"I take it back. I believe them that you do it that way. You don't take any of this serious. But it won't be you who suffers when your country goes down the drain. It will be the citizens who stood behind you because they trusted you."

"Do you want me to throw up?"

"I'd rather you came to your senses. The S-Mark will crash. It's only a matter of time."

"That's not going to happen. I'll try to explain to you why not. It's not that complicated. A basic prerequisite for the stability of a currency is that you need that currency. You need the S-Mark because you have to pay your taxes in S-Mark, because all state goods are only available for S-Mark, because you need it if you want to trade with us. We can change interest rates and government spending and thus control how much money goes where. We can change taxes and thus control how much money comes back from where. We can theoretically change domestic prices, but domestic prices are fixed. The S-Mark is fixed. If domestic demand rises, we can simply reduce export volumes or raise export prices or increase customs duties. If domestic demand rises, we can also increase production. In an emergency, we could increase production by up to 170% in many areas and even more in some others. As you have already found out, we don't even come close to working at full load here. The materials for processing are not a problem either. We always have a lot in stock due to the disaster prevention law. Shorter production fluctuations can only have a measurable impact on availability when it comes to perishable goods. We don't need foreign currencies. We are independent of imports. We export a lot, which is why the S-Mark has the urge to rise in value, which is why we buy a lot abroad to counteract this. We can create as much as we want. That's almost all it takes."

"And the fact that they can create as much as you want is the problem."

"We can create as much as we want. That means that we create in such a way that we achieve all government objectives. One of these objectives is, of course, the stability of the currency. Creation is therefore limited by one of the state's objectives. We want to create in such a way that our currency remains stable but our economy is fully utilized. Suppose we want to build a new aqueduct, then we don't just look at the... I was going to say on the inflation rate, but in reality, your member states often only look at their debt levels. In any case, we look at the overall economic situation instead and make decisions based on that and not on our feelings. Construction companies that have too few orders will not raise their prices if they unexpectedly receive an order after all. Construction material dealers will not raise prices either, because if the construction companies had no orders, they would most likely have had fewer customers during this time. But even if this is not the case, they would still increase production first instead of immediately driving new customers away with higher prices. After all, it's not as if everyone here is planning just one day ahead. People who find a new job will have more income and will be able to buy more again and in the end the money will seep away where it always does, except for the part that we recover through taxes. Every other state could also incorporate the limits of state money creation into its constitution according to its own standards. A banking system with an autonomous central bank, private banks and government bonds is not needed to prevent inflation caused by excessive government spending, because someone who can break the constitution can also disempower his central bank. That reminds me, many countries already have very strict limits on government debt written into their constitutions. But why do they still throw so many billions in interest down the throats of the private sector every year? One can only speculate..."

"I can tell that you once read a book about economics and now think you know how the world works, but you don't actually know that much. I've been in the banking business for almost 40 years and I can guarantee you that what you're doing here will not end well. The S-Mark will crash, you'll plunge into an economic crisis, you'll drag your partners and your neighbors down with you and then you'll know that we were right. But personally, I'd rather it didn't come to that."

"With age comes pride. As someone who has been watching the weather for 27 years, I can guarantee you that it's about to snow. But it won't. Experience gives no validity. You emphasize your experience because you can't refute my statement and because it wouldn't have been apparent from your statement that you have any. 40 years in the banking business? As you say, it wasn't even worth the contents of a single book. Economists have always been telling me that I'm going to bankrupt the country, but every year we have economic growth, every year we create more money than the year before, yet every year someone prophesies that the end is near. The S-Mark has an inflation rate of zero. The Fee has an inflation rate of eight. The S-Mark is the unstable currency? What has to happen for you to accept reality?"

Reyji looked up at a cloud and wondered what Marah would do if it really would start to snow.

"All I'll say to that is that just because something looks intact doesn't mean it's not broken."

Marah shook her head in resignation, then turned to Reyji.

"Reyji, can you assemble a search party, please. Mr. Jens is looking for the inflation. Apparently it's hiding somewhere here."

"Um, Ms. Von Rosenberg, I didn't mean to interrupt, but it's already after 2:00 p.m."

"Oh, Is that so..." Marah turned to Mr. Jens again. "I completely agree with you. Just because something looks intact doesn't mean it is intact. In your expanded currency area, you have had inflation of 2.3% in the last decade, as you have just proudly stated. That is true. But whenever I hear that, I just ask myself, who cares about your expanded currency area? Shouldn't you be more concerned with the inflation rates of the individual countries? If inflation is 0% in one country and 4% in another, then you have an average of 2%, but the price levels of the two countries diverge. The goods from one country retain their price. One country becomes more competitive. One country gains market share. Delxawe has had the lowest inflation rate in the Free Banks for ages, but the exchange rate between Nitzia and Fee is only adjusted once every blue moon. You'd think their board of directors is paid to never revalue the Nitzia, but then you look at Hypos and they've never had more than 1.3% inflation in the last 10 years either. Now guess who has the highest export surpluses among your members. The answer certainly comes as no surprise, but it's Delxawe and Hypos. Now guess who has the highest unemployment among your members. Everyone else has over 7%. But what are you supposed to do? You only have the prime rate and that only works for everyone. Nobody adheres to the guidelines either, because you are ultimately responsible for price stability and therefore also to blame for the fact that there is none. So should you kick Delxawe out because it's too hard to handle? I'd like to see that. The emperor is more likely to kick you out, namely from your tower. But I don't think your directorate even sees the problem, which is why you're not raising the status of Nitzia, although you could at least do that. You think your currency area is like a flower bed and money is the water and the water level is the amount of money. If someone uses the big watering can, water will remain on the ground, but over time it will spread to all the flowers by itself, so you only need to look at how much water gets into the bed and the rest will be fine. If new money increases inflation and everyone has the same money, then of course everyone must also have the same inflation. This is logical in itself, but not transferable. If Blau stops exporting gas because I want to build myself a bubble bath in the bread lake, then Jena will have 18% inflation at the next measurement, then you will raise the prime rate even more so that people don't buy the scarce gas from the others and stop heating and cooking and working. Dumb - there's no other way to put it. It's so unbelievably dumb that I can't believe it. It's a denial of reality. You should be institutionalized. You are not sane."

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"You don't even realize that you are contradicting yourself. You said earlier that Delxawe should increase its spending to boost inflation in the country. If they are benefiting from the low inflation in their country, why should they do that and reduce their own competitiveness?"

"That is not a contradiction. Delxawe does not benefit. 52% of citizens live from hand to mouth. There is hardly any inflation for years. Wages are never increased and are pushed down even further with state aid. People have less money every year. Companies have less revenue every year. Prices are falling and inflation in the country is falling because there is no demand. Companies are laying off workers because they no longer need to produce as much. Unemployment rises and the price of labor continues to fall. Export companies become more and more competitive and hire ever more cheap labor. The country focuses increasingly on exports. The export surplus is increasing and breaking all your boundaries and nothing is being done. The shipyards, oil refineries and arms manufacturers continue to increase their profits. 74% of Delxawe's citizens live from hand to mouth. Delxawe has benefited? Were you once there? Everything is dilapidated and crumbling. They are not beautiful cities. Delxawe may be the export champion, but the country is certainly not benefiting from it. The owners of the export companies benefit. The emperor benefits because he owns many of them. But no one benefits truly. Where there are winners, there are losers. Jena has the highest inflation in the free banks and has had it ever since Emperor Shikai found out that his gas pipes also have a valve. I don't know who sold his gas on to Jena, but since all the gas pipelines lead to Baele, he still thinks it was us."

"Wasn't it you? I seem to remember your sister married the King of Jena."

"I didn't take care of everything when I was 13. The books have been burned. The ones who knew are all dead. Besides, no one had been hit harder than us. If I hadn't gotten Blau, we still wouldn't have gas today. My sister's wedding was years later, when our relationship with Ceramare was no longer friendly. Ceramare is our biggest threat. Of course we support Jena, who are at war with Ceramare."

"If you say so..."

"So Jena has had the highest inflation for years. Companies are laying off workers because more and more cheaper foreign products are stealing their shares. Unemployment is rising and the price of labor is falling. Export companies are also laying off workers because more and more cheaper foreign products are stealing their shares. Unemployment continues to rise and the price of labor continues to fall. Investment falls. Savings rates rise. Social spending rises. Government spending increases. Debt increases. Normally, the currency would automatically depreciate when demand for export goods falls. Normally, the debt burden would automatically fall when inflation is high. Normally, inflation would automatically fall when people spend less and less money, but even that rarely happens. Jena has always been very dependent on imports. The less they produce themselves, the more dependent they become. One crisis follows the next and then there's the war with Ceramare... If a field dries up somewhere, the prices rise first in Jena. Jena needs money and wants to issue bonds so that it can meet its social expenditure and then the Emperor of Delxawe comes along and stands up and says he is against it because the per capita debt of the citizens of Jena is already too high in relation to productivity. The free banks agree. Everyone agrees. Of course, Jena is not left hanging, because it is, after all, a community of solidarity, or in other words, if they were to declare bankruptcy, it would be bad for everyone else. For this reason, the Emperor generously agrees to lend to Jena through Delxawe, as long as they reduce their expenditure and start paying off their debts. The king agrees to the loan and that's how you know he's not fully sane either. Jena privatizes half of all state companies. Jena lays off civil servants and administrative staff. Jena cuts jobs in the health care system. Jena privatizes health insurance. Jena sells all public hospitals. Jena sells all public schools. Jena cuts social security spending. Jena raises taxes. It becomes a thousand times less attractive as a business location. Investments are falling. Saving rates rise. Unemployment rises. Social spending increases. Crime rates rise. Suicide rates rise. Government spending increases. Debt continues to rise. It's a disaster of their own making. The emperor must be proud of himself. Jena falls into a deep rescession and even pays him for the push. The citizens of Delxawe are upset that Jena is getting so much money from Delxawe when they have nothing themselves. The citizens of Jena are upset because they know that it is Delxawe's fault that they are now even worse off. Racism is on the rise. People hate each other. Racism has always been a problem in Jena, but it's getting worse every year. You know Aine Heimat? They have their origins in the north of Jena. There used to be shipyards there. You also read the newspaper. Just two days ago, at Blenas, they beat a family of four to death because they had dark skin. They were people who had fled from Delxawe because they had nothing to eat there. They didn't even want to stay in Jena. They wanted to be smuggled from the Nordkap to Ceramare on a ship. The family wasn't at fault. It wasn't even the people from Jena's fault. Jena and Delxawe are about to go to war and I'm sitting here in my garden and doing nothing? Well, at least it's not my fault. The free banks are to blame. Your union is a union of hatred."

Marah smiled in blissful contentment and let the silence sink in for a moment. Mr. Jens said nothing during this time.

.../ End Part