“Oh my goodness,” Judy whispered in pseudo-shock. “Sarah has turned into a silver nut.”
Sarah returned a repressive look. “No. Having your economy dependent on whether some miner happens to hit a large vein of silver strikes me as a very bad idea. But full faith and credit are hard to measure. In fact, the only real way to tell is how willing people are to take your paper.”
Judy very theatrically wiped her hand across her forehead.
Karl grinned at Sarah, and Sarah grinned back at him in a disgustingly sappy way. Judy grinned. “Stop drooling, Sarah, and explain.”
“What you have is sort of stagflation!”
“That can’t be. The prices have been going down gradually for the last . . . well, at least since we got here.”
“Inflation is more complicated than it seems in economic-ese—which is as weird as medical-ese or engineering-ese. Inflation actually means ‘the devaluation of money,’ not simply the ‘increase of prices.’ What has been happening is a lack of faith in the reichsthaler silver certificates, which is being hidden by increases in productivity.”
Judy, in spite of herself, was following this. She couldn’t help her upbringing. “So the prices are going down but they should be going down more if the reichsthaler was respected as a currency?”
“Mostly, but if you will notice some prices aren’t going down. Eggs, for instance. Anywhere that the cost of production hasn’t decreased, the prices are actually going up.”
“But the price of wheat and rye are both down,” Hayley said.
“Sure. Because they can dump half their tenants off the land and still get in the crop with the new plows.” Which was overstating the case somewhat, but not unreasonably. That was why there were so many people in Vienna—because after getting thrown out of their homes, they didn’t have anywhere else to go.
“Speaking of which,” Karl said. “How are you managing this place, Hayley? It’s more active than I expected. There is a strong feeling of industry here.”
“Between the cash up front that Ron Sanderlin got for his 240Z and my drawing account with the Abrabanel family, SFIC had the start-up cash. But fairly soon we ran into the same problem everyone else in Vienna has: none of our potential customers had any money. It wasn’t that cut and dried. Most people had some money, but not enough to keep us going. So we had to offer credit to keep customers. But we are getting close to our credit limit and I am afraid that Moses Abrabanel is going to cut us off if we don’t get some sort of cash infusion soon.”
Trudi, who had been listening quietly, said, “You’ve told me before, Sarah, that money is a loan.”
Sarah nodded.
“So why don’t we make our own loan? Make our own money?”
“Because no one would accept it,” Sarah said. “If the governments of Europe don’t have the credibility to introduce new money, certainly we don’t.”
Trudi didn’t say anything else, but she had a thoughtful look on her face.
CHAPTER 22
The Reception and the Gifts
July 1635
The Hofburg Palace, Vienna
“Charming,” Empress Mariana of the Austro-Hungarian Empire murmured. Judy the Younger curtsied quite well, she thought. Not that the others were bad at it, but it was clear that they lacked practice and seemed a bit uncomfortable. Judy did it with style and not the least bit of embarrassment or pugnaciousness.
As she recovered from her curtsy, the young woman winked at Mariana as if sharing a delightful joke and the empress of Austria-Hungary was hard put not to laugh out loud. The receiving line was dull, but not quite as dull as usual. Mariana had been reminded that these things were supposed to be fun, even if they rarely were.
Prince Gundaker’s bow could be measured with one of the new micrometers, it was so rigid. The rumors of a blowup at the Liechtenstein house were apparently true.
Moses Abrabanel was his usual reserved and cautious self. But Mariana could tell that he had things to tell. It was shaping up to be an interesting evening.
The receiving line being finished, some gifts from the new arrivals at court were offered. Bolts of fabric, some of the new paisley prints with the double eagle of the Habsburg crest woven into the fabric. Then it was time to circulate before dinner. Mariana got several versions of the events at the Liechtenstein house over the next fifteen or twenty minutes. She decided to see what the up-timers had to say and spotted Judy the Younger. Not surprisingly, Judy shone like one of the new light bulbs in a dark room. Mariana made her way to Judy, dispersing a bevy of young lords by virtue of her rank. And when she had Judy alone, she simply asked, “What happened that has Gundaker so upset?”