The Economics of Prophecy

"Let me be specific."

The first thing I wrapped up in smoke in the abstract. Next builds up imaginable commonalities for it one by one.

Nodding at Natalie, she pastes the red mark across the river. It is the bend of the great river, the place facing a tributary that flows into the great river from the mountains of blood.

"Imagine we have a relay hub for trade here. As you can see from the map, it's in a place where you can aggregate paths from Kurtheit with the King's Capital, Bertoldo, and the Great River. In other words, perfect for collecting things. Next up is people. This will continue to be a land for imperial merchants and a country for the kingdoms. So there is a kind of neutrality. In other words, it's the perfect way for merchants to communicate and negotiate directly with each other. Oh, it's also a high point to be away from the little King's Capital."

Who is it, the guy who said that pinching the little joke is the basics of the presentation or something? Everyone looked awkward when they saw Craig. Don't do things you're not used to.

"Cohon. By bringing people and things together. The city will have a large commercial museum to operate due to large warehouses and business deals. And if the deal falls into the hands of merchants, it unleashes a vast amount of information that has never come out before. An increase in the variety of products that can be exported. We believe that it will also be possible to develop new products. Incidentally, the trick for this is to hold an exhibition like the one we held in Wang Du last year for the new carriage. As a result, more people and things gather here."

The members gathered in my words regain their expressions. Efficiency of the transport of supplies, activation of business negotiations. These are the benefits that any merchant can think of. The resulting revitalisation of the exchange of information should also be within the scope of the imagination. I understand that information creates wealth in itself if it's a merchant.

"A massive amount of people and things get together and interact freely, and this is where we can make an unprecedented deal. That's..."

I'll cut the word so the participants can prepare for the next shock. I can see several expressions in my anxious face about what to say and how it started again.

"It's a deal that determines the future price of a commodity. Commodity futures market."

When I get a signal to Natalie. Natalie pastes the next piece of paper. Many merchants draw deeds with trade names and delivery dates, the main point being standardized contracts, and pictures offering prices to each other. It's a venue for auctions and competitions in the light of Earth's memory. By the way, it was Vinaldia who drew the picture.

"Simply put, is it a public business meeting? The most important information for commerce is' what time, how much and how much you can buy and sell '. The futures market creates that information."

I'll keep explaining. For producers who make goods and consumers who use them, lower prices due to the rapid elimination of the supply and demand gap and new demand due to the guarantee of stable supply open up. There are as many products that are technically possible, but which are not achieved by unstable supply.

A meal that brings together rare specialties and a wide variety of dishes, like the one we served at the Shaoxian Festival and trade fair, comes to the fore because it's difficult.

"Promptly and stably deliver the product from the person making the product to the person using the product. That would be the merchant's real deal. The most important part of this is information about when and how much you can buy or sell."

I repeat the three elements of a commercial transaction again. When it comes to futures trading, it is the image of the speculative Bakuchi, but the essence is hedging. Its greatest significance is not to mitigate the risks of merchants, but to provide a stable basis for producers and consumers mediated by commercial activities, in other words society as a whole.

"Let me give you an example. She, Natalie, is making lamb that is now becoming a reputation in the King's Capital. One of the key ingredients is beans."

I'll explain. Even if there is a new demand for beans, it will take a long time for it to increase the production of beans to producers. Besides the difficulty of making crops that are different than before, because there is no guarantee as to when they will be sold.

But with the bean futures market, I can get that guarantee. It may be said that the information on the new product will circulate promptly in the form of price information on the futures market.

By the way, if the filling spreads, the beans turn from a degraded version of the cereal into a commodity crop. See, the look on Giverny's face connected to the prime minister, the Duke of Greenicias, the bean region, moved slightly. Natalie is about to accidentally retrieve the paper she had. This level of publicity is useful.

"Isn't that to say make the price known to everyone"

Kenwell's chairman raised his hand. Her face is slightly red. Given his position, I should say how restrained he was to that extent. No matter what means you use at this moment Drefano or Kalest makes the decision to crush me, it's not weird.

Naturally, for Kenwell, who has influence over "the entire food price” by handling large quantities of grain, price information is an extremely important weapon, that is, information that should be strictly adhered to.

"Exactly."

I affirmed. Let him look as cool as possible. Half of it is a void. But I believe this will never be his loss in the end. No, he gets the biggest beneficiary or something.

"… it would be impossible to trade all goods publicly"

You saw the look on my face, Kenwell's chairman has changed the incision. It's enough that it's not a headless denial.

"Yes. Not all commodities can create futures markets. Only a limited number of varieties, such as cereals and mineral resources, would be eligible for handling. As you can see, the biggest target would be wheat."

There are conditions for what can be handled in the commodity futures market. Goods with large quantities of buyers and sellers, which can be preserved, standardized, etc.

The grain fills all of that. Rice in Japan. It is no coincidence that the first modern futures market in the world was the Edo-era Osaka, Dojima Rice Hall, where rice was gathered from all over the country.

Even with the same food, the shape varies over the large size of each grain, the value of sweetness varies, and fruits that are even more difficult to preserve are much more difficult. At least with technology in this world, these kinds of goods have to be traded directly. In the case of meat, raw meat is difficult without refrigeration facilities, but it is not impossible without changing its shape, such as cutting it and turning it into dried meat.

Of course, it's not as easy as it sounds. What was extremely important about the supply and demand gap on the planet in previous life was the tremendous efficiency of production, transport and the fact that we could make as many as we wanted to.

The world I live in now is not, no matter how much demand there is, there is little room to increase supply. But that means that the significance of closing the supply and demand gap is significant in the opposite sense of modern times. Extreme stories, whether honey bursts or crashes, have no major impact on society. But the grain is different.

"Instead of relinquishing the monopoly on pricing information, we obtain a guarantee against the risk. I guess so..."

The head of the food guild said with a difficult face. The direct benefit of the futures market is guarantee. But the scale is a guarantee in itself. Make it worthless for Kenwell, the big merchant, or you'll think about matching it for the biggest downside.

If the value of the futures market rises, information about where Kenwell was monopolizing will be exposed to the public.

However, hedging is not the same as the fundamental benefits of the existence of futures markets. The things that result are important.

"First of all, the influence of cereals, wheat, on the entire food price will not be lost. Rather, it expands. It is not surprising that the price of the food that is essential to live, the grain that accounts for the largest proportion, is inherently linked to all commodities. What that only occurs in a limited way is that accurate information is not available. That is, because there is not enough information available for credibility. The futures market is a mechanism that creates enough information for its credibility. That's what I meant when I first said that the biggest product in a new city was information."

If there is no longer a monopoly on information, the influence of the information itself will spread. Information One profit margin falls, but demand expands more than that. And in terms of earlier demand and supply, information is an easy commodity to increase supply.

"And that information turns wheat into a special product"

It doesn't just increase in value, it becomes a steady value. It will be of value with credibility. As a result, the value of cereals approaches the gold itself. I want you to think about it, it's storable, it can be traded on a unit, it's worth it to many people. This is of a common nature with currency.

Instead of saying that credit increases or decreases the value of gold, credit is the value of gold itself. And with the value and credibility of the commodities gathered in this city, that means that the city itself will gain credibility. Then...... No, this is too far ahead of you. How long will it take just to list one product called wheat on the futures market?

"So you're saying that grain brings its properties closer to gold."

I can see that Kenwell's chairman drank Gokuri and Tsuba. Half of the price of the product is made from credit. If that credibility increases, it will increase in value. Moreover, the invisible object of information, unlike arable land, can be increased at an unlimited cost close to zero.

The first objective of my aim to revitalize commercial activities in this world, in other words to accelerate the distribution of information, was the establishment of a general trading company. I thought that was the best solution I could get.

But with the members of the Central Garden, I walked all the way here and thought that even if I didn't set up a general trading company myself, I'd have to build a new city that could accommodate them.

This is its development. International commercial cities with a focus on futures markets. No, an international commercial finance city. That's my new answer.

Well, it's only that concept that I've explained so far. It depends on everyone here right now if we can do it in real life.