Chapter 679 Currency War

Arthur had not been immersed in the improvement of transport aircraft for too long when a big news broke in Europe.

In fact, this news was also expected. Because since the onset of the economic crisis, many countries, including Britain, Germany, Italy, Austria, France, and France, have suffered considerable property losses. With the exception of Australasia, France has been the least affected by the economic crisis.

This seems a bit strange. After all, France can only be regarded as the upper middle class among the great powers in terms of population and economic scale. Why is it not deeply affected by the economic crisis?

Much of the credit for this is the result of France's drastic currency devaluation strategy.

First of all, currency depreciation will wildly stimulate exports, continuously create more jobs, boost people's consumption levels, thereby stimulating the growth of internal demand.

Secondly, the continuous depreciation of the currency will also lead to the continuous rise in prices, which will lead to the continuous decline of the stock market.

This also means that before the economic crisis broke out, the Paris stock market was already in a downturn. This is also the real reason why the French people have not suffered much.

After all, the stock market has already dropped to a lower level, where can it drop further?

Because of the depreciation of the currency, the French's domestic demand is constantly increasing. This has also resulted in France's overproduction not being that serious, which is also an important reason for avoiding an economic crisis.

What makes other countries even more envious is that France's unemployment population is constantly decreasing and has stabilized at the lowest level among the major powers, second only to Australasia.

This is what attracts other countries the most. After all, what is currently causing chaos in various countries is the huge number of unemployed people.

If there were not tens of millions of unemployed people in the United States, the people would not be so angry with President Coolidge, and they would not directly contribute to the opposition party's impeachment of President Coolidge.

It is precisely because they have seen the benefits of currency devaluation that the British can't sit still. The British government is already proposing a plan to devalue the pound and is applying for approval from King George V and the British Parliament. ♢♦

News of the British actions on currency naturally spread to Australasia. To be honest, the Australian dollar and the pound are highly tied, and the Australian dollar cannot escape if the pound depreciates.

This is also equivalent to a causal relationship. The Australian dollar enjoys the benefits of being tied to the pound, and naturally has to bear the disadvantages of the depreciation of the pound.

However, the depreciation of the Australian dollar is also in Arthur's plan. After all, the current size of the Australian dollar cannot support the framework of the world currency. Acting with the pound is the best result.

The current world currency still leaves the British pound and the US dollar to compete, which just makes the rift between the two superpowers Britain and the United States deeper and deeper.

By the time the British decide to take action against the United States, it may be time for the next war to break out.

Until then, it's best not to have any ideas about Australasia. Even if it is the United States alone, Australasia has no way to defeat it.

If the United States and island countries join forces, even Australasia may not be able to withstand the dual pressure of the army and navy.

This is also the benefit of having someone behind the scenes. Let the British come in in advance. Anyway, the British family has a great cause and they don't care about this small loss.

When the benefits are divided in the future, Australasia will be indispensable. After all, Britain cannot completely divide the world situation, and allies like Australasia are needed to stabilize order.

What made the British decide to abandon the gold standard was not only the current situation of the French, but also the significant impact of the economic crisis on the British.

As the most powerful country in the world, the British Empire's import and export balance is generally positive, and the profits are enough to tempt all countries.

But since the economic crisis began, the British Empire's exports plummeted, and the import-export trade balance instantly became an upside-down situation.

Even if the British family has a great business, it still cannot bear the loss of hundreds of millions of pounds in foreign trade balance.

The original exchange ratio between the British pound and the U.S. dollar was changed from 1 to 85, which also made it difficult to maintain the British pound under the gold standard. ♦♤♗

Because the gold standard was first established by the United Kingdom, and coupled with the strength of the British Empire in the past century, the currencies of various countries are more or less pegged to the pound.

If there is a problem with the pound, then there will be a problem with the currencies of various countries. The British gold standard is difficult to maintain, and the gold standard in other countries is also difficult to maintain.

The good news is that the British plan to abandon the gold standard was not prompted suddenly, but was decided after careful consideration and long-term consideration.

Shortly after the British government proposed the bill, British Prime Minister Baldwin contacted Australasia and stated that after abandoning the gold standard, he would establish a pound-centric pound group, and said that the new pound would still be pegged to the Australian dollar, and the Australian dollar would also become The main currency in the British pound group.

British Prime Minister Baldwin's wooing of Australasia is already evident. In fact, this is indeed the case.

Because after abandoning the gold standard, there is no fixed ratio of currency exchange ratios between countries.

Whether the value of the currency is stable and whether the new paper currency can gain the trust of the people depends not only on the number of countries that recognize the currency, but also on the country's gold reserves and strength.

Obviously, if you want to continue to maintain the pound as the world currency, the British Empire alone cannot do it.

Because Americans also have help from island countries, and the United States is rich and powerful, the British may not necessarily be their opponents if they really fight to consume.

This can only be attributed to the fact that the British family has a great cause and basically has certain enemies in every region.

The enemy in Europe is France, the enemy in Asia is Russia, and the enemy in the Pacific is the island countries and the United States.

Under such circumstances, if the UK does not win over a reliable ally to maintain the stability of the pound, the value of the pound will definitely be impacted.

The British win over did not surprise Arthur, and it was also in Arthur's interest.

After all, the Australian dollar and the pound are deeply linked, and judging from the current situation, it is impossible to separate them.

With Arthur's nod, the Australasian government agreed to abandon the gold standard after Britain abandoned the gold standard and join the British pound group.

With Australasia's commitment, the British government was clearly emboldened, and the issue of abandoning the gold standard was quickly passed in Parliament.

1. The British government officially issued an announcement announcing that due to irreparable mistakes, it would abandon the gold standard after careful consideration and establish a currency system managed by the government. The new pound will no longer be linked to gold.

Such news caused an uproar in the United Kingdom and the entire Europe, because the United Kingdom was the first country to stand up and declare that it would abandon the gold standard.

In addition, the pound involves too many countries, including a wide range of colonies around the world. This is simply a heavy blow to the world gold standard.

This also means that since the United Kingdom, it is impossible to maintain the gold standard in various countries. Britain, the leader of the gold standard, gave up, and they had no choice but to follow suit.

Australasia did not break its promise. After certain preparations, the royal family and the government jointly issued a declaration to abandon the gold standard from now on, and the Australian dollar will no longer be pegged to gold.

Before the people around the world started to discuss these two pieces of news, the British and Australasian governments issued a joint statement to form the British Pound-Australian Dollar Group, using the British pound and the Australian dollar as the official currencies of the group, and establishing a fixed exchange rate. Conversion.

The new currency rates are as follows:

1 pound = 20 British shillings = 240 British pence = 2 Australian dollars = 20 Australian shillings = 200 Australian pence.

At the same time, the currency bloc also issued requirements for countries. The two governments jointly stated that the currencies of countries joining the currency group will maintain a fixed parity with the British pound and the Australian dollar to ensure that the currencies of each country maintain a relative balance.

In addition, trade between member countries in the currency group is calculated in pounds sterling or Australian dollars, ensuring that there will be no losses caused by currency value fluctuations in import and export trade.

Such a piece of news naturally attracted the attention of the world, and the GBP-Australian dollar group has become a hot topic in all countries in the world.

Whether to join this new currency group and whether to immediately abandon the gold standard has become a very difficult choice.

Abandoning the gold standard also means abandoning the monetary system that the country has adhered to for decades or even hundreds of years.

This is a huge impact on a country's currency. A little carelessness may cause the country's currency and credit to collapse instantly.

After all, compared with gold, whose value has steadily increased, paper currencies that rely on official government credit have become even more uncontrollable.

No matter how bad the previous pound was, it was still converted to gold, so there was no need to worry about the pound depreciating significantly.

But now, if the United Kingdom and Australasia have relevant plans, they can easily depreciate and appreciate the pound and the Australian dollar arbitrarily, which is not very friendly to those countries that have joined the currency bloc.

After all, their currency is pegged to the Australian dollar and British pound, which means their currency is likely to be influenced by the UK and Australasia.

This way of handing over one's own country's currency and credit to other countries is undoubtedly showing its own weakness to other countries.

However, some countries will hesitate, while others will naturally be moved and take action.

There are still many followers in the UK, and a large number of countries have expressed their interest, which is already promoting the issue of abandoning the gold standard.

What Arthur didn't expect was that the one that took action the fastest was the Grand Duchy of Finland controlled by Dmitri.

It didn't take long for the principality government to issue a statement stating that Finland would abandon the gold standard and join the pound-Australian dollar currency group with immediate effect.

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