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Chapter 220: Becoming Europe’s Creditor (Fourth update, please subscribe)

Great careers often begin by accident.

When Jiahe Trading Company was established in 45, it was only a medium-sized small company aiming to establish grain reserves for Borneo and conduct grain trade in the international market.

But compared to other grain companies in this era, what it has is almost endless resources!
  "Beef, wheat from South America and rice from Southeast Asia are all urgently needed by European markets. We can be like the Russians and don't necessarily need hard currency, just exchange for machines..."

Once again, in the office, facing several executives of Jiahe Trading Company, Li Yian emphasized the method of transaction-barter trade.

After the war, European countries had little hard currency. Without US dollars or gold, it is naturally impossible to purchase the needed materials from the international market. This is why the commodities of agricultural countries after the war are unsaleable and the European market is short of materials.

This is the so-called "dollar shortage". The "dollar shortage" marked by the shortage of hard currency lasted until the 60s, and was slowly alleviated with the "Marshall Plan" and the subsequent European Renaissance.

Jiahe Trading Company is a company specially established by Li Yi'an to specialize in international grain and oil trade. It relies not only on Borneo's merchant fleet, but also on the foreign exchange reserves in his hands - after all, in the black market in the United States I have indeed made a lot of money from trading, with more than a dozen small goals!
  This money is the basis for the company to engage in international grain and oil trade. Using US dollars to purchase grain and meat from South America and Southeast Asia, and then transporting it to Europe in exchange for the machinery needed for the construction of Borneo, can be described as killing two birds with one stone. Not only can it make a huge profit, but it can also speed up the construction of Borneo.

"But, Chief Li, many factories in European countries are currently recovering, and the Russians are also exporting grain to buy machinery. If we grab it like this, it is likely to raise the price of machinery. Moreover, for now, Borneo is not So many machines are needed. In Tunisia alone, there is a backlog of more than [-] pieces of machinery and equipment. In Italy, there are still about [-] pieces of equipment waiting to be shipped. In the cargo yard of the German search team, there is also a backlog of more than [-] pieces of equipment. Various machines and equipment, now compared to machines, what we need are factory buildings and skilled workers."

As the manager of Jiahe Trading Company, Li Jiebai decisively stated the reality and pointed out the biggest problem in the boss's proposal - there is no shortage of machines in Borneo.

There is no shortage of machines right now.

"Uh……"

Hearing this, Li Yian was stunned. Indeed, he had forgotten this, but how could he miss the great opportunity in front of him.

"The currencies of European countries are now unstable. They will depreciate. If they are not exchanged for physical goods, we will suffer losses."

The reason why Li Yian mentioned barter trade was because exporting Burmese rice to Europe reminded him of the information he had read. In the first two years after the war, Western European countries imported a large amount of grain from Russia. The total amount even exceeds that of the United States.

Because importing Russian grain and meat does not require foreign exchange or hard currency. Russia exported grain in exchange for machinery for postwar reconstruction. Even though Russia's own food supply is very tight, they are still doing everything possible to export food - even increasing the expropriation of grain from Ukraine. As soon as they were liberated, they asked for 4 million poods of food to be expropriated in Ukraine, equivalent to 65.52 million poods. Billions of kilograms of grain, even if it leads to famine.

What matters is the machinery, the machinery needed to rebuild industry.

Although there are currently no large rice fields in Borneo, Li Nian has plenty of hard currency and ships. He can make huge profits by just buying cheap rice in Southeast Asia and shipping it to Europe. It doesn't matter if European countries don't have hard currency. Like the Russians, Borneo needed machines to industrialize.

But unlike Russia, Borneo has no shortage of money for machines, but more people than machines. Even if you buy a bunch of machines, they will just sit there and rust because there are not enough workers.

In this case, it is necessary for Europeans and Russians to rush to buy machines and drive up prices.

After Cheng Jide's reminder, Li Yi'an realized that Borneo did not have such urgent needs. And driving up the price of machines is not a good thing for Borneo! Li Yian said after thinking for a moment.

"So... what about accounting?"

"Accounting? What do you say?"

Li Jiebai and others were surprised.

"Basically, we designate a bank to grant credit to a certain country. The credit limit can be US$[-] million or US$[-] million. They do not need to deliver barter supplies to us now, but use bookkeeping. Agree on a delivery date, which can be one year or two years later. Of course, interest will be calculated during the billing period..."

Then Li Yian explained Germany's trade policy before the war. Before the war, Germany, like all European countries now, had a serious shortage of hard currencies such as gold and foreign exchange. This had a serious impact on the German economy. Because of this , after Hitler came to power, he implemented the barter trade of "de-goldization".

When Germany conducts trade with a country, it is required to sign a "Barter Trade Agreement", which stipulates that the mutual import and export quantities of both parties must be balanced, and then both parties establish a barter account. If Germany imports a sum of raw materials or agricultural and sideline products from this country, then The other party will import industrial products of the same value from Germany to form a hedge on the account. The ultimate goal is to keep the account in balance and no one owes anyone money. Through this barter trade, Germany not only obtained cheap agricultural products and raw materials through the so-called barter trade system, but also seized the market for British and American products, accelerated its own economic recovery, and suppressed the economies of the British, American and French.

But this is just the "barter trade" of the 20th century. In the [-]st century, there has been a new evolution. What drives this evolution is that China has become the world's factory. Since China's resources are scarce, it needs a large amount of agricultural and sideline products and industry. raw materials, while exporting industrial finished products. However, third world countries such as Africa do not have sufficient foreign exchange in their hands.

As a result, China provides loans to third world countries through banks, but these loans can only be used to purchase Chinese goods. How do those countries repay the loans? Of course, we use agricultural products and raw materials. It doesn't matter if you can't pay it out temporarily, just calculate the interest and repay it annually.

This approach, in another world, was accused by Europe and the United States of being a "debt trap" and "neo-colonialism."

This is not important, what is important is that Li Yi'an can learn from its model - providing loans to Western European countries, of course not giving them money directly, but using his own money to purchase relatively cheap grain and meat around the world, and transport it to After Europe, it is provided to European countries in the form of credit loans. Of course, the price is the price of the European continent.

"Currently, the price difference between beef, wheat, coffee and other supplies in South America and continental Europe can reach three times. This means that with US$3 million in supplies, we can leverage US$[-] million in funds, which are accounted for In the form, it is deposited in a designated bank. In the next two or three years, the central banks of European countries will repay it in their own currencies. We will then use it to issue orders for machinery and equipment to their domestic enterprises. Of course, we can also use these funds to acquire high-quality assets in various countries. .”

And European countries will also welcome this trade method very much. After all, for them who lack hard currency, they need food and meat from abroad to fill people's stomachs.

At the same time, the multiple returns that this trade method can bring will undoubtedly provide a powerful engine for the development of Borneo - European mechanical equipment technology will greatly accelerate the construction of Borneo. Even if there is no need to import European machines in the future, it will not have any impact. The money can be used to acquire high-quality European assets.

And through trade accounting, the Eurasian Development Bank can also reach into Europe and quietly intervene in Europe's financial lifeline.

By that time, even the Europeans themselves will not realize that they are involved in this trade process. They have inadvertently opened their doors completely, and even handed over part of their financial lifeline to the Eurasian Development Bank. After all, they can do a lot with debt. If they are willing, those debts can be turned into high-quality assets in Europe, and With the revival of Europe, those high-quality assets will receive returns of dozens or even hundreds of times.

Thinking of this, Li Yian found that his situation seemed to be smaller again...

(End of this chapter)