Holy Roman Empire

The government’s guidance still could not withstand the enthusiasm of capital. Profit always has a way of blinding people to risks.

If they can’t get government support, they’ll find other ways to cut costs. For example, they might move factories to the suburbs or to small towns with convenient transportation, dramatically reducing land costs.

Tax incentives? Not a problem either. With Prussia and Russia buying frantically, profits remain substantial, and a few percent in taxes won’t make much difference.

“Good advice is wasted on those doomed to fail. Great mercy cannot save those determined to destroy themselves.”

Watching capitalists flock like moths to a flame, Franz could only turn a blind eye.

Beyond greed, the market frenzy also reflects deeper societal problems. The capitalist world is once again facing overproduction, with Britain and Austria being the most affected.

The crisis hasn’t erupted yet largely because of the international situation. Since 1873, there have been the Second Near East War and the consecutive colonial wars sparked by Britain, France, and Austria dividing Africa.

These wars have consumed enormous amounts of wealth and resources, and the apparent market prosperity has masked the overproduction crisis. If the Russo-Prussian War hadn’t broken out, a new economic crisis would have hit by next year at the latest.

After years of accumulation, the issue isn’t just overproduction, it’s also excess capital.

As the saying goes, “Money spent is real money while money sitting in a bank is just numbers.” In a world where most industries are already saturated and overproducing, capitalists desperately need new investment channels.

As per the usual self-destructive pattern, every time a situation like this arises, the stock market surges with volatility. Huge amounts of capital flood into the stock market, creating an unprecedented boom. Then, when the bubble bursts, the excess capital evaporates along with it.

“Better a friend’s ruin than my own downfall.” The conflict between Prussia and Russia has been strategically exploited. Austria supports the Russian government, while Britain and France back the Prussian government. Beyond political necessities, capital also plays a significant role.

When money is loaned out, the problem of capital surplus naturally disappears. The massive orders generated by war further stimulate economic development.

Most importantly, what started as an industrial crisis confined to Britain and Austria has, through the catalyst of war, spread across the entire European continent. No one can escape unscathed.

Dragging everyone into the water isn’t an act of mutual destruction. On a national level, this is a strategic move to weaken potential competitors.

Economic warfare is unlike military warfare. The greatest losses aren’t always suffered by the direct combatants. More often, it’s the third, fourth, and fifth-place contenders who end up being crushed while the top two competitors battle it out.

Under the free trade system, the global market is limited and cannot satisfy everyone’s appetite. It inevitably follows the law of the jungle.

Britain and Austria dominate the global industrial landscape, accounting for 29.8% and 36.5% of the world’s total industrial output, respectively. Their imports and exports respectively make up 49.6% and 24.7% of global trade.

With such overlapping interests, conflict is inevitable. Capital is inherently predatory, and in this survival-of-the-fittest world, the weak are always the first to fall.

Today, speculators are swarming to profit from war. It’s not that they don’t see the risks. Rather, they are blinded by their own confidence, believing they can outrun others when the crisis erupts.

As long as they can find someone to take over their position before the collapse, they can reap immense profits.

Vienna Palace

Royal Steward Mirabelon reported, “Your Majesty, as of now, we have successfully sold 76 factories, and the remaining ones are in negotiation. It is expected that all will be sold within the next two months.

The stocks and bonds we hold are also being gradually liquidated. To avoid market turmoil, we have only sold about one-tenth so far.

Thanks to the booming market, the proceeds from our asset reduction have been more lucrative than expected. We have already secured 130 million guilders, and once everything is sold, we anticipate a total return of 440 million guilders.

However, our actions have drawn the attention of observant parties. Future operations may face certain obstacles.”

Franz nodded. Being noticed was inevitable. Selling off assets during the market’s peak frenzy is such an unconventional move that it would be strange if no one noticed.

But there was no other choice. The royal family’s assets have snowballed over the years, and if they didn’t start withdrawing now, there would soon be no way out.

The idea of finding a high-paying buyer on the eve of a market collapse was nothing but wishful thinking.

Where in the world are there so many fools? The reality is that once the Russo-Prussian War ends, the value of these factories will plummet dramatically.

Perhaps the hefty war profits would offset some of the decline in asset value, but finding buyers at that point would be exceedingly difficult.

If no buyer emerges, they would have no choice but to endure the storm, relying on their substantial financial reserves to weather the most brutal phase of market competition.

At first glance, it might not seem like a big deal. After all, in low-tech industries, the survivors will undoubtedly be those with deep financial reserves. However, the royal family’s assets are vast, and without preparing sufficient reserves, Franz felt uneasy.

After deciding to join the British in launching a dumping war, Franz resolved to completely abandon the food processing industry, textile industry, and primary manufacturing sectors.

When the crisis inevitably hits, these low-tech industries will be hit the hardest, and Franz had no intention of stubbornly holding on to them.

Selling 274 factories across more than 14 countries in one go was such a bold move that it could qualify for a Guinness World Record.

If even the factories were being discarded, then stocks and bonds certainly wouldn't be kept either. Selling them as early as possible was the safest approach. After all, nominal market value is the most unreliable asset.

After some thought, Franz said, “Well done. The current market is insanely overheated and there’s no need for us to go down with it.

In addition to the assets we are already liquidating, starting next May, we will gradually reduce our holdings in several long-term listed investments.

Including the companies we control, as long as their stock prices exceed their normal valuation, we must offload a portion. Once the market crashes, we can buy them back at a lower price.

Especially our overseas investments, they must be handled as quickly as possible. For example, the investment in the Panama Canal… Find someone to take it off our hands while we still can.

This crisis could be far more severe and last much longer than previous ones. For the next two years, all investments must be short-term and conservative.”

Man-made disasters are far more terrifying than market forces. Once an economic war breaks out, it won’t be resolved in just a day or two.

Without eliminating large amounts of outdated production capacity and freeing up enough market space, capital will not stop its advance.

At such a critical moment, the broader your investments, the greater your potential losses.

In later generations, major financial conglomerates shifted towards finance, with few stubbornly clinging to manufacturing. This was a crucial factor in their survival.

Reality once again proves the importance of foresight. Franz was well aware that he was never a business genius.

If he hadn’t had access to firsthand information, seized key investment opportunities, and avoided crises in time, the royal family’s industries would have already suffered catastrophic losses.

Of course, without such privileged information, the royal family’s industrial empire wouldn’t have grown so vast in the first place. Investing in anything profitable is inherently an unsustainable strategy.

Even the largest conglomerates cannot manage every industry simultaneously. The later downfall of “Samsung” serves as an example. Overextension spread them too thin, and without a nationwide effort to bail them out, they would have collapsed entirely.

To achieve better growth, shedding excess burdens is inevitable. This is only the beginning. In the years to come, the royal conglomerate will abandon even more businesses.

For now, the reason they haven’t been discarded is simply because they remain highly profitable. Traditional industries and emerging industries are relative concepts. What seems like cutting-edge technology today might become obsolete tomorrow.

Mirabelon asked in surprise, “Your Majesty, are we really going to abandon our shares in the Panama Canal now? Shouldn’t we wait for the final harvest?”

Franz shook his head and said, “There’s no need. Based on the current situation, it’s unlikely we’ll see that final moment of profit.

Once an economic crisis erupts, the Panama Canal project will grind to a halt. We’re not in a position to warn the French, unless they proactively decide to pull out early.

Our shareholdings are limited, and even if we were to cash out at the peak, the profits would be modest. Exiting now allows us to avoid the turmoil ahead.

If shareholders suddenly discovered that the canal they’ve been banking on has failed overnight, who knows what chaos might unfold.”

The royal family values its reputation and not every dollar is worth earning. An early exit is ultimately a wise decision, sparing resources that would otherwise be spent on damage control later.

Others might not know, but Franz is well aware. For the next 30 years, the Panama Canal will not be operational.

It’s not a technical issue, but a political one. The Austrian government has consistently opposed the project. Their lack of action so far is simply because the canal is still in its early excavation phase, and there’s no urgency yet.

The French capitalists invited the Austrian royal family to invest, mainly to reassure shareholders and create the illusion that the Austrian government wouldn’t intervene.

Had Franz not realized that these French financiers were simply looking to profit off stock market speculation, he wouldn’t have gotten involved no matter how attractive the returns seemed.

The purpose of endorsing the project has been achieved. Now it’s time to leave with a handsome exit fee and there’s nothing wrong with that. The fate of the Panama Canal Company has nothing to do with an early investor who has already exited.

After all, the Panama Canal shares are listed in Paris, and any collapse will primarily affect French investors, not Austria.

If the canal company goes bankrupt, the blame certainly won’t fall on Franz.

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