Chapter 126 Treasury bond issuance

The interest rate of Spain’s government bonds is not high, so there are not many government bonds that need to be repaid when they mature, but this will also cause capitalists to be reluctant to pay for government bonds.

In layman’s terms, national debt is a way for the state to borrow from the private sector. Private capitalists lend money, and the borrower is the state.

Since the issuer of national debt is the country, it has the highest credit, so it is regarded as a means of investment by capitalists.

If the interest rate is too low, it may make the capitalists abandon this investment, so that the country cannot borrow money, and the money that can be raised by simply taking advantage of the patriotic sentiment of the people is limited.

If the interest rate is too high, there will be corresponding harm.

After the Franco-Prussian War, the French gave full play to the power of financial capital and issued 5 billion francs of government bonds in three installments. The interest rate of these bonds reached 5%.

Such huge profits have led to big domestic capitalists and civilians rushing to buy. The French government quickly raised 5 billion francs to send the Germans away.

But the drawbacks are also very obvious. Such a high interest rate makes it very difficult for the French government to repay.

It even directly led to the usury imperialism that followed. After French capital tasted the sweetness again, it started to start lending around the world waving its banknotes.

The results are self-evident, the real economy in France is developing slowly, and its industrial strength is gradually surpassed by Germany and the United States.

Even after the end of the First World War, the fall of Tsarist Russia, the foreign debt and investment of tens of billions of francs owed by Tsarist Russia to France were all in vain. So after World War I desperately asked Germany to pay reparations.

Spain cannot follow the French way, and real industry is still the foundation of a strong country, so the interest rate cannot be too high.

“Palacides, our Treasury rate needs to come down a little bit!”

Alfonso looked at Palacides and said solemnly, the interest rate of the national debt should not be too high, nor too low.

“Then I don’t know, Your Majesty, what should the interest rate be set for the issuance of this treasury bond now.” Palaciides asked.

“Treasury bonds should be divided into 3-year and 5-year maturities, and different maturities should have different interest rates.”

“In general, the longer the time, the higher the interest rate, and this standard, I think 3%, 3.5% is the most appropriate number.”

Alfonso replied that although this interest rate standard is not professional enough, most national debts in later generations are actually within this range, which is a relatively reasonable interest rate.

“But the specific interest rate still needs you to go back and calculate it, but it needs to be within this range, not too much, not too little!”

“Yes, Your Majesty!”

…..

The information about the issuance of government bonds by the Spanish government was passed on by Le Monde.

During this period, the new Spanish government had never issued a national debt. As for the people’s trust in the government, Alfonso was actually quite uneasy.

Before that, neither the republican government nor the royal government has ever truly gained the trust of the people, so the national debt is not a novelty.

But the Spanish government did not make much profit from it, and more often it looked at the British and the French, relying on borrowing money from the people to develop the country, although it was jealous but there was no solution.

“Your Majesty, I don’t think you need to worry too much about the issuance of government bonds.”

Inside the palace, Queen Hepburn leaned on Alfonso’s shoulder and comforted her softly.

“Well, I hope the people trust me more than before.”

The national debt of the 2 million match tower can definitely be dealt with, but the problem is whether it will be sold out or dealt with slowly.

If only two million cannot be sold out, then it is nothing more than a joke to rely on the issuance of government bonds to fight the war against Morocco in the later period.

“Your Majesty, since you ascended the throne, you have opened up compulsory education, guaranteed veterans, and even helped special groups in Spain. The people will support you no matter what.”

“I believe this bond issuance will be sold out in one day!”

Hepburn still reassured that the relationship between the two sides has been good since they got married, and the Spanish government has gradually been accepted by the people under the leadership of Alfonso.

From the continuous opposition parties and rebellions to the current national stability, this is the best proof that people from all walks of life still recognize Alfonso’s rule.

The public’s trust in the royal government is also gradually increasing. Although it cannot be called peace and prosperity, at least the basic life of the people is guaranteed.

“Lend your auspicious words!”

Alfonso looked at Hepburn, smiled heartily, and calmed down.

…..

Early the next morning, Alfonso, who had just woken up, received a report from the Chancellor of the Exchequer, Palaciedes.

“Your Majesty, the government bonds have been sold in just one day!”

“Many people have been waiting in line at the gates of banks in various places before the issuance of government bonds, but because of the small number of issuance of government bonds, there are still a large number of people who have not bought government bonds.”

The issuance of treasury bonds was officially launched at 9:00 a.m. yesterday, and the exact time of the short-sale cannot be counted. It is true that today cannot be compared with the Internet era of later generations.

But Palaciides’ remarks completely reassured Alfonso, who was a little nervous.

The smooth issuance of national debt at least proves that the people still have confidence in the recently established royal government.

“That’s good, that’s good. If the issuance of the national debt goes smoothly, then the war in Morocco will not be a problem at all.”

Looking at Palacides who was passing the news in front of him, he suddenly felt pleasing to the eye.

The Kingdom of Morocco is 500,000 square kilometers and has a population of 3 million. The Moroccan Army and the rest of the African troops are still different, at least the troops equipped with muskets.

The military expenditure required to completely occupy Morocco is still a relatively large amount. According to Spain’s current finances, there is no way to pay it except by issuing government bonds.

Almost the same area as Spain~www.readmtl.com~ It is not difficult to defeat the Moroccan army, but after defeating the Moroccan army, the localization management is directly implemented, and the expulsion of the infidels in Morocco.

The cost of maintaining and maintaining the military is a big problem.

Diplomatically, there is almost no problem with Moroccan military action.

The cooperation between the British and the Spaniards is bound to be impossible to hinder the actions of the Spaniards.

The French even signed a partition treaty with the Spaniards, and it is impossible to raise objections.

And the Germans who still have interests at the time, not to mention it…

Any attempt to interfere in this area, unless the occupation of France directly borders Spain, is empty talk.

……

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