Chapter 86 Someone Wants to Attack Lira (1)

After receiving the news that the British were interested in the Algerian Petroleum Company, Contini initially instinctively thought it was a scam: because United Petroleum is not currently listed, United Group still holds 42% of the shares. Although this share ratio is not enough to make a unilateral decision Any matter, but basically the oil company is still controlled by the United Group, and funds for various share capital increases have also flowed into the hands of the United Group in one way or another.

To get funds from oil companies into your own hands, you need to pay attention to strategy. Simply getting money from oil companies will turn into major shareholders usurping the company's interests, so United Oil has designed a complex operation method.

The first is the salary of personnel. The standards are set according to the standards of British and American companies. There is nothing special. The problem is that these personnel usually also hold other positions, which is equivalent to the salary of other projects undertaken by United Oil;

The second is interest. The highest interest rates borrowed in the early stage were all borrowed from Algerian companies. Although it was reduced a lot in the later period, the interests still had to be transferred to the United Bank;

Next is the operating expenses. Of course, the equipment itself used in the oil field is amortized directly, but the expenses incurred during the procurement process, including the procurement of other power generation equipment and refining equipment, are also recorded in the Algerian Petroleum Company;

The final bulk is the construction cost, whether it is the oil pipeline or the cost of handling crude oil from the Tripoli port, as well as the related roads, telecommunications and electricity use, a relatively high amount is set, and even the dredging cost of the Tripoli port is amortized. The reason It's very simple. The first oil pipeline laying in the desert and the expansion of the Tripoli port are all supporting services for the oil fields. If it doesn't pay, who will pay? The problem is that these expenses can also be used for other purposes in the future, which the United Group has not mentioned.

Of course, there is an even more exaggerated side. The cost of oil guards, laying mines, and using tanks are all charged to the Algerian Petroleum Company. Although it is understandable, this price is a bit high.

In the final analysis, it can be summed up in two sentences: the United Group used the method of "low in, high" to withdraw funds from Algerian Petroleum and into other subsidiaries; it adopted the method of sharing the whole with parts to quickly squeeze out the liquidity of Algerian Petroleum Company. Dry.

Finally, there is the hidden erosion: the crude oil production reported by Contini to France and registered in the company's accounts is only 86-88% of the actual production, and the extra one-eighth is directly the net profit of the United Group. So the British felt uncomfortable with this, and the French also felt uncomfortable, and tried every means to get it over.

Of course, these did not create any sense of moral guilt in Contini's mind: I was the one who took you to play. If it weren't for me, who would have known there was a big oil field here? I haven’t released the reserves yet! Furthermore, in order to resist the French pressure on the oil fields, I have paid a huge political and military price at home. Shouldn't more of this invisible guarantee and competition be allocated to me?

The United States also has such considerations, but they have more ideas: they do not want to control the oil field like the United Kingdom or France. Wall Street is not interested in the oil field itself. What they are interested in is the capitalization operation behind the oil field. In other words, as long as the oilfield shares can maintain independence and conduct an IPO under the strong promotion of the president, and then achieve a strong rise, they do not mind the Italians sneaking away some through small actions.

Are all Americans fools?

Of course not, they clearly see that whoever controls the oil field can get a little more benefit like Italy. This is the natural impulse of the majority shareholder of the controlling company. The British and French are not necessarily more powerful than Conte when they are in power. Hello, but then again, if Britain and France are in power, then American capital will have no say at all. The Italians control the oil fields. In order to compete with Britain and France, they may have to rely on the power of Wall Street, not to mention that the president himself is still there. There's plenty of lending on Wall Street!

When he discussed the news with Francisco, he nodded first and then shook his head: "President, what you saw may not be everything. We have other hidden dangers."

"What do you mean?"

"I just received a telegram from China. The leader is dissatisfied with the current currency value of about 100 lire for 1 pound, and hopes to promote the realization of 90 lire for 1 pound, and incidentally improve the exchange rate with the United States."

"Is he going to promote the appreciation of the currency?"

"Yeah, it's a nuisance."

The current exchange rate between the US dollar and the British pound is almost 5:1, so the lira has roughly maintained a pattern of 20 lire for 1 US dollar and 100 lire for 1 pound. However, if we follow this idea, in the future it will be 18 lire for 1 US dollar and 90 lire for 1 pound. Sterling, the local currency needs to appreciate directly by 10%.

"Who gave this advice?" Contini's face immediately darkened. "Doesn't the Minister of Finance, Count Volpi, not understand? Such an appreciation will severely damage the export competitiveness of Italian goods."

Volpi was the second finance minister appointed by Fascist after he came to power. He successfully resolved the British and American demands for war reparations in Italy at the cost of trying to keep tariffs and currency values ​​stable and importing as much supplies as possible from Britain and the United States. He has performed well since he took office. In addition, Contini continues to introduce complete sets of equipment from the United States and imports from the United States continue to rise, so all aspects are satisfied. It is a bit unbelievable to suddenly promote the appreciation of the local currency.

Francisco smiled bitterly and said, "The telegram was sent by the Count. He said that the idea was completely decided by the leader himself and no one could stop him."

"Did he say why the leader did this?"

"Yes, the leader gave two reasons. First, the trade deficit has continued to rise in recent years, and the appreciation of the local currency is conducive to reducing trade losses; second, the fascists have been in power for 5 years, and the lira has remained at its previous level. The average salary of Italian workers has not increased much. In horizontal comparison, it is at a lower-middle level in Europe, which does not match Italy's image as a great power."

Now even Contini could only laugh and cry. He knew that the first reason was not Mussolini's true idea. His understanding of economics might not be able to explain the triangular relationship between cash flow, capital operation and foreign trade balance. What he really cared about was the second question of how to maintain the face of a great power.

"This is not an economic or financial issue, it is a political issue." Contini thought for a while, "You call the Count back and ask him to find a way to stop the leader's impulse."