American: Native Empire

Chapter 118: Bubble.



Chapter 118: Bubble.

There was something else that was special during this period.

The empire already had a lot of children, but now there were even more.

This was thanks to the development of medicine and the distribution of vaccines, as well as the establishment of hygiene awareness.

The birth rate itself was similar, but the infant mortality rate had plummeted.

The empire society, which had always encouraged having many children by paying attention to child welfare, experienced another baby boom due to the decrease in infant mortality.

However, there were more and more people who viewed this negatively.

Your Majesty! The current population growth could be dangerous. No matter how good it is to farm thanks to the livestock like cows, the number of livestock is still insufficient and the number of people who want to farm is decreasing. This could soon become a big problem.

Kim Ki-woo stroked his chin after hearing the words of the agricultural minister.

This is similar to the Malthusian trap.

This theory was proposed by Thomas Robert Malthus before the arrival.

Malthus argued that population growth was much faster than food production, so there would be a food shortage someday, and this could lead to the end of humanity.

But his theory was too one-dimensional and had many flaws, and there were many problems such as targeting the poor as the population control group.

Well, its not exactly the same.

There was still a lot of land to farm on the Wakan Tanka continent.

The western part of the northern continent, which was being gradually developed, was not a huge grain-producing area in the pre-arrival California region.

And there were also vast undeveloped areas in the southern continent.

Moreover, thanks to guano, a high-quality fertilizer, food production increased even more.

And finally, there were various seeds that had been improved before arrival.

Now that transportation efficiency has also improved, there will be no major problems for a while.

But the agricultural minister has a point.

It was fine for now, but it was also true that the agricultural population was decreasing.

More and more people in the empire wanted to live in cities.

The price of food also decreased due to guano, improved seeds, livestock distribution, and increased transportation efficiency.

It would be fine if large-scale mechanized farming became possible in the future, but there was a limit to how much land one person could farm.

Anyway, some food reserves are needed.

The population could change drastically in the future.

And there could be severe droughts at any time, so they needed to pay some attention.

Kim Ki-woo organized his thoughts and replied to the agricultural minister.

First of all, buy up the crops that are on the market. Then the price of crops will rise and more people will want to farm. And in case of emergency, we can release the stored crops and overcome the crisis.

Thanks to this policy, food production increased even more and it didnt matter much that crops were piled up in warehouses.

People were not only on Wakan Tanka continent, and food was very important at this time than anything else.

As soon as the Age of Exploration began, there would be plenty of markets.

***

But Kim Ki-woos decision caused an unexpected situation.

What? The government is buying up agricultural products indiscriminately?

Thats what they say? And His Majesty personally ordered this to the agricultural minister.

Hmm, this is strange. Its not like him to suddenly issue such an order.

The merchants who watched the price of agricultural products rise slightly soon learned about the empires agricultural import policy.

And that Kim Ki-woo was deeply involved in it.

This gave a sense of urgency to the commercial sector.

His Majesty ordered us to stock up on agricultural products

Is this something big happening? Hes not someone who would give such an order out of nowhere.

Thats probably likely. Even if not other merchants would think the same. That means, anyway, that the price of agricultural products will go up.

Oh! Youre really a merchant lord. I didnt think of that.

Haha. What are you talking about? Then what do we have to do?

Of course we have to buy agricultural products. If we buy them now, they will go up, right?

Thats the correct answer. Lets start right away.

Yes, Lord Sangdan!

The first ones to act were the quick-witted merchants.

They started to buy up food supplies in sync with the government.

As a result, the prices of agricultural products skyrocketed.

And as time passed, other merchants also got wind of the information and joined the trend.

We have to buy up the crops too!

Eventually, an abnormality occurred in the market.

Even worse, when some people went to the financial office to get money after the prices soared, they encountered this situation.

What do you mean? Youre asking for twice as much as you did just before?

If you dont want to buy, then get lost. That person over there offered that much money, but since you showed your intention to buy first, Im giving you the priority out of courtesy.

Ugh Just give it to me for now.

It was that bad.

As the situation changed like this, the crops in the market began to dry up gradually.

If we hold on to them, theyll go up more.

The farmers thought so and stopped selling their crops.

What if we use our spare money to buy some crops?

The middle class who had only hoarded money in the financial office or simply invested also joined the hoarding.

Then, bubbles began to form in an instant.

***

I cant believe this

Kim Kiwoo let out a hollow laugh.

The agricultural products circulating in the Wakan Tanka continent were enough to feed all the population.

But as soon as Kim Kiwoo bought up the crops, everyone went crazy and hoarded them, creating a severe bubble.

It was like seeing the various bubbles before his arrival.

If he had to compare it, it would be similar to the tulip bubble in the Netherlands?

But soon Kim Kiwoo hardened his face.

If this goes on, it will cause a huge damage to the economy.

People die if they dont eat food.

But since the crops in the market dried up, people would soon starve.

They would buy food at any price, and the bubble would grow bigger.

But someday, the bubble would burst.

It would be a disaster if a huge bubble burst.

For example, didnt the tulip bubble completely ruin the Dutch economy?

The only good thing was that the bubble had not been going on for long, and there was enough food stored in the government.

Kim Kiwoo did not hesitate and ordered.

From now on, open all the warehouses in the country and keep selling food until they say enough.

As this order came down, the governments food warehouses opened wide.

And they started selling food.

Then, the rapid rise in crop prices came to a halt.

They dumped a huge amount of food into the market at once, but because the continent was wide and the information and communication system was still poor, there were many people who bought crops late.

But as they continued to sell off the food that had been stocked up enough, the crop prices that had only risen began to drop slightly.

And around that time, the news that the governments warehouses were open wide also spread somewhat.

Huh? The governments food warehouses are open wide?

Does that mean nothing big was happening?

Gasp! Then we have to sell our crops right away! If this news spreads widely, the prices will collapse!

It was Kim Kiwoos trust that created the bubble in the first place.

Then it meant that he could also make the prices plummet by his actions.

The merchants realized this and started throwing their crops into the market.

Thats when it started.

The collapse of the agricultural product prices began.

Ah, no!

Why why did this happen?

The small and medium-sized merchants who noticed it first and got out were clueless, but the huge merchants and capitalists who led the hoarding, and the middle class who bought the agricultural products above their shoulders, being slow on information, suffered great losses.

They experienced the damage caused by the bubble burst for the first time and became panicked.

The markets fear continued even when the prices of agricultural products fell below the original level.

Then, Kim Kiwoo gave another order.

From now on, buy agricultural products until they reach the appropriate price that I instruct.

Yes, I understand.

The agricultural minister nodded in agreement, but his expression did not calm down.

Kim Kiwoo asked him.

Do you feel like I intended this situation?

H-how could that be possible?

Haha. You can say what you think inside. I wont blame you.

I do think so a little.

The agricultural minister finally admitted.

Kim Kiwoo smiled bitterly at this.

I honestly didnt think it would go this far.

He didnt announce it publicly, it was just a measure to increase the stockpile of food.

If the prices rose a bit, the number of farmers would also increase.

But he didnt expect a bubble to occur so quickly.

He thought that if a bubble occurred, it would soon burst naturally, but this was not what Kim Kiwoo intended.

However, Kim Kiwoo did sympathize with the thoughts of the agricultural minister and some other ministers and scholars.

The government made astronomical profits from this bubble.

They bought agricultural products at low prices and sold off even the existing stockpiled food when the bubble was full.

Thanks to that, the empires budget, which had been struggling due to various policies and continental unification costs, and development costs, changed to be abundant in an instant.

It was understandable that they would misunderstand that Kim Kiwoo, who had shown tremendous insight so far, had caused this to increase the budget.

I dont know if youll believe me, but I didnt think that far either. I have no intention of causing such social unrest to increase the government budget.

When Kim Kiwoo said this much, the agricultural minister bowed his head deeply.

As planned, the government began to buy back the agricultural products that were left in the market.

Thanks to that, as time passed, the agricultural products that had plummeted stabilized and regained the price range and stock amount that Kim Kiwoo intended.

From then on, merchants who tried to buy and sell agricultural products and make profits from price differences appeared steadily, but whenever there was a sign of that, the government kept the price constant.

Thanks to that, the agricultural product bubble ended with minor damage compared to the first large-scale bubble that occurred in the empire.

It also served as an opportunity to make the imperial citizens aware of the danger of bubbles, and especially to make merchants realize that they should not blindly follow Kim Kiwoo and hoard products.

***

Its really a huge amount.

After checking the money that flowed into the government due to this agricultural product bubble, Kim Kiwoo licked his tongue.

It was good that he caught the bubble in time, but if it had been delayed a little longer, he might have driven the empires economy into ruin.

As expected, crowd psychology is really scary.

Watching this situation, Kim Kiwoo realized once again the instability of humans.

Anyway, theres nothing bad for me in this situation.

However, Kim Kiwoo did not intend to just pile up the money he earned in such an uncomfortable way.

Money is power.

This was also true for Kim Kiwoo.

When money is abundant like now, many things are possible at the government level.

Especially considering the central continent and southern continent that had not been integrated for long.

Kim Kiwoo increased the development budget for both regions as a first step for quick integration into the empire.

And after having a lot of budget left over, he invested it in various civil engineering projects and research funds for each research institute, as well as industrial development.


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