Vol 5 Chapter 164: ,Currency war

After the First World War, the French government was forced to adopt a paper currency inflation policy in response to the financial crisis. The French announced that they had abandoned the gold standard, which kicked off the currency war.
The French were the first to play this way, and everyone was unprepared. At that time, the franc was the second international currency in the world. A large number of franc holders paid for them and suffered heavy losses.
However, the French government's original plan was unsuccessful. Ideally, it would double the currency and devalue the franc by half.
In the end, because of the downfall of governments of various countries, the market lost confidence in the franc and plunged all the way, and finally depreciated ten times before it stabilized its currency value.
However, the amount of francs issued was far less than ten times. The losses included the loss of credit, inflation caused by the government, and the profits of the government's printed currency. Most of them fell into the hands of capitalists.
In this currency war, the financial supremacy of the pound was again established. Lev also later replaced the franc and became the second largest currency in the world.
Although this French operation was not considered a complete success, they did get rid of the financial crisis, paid a huge war pension, and prevented the government from going bankrupt.
Even in the subsequent economic activities, with the sharp depreciation of the franc, the price competitiveness of French goods has also greatly increased, and it still has a role.
But the aftermath is also quite serious, and the wealth of the French people has also been plundered, including the small capitalists and the middle class, which have suffered heavy losses.
This is also a characteristic of European countries in this era. Ordinary people don't care much about inflation, because they have no extra money at all, and naturally they can't talk about how much loss they have.
With the destruction of the petty bourgeoisie and middle class, French social wealth has become more concentrated, and small factories engaged in processing and manufacturing have gone bankrupt.
It can be said that even without Ferdinand's guidance, France will embark on the road to industrialization, and look at the development of French industry in history.
Ten years after the World War, the total industrial volume of France returned to pre-war levels. We must know that the area of ​​France also expanded during the First World War, and the population increased by several million.
In fact, at the outbreak of World War II, France ’s industrial proportion was actually not as good as that of World War I. It was not surprising that the French government would surrender immediately.
Now it ’s the British turn. Affected by the economic crisis, the London government has also announced that it has given up the gold standard. Big capitalists around the world are rubbing their hands and preparing to grab a piece of meat from it.
However, the pound is not the same as the franc. The pound is the world currency. This is the foundation laid by the British with the Royal Navy. It is not easy to break the pound.
"How much has the value of the British pound dropped since the London government abandoned the gold standard?" Ferdinand asked with concern.
"Your Majesty, in the past two months, the British pound has depreciated by 8.5 percent. We have not yet tried our best, and the major consortia are just tentatively blocking.
If nothing else interferes, the pound may end up depreciating between 30% and 35%! Answered by Treasurer Kennedy
Ferdinand frowned. The foundation of the British Empire was really strong. People in the market have not lost their confidence in the pound. Even if Bulgaria shot down, there is no way to beat them to the bottom like the franc.
"What if there was external intervention?" Ferdinand continued to ask
"Your Majesty, this depends on the specific situation. The worst result may turn the pound into waste paper, and the easiest may have no impact.
As long as the Royal Navy is annihilated or the main force is greatly damaged, it can be done.
Other circumstances, including the British government being badly hit, or a war with a major power, the intensification of the domestic crisis, and a series of factors may devalue the pound! "Kennedy said humorously
Ferdinand nodded. The influence of the British was not covered. After the devaluation of the pound, more than a dozen countries in the world have abandoned the gold standard.
These countries gave up the gold standard at this time, and undoubtedly shared the firepower for the British. The international consortium wanted to take advantage of the opportunity.
It doesn't matter if you bite a piece of meat from any country, there is no need to die with the British.
Except for the political needs of Bulgarian capital, in the fight against the pound, the remaining international consortiums are spreading their bets. Wherever they make good money, they will kill there.
"Front attack is not enough, then you can only go dark, and prepare to send fake banknotes!" Ferdinand sighed and said
This is the last option. After many years of hard work by the Bulgarian technical department, they can now also make pounds.
Of course, this is a fake British pound, but it can only be faked. Under normal circumstances, everyone can't recognize it.
Ferdinand didn't want to adopt this approach. The sequelae are too big. Once this is started, it is often endless.
"Your Majesty, we haven't reached this point yet. We can make fake pounds, and then the British can make fake Levs. This is a complete loss!" Kennedy said in distress.
Now the competition between Britain and Bulgaria is back to competition, but it has not yet reached the point where the bayonet has become popular. Once you take this step, you can't go back!
"It's enough not to let the British know? Even if the British pounds are printed, we don't have to ask ourselves to do it?
This year, many people are short of money. As long as we produce a few sets of pound printing equipment and sell them secretly, someone will do it for us later!
As long as the fake pound sterling is not printed by us, let the British people find it slowly. It does not matter if we cannot find it.
We disassembled all the printing equipment into parts for export, and some of the spare parts produced by the British themselves could be mixed and assembled at the place. Ferdinand said with a smile
This damaging idea was inspired by the Japanese in Ferdinand. During the War of Resistance Against Japan, the Japanese government printed a large number of legal currencies, which overwhelmed the economy of the National Government.
Now he has a bunch of fake sterling out, not to mention that it can bring down the British economy, but let the pound depreciate even more. Is this always okay?
Eighty percent of the decline has not yet broken the market's credit to the pound, but if it becomes a 40%, 50%, or even a 70% to 80% decline, is this confidence still not broken? What?
You know, in the case of the devaluation of the pound, the more they hold the pound, the greater their loss. Even if they have confidence in the pound, seeing the constant loss of wealth in their hands will allow them to make the right choice.
In order to stop losses, reducing the pound has become the only option for everyone. As long as there are people in the market that insist on the pound, the London government doesn't want to devalue the pound.
Stimulating the economy with inflation is unlikely to continue. Every currency devaluation is to postpone the crisis, not to say that the crisis can be lifted.
The sharp devaluation of the currency occurred, and more and more people lost confidence in the pound in the market, and finally fed back to the circulation of the pound.
Internationally, the holding of the British pound has fallen, which means that the international currency position of the British pound has been shaken, and it has meant that other currencies will gradually become larger.
"Your Majesty, these alone are not enough. We can also follow up on currency depreciation, but we don't have to give up the gold standard and directly lower the ratio of Lev to gold!" Kennedy suggested after thinking about it
"No, at this time Lev ’s currency cannot be shaken. Do n’t forget that Lev ’s holdings in the international market have increased by 18.6% in the past two months.
Now that we have begun to erode the pound's status, at this time let Lev depreciate, and all the previous efforts are wasted.
Let Lev replace the British Pound as an international currency, how much the benefits are there. I don't need to say that everyone knows this.
Compared with this, the other ones are not worth mentioning at all. Bulgaria's largest export market is in Southeast Europe. As long as this part of the basic market is not lost, they can compete. Ferdinand shook his head and said
Establishing currency credit cannot be completed overnight. Even if it is linked to gold, everyone still has doubts about holding small goods.
Lev's rise has been very fast. The original competitors were almost dead, leaving only the British pound.
For example: Ruble himself played to death after the outbreak of the Russian Civil War.
Another example: the German mark killed his credit because of the war compensation.
Another example: the US dollar has become history with the collapse of the United States.
There is also the franc, which was sacrificed by the French government to resolve the financial crisis, thereby losing the possibility of becoming a world currency.
There is a good saying, "If you want to establish a world currency system, you must first establish a world hegemonic system!"
At present, the position of world hegemon is still some distance from Bulgaria. At this time, it is naturally not easy for Lev to replace the British pound as the world currency.
Ferdinand didn't even think of a step up. He just wanted to shake the position of the British pound and affect the British economy. At the same time, he released a signal to the outside world that the British had become weak and ready for the future.
"Then, we can only find a way to keep the franc depreciating. As long as the currency devaluation war is picked up, the British will either continue to follow up or let the existing plan go to waste." Kennedy thought about it
If you want to rely on currency devaluation to obtain competitiveness, it is so simple. As long as everyone devalues ​​together, who else can the British market?
Bulgaria may not participate, because it is too late to rise, and the market has long been divided up and played by the old empire. As a rising star, they can only rely on Southeast Europe and local market development.
In other regional markets, Bulgaria still has some advantages in food processing and mechanical equipment manufacturing, and other industries can only sell oil.
No matter how the market changes, food and oil, the two most-needed industries, are at best the decline in demand and cannot be banned.
Even if all countries have adopted tariff barriers, no country has restrictions on food imports and oil imports?
With these two industries supporting, Ferdinand can naturally sit on the Diaoyutai.
The remaining machinery and equipment manufacturing, at this time there was no market, everyone is reducing production capacity, who still buys machinery and equipment?
No matter how strong the competitiveness is, it is not needed in the market, it is not useless!
"Secretly, now the French are not doing well. They will not mind devaluing the currency again ~ EbookFREE.me ~ At the same time, they also induce Germany and Italy to join the devaluation army Finally look at the one who can win! "Ferdinand sneered
He hoped that the British could persist until the end, so he didn't have to do anything, and the British played the pound themselves.
The British Empire today is not the same as the United States in later generations. The Americans are a monopoly.
And the British, many countries dare to challenge their hegemony during this period, especially the rapid rise of Bulgaria, the comprehensive national strength of the two sides is very close.
The two sides did not fight, that is, the conflict of interest between the two parties is not large enough to make the two countries desperate.
But competition is indispensable. If the pound continues to depreciate, who would dare to hold a large amount?
Can anyone become an international currency without a continuous currency?
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