Chapter 679 Currency War

Arthur hadn't been immersed in the improvement of transport aircraft for too long, and a big news broke out in Europe.

In fact, this news was also expected. Because since the economic crisis, many countries including Britain, the United States, Germany, Italy, Austria, and France have suffered quite serious property losses. Except for the special case of Australasia, France has suffered the least impact of the economic crisis.

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

Most of the credit is the result of France's substantial currency devaluation strategy.

First, currency devaluation will stimulate exports crazily, continuously create more jobs, and drive people's consumption level, thereby stimulating the growth of internal demand.

Secondly, the continuous depreciation of currency will also lead to continuous price increases, which will lead to a continuous decline in the stock market.

This also means that before the outbreak of the economic crisis, the Paris stock market had already fallen into a slump, which is also the real reason why the French were not affected much.

After all, the stock market has already fallen to a relatively low level, how much lower can it go?

Because of the depreciation of currency, the domestic demand of French people is constantly increasing. This also leads to the fact that the overproduction in France is not so serious, which is also an important reason for avoiding economic crisis.

What makes other countries envious is that the number of unemployed people in France is constantly decreasing and stabilized at the lowest level of unemployment among the powers, second only to Australasia.

This is the most attractive place for other countries. After all, it is the huge number of unemployed people that is causing chaos in various countries.

If the United States did not have tens of millions of unemployed people, the people would not be so angry with President Coolidge, and would not directly promote the opposition party to impeach President Coolidge.

It is precisely because of the benefits of currency depreciation that the British people are somewhat restless. The British government has already proposed a plan to devalue the pound and applied for the approval of King George V of the United Kingdom and the British Parliament.

The news that the British have taken action in terms of currency has naturally spread to Australasia. To be honest, the Australian dollar and the British pound are highly bound, 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 bound to the pound, and naturally has to bear the disadvantages brought about by 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. The best result is to act with the British pound.

At present, the world currency is still for the British pound and the US dollar to compete, which can make the rift between the two superpowers of Britain and the United States deeper and deeper.

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

Before that, it is better for Australasia not to have any ideas. Even if it is the United States alone, Australasia has no way to defeat it.

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

This is also the benefit of having someone behind the scenes. Let the British take the lead first. Anyway, the British are big and powerful, and they don't care about this little loss.

When the benefits are divided in the future, Australasia will also be indispensable. After all, it is impossible for Britain to completely divide the world situation, and allies like Australasia are needed to stabilize the order.

What made the British decide to abandon the gold standard is 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 profit is enough to attract all countries.

But since the beginning of the economic crisis, the British Empire's exports have plummeted, and the import and export trade balance has instantly become reversed.

Even though the British are big and powerful, they still cannot afford the loss of hundreds of millions of pounds in foreign trade balance.

The original exchange rate between the pound and the US dollar has risen from 1 to 95 to 1 to 85, which also makes it difficult for the pound under the gold standard to maintain.

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

If there is a problem with the pound, there will be problems with the currencies of various countries. The gold standard in the United Kingdom is difficult to maintain, which is also equivalent to the gold standard in other countries.

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

Soon after the British government proposed the bill, British Prime Minister Baldwin contacted Australasia and said that after abandoning the gold standard, a pound group centered on the pound would be established, and that the new pound would still be linked to the Australian dollar, and the Australian dollar would become the main currency in the pound group.

British Prime Minister Baldwin's wooing of Australasia is obvious. In fact, it is true.

Because after abandoning the gold standard, there is no fixed ratio for the exchange rate between countries.

Whether the value of a 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 this currency, but also on the country's gold reserves and strength.

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

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

This can only be blamed on the fact that Britain is so big and powerful that it has certain enemies in almost 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 Britain 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 people's winning over was not unexpected by Arthur, and it was also in Arthur's interest.

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

With Arthur's nod of agreement, the Australasian government agreed to abandon the gold standard after the UK abandoned the gold standard and joined the pound group established by the UK.

With the promise of Australasia, the British government was obviously confident, and the issue of abandoning the gold standard was quickly passed in Parliament.

On May 25, 1927, the British government officially issued an announcement to the outside world, announcing that due to irreparable mistakes, after careful consideration, it abandoned the gold standard and established a monetary system managed by the government. The new pound will no longer be linked to gold.

Such news caused a great uproar in Britain and the whole of Europe, because Britain was the first country to stand up and declare that it would abandon the gold standard.

In addition, the pound involved too many countries, including a large range of colonies around the world, which was a heavy blow to the world's gold standard.

This also means that after Britain, the gold standard of various countries cannot be maintained. Britain, the leader of the gold standard, gave up, and they had no choice but to give up this path.

Australasia did not break its promise. After some preparation, on June 2, 1927, the royal family and the government jointly issued a declaration to abandon the gold standard from that day on, and the Australian dollar would no longer be linked to gold.

Before people all over the world began to discuss these two news, the British and Australasia governments issued a joint statement to form the British-Australian dollar group, making the British pound and the Australian dollar the official currencies of the group and converting them at a fixed exchange rate.

The new currency exchange rate is 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 group also issued requirements to various countries. The two governments jointly stated that the currencies of countries joining the currency group will maintain a fixed exchange rate with the British pound and the Australian dollar to ensure that the currencies of various countries maintain a relative balance.

In addition, trade between member countries in the currency group is calculated in British pounds or Australian dollars to ensure 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 British pound-Australian dollar group became a hot topic for all countries in the world.

Whether to join this new currency group and whether to abandon the gold standard immediately became the most difficult choice for countries in the world in 1927.

Abandoning the gold standard 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. If you are not careful, the country's currency credit may collapse instantly.

After all, compared with gold, which has a stable value growth, paper currency that relies on the official credit of the government has become more uncontrollable.

No matter how bad the pound was before, it was converted with gold, so there is no need to worry about a sharp depreciation of the pound.

But now, if the UK and Australasia have relevant plans, they can easily make the pound and the Australian dollar depreciate and appreciate at will, which is not very friendly to those countries that join the currency group.

After all, their currencies are pegged to the Australian dollar and the British pound, which means that their currencies are likely to be affected by the UK and Australasia.

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

However, some countries will hesitate, and some countries will naturally be tempted and take action.

The UK still has many younger brothers, and a large number of countries have expressed their heartbeats, which is already promoting the issue of abandoning the gold standard.

What Arthur didn't expect was that the fastest to take action was the Grand Duchy of Finland controlled by Dmitry.

Not long after, on June 14, the government of the Grand Duchy of Finland issued a statement to the outside world, stating that Finland would abandon the gold standard and join the British pound-Australian dollar currency group from now on.

The first update of 3,000 words, please vote for the monthly ticket, please support!