A Deadly Trap

Time passed quickly, and in the following days, Edward, accompanied by Müller, visited many taverns.

Only two taverns were willing to join the Lübeck Brewing Guild and accept Müller's command.

Müller sneered, "Have these taverns forgotten the fate of the Blue Moon Tavern so soon?"

Thus, the Lübeck Brewing Guild's initial members consisted of four breweries, including Müller's

Night Pearl Tavern and three other taverns.

These taverns and breweries were now Edward's allies.

Edward began teaching the other two taverns how to play with futures contracts.

"When you're free, come to the exchange and monitor the beer futures market. If the price is right, you can buy long positions. Upon expiration, come to the warehouse and exchange the contract for physical beer."

"At the same time, the guild will provide financial support to all members. If you need funds for expansion, come to me. I'll lend you money to grow."

"All members of the guild are brothers who should support each other. Those outside the guild are our enemies. We need to bankrupt them."

"Let's unite and fight together. I hope that within the next decade, all our competitors in Lübeck will be eliminated, and only those present here will enjoy the entire Lübeck market."

Edward utilized the art of creating lofty ambitions, as he had done in his past life.

Merchants were inherently greedy, unable to see how the bankruptcy of their competitors would plunge many families into misery.

They could only think of how much money they could make if the entire Lübeck market were divided among the guild members.

Business competition was incredibly ruthless, a survival of the fittest.

The guild effectively brought the merchants into the tribal era, where they grouped together for warmth and to eliminate non-allied members.

Non-guild members were like isolated beasts, destined to become prey.

...

At this point, Edward's exchange no longer faced the threat of shutting down.

Beer futures had been established.

With upstream factories and downstream taverns, the exchange now functioned as an intermediary channel.

The price of beer also became transparent.

Moreover, the entire beer industry in Lübeck had fallen under Edward's control.

Though the guild answered to Müller's command, with Müller elected as the first president of the

Lübeck Brewing Guild, it was effectively under Edward's control.

Furthermore, Edward could now use this opportunity to kickstart his banking operations.

Here's a joke: in an economy of scarcity, if Edward were to personally establish a brewery, it probably wouldn't succeed.

Let's not even talk about the 10,000 gold coins required to build the factory.

The question is: how would one even make beer in the ancient world?

Where would the skilled labor come from?

These were all obstacles.

For now, businesses were family-owned, and technical knowledge was passed down within the family.

Moreover, it was typically passed from father to son, not daughter.

In such an age where secrets were kept so closely, why would anyone betray their family and work with you?

Therefore, lending money to breweries owned by Edward's people to help them expand was the role of a banker.

...

After the first Lübeck Brewing Guild meeting, Edward and Müller stayed behind to have a private discussion with the four brewery owners.

Edward spoke first: "I need you to expand. If you don't have enough money, come to me for a loan with a 5% annual interest rate, half of what the Jews charge. You'll sell all your goods to me."

Edward still remembered his agreement with the Swedish merchant to send a large quantity of beer, and he wasn't the type to go back on his word.

Müller then added, "I expect you to at least expand one factory, or more if you can. We need enough supply to crush the other breweries."

One brewery owner hesitated, "But what if the price of beer drops too much? We won't survive either."

Edward reassured him, "Don't worry, you'll have a monopoly on the beer supply market. Initially, I'll focus on exporting your beer. Then, when the opportunity arises, we'll crush the Lübeck market."

Müller chimed in, "No matter how many breweries we crush, we promise to raise the prices again after a while and restore them to normal."

Edward continued, "And I'll provide financial support. I can guarantee that during the price crashes, you'll stay afloat. This will be a cycle—crash, raise, crash, raise—until only you remain standing."

One of the factory owners, trembling, pledged, "We… we will follow your orders."

Edward walked over and patted the owner's back, "As long as you follow our orders and expand production capacity in an orderly manner, you will make a lot of money. We are brothers, and we will make money together."

In his heart, Edward thought, as long as he had enough stock, not only could he make money by exporting to Swedish merchants, but he could also maintain control over the beer market.

If even his own people started disobeying, he could expel the disobedient ones and use the stock to crush the market, making those who defy him wish they were never born.

For all of this to happen, he needed to ensure there was enough stock.

The exchange would allow the stored goods in the warehouse to continually generate trading value.

With this system, Edward was the only one in the world capable of hoarding goods while covering the expenses that came with it.

Indeed, with the exchange, one could truly act with impunity.

Massive hoarding was a strategic weapon—release it at the right moment, and a slew of factories could go bankrupt.

By mastering the pricing power, one could indeed do whatever they wanted, and this was the true power of the exchange.

...

One of the owners asked, "If I borrow 10,000 gold coins to expand one factory, how do we sign the contract?"

"Just a standard contract, specifying the interest rate and terms. Of course, the guaranteed sales I promised can also be written into the contract."

"I'll borrow 10,000 gold coins too!" *3

Other owners also chose to expand one factory.

...

The meeting ended, and everyone returned to their respective places.

Only Edward and Müller stayed behind to review the situation.

11.1 million - 4 million = 7.1 million

Edward's gold had dwindled to 7.1 million.

But with these four contracts in hand, Lübeck Bank was now officially in operation.

Of course, the bank was still in its early stages.

"We need to find a storefront to open a bank," Edward murmured.

"What did you say?" Müller asked curiously, wondering what Edward was planning.

"Nothing. By the way, do you think these four will be successful?"

"They're in the middle of the pack, usually keeping a low profile. The fact that they've thrown in their lot with me shows they have some vision."

"Good. I'll lend them money. If they're too incompetent and waste my money, it's no big deal. The real problem is if they ruin my plans."

"Oh? What plans do you have?"

"Our guild aims to unify the entire beer industry. Our hopes are pinned on these four."

"What?! Relying on them?"

"Just as we discussed, we'll use the repeated cycles of price crashes and surges to wipe out all other breweries in the supply chain."

"Ah! Ah! Ah! You're ruthless. Your plan really monopolizes the beer supply! Apart from our three taverns, all other taverns will be forced to close!"

"After that, you three taverns will expand your production capacity, open new taverns, and fill the void left by the ones that closed."

"You're amazing! This way, the entire Lübeck beer industry will only have these four breweries and our three taverns left. It's terrifying! How do you come up with such a plan, everything fits so perfectly!"

"This is just normal business operation. In this way, we can ensure that the beer industry remains compliant, orderly, and never suffers from overproduction again."

"Overproduction?"

"You who live in a scarcity economy are truly fortunate. Let me tell you a story about an economy of surplus."