King of The Wall

2021-01-06

Chapter 59 Night's Watch Bond (Part 1)

Take a nap and ask Yoren again to make sure he Not going back to the Wall for a few days, Igor and Tyrion headed out the door together and started discussing the details as they rode.

"Any fundraising is pay a small price for big rewards in return at the beginning. The difference between real finance and financial scams is that the former 'cheat' to get money is only a means and a beginning, not an end and a The end. We are, at least hope that oneself is doing the former... If that is the case, we have to build a formal and complete system that not only looks like that, but actually works." Igor explained Dao: "This requires a lot of rules and regulations to govern the behavior of all participants - not only you and me. Now, I will start discussing the details with you, as you wish."

"Very well, tell me, I will listen and provide reference suggestions."

"en. "Igor has already prepared everything in the oneself room, and his thoughts are naturally quite clear: "A A mature financial system needs to consider a lot of things, such as stability, order and development... But we are just getting started, so we only need to consider stability. The so-called stability mainly refers to the stability of the capital chain, and we The main source of funds is borrowing ... to maintain stability, as long as the creditor, or the creditor, does not demand repayment at will."

Faced with the whole pile of new knowledge and new words, Tyrion couldn't get in the mouth at all, he could only nodded, and while trying to absorb it, he responded: "You said it, interest."

"Yes, interest, that is return... I said at first casually every time 1% per month. If you think about it carefully, this number is quite reasonable. The lower the rate of return, the lower the risk of scam collapse. This number can be said to be moderately low, so we have to add other rules to cooperate - the method is also very good. It's simple, agree on the repayment time when borrowing, continue to calculate the interest over time, and punish those who are not enough."

"There is still a penalty?" Tyrion questioned disapprovingly: "Lending money is to ask for help. If you say that, who else would dare to take out the money?"

"Don't worry, first of all, there is a bottom line that we must guarantee, that is, the principal of the creditors will never shrink, and the 'punishment' is only the income part." Igor signaled that the other party don't be impatient: "What are we doing? Cheat money. But only we oneself know this, on the surface we are raising funds on behalf of the Night's Watch Legion and under the guarantee of the Prime Minister to raise funds. , and then purchase food and grass equipment to send to the Wall to defend the kingdom against beyond the wall wildling. This is a serious and noble thing, although everything is actually handled by the two of us, and only part of the funds are used for what we claim to use in place, but the subject of the debt... is Night's Watch Legion, not me. "

He paused before continuing: "This is a very crucial point. I represent the Wall Defenders. Although it is self-initiated, although this organization is indeed declining, the southerners look down on it. But legally Night's Watch is an independent organization on par with the seven Duke leaders, and that's enough. This organization 'official' borrows money to do business, and I, as a representative, must act like a businessman, and it must not be seen that I am acting high and mighty due to the words of a superior. On the basis of guaranteeing zero risk to the principal of the creditors, we have to establish some tough, seemingly domineering, and indeed beneficial principles for oneself - the least one is that our bonds refuse to be redeemed before the agreed time. "

"You are right, but there are very few people in the world who are willing to be reasonable." "Tyrion shook his head: "I don't know how you do in China, but in Westeros, you not only won't work like this, you may also cause panic." "

"Indeed, the rules are dead and people are alive. If the creditors really need money urgently, of course we can't bite the rules and not pay the money, but the punishment is essential - if the creditors demand If the money is withdrawn in advance, when the money is in our hands for more than two months, we need to pay a 1% handling fee for early redemption, that is, the interest repayment will shrink by one month. And if the borrowing time is less than a month and the interest and even the handling fee are not enough to pay, in line with the principle of not letting the creditor's principal suffer, the handling fee will naturally not be charged - but there can also be other punishments, such as, I would refuse to borrow money from this person again. "

"Refuse to borrow money from this person?" Tyrion was amused, but looking at Igor's expression carefully, he found that oneself's adventurer friend was not joking: "Don't make trouble, who would beg to lend you money?" "

"Sounds a bit arrogant, right, so to put it in a low-key way, this person will be disqualified from buying Night's Watch bonds." "Igor said confidently, and Tyrion's participation gave him a lot of confidence: "Unless he pays the fee for the breach of the last purchase... Maybe you think it's incredible, but sometimes the reality is so bizarre. "

dwarf was as cautious as ever: "Well, I'd love to believe it, but I can't." "

"It's true that a one percent monthly rate of return doesn't have that much magic power. "Igor admits," So, there must be a reward if there is a penalty. Reward 1: Redemption after 3 months later no longer needs to pay the handling fee, Reward 2: Interest increase - for example, the monthly interest of the third month is 1.5% , the sixth month is 2%, and so on, the ninth month is 2.5%, the Twelfth month is 3%, and the monthly interest increases by 0.5% every three months. "

"Too much." "

"It's the current month, not the month, so it doesn't count. "Igor corrects: "So, the creditor loaned me 3.5% for three months, 7.5% for six months, 12% for nine months, 17% for twelve months... in this case , the rate of return is attractive enough. In this way, creditors will naturally have the impression that the longer the money is in my hands, the higher the return. The same 100 Golden Dragon, after a year of putting it at home, it will still be 100. After lending it to me, it will become 117. What would you do if it was you? ”

***
The annualized interest rate of 17%, put it aside for modern times, and then double it will be close to the red line of usury, which seems incredible. But it must be faced with the law Yes: the less developed the society, the higher the loan interest rate... Take today's Westeros as an example, at the beginning of the year to raise livestock cubs to raise double the repayment at the end of the year, in the spring to borrow seeds to plant the land, and to pay back half in the fall... annualized The interest rate is at or close to 100%.

The reason why this happens is that when the productivity is not yet developed and the social civilization is not high, the loan is often not "idle money". But the important production materials, the family's meals for the next month and even the coffin book, not only that, but also facing the extremely high risk of running away and losing everything in the case of an unsound credit system... High risk, it must be Balance it with high interest.

Igor is now borrowing money in an official capacity, and the debt can be secured with land-grant taxes (of course southerners don't know how much money they can collect) and land. In the case of "running Night's Watch but not Wall", the interest rate naturally does not need to be as frighteningly high as the private loan borrowing one to two or two to three... But even so, there is no Iron Throne or fertile Fiefdom in credit after all. Under the circumstance of being as reliable as the nobles, there are not more than a dozen points, and it is still impossible that anyone will be willing to pay.

***
"Seventeen... Indeed, barely enough. Attractive. "Arithmetic has always been Tyrion's forte, but compared to a certain science student who has received exam-oriented education in China for more than ten years, he looks so scum. He feels that oneself has been persuaded more times after getting to know Igor than in the past 20 years or so combined: "Understood, not only that, the person who lends you money will gradually form a habit of thinking that the longer you put the money, the more money you put away— -Unless it is really in short supply, they will try not to redeem it. "

"Yeah, think about it a little more, if you were a creditor and you lent me 100 Golden Dragon - no, I should say Night's Watch Legion - for eleven months, Even eleven and a half months. Your family is in urgent need of money. If you redeem it now, the calculated return will be calculated on the basis of eleven months, that is, one hundred plus eleven months of interest. 114Golden Dragon, you just need to wait another half a month, 114 It will become 117, but you really can't wait, what will you do? "

"Uh..." Are you going to use your brain again, Tyrion likes it, he thinks for a while, and has the answer: "I will transfer this bond to someone else at the price of 115 or 116 Golden Dragon, In this way, I solved the urgent need, and the person who took over this bond could earn one or two Golden Dragons in just ten days. "

"Yes, what does that mean?" "

Tyrion continued to think about it, and quickly thought for a while: "In this step, the Night's Watch bond you issued can be used as a 115 or 116 Golden Dragon!" In other words, that thing has in a sense... the function of the 'banknote' you speak of! "

"That's it, but that step requires the whole society to recognize the reliability of the Night's Watch bond. It takes a long section of the road to go, and it's good to see it in our lifetime. . It's more likely that the king saw the potential in finance, issued state bonds, and crowded out my market. Igor smiled, "Real finance is thousands of times more complicated than this, but we have only just started, so let's not think about it that far... Well, how do we get to this intersection? ”

—

(end of this chapter)