am an ordinary Braavos citizen, and you represent the iron vault, now, how many people in our city? A wealthy resident has deposited ten thousand Golden Dragons with you."

dwarf looked at the Silver Coin symbolizing ten thousand Golden Dragons in front of oneself, the disapproval expression on his face relaxed, he was an easy-going A person, but the things he looks for will not change easily, and he will never support anyone in fraudulent behavior, even an approved friend. Because of this, he was more curious about how Igor was going to convince oneself.

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Igor's tone became serious: "I am an ordinary Braavos person, and I am planning to open a shop. After preliminary calculations, I think I need about 10,000 Golden Dragon , but I don't have any money... So, I ran to you and borrowed ten thousand Golden Dragon."

Igor picked up the Silver Coin just placed in front of Tyrion and put it back on oneself. , the game starts.

"Then, I used ten thousand Golden Dragons to rent a shop, buy tools, and open the shop." Igor put Silver Coin on the side of the table where no one was sitting, to show oneself Spent the 10,000 Golden Dragon: "The first round of the game is over, so far, everything is well understood, I owe you 10,000 Golden Dragon, and you owe the person who deposited it with you - the depositor 10,000 Golden Dragon for short Then, something interesting happened."

"en?" Tyrion stared at Igor, watching the Silver Coin he put aside to show that he had spent, and took it to oneself again, "What does this mean?"

"That's the biggest difference between Braavos and Westeros. In Braavos, people don't hide their surplus money at home, but deposit it in iron vaults. That's it. A little change is very important in the game of money." Igor couldn't help laughing, thinking that oneself had a good idea: "After I spend the ten thousand Golden Dragons, I will earn my ten thousand Golden Dragons. , and handed over the money to you again."

"Huh..." Tyrion seemed to realize something, but he still didn't know what was going on.

"Then, there was a problem with my business plan, and I found that although I opened the store, I haven't bought the raw materials yet, and I still need ten thousand Golden Dragons, so I asked you to borrow it again. ."

"But you haven't paid off your last payment."

"Yes, but if you don't lend me, I'll have to declare bankruptcy and let you put I took away the store halfway through." Igor said with a smile: "But the facade is rented by me, and the things in my store are useless to the iron vault, which means that if you want me to pay back the money, just I can only continue to lend me money and hope my shop can open and make money."

"Isn't this a rogue?"

"No, this is not a rogue, this is Braavos The strongest among all Free Cities, and the richest reason!" Igor raised his voice, and took the Silver Coin back to the oneself side, and put it on the unoccupied corner of the table: "I will borrow it from you again. 10,000 Golden Dragons, opened the store, and started business. Do you understand what's going on?"

"You turned this '10,000 Golden Dragon' upside down and opened it up. Become a store that costs 20,000 Golden Dragons?”

“Yes, with 10,000 Golden Dragons, I opened a store that can only be opened with 20,000 Golden Dragons, and you can recycle them in the future. The principal and interest formed by the 20,000 Golden Dragon loan, the rich people who deposit with you will eventually earn the interest of the 20,000 gold deposit, all three parties are happy!" Igor asked Tyrion in return. "But how did this happen? Where did the extra 10,000 Golden Dragons come from?"

dwarf thought for a while before carefully answering: "It's because I took a risk, When you still owe other people's money, you lent other people's money to you who haven't paid off the last loan!" Tyrion quickly remembered the problem that had not been solved before, "This extra does not exist. The 10,000 Golden Dragons are actually the embodiment of the risk I took!"

"Yes, but back to your previous question, if you are lending me the 10,000 Golden Dragons When the time comes, the person who keeps the money with you, we call it the depositor, suddenly comes to withdraw the money, what should I do?”

“Impossible only 10,000 Golden Dragon in the iron vault.”

"That's true." Igor took out another Silver Coin and put it in front of Tyrion: "You have a lot of money in your vault, so if someone wants to withdraw 10,000 Golden Dragons, you will give him 10,000 Golden Dragons. That's it. But now the problem is, with so much money in your vault, none of it belongs to your iron vault oneself, what if all depositors ask to withdraw money at the same time?"

Tyrion suddenly remembered The difference between the previous conversation between the two is that now the questioner has become Igor, who is sitting opposite: "This is impossible to happen, because this is what the Iron Vault tries to avoid."

"How to avoid it? This happens."

How did Igor ask, oneself answered? Tyrion found that oneself had been detoured, and realized that the other party made oneself play the iron vault just to make oneself think about this problem. However, he always prided himself on being smart and liked thinking games, so he decided to accept the challenge.

After thinking for a few seconds, he had the answer: "Interest and trust, interest makes 'depositors' willing to deposit, and trust in the strength of Iron Vault makes 'depositors' never worry When you want to withdraw money, you will not be able to withdraw it, so unless you really want to use the money, no one will withdraw money just out of fear."

"Good point, but now there is a problem, if My shop doesn't make money?"

Dwarf's eyebrows were drawn into a ball, and after a while, he answered word by word like a curse: "Then I won't borrow money. Here it is! I will send my staff to confirm before I release the loan, and if my staff thinks that your store is difficult to make a profit, then I will not borrow a single penny."

Tyrion's answer is more than The answer in Igor's mind is even more accurate. It is not a loss that he is one of the smartest people at Westeros, and he can understand the truth of risk assessment before lending so quickly. But this is also good: "Well, now we can conclude that what we can do with 10,000 Golden Dragons that can only be done with 20,000 Golden Dragons is because through a series of seemingly complicated but actually very simple principles Operation, virtualized 10,000 Golden Dragons that do not exist. And the reason why you can do this is because you believe that my store can make money, and your depositors also believe that you can always pay them off both principal and interest savings.”

…

“It’s not so much that the ten thousand Golden Dragons that don’t exist are the embodiment of the risks you take, but the iron vaults, savers and lenders The embodiment of the mutual 'trust' between the three. It is this trust and confidence in the future that enables Braavos people to use limited money to build a huge fleet and a beautiful city far beyond the financial capabilities of oneself, becoming the most beautiful city in the Nine Free Cities. The young, but the most powerful one. Other Free Cities then imitated the establishment of banks, but because they could not simulate the cultural atmosphere of Braavos people who are used to depositing money in iron vaults, they were completely unable to compete with iron vaults in terms of capital. ."

Tyrion was overwhelmed by Igor's new vocabulary and unheard rules. For the first time, he felt that oneself's brain was not enough, and after thinking for a while, he admitted that oneself couldn't find it. out of the problem.

But Igor didn't stop, he decided in a spurt of energy: "Do you think our game is over?"

"Not yet?" dwarf lifts the head , looked at oneself's adventurer friend for a few seconds, and suddenly realized: "The Seven, you...do you want to continue to borrow money!?"

——

(end of this chapter)