Ch65. Economy of Wizarding Britain

Sharpmaw, shaking in excitement, gave Tom several forms he had to fill if he wanted to transfer his funds from a mundane bank into Gringotts.

Three hundred million was not much to Tom nowadays. Each healing of the Sleeping Sickness cost fifty million and once Sarael's share was subtracted, Tom still received forty million for his efforts. Three hundred million was earned by healing eight devils.

One had to love how loaded these ancient devil households were...

An hour and a whole bunch of depressing paperwork later, Sharpmaw gestured towards a comfortable couch on the side of the office and offered Tom and his companions coffee or tea. Apparently, they had to wait for ten to twenty minutes for the new vault keys and the transfer of Tom's funds to be finalized.

The goblins were nothing if not efficient. Tom quite liked that. Transferring money from a mundane bank to Gringotts couldn't be that easy since the money would have to practically 'disappear'. The fact they could do it in ten to twenty minutes spoke a lot about their connections in the banking sector of the mundane world.

Well, Tom had no idea how exactly this was supposed to work and goblins definitely were not ones to share their ways so he decided to ignore the matter, leaving it to them.

He did all he could, arguing with Sharpmaw about fees and stuff while they were hashing out the agreement between Tom and Gringotts. The goblin was vicious but... not overly so. He was vicious like a proper businessman looking out for his company. Not as a goblin trying to screw with a wizard.

All in all, Tom was quite satisfied with the final agreement. No outrageous fees, no 'We can confiscate your money if you do this, this, or this minor offense...' the goblins liked to trick naive Hogwarts graduates with, and no allowance for the Gringotts to disclose the information about Tom or his vault...

Hell, Tom even managed to make it outwardly appear that the Vault belonged to Hermione while in truth, it was fully in his control. Less room for the Wizengamot to do some 'You no wizard, you no need your money. Gimme!' kind of political bullshit.

Because yes. That was apparently a thing and it had already happened in the past when some wealthy muggle-born parents decided to open a big account in Gringotts. Poor sods were obliviated of that fact alongside their child when the Wizengamot decided to confiscate the account on the premise they did not have 'enough magic to own so much money in the wizarding community'.

For some reason, after hearing that, Tom got the urge to help the other Tom to get back to his feet so he would continue to decimate this retarded community from the inside out.

At least, Hermione gained a healthy dose of reality and went pale white when she heard about that case.

Of course, Gringotts would not just give Tom's money to the Wizengamot because they knew better than to fuck with someone unknown from the wider Supernatural World. The only reason why they complied in the previous case was that they got their own major share of these vaults and there was no reason for them to give a flying fuck about the obliviated harmless muggles anyway.

It was not as if these muggles could just nuke their race out of existence. Not when they wouldn't even remember having that money in the first place.

In Tom's case, the goblins would be much more cautious and discreet. If only because Tom could not be so easily obliviated due to being a magician.

From how excited Sharpmaw was, the little cretins would do everything in their power to not fuck it up since he was presenting one massive stick, and on the end of it was dangling a very enticing skyscraper-sized carrot.

Hell, the little guy instantly forgot his subtle fear of Tom when he heard 'three hundred million' and suddenly, he was acting as if Tom was his best buddy.

Tom couldn't help but smile in amusement at his enthusiasm. He had to say, he quite liked his new account manager.

As they sat on the couches, Sharpmaw poured all of them tea. For a moment, a companionable silence spread through the room as they sipped on their tea, but...

"Oh, for god's sake, just ask your question, Hermione." Tom couldn't handle the unending glances of his cousin and exasperatedly blurted out.

Hermione blushed and pouted, hiding her mouth behind her teacup as her shoulders sagged.

"How do you know how wealthy Malfoys are?" She eventually asked.

It bothered her. How could Tom know that?

Also... she thought they were a lot wealthier! From the way Draco held himself, Hermione thought they were at least billionaires but they only had five to fifty million in total? That... wasn't really all that much, considering how much money some wealthy muggles had in their accounts.

Hearing her question, Tom hummed and put his teacup back onto the table, "Oh, that's quite simple. It's simple math, after all." He teasingly said, giving Hermione a meaningful look, earning himself an unimpressed look from the teenage girl.

Tom simply couldn't help himself.

Chuckling, he decided to explain in detail how he came to that conclusion. It might help the girl to form a better mindset when it comes to the the economy. "The Wizarding Community in Britain has how many wizards and witches again? Twenty thousand?" He turned towards Sharpmaw who was watching their exchange with interest.

Sharpmaw realized Tom wanted his input so he slowly nodded, "Somewhere around that. Maybe less after the last Dark Lord's escapades. It's closer to seventeen thousand right now."

Tom nodded back in thanks and turned back to Hermione, "Add 'creatures'," He air-quoted that, "that use the British Wizarding currency and you will get a number around fifty thousand strong." Tom glanced at Sharpmaw who knew more about these kinds of statistics than him and the goblin once again gestured with his hand that Tom was more or less right.

Sharpmaw was however very impressed with Tom's deduction so far. He could see where this was going and it earned Tom his respect. He doubted any wizard would be able to so accurately deduce the situation of the Wizarding World's economy with just a few simple facts as Tom had just done.

"That's how many individuals are a part of this isolated economy." Tom continued, "From there, you need to take into account a few variables. Do you think the old British Families would let some foreign wizards freely do business on their soil?" He asked, trying to get Hermione to actively participate.

Hermione who was intently listening to Tom's explanation furrowed her eyebrows when she was called out. When she thought about it that way, she realized that most businesses in Diagon Alley were old... and owned by similarly old other English Wizards. Just look at Ollivanders.

"No. They don't allow foreigners here!" Hermione exclaimed in surprise as she realized that the economy in the Wizarding World worked totally differently than in the muggle world. She had never thought about it, to be honest. But...

"Close enough." Tom nodded with a proud smile that made Hermione beam at the subtle praise, "In fact, the wizards are borderline hostile to any kind of foreigners. Be it muggles, other magic practitioners, or even their own kind from beyond their own borders. But this kind of isolationist policy works both ways." He then gave Natasha a meaningful look, catching her in the middle of enjoying a biscuit.

Natasha's eye twitched, but with an inward sigh, she longingly put down her biscuit and spoke with a slight irritation in her tone, "Just as English wizards are antagonistic to foreigners and the old Houses try to keep themselves in economic power by not allowing foreigners to do business here, the foreign nations have their own old Houses that do the same." She droned on, staring at Tom in a silent demand to let her continue enjoying her biscuit.

Tom amusedly nodded, making Natasha stick her tongue at him as she started nibbling on the biscuit once again while Tom turned back to Hermione who giggled to herself, catching their silent interaction.

"Unlike the muggle world, there is nothing like an international economy here. Some very rare things can be ordered from beyond the borders but most businesses are centered locally. This significantly reduces the potential profits of local businessmen. It limits the whole economy. After all, the richest people are those who trade or sell things internationally." Tom continued explaining.

But Hermione was not called the brightest witch of her generation for nothing. She was definitely Tom's cousin and caught up quite quickly. Despite having close to no knowledge of economics, she could put some things together.

"So... the local businesses are limited with their profits," She started to bite her lower lip due to her pondering state, "which reduces the available wealth the old Families could amass." She carefully summed up, looking at Tom if she understood him right. When he nodded she unsurely continued, "But... didn't they have centuries to get richer? Shouldn't they be, I don't know, wealthier?" She curiously tilted her head without even noticing it.

Tom chuckled to himself at how similar to a curious squirrel she looked. Alas, he was smart enough not to voice his thoughts out loud. "No. You forget that there are costs and losses in doing business too. With localized businesses, you don't only have lower profits but also more rigid costs due to the lack of competition. For example Ollivander. He is the only wandmaker in the country with the legal right to sell wands."

Tom snorted at the absurdity of this. Wands were one of the most precious resources to wizards and they allowed one guy to legally have a monopoly on their creation? Just how stupid did their government have to be to allow this?

"Of course, there are others who create and sell them illegally but that's not the point. Because Ollivander has close to no competition, he can decide the price of his wands. If he wanted, he could ask twenty galleons for a wand and the English Wizarding Community would simply have to silently bear it." Tom presented a situation.

It didn't matter that Ollivander was a good guy and sold his wands only for seven Galleons. This could still happen and it was happening in other businesses quite frequently.

Hermione sullenly hummed, her eyes stormy as she remembered how overpriced books were. The biggest expense for every year in Hogwarts is actually the new course books. Each piece costs three to six Galleons.

Tom didn't mind Hermione's distraught expression and just continued. He knew she was still listening. "Because of this, the economy is not healthy. The businessmen earn a lot but they also have a lot of costs which reduces their profits massively. And then there are losses. Deals that went through. Because that's a normal thing that happens more often than not." He smirked.

Just imagining how much it must hurt to have an investment fail in this kind of economy made him inwardly snicker with schadenfreude. It was no wonder the old Houses mostly tried to keep their old and proven investments going without trying to risk expanding.

Oh! And he had the best example too!

Tom's eyes mirthfully sparkled, "An apt example would have been supporting the last Dark Lord," Hermione's head snapped toward Tom at the mention of the git, "where many Noble Houses lost a lot of their wealth when he was defeated and then they had to pay some more to keep themselves out of prison. That's as good of an example of failed investment as it gets. All that considered, the Malfoys could not really get past the ten million Galleons point. In fact, I believe their wealth took a steep hit in the recent decades and Lucy has a lot of work to keep his House on the top." Tom wiggled his eyebrow at Hermione, making her giggle at the mental image of panting Lucius who tried to do three things at once, failing at each of them.

"But less than one million Galleons seems too little to be one of the wealthiest in this kind of economy. I personally think they have somewhere around six million in their accounts right now." Tom shrugged and subtly glanced at Sharpmaw. His smirk widened when he saw the goblin wince.

'Strike! Prest 1, goblin 0!' Tom smugly thought as he gave the goblin a knowing look, making him wince even more.

Tom took that number totally out of his ass, just trying his luck but... eh, what do you know? It worked.

A knock suddenly came from the door, interrupting the atmosphere in the room.

"As interesting as your analysis was, Mr. Prest, your vault keys are here." Sharpmaw grumbled as he stood up, both astonished and exasperated with Tom.

After listening to him explain his thought process on the Wizarding Economy, Sharpmaw knew that scamming this guy would be hard. He just had no idea if he was more irritated or impressed.