At this time, the Austrian Empire still used the most primitive gold coin standard. It was highly advanced for its era, completely avoiding such drawbacks of the bimetallic gold-and-silver system as price chaos and unstable currency. It even ensured the unity of the world market and the relative stability of foreign exchange rates.
In peaceful, low-debt, gold-abundant nineteenth-century industrial nations, such as the Austrian Empire had once been, it was the perfect stabilizer.
But as the Austrian Empire's economy continued to expand, this system could no longer satisfy Franz's needs—especially at this moment of economic strain.
What if there wasn't enough money? Naturally, they had to manipulate—no!—use monetary policy to make adjustments.
The gold bullion standard meant that gold coins would neither be minted nor circulated domestically. Instead, only banknotes representing a certain weight of gold would circulate. Those banknotes could not be freely exchanged for gold or gold coins; they could only be exchanged for gold bullion from the issuing bank under certain conditions.
This would greatly improve the nation's efficiency in utilizing gold. At the very least, those merchants who liked hoarding gold coins would have no choice but to exchange them for paper currency before conducting trade.
Under the gold coin standard, the Central Bank had little role to play. At the very least, it was difficult to tamper with the currency itself.
But once the Central Bank monopolized the right to convert gold into currency, its ability to intervene in the economy would be greatly strengthened.
Furthermore, because the gold bullion standard was an incomplete form of the Gold Standard, Franz could make all sorts of maneuvers with it—such as conjuring something from nothing, or eating next year's grain this year.
Though it sounded like digging one's own grave, after all, once a nation's credit system