Vol 5 Chapter 157: Knives

?London
Prime Minister Macdonald has no longer the spirit of the past. He had already paid a huge price. The cabinet has completely compromised with the consortium. As a result, the economic crisis broke out.
"His Prime Minister, the Japanese government announced on October 1 that it will suspend the payment of international debt, and the stock market may continue to fall!" Said Finance Minister Pete, frowning.
Now it is not a matter of one or two defaults, but almost all loans and bonds issued by the British Empire overseas have defaulted.
This is undoubtedly worse for domestic financial institutions. Everyone would have a hard time. The bad news at this time is likely to crush their last straw.
"If it falls, it will fall. At this point, how can the stock market fall?
The scope of the economic impact is so large this time that debt default is almost inevitable. Haven't we already prepared? McDonald said with a grin.
This is completely released, ready to break the jar! But at the moment there is really no good way. About a dozen countries have declared debt defaults. How many independent countries are there in this era?
People do n’t have money and do n’t pay it back, but they do n’t have money to pay back at all. It is the most troublesome for such creditors. Whatever you do, if you have no money, you have no money.
It ’s good enough, but at this time do they dare to accept it?
Obviously, domestic factories are full of mountainous goods. At this time, as long as McDonald is not stupid, he will not accept these things again.
"So what do we always have to do? The British people are watching us. If it weren't for a little bit of results, I'm afraid it can't be justified!" Secretary of State Rice said depressedly.
"I visited the Prime Minister of Stanley, and he suggested that we adopt tariff barriers, temporarily abandon our interests in Germany and Italy, and give priority to keeping our homeland!" Macdonald said with a frown.
This decision is not good. Once tariff barriers are adopted, even the goods of Germany and Italy will not be allowed to enter, except for the capitalists behind the foundry will definitely be dissatisfied.
Everyone knows that once this happens, it is not a problem that can be solved after a few months of suspension. Germany and Italy will soon have chaos. Most of their investment there will be put to waste.
"This is a sloppy idea. Simply adopting trade barriers, you can try it, but giving up so many overseas assets is simply killing us!" Finance Minister Pete said with a blushing expression.
"I also know this issue, but the current domestic economic situation, if you want to get out of the economic crisis as soon as possible, this is the best way!
Most of our imported goods come from Germany and Italy. If you do not impose high tariffs on these industrial products, the so-called trade barriers will never be discussed!
Our domestic market, even with the colonies, cannot support so many companies, let alone the three North American countries?
Their situation is similar in our homeland. Now they have begun to adopt tariff barriers. If we do not abandon the guards, I am afraid the situation will worsen! "McDonald said with a headache
The current British Empire is a mess. To get out of the economic crisis, you must make a choice. In fact, it is not impossible to give up the foundries in Germany and Italy. It is not impossible to give up the three North American countries.
As long as the goods of the three North American countries are not allowed to enter the colonies of the British Empire without restriction, then they can overcome the difficulties slowly as in history.
However, it is enough to think about such a thing. Once it is done, the three North American countries will part ways with the British Empire.
No one doubts they can't do it. Once their interests are damaged, they can rebel in minutes. At that time, all the efforts of the previous two governments will be wiped out, and no one can bear the consequences.
"So let's do it now. We can't afford it now. In more than a month, more than 10,000 people have committed suicide in London alone. How many people in the country don't know?
Crime rates are also skyrocketing, and our prisons are overcrowded.
Even the reasons for going to prison are strange, some people are for revenge, some people are for hiding debts, and some people are simply looking for a job in charge of food!
Heck, seeing that jail time has become their job, you know how bad the situation is now! Secretary of State Rice complained
"But then, I am afraid those capitalists will go crazy! Moreover, the party can't pass, don't forget who our supporters are?" Finance Minister Pete said nervously
"There is no way. If they do n’t go crazy, it is estimated that the people in China will go crazy first. According to the current situation, the revolution is not far away from us!
As for the issues within the party, at this time, everyone should work together and national interests are above all else! The Minister of State Rice countered.
"Well, Pete, I know what you want to say. Now we are the ruling party. It is not the same as before. If we take measures at this time, what will happen?
Don't you wonder? We must take care of the overall situation, and this time someone must be sacrificed. The losses of these capitalists can be remedied later, but now they must make sacrifices!
Domestic employment must be preserved, otherwise the British Empire will be over, and chaotic people will not reason with you! "McDonald said very embarrassed
Once the tariff barriers were adopted, the free trade policy that the British Empire had always admired was almost over.
Everyone is not a fool, as long as someone takes the lead, everyone will follow suit.
Governments in various countries have begun to adopt trade barriers, which is equivalent to everyone playing a single machine. In the face of high tariffs, competition will become empty.
But before the crisis, who can take care of it so much? The question of the future, let's talk about the future, at least to survive the disaster now?
"Well, Your Excellency the Prime Minister! I respect your choice, but isn't that enough?
In my opinion, unless the three North American countries are excluded, our market still cannot meet our needs, which is equivalent to doing nothing! "Treasurer Pete said with some hesitation
"Of course not enough, how about if we give up the gold standard?" Prime Minister Macdonald said fiercely.
Everyone's face changed greatly, and once the gold standard was abandoned, the pound would depreciate immediately. What's more important is that it will lose the international reputation of the pound and gradually lose the pound's status as a world currency.
"Her Prime Minister, you can't do this! Don't forget that this economic crisis has not affected the whole world, at least Bulgaria has no impact!
Once we give up the gold standard, they will take advantage of it, and Lev will gradually replace the pound's international currency status. Said Minister of Finance Peter Frowning
"Of course I know the risks of giving up the gold standard, just like the franc was the international currency second only to the British pound. After they gave up the gold standard, they were quickly surpassed by Lev and their influence became smaller and smaller.
But, don't we have no choice now? After the French gave up the gold standard, in the long run, they did suffer heavy losses. However, in the short term, the competitiveness of French goods has indeed increased internationally and the economy has also developed rapidly!
At this step, we can't take care of it too much, let's talk about the present disaster first, and then talk about the later things! McDonald said with a grin.
Well, enhancing the competitiveness of goods is an excuse. You have given up the gold standard, and others have given up the near standard. Everyone is depreciating to enhance the competitiveness of Mao's products?
Is it faster than looking at, whose currency is depreciating faster? If it is useful, after the First World War, the franc ’s depreciation speed is fast. Has the competitiveness of French industrial and commercial products really increased?
In addition to having a role in the beginning, once the foreign exchange market reacts, it immediately recovers. You ca n’t play devaluation every day, right?
The biggest role of currency devaluation is to get money, plunder private wealth and solve the government's financial problems by means of excessive currency issuance.
It's just that these words cannot be said. Why did the French give up the gold standard? It is not because their economy can't support it, but because the government owed too much debt in the World War.
Is there a better way to solve the debt problem? The British are now in a similar situation. The Southeast Asian War consumed a lot of their funds, and the high domestic expenditure on welfare has weighed down the government's finances.
Resolving the economic crisis and creating jobs require money. Where do these jobs change without money?
Including the construction of the Roosevelt New Deal, do you want government investment? You always need money to invest?
One of the reasons for the economic crisis is that the capital chain of certain industries is broken. In addition to printing money at this time, where can the government go to get money?
The consortium is rich, but is it not good for others to keep the bottom? Want to fill it out for you?
We must know that the currency circulating in the market is far less than the theoretical wealth value. In fact, after the run-out crisis, the bank's funds are not much. In order to protect themselves, they must shrink their money!
Including Ferdinand's government bonds, he used government guarantees to allow these bonds to circulate in the market as currency, which was essentially printing banknotes.
It's just that people don't think of bonds as Lev in people's minds, so everyone doesn't think that the government has issued more currency, and used everyone's confidence in the market to support the currency value.
What was originally a currency supplement when the gold was insufficient, has now become a credit currency.
As long as the government's credit has not collapsed and it can circulate on the market itself, and banks are willing to endorse bonds, is there a fundamental difference between bonds and Lev?
The only pity is that such bonds cannot be issued in large quantities. Once the market capacity is exceeded, it will impact Lev's position and cause uncontrollable consequences.
History is always full of coincidence, and the McDonald's cabinet has adopted the same policies to cope with the economic crisis.
On October 15, 1929, the London government announced the implementation of a new tariff policy. All foreign goods entering the British market will be charged an ultra-high tariff of 50%.
On October 16, the London government announced that it had abandoned the gold standard, and the value of the British pound was no longer linked to gold, and the world was in an uproar!
Sofia
After receiving the news that the British raised tariffs, everyone in the Bulgarian cabinet did not look better. Obviously, the situation that most worried them still happened.
"Prime Minister, now that the British have raised tariffs, are you ready to respond?" Ferdinand asked lightly.
"Your Majesty, we have decided to increase the tariffs on imported British goods and retaliate!" Constantine said with a pale face.
Now the British Empire is the second largest trading partner of Bulgaria, and Bulgaria is the first largest trading partner of the British Empire. Once the two sides get into trouble, everyone will not have a good life.
However, the British still raised tariffs, so their rivalry became inevitable, and the trade between the two countries was about to be interrupted.
"Then let's improve together! Anyway, we are not a country for foreign trade. As long as we stabilize the country and there is no British market, we can afford it!" Ferdinand thought and said
Losing the British market is actually not so terrible. Even if the tariffs are raised, it is impossible to keep all products blocked.
Bulgarian products do not win by volume. Many high-margin products can also be sold. This is the difference between an industrial power and a cottage power.
It is not high to withstand the profits of commodities, and now it is impossible to enter the British market. But Ferdinand's high-end goods, which are specially produced for the rich, can also go in and out freely.
Just like later generations, a country importing a car has to pay 40-50% of the tax, and as a result, it sells well. It is nothing more than adding taxes to consumers.
Now it is no exception, ordinary goods cannot be sold. In fact, even if the British do not raise tariffs, they will not be able to sell. The people have no money. What do you buy?
On the contrary, the sales impact of luxury goods is not great. When someone loses money in a stock disaster, some people make money, and there are not a few outbreak households.
Shorting the stock market is not big news, how can it be done without smart people? No matter how the economy deteriorates, there are still many rich people.
The one million people who have the most purchasing power have not actually reduced much. With the advantage of information, these people can always take the lead and avoid the crisis.
However, Ferdinand's mood is still very uncomfortable. For a long time, overseas trade has been unprofitable. If it is not good, he will still have to lose a sum of money.
The profits obtained by exporting high-end commodities must be used to make up for losses in other fields, and enterprises must reduce production and transform, all of which require investment.
The world economy will not be very good in the next three to five years. He cannot make factories stop production and other markets to recover. He must enter new industries to obtain profits. This is the instinct of capitalists.
"His Majesty, in addition to raising tariffs, we can actually retaliate in other areas, such as North America!" Foreign Minister Metiev suggested
"You mean to motivate the independence of the three North American nations? I'm afraid it's difficult. The British are not stupid. How could there be no defense?" Ferdinand shook his head and said
"Of course not, but we can give the British people a block. The three North American countries have their own government teams. We don't need to do anything else. We just need to build public opinion and let them raise tariffs!
This can also be done by several other autonomous territories, allowing them to raise tariffs within the Commonwealth. After all, according to the current situation, some states are actually losing money economically! "Metev analyzed
Taxes are also collected on the circulation of goods within the Commonwealth, but for example, the outside world is much lower and there are a series of preferential policies.
Now Metev's plan is to take advantage of the imbalanced development and uneven distribution of interests among the states and encourage them to set tariffs. No matter whether they can succeed in the end, the London government can be busy.
"Then try it, I will let the intelligence department cooperate, if you want to do it, get bigger!
There are independent organizations in the three North American countries. We secretly fund them a little bit, and we also provide a set of independent country secrets, let them go to trouble! Ferdinand said lightly
If you don't stab each other, is it still an imperialist country?
The British raised the tariffs all at once, caught a surprise in Bulgaria, and did not leak any news in advance. It was clearly a mischief, and Ferdinand naturally wanted to pay back.
"Your Majesty, in fact, making a fuss about the currency will hit the British even more seriously!" Finance Minister Kennedy suggested
"You mean, let's start the currency war now?" Ferdinand asked in doubt.
"Of course not. As long as the British Empire is still the world's hegemon, the position of the British pound will not be so easily shaken.
Now that the British have given up the gold standard, the pound will definitely depreciate. Let's make the depreciation of the pound faster. Kennedy suggested
Ferdinand nodded, it is not easy to immediately destroy the pound's status, but to make the pound depreciate faster, this is simple.
As long as the market loses confidence in the pound, the depreciation rate of the pound will be beyond imagination. If you toss for a while, do you still want to hold a lot of pounds?
Just like the last depreciation of the franc, according to the French plan, the franc depreciated slowly, reducing the value of its currency by half within three years, and finally depreciating three times in one year.
The market's confidence in the franc collapsed, governments of various countries sold the franc in succession, and the French government had to take over the market. The number of francs in circulation internationally decreased, and finally the currency value stabilized at one tenth of the original.
Now Feng Shui is taking turns, and it is the British turn this time. If the pound depreciates tenfold, you don't have to do anything about Ferdinand, and the status of the international currency will naturally collapse.
Anyone who sees holding so much currency depreciating in one hand is afraid to hold it for a long time?
Governments, whether they are willing or not ~ EbookFREE.me ~ In order to be safe, they must reduce their holdings of sterling foreign exchange and exchange for more stable international currencies.
If there is no currency that can compete, that's fine. Everyone will recognize it by gritting their teeth, but is there still Lev?
Everyone knows that Lev ’s currency is horribly stable. Unlike in Britain and France, their people have no deposits, and their currency depreciates.
The people of Bulgaria have not given up the tradition of deposits, nor do they have the concept of pre-consumption. If anyone dares to devalue Lev at this time, they must first ask if they agree.
In this context, the confidence of the international market in Lev has always been strong, and it is now the second largest currency system in the world.
"It's up to you, the Treasury, to be cautious. At this time, the British may take precautions. Dora's allies shot together!" Ferdinand said after thinking about it.
"Yes, Your Majesty!" Kennedy answered.
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