A report to the Kaiser on the state of Trade

[Andreas the Wise]

Oh nifty Kaiser,

After being appointed Minister for Trade, I have prepared a report on the state of our trade. Through the blessings of the gods and the wisdom of our forefathers in choosing and defending the land they did, Shireroth has been well-endowed with natural resources. We have food enough to feed two or three times our population, and a great variety of resources allowing us to transport goods. We also have many luxury goods and luxury metals. However, in other areas our nation is quite poor - we have little clothing, and no metal. Did you not wonder that many of the spears and swords of the Kaisers of old were forged not from Iron but from Gold? This was not a matter of showing wealth, I expect, but instead a matter of necessity - we have a good deal of gold, but virtually no other metal. Our citizens are crying out for clothes for their backs, and metal for swords and shields, that they might defend their lord in times of civil war. But, alone, we cannot provide it to them - many are reduced to making clothes out of camel hair.

However, my Kaiser, an option does present itself. For too long has trade been absent from Shireroth. I do humbly beg for your permission to begin immediate trading with our close friends, the Confederation of Gralus. They have many of the resources we lack, and require many of the resources we have in abundance - especially those luxury goods which we can charge through the teeth for. I have drafted a proposal with them, and determined that we could likely jump from the most basic level of subsistence, overall, to a mid-range level of economic development, merely by trading with them. If this endeavour is succesful, I would call for permission to act upon the Mango-Camel pact, and extend second trading to our cousins in Babkha, who will have more of the resources we need. I understand that the exchange of currency is a topical issue, and that you would prefer no foreigner owning our currency should we need to pay them for trading. To this end, I will work as closely with the Gralan Bursar as possible to ensure our total imports and exports are of equivalent worth, and that no money, merely goods, need exchange hands. To determine worth I will post pricing according to NCUs, which are rapidly becoming the international currency of trading - not to defer to the foreigners, but merely because it is much easier to determine value than with the erb, which it is impossible to exchange.

Most nifty Kaiser, your citizens are crying out for clothes and metal. I am sure it will be said to you many times during your reign, but the future of Shireroth is in your hands! The trading proposal I have come up with with the Gralans is both wise and able. Let us open ourselves to trade - first with the Gralans, then the Babkhans, and then, if it suits us, the world - that Shireroth may profit, and be recognised as the truly wealthy nation it deserves to be!

humbly yours,
Andreas the Wise

[Yvain Wintersong]

Your Niftiness!

Trade destroys the spirit of a nation, ending its self-sufficiency and forcing it into dependence on fickle foreign powers. It corrupts a people's spirit, importing foreign decadences along with foreign goods.

Our shortage of clothing and metal is a dire problem indeed, but in Ynnraile there is a saying, "The wise leader sees even in catastrophe an opportunity to gain." Therefore, let us solve these problems creatively, in a manner that benefits all our people. Decree, for example, that all attractive women under the age of twenty-five must wear as little clothing as possible, to conserve our scarce textile resources.

As for our metals, the resource map indicates that there is a deposit of chromium in the Crestfall Downs. Let us mine it, and build chrome-plated armour and vast chromium palaces, so that, millennia hence, our descendants will look back upon their still-shining remnants and say "Truly, the Age of Chromium was their finest hour."

[Andreas the Wise]

Your Niftiness,

While I normally respect Baron Yvain as a wise leader full of foresight, in this case I must speak against him. For a start, his proposal should be changed to read all attractive women between 16 and 25 . Chromium, while a possibility for our weapons, is generally counted as a luxury metal, and, like Gold, therefore does not count towards our amounts of metal for any practical purpose. Your Niftiness, Gralus and Babkha are anything but fickle foreign powers, at least to Shireroth. I personally know the Gralan Bursar (well, the President stepping in with his powers) extremely well, and I assure you, he will not let us down. And how can we doubt our friends in the Mango-Camel Pact?

You niftiness, if we decide this trade is not in our interest, we can drop it any month of our choice. But I am quite sure it will be in our best interests. And, if Yvain would not let me trade, what would he have me do, as Minister of Trade ... invent silly walks?

[Kaiser Hasan I]

We can have no trade until we have a bank. And even then, it would be prudent to at least pitch the idea of our economic system to Gralus if they are interested in trade with Shireroth. However, at this early stage in our financial development it would be irresponsible and possibly dangerous to trade considering the value of our currency.

Andreas, I would like you to explain to me the system our friends in Gralus use for their economics. With that I will be able to work out a plan.

[Erik Mortis]

As it stands I don't believe our currency has a value to speak of.

There was a time when the erb was backed by about 32 US dollars. I still have the $32.

[Kaiser Hasan I]

The value of our money is based on the value of our vote. Which I suppose acts as a share in the total sum value of the Shireroth online presence.

[Jacobus Loki]

I still have the $32.

Then we are even?

I used to back a currency with change in a little box. Most people kept it as souvenirs.

[Erik Mortis]

That's basically what I did. There was a time when Shireroth had 2 currency. Real erb and simulated erb.

[Liam conToketi]

Andreas, I would like you to explain to me the system our friends in Gralus use for their economics. With that I will be able to work out a plan.

I can answer this. The government pulls money out of its ass and hands it out for each post (ecu1 in Gralus and Toketi, 10NCU in Novatainia, 5 Aerin in Chelkran Kesh, and a character based amount in Amokolia). Then people collect it and a powerful upper class emerges that can buy damn near anything. Then, on top of that, we pay people for jobs they hardly do...

Gralus desperately needs an economic overhaul...

[Erik Mortis]

What do they buy?

[Andreas the Wise]

Liam missed the bit that, in Novatainia at least, a lot of the money returns out of circulation because it's spent on property, which goes back to the crown, and a tax system also removes a bit. And besides, it's a post based economy. Wealth is tied to activity, and inflation isn't really a problem because half the prices are set by the government, and not enough buying happens for market forces to take affect.
What do we spend it on? Property is very popular. Magical items and weapons are more bought in Toketi. There was a spate of buying Loot when I opened a shop for it (you know, expensive and probably illegal items like Sphinxes, the burial treasure of King Jeremy I etc ... )

However, this has very little affect on the way I envisage international trade. I'm sorry if I didn't make it clear - since an exchange rate is at this time difficult or impossible to establish, there would be no trade between citizens - purely resource trading between countries. Whenever resource trading has (attempted to) been implemented before, the governments of those nations set aside a certain budget (at least 100 000) that is allocable for trade. It's little more than a way of 'keeping score' about whether you're exporting more than you import - if, two or three months down the track, you have more money than you started with, then you're doing good. In simulated terms, these goods are then consumed by the simulated citizens of the nation, so it makes sense the money comes from a 'simulated' budget. (Come on, how many micronations have you seen who say they have 1 million to spend on health, 10 million on defence, 5 million on education etc, and the money is an entirely arbitary value that is never used on everything). While every other part of Novatainia's economy is pragmatic (used by actual citizens), trading for a country, by it's very basis, is not going to be used by all citizens - it's managed by each country for the citizens they assumedly have.

*rereads post* Ah, I see what the problem is ... when I planned this post I'd included a line 'set aside a number of erbs not tied to voting for trading purposes'. I forgot to include it when I actually wrote the post .... oops ...

In summary, I'm only suggesting trade of resources with a government budget. Sorry I didn't make that clear. I agree, trading goods and services and this point is far too complicated, especially since Post Based and Service Based economies are very different in the way they generate money and the amount floating around.
On changing, well, I mentioned it briefly and I think Liam was the one who said most strongly "Not another change ..." I think we're probably too stuck in our ways to change our system a great deal (certainly the voting part wouldn't be popular with some people). However, the only real difference is that in our system, you can generate money from posting, and thus a lot more flows into the system. It's still essentially based on services and goods between citizens.

[Kaiser Hasan I]

It doesn't seem that Gralus' economy is compatable with Shireroths system. Perhaps once we get it up and running we can look at ways to generate trade, but I see a few problems.

Purchasing any foreign goods means taking erbs out of the system (which causes deflation) but it also means that a country like Gralus would have a portion of erbs that potentially could effect the Landsraad unless we negotiated otherwise. Where as Gralus' currency isn't tacked to anything, so its money here in Shireroth is virtually useless.

[Andreas the Wise]

That's fine, my Kaiser, I've said before the exchange of goods or services would be impractical. And certainly any erbs used for trading should not be tacked to voting.

However, I don't see how that stops us trading, or shall we say instead 'bartering' resources. MCS Resource Map resources are, as current, worthless in Shireroth. But by trading them, they gain worth. With a nation like Gralus, since I'm heavily involved on their side of trade too, it really isn't hard to make sure our overall cost is nil - that we exchange an equal worth of resources. I think the problem here is probably that when I use the word trade I've always meant primarily Resources, but I think a lot of you are thinking of goods and services ....
And if you didn't trust bartering, well, my original version of this trade proposal had all nations get allocated 'Trade Credits' - an extra currency only of use for trading, so it was all managed in the one currency without exchange. While the organisation part has been dropped, the idea of Shireroth floating a second currency purely for trading purposes is not out of the question ...
EDIT: And, as mentioned elsewhere, if there were interest in a Stock Exchange for the purposes of having one, rather than for citizens to start companies ... it could be based on resource companies, and pay a dividend based on how our stock sells overseas. Dividends would be funded from the initial float, so no money actually leaves the system ... it just gets paid out over time. And people can buy and sell them which raises the price and so on like the real world ... just a thought.

[Liam conToketi]

On changing, well, I mentioned it briefly and I think Liam was the one who said most strongly "Not another change ..."

In reference to economics? I said no such thing.

[Andreas the Wise]

Well, you didn't like the idea of the political change to a camel economy, and it's not much use without the political bit ...

[Liam conToketi]

When? Link me to a post...

[Andreas the Wise]

I considered quoting it but thought you might not like it ...
http://www.novatainia.org/gralan/forum/ ... c&start=44
It was actually Gerk who said 'not another change', but you said 'If we're going to make a change, it's going to be small.'

[Liam conToketi]

That was a change of government, not a change of economy...

[Andreas the Wise]

Well, you didn't like the idea of the political change to a camel economy, and it's not much use without the political bit ...

Hence as I said above.

[Liam conToketi]

But the economy part was never mentioned, so I couldn't have "rejected" it...

[Andreas the Wise]

....
We're arguing pointlessly again and I won't be drawn into it.

Funny thing is it probably was a genuine misunderstanding between us ...

[Liam conToketi]

Or you're inferring things that have no basis for truth. I denied a government system that has no relation to this economic system whatsoever...

[Andreas the Wise]

And I inferred that since the post I introduced it in was talking about the Babkhan Camel Economy, the entire basis for the government system, you were also objecting to the economic system ... sily me *roll eyes emoticon*

[Kaiser Hasan I]

Gents, we have an under used Judicial system for cases such as these if you're interested....

[Andreas the Wise]

Ooh, ooh, can I defend Liam?

(joking)

[Erik Mortis]

But.. what exactly would I be judiciating about?