novelraw Chapter 20
Chapter 20
Chapter 20: café Economist
‘Sunflower No. 17’ was a neat little two-story house with gray walls, and there was indeed a small garden in front of the porch. Jimmy unlocked the front door with a key. The interior was well lit, thanks to several wide east-facing windows, and the morning sunlight made the living room bright and clear.
The house had been decorated in the recently popular ‘Lannia Bay’ style, mainly using simple warm yellow and white tones, making it feel very cozy and tidy.
Lina quickly swept her gaze around. The living room, dining room, and kitchen were connected in an open-plan design, making the space feel spacious. The walls had been freshly painted, and the floors were laid with light-colored wooden planks. Just as Jimmy had said, the furniture was a brand-new standard set. Although the style was ordinary, it looked sturdy and durable.
“Is there enough storage space in the kitchen?” Lina asked as she walked over and opened the cabinets for a look.
“Please rest assured, Miss Lina, we selected models that maximize the use of space,” Jimmy replied.
Lina nodded, then went to inspect the two bathrooms, focusing on the water pipes and drainage. She twisted the faucet, and the water ran smoothly without any strange noise. “Is the drainage system new?”
“Yes, the entire neighborhood uses the new pipe network that was just completed last month.”
Then they went upstairs. Both the master bedroom and the secondary bedroom faced south and had excellent lighting. Lina paid special attention to the window seals and the thickness of the walls, confirming that the soundproofing should be good. That so-called terrace was actually a spacious balcony with an open view, and from there one could indeed see the distant spire of the Witch Association building.
“Annie, what do you think?” Lina turned toward the girl who had been quietly following beside her the whole time.
“It’s very bright and very clean,” Annie answered honestly. “It’s also close to the Association, so it’s very convenient.”
Lina calculated inwardly that this layout basically met her requirements, and the price of 6 gold dragons was fairly reasonable as well. But she did not state her position immediately and only said to Jimmy, “All right, Mr. Jimmy, let’s go take a look at the shaded one as well.”
“Certainly, this way please.” Jimmy smiled as he led them on, and the group turned toward ‘Moonlight Grass No. 34’ in the middle section of Narcissus Street.
Compared with ‘Sunflower No. 17’, the outer wall of this house was a slightly darker color. When the door was pushed open, the interior decoration leaned toward cool tones and carried a bit of the feel of western Adler residential homes.
The walls were light gray, the wooden floors were dark, and the lighting fixtures in the living room used simple metallic lines, giving the whole place a calmer and more subdued feeling.
“The furniture configuration here is the same as over there, only the choice of tones is different,” Jimmy explained.
Lina looked around. The living room truly was not as bright as the first house, but just as Jimmy had said, the north-south open design guaranteed basic lighting and ventilation, so it did not feel oppressive. She carefully checked the kitchen and bathrooms, and functionally everything was intact.
“The situation on the second floor is similar,” Jimmy said as he took them upstairs. “Only the angle is different. The terrace faces west, so the afternoon light is very pleasant.”
Lina nodded, her gaze sweeping over a small door at the end of the corridor. “What’s that?”
“Oh, that’s a storage room leading to the basement.” Jimmy stepped forward and opened the door, revealing a flight of stairs leading downward. “The space isn’t large, but it’s very dry and suitable for storing some infrequently used items.”
Lina went down to take a look. The basement was not very spacious, and the ceiling was a little low, but the walls had basic waterproofing treatment, and there was even a vent in the corner. Her heart stirred slightly—after a little remodeling, this place could completely become a simple and secluded alchemy workshop, which would save quite a bit of the expense of renting a laboratory at the Association.
Although the lighting and location were slightly inferior, the value of this extra space far exceeded that small difference in price.
She returned to the first floor, already having made her decision. “Mr. Jimmy, let’s take this one. The weekly rent is 5 gold dragons and 6 silver lions, including water and magic utility fees, correct?”
“Absolutely correct, Miss Lina.” The smile on Jimmy’s face became a little more sincere.
“In addition, I need a detailed copy of the community management regulations, especially the clauses regarding minor interior modifications to the house.”
“No problem. It is all explained in the contract appendices, and I’ll prepare them for you shortly as well.”
With the help of Sibyl and Jimmy, the rental procedures were simplified considerably. In less than an hour, Annie and Lina had completed the move-in paperwork and received two sets of house keys and the lease contract.
Including the deposit, the total cost came to 20 gold dragons, split equally between Lina and Annie.
Lina only signed a half-year contract for the time being. After half a year, if she passed the C-rank Witch exam, she might leave Osselro Town and go to a big city in search of new opportunities.
“Oh, right. If these two houses were to be bought...” Lina asked casually before leaving, “about how much would they cost?”
“The pre-tax price for the Sunflower layout is 3200 gold dragons, and the Moonlight Grass layout is 3000 gold dragons, ma’am,” Jimmy added, “If you want to buy a house, you also would not need to pay all at once. We accept installment payments, and the annual interest rate is only one percent.”
“Of course, you can also pay in livre or crown. Naturally, paying in crown requires a handling fee of 0.1 percent.”
Livre was Koberen’s official currency, while crown was the official currency of the neighboring country Solennam. The gold dragon system was a universal world currency issued by Celestis.
Because Osselro Town was located on the border between the two countries, most transactions here still used gold dragon, the currency jointly recognized by all nations.
One gold dragon was roughly equal to 17 livres and 12 crowns... but judging from recent trends, both the livre and the crown seemed to be depreciating.
As a D-rank Witch, Lina happened to have a credit line of three thousand gold dragons at the Celestis Central Bank under the Witch Association.
But Lina had no intention of taking out a loan to buy a house, and after handling the relevant procedures, she left.
There were still two hours before lunch, so at Sibyl’s suggestion, Annie and Lina decided to sit for a while in one of the town’s cafés.
“A café is definitely the most affordable club there is. I even think the atmosphere there surpasses that of many noble tea parties, especially after the Magitech Revolution,” Sibyl said as they walked. “For just one silver lion, anyone can write, play cards, read magazines and newspapers, and discuss major international affairs here.”
“Ah, I’ve heard of that.” Lina nodded. “People in Koberen like to call this kind of discussion ‘café politics’.”
“In fact, that’s true. Cafés have produced quite a few famous people over the years,” Sibyl said with a smile. “It’s said that the current Prime Minister of Solennam’s capital only got where he was because he bragged in a café about opening a transcontinental shipping route, and a shipping magnate reading the newspaper there took a liking to him and supported him all the way to his current position.”
“Mhm, my mentor has said the same thing too. Cafés are the places with the most young people. Here, we do not just use our own eyes to look at the world, but through exchanging with others, we can observe every new thing with eyes from all over the world,” Annie said, nodding in agreement.
It sounded just like an online social platform, truly a very good channel for gathering information.
“Generally speaking, the outdoor area on the first floor of a café is the entertainment area, the indoor area is the discussion area, and the second floor is the reading area,” Sibyl said. “Coffee prices also differ depending on where you sit. Usually, shops do not state these rules openly; they are all customary habits everyone understands. But at this hour in the morning, generally no one comes to a café, so there should be seats everywhere. Still, I recommend the second floor. Solennam’s newspapers and periodicals arrived yesterday, so today we should be able to see quite a lot of fresh and interesting things.”
However, when the three of them arrived at the café, they received unexpected news—the second floor was fully booked.
“Terribly sorry, ladies.” The server put on a deeply apologetic expression. “Two special guests came to the second floor... they booked all the seats for this morning yesterday, so...”
Seeing that Sibyl still wanted to say something, Lina quickly stopped her and shook her head. “It’s fine. Let’s just sit on the first floor for a while. Chatting a bit is nice too.”
“Just who are they, to put on such a show...” Sibyl pouted, looking somewhat indignant.
The three of them each ordered a cup of coffee and sat down on the first floor.
Sibyl ordered an espresso black coffee, Annie ordered a latte with extra sugar, and Lina chose a hazelnut coffee.
There were already several customers on the first floor, and Lina tilted her ear, listening to their discussion.
A slightly plump man in a striped vest tapped the table with his knuckles and said to the bespectacled companion sitting across from him, “Hey, did you hear? Housing prices in Gaul have gone up again!”
“Ugh, seriously!” The man with glasses pushed up his spectacles, let out a heavy sigh, and leaned back into his chair. “Ever since the magitech train was built out to the western frontier, housing prices have been rising insanely fast! I really regret not buying a house in Gaul a few years ago...”
“What’s the point of regretting it?” The man in the vest leaned forward. Even though he lowered his voice, he could not hide his excitement. “Isn’t there an opportunity now? The train is about to come through here too, and a few developers have already shown up around here lately. I think the area around Garden Community is pretty good!”
“But where would I get that kind of money?” The man with glasses spread his hands, his face full of helplessness. “Investment still needs principal, doesn’t it?”
“Heh, what era do you think this is? You still want to pay for everything one gold dragon at a time?” The man in the vest sneered, then pulled a leather wallet from his coat with some pride and flicked it with his finger. “I already have three houses under my name in Osselro Town, and shares in quite a few big companies too! Brother, just wait until the next market close, and the money in my hands will double again!”
“My Goddess of Harvest,” the man with glasses said, his eyes widening in shock as he instinctively covered his mouth. “You didn’t rob a bank, did you?!”
“What nonsense are you talking about!” The man in the vest waved his hand and tapped his temple with a finger. “I bought them with loans! This is investment—this is called credit investment! Just watch, the bank’s interest rate absolutely won’t keep up with how much my houses will appreciate later!”
As Lina listened, she stirred her coffee with a coffee stick. Beside her, Annie could not help asking in a low voice, “Sister Lina, what they’re saying does make sense. Housing prices in Koberen have indeed been rising lately, especially for houses along the railway lines.”
“Mhm, the banks have also introduced a lot of financial products and credit policies,” Sibyl agreed. “The Koberen government has also been cutting interest rates all this time, and loan interest rates have fallen quite a lot over the past few years. Everyone seems really enthusiastic about finally spending money on financial products... especially my father. He even wants to mortgage part of the factories to invest in stocks.”
“Take my advice—absolutely do not let your dad do that. In times like these, the scariest thing is investing with borrowed money.” Lina, who had been silent for quite a while, finally spoke slowly. She raised a hand and gestured to the clerk behind the counter. “Excuse me, could you lend me a sheet of paper and a pen?”
Although the young clerk looked somewhat puzzled, he still quickly brought over the paper and pen. The two gentlemen in the booth beside them were also drawn in, stopped talking, and looked over curiously.
Lina spread out the paper and drew a small circle in the middle. “Look. Let’s say this is the real wealth in the market, or in other words, the price things originally ought to have.” Then, taking that small circle as the center, she began drawing a larger circle around it. “And this ever-growing circle represents the price inflated by borrowed money—that is, by credit.”
The slightly plump man in the vest could not help cutting in. “Miss, isn’t credit just money? If it can buy things, that’s the only hard truth!”
Lina lifted her head and glanced at him, her pen never stopping. “The difference is that gold dragons are solid, while credit is hollow. All this so-called ‘wealth’ of yours is built on the expectation that ‘you’ll make even more money in the future.’”
On the outer edge of the large circle, she drew several even bigger bubbles connected to one another. “Look. When everyone relies on credit borrowed from banks to chase after things whose prices keep rising—whether houses or stocks—those prices themselves have already separated from the actual value of what lies at their core.”
She pointed the tip of her pen at the trajectory magnified layer upon layer. “Prices get pushed like this by enthusiasm and debt, climbing higher and higher. It is like blowing up an alliance of soap bubbles linked together by countless lending relationships. It looks spectacular.”
“But can this bubble alliance keep getting bigger forever?” Lina asked and answered herself, while heavily tapping the largest bubble with her pen. “No. It is extremely fragile. Maybe the banks lend out too much money, realize the risk of bad debts is increasing, and start tightening credit.”
She drew a slanting downward line at that point and looked at Sibyl. “Or perhaps a major investor like your father, who invested through borrowing, suddenly has his cash flow break, and is forced to dump assets at low prices...”
Sibyl instinctively continued, “Then the other companies in the factory supply chain and the banks would also be affected... that would be a chain reaction.”
“Exactly.” Lina gave her an approving glance, then from that rupture point, quickly drew arrows spreading outward one after another with the tip of her pen. “As long as one link in the chain goes wrong, panic spreads. The people who were scrambling to borrow money to invest before will suddenly discover that asset prices have crashed, perhaps even to the point where they are worth less than what they owe the banks. To repay their debts, they can only be forced to sell assets, and that in turn causes prices to fall even further...”
“That creates a vicious cycle. When the bubble bursts, the first to drown are the people who borrowed too much money. Your dad wants to mortgage the factory to invest. Once the wind changes, he may not only lose everything, he may even drag your entire family down with him.”
“At that point,” she gently pushed the paper to the middle of the table, “everyone would realize that most of the growth in wealth on paper had merely been an illusion built on chains of debt.”
The man in the vest, who had been so excited before, stared at the diagram, opened his mouth, and for a moment could not say a word. Even when the clerk came over to take back the paper and pen, he could not help taking several extra looks at that peculiar “bubble diagram.”
A bubble economy. It seemed the people of this world had not yet experienced a financial crisis... which made sense. Magitech was far more ruthless than internal combustion engines, and with large organizations like the Witch Association and the Wizard Association stabilizing the credit system, the world’s overall stability really was somewhat higher.
But if things continued developing along this trend, it was only a matter of time before the bubble burst... no, perhaps it had already begun.
Lina suddenly thought of that bankrupt Volgania mining magnate from the newspaper, and her heart grew a little more uneasy.
It seemed this world was not as peaceful as it looked on the surface after all...
Just then, a female attendant wearing a ladies’ blouse, black trousers, and black-rimmed glasses came down the stairs leading to the second floor. She walked straight toward Lina, gave her a deep bow, and said:
“Miss, what you just explained was truly brilliant... My lady wishes to invite you upstairs for a conversation. Might I ask whether you would be willing?”