The outside world did not buy Bulgaria's "Million-Kilometer Highway Plan." Many guessed it was merely a fig leaf thrown out by the Bulgarian government, and that the project would most likely fizzle out in the end.
But people were soon left dumbfounded. On February 1, 1922, the Bulgarian Infrastructure Investment Group began issuing bonds. Though the interest rate was outrageously low, was it not still the same as bank deposit interest?
Moreover, the bonds' security was guaranteed. They could circulate directly on the market as currency, drawing in many patriots. After all, the returns were the same as putting money in the bank, and if they needed cash, they could directly use the bonds as lev!
The economists had yet to react. It was only when the Great Depression dragged on and nations began printing money to ease their fiscal crises that everyone suddenly remembered Bulgaria had long been overissuing currency!
It was simply issued in the name of bonds. The amount of money circulating normally in the market had increased, yet it had not affected the value of the lev.
After all, the lev's value was pegged to gold. Bulgaria's gold reserves had not decreased, nor had its money supply increased!
The bonds' value was actually maintained by the banks' credibility and the public's support for the project! In essence, it was already credit-based currency, except it did not rely on national credit!
With no currency depreciation, increasing the money available for circulation in the market would inevitably stimulate short-term economic growth.
Of course, Ferdinand also knew that this liquidity could not be increased too much, or inflation would erupt within the country. Thus, the first batch of bonds totaled only two billion lev.
In the end, the investment company contributed one billion lev, together with twenty lev in