Dangerous Games: The Wizarding World

(It is still recommended to read this chapter repeatedly.)

The Daily Prophet reported on December 27, 1989:

"After November 9, 1989, in order to cope with the financial deficit caused by the collapse of the Berlin Wall, Germany began to massively issue its national currency. This directly exacerbated domestic inflation in Germany. The enormous inflationary pressure forced the Federal Reserve Bank of Germany to raise its interest rates. However, beneath the surface, disguised by the economic crisis, we still have reason to suspect that the dark wizards of the German wizarding world are harboring the idea of rescuing their former leader, Gellert Grindelwald, from Nurmengard."

Jon closed the newspaper in his hand and lightly tapped the table twice, earning a disapproving look from Mrs. Pensworth, the librarian.

Apologizing softly, Jon rolled up the newspaper and tucked it under his arm, then turned and walked out of the library.

He had been at Hogwarts for a week now. During this week, he would meet with Helga every 2-3 days. The two of them had developed a mutual understanding, and their class times were always precise, ensuring that Jon wouldn't be too tired the next day.

As for the homework at Hogwarts, it wasn't particularly difficult for Jon. With a little time and effort, he could achieve a decent score. Jon didn't display any extraordinary talent in flying class, so as long as he didn't actively get involved, Quidditch had nothing to do with him.

The assignments given to him by Helga, on the other hand, were quite extensive. For example, the Daily Prophet he had just read was an assignment Helga left him after discussing his thoughts on Wednesday evening.

Today was Saturday, and he would continue to enter Helga's portrait space in the evening. Before that, he needed to organize the contents and be ready to present them to Helga.

Then Helga would make some inferences, including various possibilities, and Jon's task was to identify the most likely one from them.

Of course, this wasn't just homework; it was part of Jon's studies.

As Helga said, an excellent wizard must possess keen judgment in order to avoid danger as much as possible.

Recently, Jon had found a small corner on the eighth floor of the castle. The window in that place was in one corner of the castle, offering a view of the entire Hogwarts scenery. And because it was on the eighth floor, although students were not forbidden to go up there, very few people actually went to that place.

Jon often came here, mostly for meditation. The magical environment of Hogwarts was quite conducive to meditation, and he made good progress here.

The remaining time Jon usually spent daydreaming, a state similar to meditation.

But when Jon daydreamed, he thought about many more things than usual.

Just like the article he had just read, it made him realize that not everyone in the wizarding world was foolish; there were also people who could perceive emergencies.

However, it was a grave mistake to publish this inference in the Daily Prophet. The credibility of the Daily Prophet's people had long been tarnished over the years.

This newspaper is indeed the mainstream media in the British wizarding world, but it has reached a point where no one believes these speculations except for some factual news. It's not a big problem that no one believes it. At least Jon has a memory of this matter, but he didn't react immediately. Who could have imagined that the dark wizards, who advocate violence, would also start using their brains and attempt to conceal their true intentions through economic warfare in the Muggle world?

The biggest problem in the wizarding world is the wizards' reluctance to change. On one hand, pure-blood wizards harbor hostility and disdain toward Muggles, and on the other hand, they have an inflated sense of self-importance. However, they fail to realize that today's Britain is no longer the powerful empire it once was, and the situation in the wizarding world is not much better than the Muggle world. Young and talented wizards from various countries are emerging like mushrooms after rain. Although Dumbledore is still one of the most powerful wizards in the world, he is ultimately standing alone. It is already extremely difficult for him to maintain the influence of the British wizarding world in the entire magical world. Especially after World War II, that country on the wheelchair in North America has seized the greatest influence from the British Empire's hands, and correspondingly, the wizards of that country have risen in power and gained more influence in the International Confederation of Wizards.

It is because of this that in 1990, the Muggle government of Britain decided to join a new currency system established by Western European countries in order to break free from American constraints. This currency system, the European Exchange Rate Mechanism, effectively locked the currency mechanisms of various countries together through a treaty. In simple terms, each currency could only fluctuate within a certain exchange rate range. Once it exceeded this predetermined range, the central banks of the member countries had to intervene in the market to stabilize the currency exchange rates. And all of this was centered around the German currency, the "Mark."

This system quickly became a tool, and a Muggle representative of the dark wizards, a merchant named George, exploited the weaknesses of this system to launch a "currency hunt" against the Muggle society in Britain. In Jon's memory, in his previous life, this George practically brought the British to their knees, leading to an economic collapse in 1992. At the present time, the Muggle society in Britain is facing rapid economic decline and deflation.

Just when the Muggle society in Germany was facing inflation and had to raise interest rates, the Muggle society in Britain, due to economic decline, needed to lower inflation and therefore urgently required a decrease in interest rates to stimulate its own economic recovery.

A conflict arose at this moment. In order to maintain the "European Exchange Rate Mechanism," Britain had to maintain an extremely high exchange rate and interest rate, which put Britain in a dilemma.

According to the Mundell's trilemma (that is, under the conditions of an open economy, the independence of domestic monetary policy, exchange rate policy, and free capital flow cannot all be achieved simultaneously; at most, two out of three objectives can be simultaneously met, and one objective needs to be given up to achieve regulation purposes), while maintaining stable exchange rates and free capital flow, Britain also wanted to maintain high interest rates. This, in itself, was an impossible task.

And Jon knew that the representative of the German dark wizards, George, was gambling on the fact that the Muggle government in Britain could not simultaneously maintain these three objectives and would have to give up exchange rate stability and withdraw from the European Exchange Rate Mechanism, causing the British currency, the pound, to plummet.

Jon didn't have much knowledge of economics, but one thing was clear. If there were an economic collapse, it would inevitably cause social panic. At that time, the British wizarding world, which relied on the Muggle society, would become a sieve and would disintegrate under the infiltration of those dark wizards.

"That would be a real disaster!" Jon murmured as he sat by the window.