The First Pot Of Gold

Thus, Edward visited all 11 breweries in the city. Leveraging the influence of the Night Pearl Tavern, he secured the production capacity of these breweries for the next three months.

In modern society, futures contracts typically involve the buyer paying upfront, and the seller only producing once payment has been made. However, in 1370, Edward's futures contracts were an innovative creation—payment and delivery were made simultaneously, with both parties exchanging goods and money at once. This method allowed the Night Pearl Tavern to avoid tying up any of its funds.

Though he was simply taking advantage of the era's lack of knowledge, Edward did not feel any pride in his manipulation. During the first week, the Night Pearl Tavern hoarded all the beer in its warehouse, ensuring that no beer flowed into the market.

By the second week, taverns began struggling to find beer, as the production capacity had been monopolized by the Night Pearl Tavern. Many taverns approached them, hoping to acquire some beer. Edward, ever the strategist, raised the price by 20%, and they accepted. After all, sourcing beer from Rostock or Hamburg would have meant a 40% markup when accounting for shipping costs.

At this point, the direct competitor to the Night Pearl Tavern, the Blue Moon Tavern, attempted to buy beer. Edward smiled and refused, offering them nothing. "The underworld is ruthless—Müller intends to crush you. All of this is designed to make you fail. You still want beer? How amusing."

In the third week, Edward began selling the beer from his warehouse to Swedish merchants at the port, and he marked up some of his futures contracts by 20%, passing them off to the Swedish traders. Lübeck, as the production hub for beer, began to experience a shortage under Edward's careful orchestration. While the breweries felt a sense of loss, they had already signed contracts and were bound to honor the agreed prices, or face penalties for breach.

By the fourth week, the price of beer had risen by 40%, matching the prices in Hamburg. Lübeck and Hamburg were connected by a canal, though the cost of shipping was high. Edward's hoarding strategy had reached its limits, constrained by Müller's financial strength. It was time to release the beer.

Edward continued selling large quantities to the Swedish merchants, while distributing small amounts to Lübeck's smaller taverns at a slow, strategic discount. He still refused to supply the Blue Moon Tavern.

By the fifth week, the Blue Moon Tavern, with its four locations, collapsed after three weeks of beer shortages. With a 40% markup, the price had become unsustainable for them. Even if they sourced beer from Hamburg at the inflated price, they would make no profit. Accounting for taxes, wages, and rent, they would lose much more than if they simply closed their doors.

Other taverns, though they had received some stock, found it insufficient and treated it as strategic reserve, unwilling to distribute it to the Blue Moon Tavern. Without beer for three weeks, could the Blue Moon Tavern retain any loyal customers? In the fierce competition, it was outpaced and eliminated.

Müller, with a look of apprehension, observed Edward, astonished by the sharp intelligence of this young nobleman from a rural estate. Edward had effortlessly put his greatest rival, the Blue Moon Tavern, out of business and exceeded expectations.

By the sixth week, Edward intensified his distribution. Beer began to circulate more freely, as the taverns, driven by scarcity, were eager to purchase anything at a 30% markup. At least it allowed them to make a 10% margin, enough to cover rent, with wages paid from previous surpluses.

In the seventh week, Edward continued to focus on the Swedish merchants, who were overjoyed, believing that Edward was their insider in Lübeck. In the Age of Exploration, during times of scarcity, regions with lords often implemented a rationing system.

Everyone understood that in times of scarcity, goods equated to money. To profit from commodities, one needed connections. That meant bribing the lord to secure a supply quota. It was an era where wealth alone didn't guarantee access—one needed both money and the privilege to purchase goods.

However, in cities like Venice and Lübeck, without a dominant lord, merchants like Edward could manipulate the scarcity for their own gain, supplying goods to foreign merchants at the expense of local taverns. In comparison to the lord-run cities, Lübeck and similar places seemed like oddities, yet they were thriving.

The Swedish merchants, naturally, bought as much as they could, for they would sell it at double the price in Sweden. Edward's deliberate manipulation of the beer flow caused the city authorities to take notice. In the past, Swedish merchants could never acquire so much stock. Only surplus beer, leftover from taverns, was sold to them. But this time, despite the prices remaining stable at the point of sale, the price on the supply side had skyrocketed—an abnormality. Even Lübeck's second-largest tavern went out of business.

The city lost a major taxpayer, prompting the merchant guild to begin an investigation.

In the eighth week, the Lübeck city government issued a temporary ban on beer exports. Edward, seasoned by his experience in modern markets and especially in China, was highly sensitive to policy changes. He quickly increased his supply, working with officials to suppress the price increase on the supply side.

More beer began circulating, and the prices gradually fell from the 30% premium.

By the ninth week, Lübeck's beer market began to stabilize. It seemed as though nothing had happened at all. Although the investigation had uncovered that Müller's Night Pearl Tavern was the mastermind, the authorities, wary of Müller's influence, decided to halt the probe. The beer prices had normalized on the supply side.

Thus, Lübeck's beer market returned to equilibrium, with the exception of the Blue Moon Tavern's demise.

Now, on July 1, 1370, three months had passed. Müller recognized Edward's brilliance. Not only did Müller return Edward's five gold coins, but he also gave him half of the profits from their venture—4,310 gold coins.

This was an unexpected windfall. Müller had originally only intended to hurt the Blue Moon Tavern, but instead, he had driven them to ruin and made a fortune in the process.

Edward was a force to be reckoned with. Müller, who had once nearly had Edward killed, now saw the true gravity of the situation. Someone like Edward, with his intellect and ambition, would inevitably rise to great heights. To maintain their relationship, Müller had to act quickly.

Subconsciously, Müller hoped that Edward would become blinded by the wealth, falling into decadence. After all, 4,315 gold coins were enough for an ordinary person to live comfortably for a lifetime.

"What are your plans now?" Müller inquired.

"I intend to acquire a ship and join the Hanseatic League as a merchant," Edward replied.

"Hmm, you wish to become a Hanseatic merchant? That's not enough money. Even the smallest cargo ship costs 20,000 gold coins..."

"Then I plan to build a factory," Edward stated.

"Building a factory requires at least 10,000 gold coins."

Edward fell silent.

In an era of scarcity, even basic materials like wood and brick were prohibitively expensive. No wonder it was called a scarcity economy—common people could hardly afford to build factories. Nobles had wealth but only used it to build estates, leaving the burden of economic development on the shoulders of the common folk.

It was a paradox: if ordinary people had 10,000 gold coins, why would they still need to struggle? In an age where a meal cost only five copper coins, what did 10,000 gold coins even mean?

But Edward was no ordinary person. He wanted to achieve something monumental. Earning 10,000 gold coins from 4,315 seemed easier than starting from one gold coin.

Everything he did was in service of establishing the world's first bank.