Mediterranean Hegemony Road

? London

Prime Minister Macdonald no longer had the high spirits of the past. He had already paid a huge price. The cabinet had completely compromised with the consortium, but the economic crisis still broke out.

"Your Excellency, the Japanese government announced on October 1st that it will suspend the payment of international debts. The stock market may continue to fall!" said Minister of Finance Pete, frowning.

Now it is not a matter of one or two defaults, but almost all the loans and bonds issued by the British Empire overseas have defaulted.

This is undoubtedly worse for domestic financial institutions. Everyone's life was difficult at first, and the bad news that came at this time was probably the last straw that crushed them.

"Let's go down as long as it goes down, how can the stock market go down at this point?

The scope of the economic impact is so large this time, and debt default is almost inevitable. Haven't we already prepared for it? "McDonald said with a wry smile.

This is completely released, ready to smash the jar! But there is really no good solution right now. More than a dozen countries have announced that they have defaulted on their debts. How many independent countries are there in this era?

It's not that people don't pay back when they have money, but they don't have money to pay back at all. This is the most troublesome thing for such creditors. Whatever you do, no money means no money.

In kind, they have to dare to accept it at this time?

Obviously, the domestic factories are full of goods that are piled up like a mountain. As long as McDonald is not stupid at this time, he will not receive these things anymore.

"Then we have to do something, right? The British people are watching us. If we don't come up with some results, I'm afraid it won't make sense!" Secretary of State Rice said depressingly.

"I went to visit Prime Minister Stanley, and he suggested that we adopt tariff barriers, temporarily give up our interests in Germany and Italy, and give priority to keeping our homeland!" McDonald said with a frown

This decision is not easy to make. Once tariff barriers are adopted, even goods from Germany and Italy will not be allowed to enter, except that the capitalists behind the foundry will definitely be dissatisfied.

Everyone knows that once this happens, it will not be a problem that can be solved by stopping work for a few months. Chaos will erupt in Germany and Italy, and most of their investments there will be lost.

"This is a bad idea, simply adopting trade barriers,

You can still try, but giving up so many overseas assets is simply killing us! "The chancellor of the exchequer, Pete, said with a livid face.

"I also know this problem, 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 the commodities we import come from Germany and Italy. If high tariffs are not imposed on these industrial products, the so-called trade barriers will be out of the question!

Our domestic market, even with the colonies, cannot support so many enterprises, let alone the three North American countries?

Their situation is similar to that of our homeland. Now they have begun to adopt tariff barriers. If we don't abandon our pawns and protect the handsome, I am afraid the situation will deteriorate even more! "McDonald said with a very headache

The current British Empire is a mess. If you want to get out of the economic crisis, you must make a choice. In fact, it is not impossible not to give up the foundries in Germany and Italy. Just give up the three countries in North America.

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 slowly tide over the difficulties just like in history.

But such a thing, just think about it, once it is really done, then the three North American countries will part ways with the British Empire.

No one doubts that 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 in vain, and no one can bear the consequences.

"Then let's do it. With the current situation, we can't afford it anymore. In just over a month, there have been more than 10,000 suicides in London alone. How many people across the country don't know?

Crime rates are skyrocketing, and our prisons are overcrowded.

Even the reasons for going to prison are all kinds of strange, some people are for retaliation against the society, some are for avoiding debts, and some are simply looking for a job in charge of food!

Hell, seeing how jail time has become a job in their eyes, you will know how bad the situation is now! "Secretary of State Rice complained

"But in this way, those capitalists may go crazy! Besides, the party will not be able to pass it. Don't forget who our supporters are?" Pete, the Minister of the Exchequer, said nervously

"There is no way. If they don't go crazy, the people in the country will probably 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 help each other, and the national interest is above all else! ’ retorted Secretary of State Rice

"Okay, Pete, I know what you want to say. Now we are the ruling party, which is different from before. If we take measures at this time, what will happen?

You don't know, do you? We must take the overall situation into consideration. Someone must sacrifice this time. We can find ways to make up for the losses of these capitalists later, but now they must make sacrifices!

Domestic jobs must be preserved, otherwise the British Empire will be over, and the rioters will not reason with you! "McDonald said very embarrassingly.

Once tariff barriers are adopted, the free trade policy that the British Empire has always advocated will be over immediately.

Everyone is not a fool, as long as someone takes the lead, everyone will follow suit.

Governments of various countries have begun to adopt trade barriers, which means that everyone is playing single games. In the face of high tariffs, competition will become illusory.

But in the face of a crisis, who can take care of so much? The problem of the future, let’s talk about the future, at least we have to get through this catastrophe right now?

"Well, Your Excellency the Prime Minister! I respect your choice, but this alone is not enough, right?

In my opinion, unless the three North American countries are excluded, our market still cannot meet our needs, which is tantamount to doing useless work! "Minister of the Exchequer Pete said with some hesitation.

"Of course it's not enough. How about giving up the gold standard?" Prime Minister MacDonald said fiercely

Everyone's face changed drastically. Once the gold standard was abandoned, the value of the pound would immediately depreciate. More importantly, it will lose the international reputation of the British pound and gradually lose its status as a world currency.

"Your Excellency Prime Minister, you can't do this! Don't forget that this economic crisis has not affected the whole world, at least Bulgaria has not had any impact!

Once we abandon the gold standard, they will take advantage of the situation, and the lev will gradually replace the international currency status of the pound, and then there will be big trouble! said Chancellor Peter, frowning.

"Of course I know the risk of abandoning the gold standard, just like the franc was the international currency second only to the pound at the beginning, after they abandoned the gold standard, they were quickly surpassed by the Lev, and their influence became smaller and smaller.

But, don't we have no choice now? After the French abandoned the gold standard, they did suffer heavy losses in the long run, but in the short term, the international competitiveness of French products has indeed increased, and the economy has also developed rapidly!

At this point, we don't care so much anymore, let's get through the current calamity first, and let's talk about the rest of the matter later! "McDonald said with a wry smile.

Well, enhancing the competitiveness of commodities is an excuse. You have given up the gold standard, and others have also given up the near standard. Everyone is depreciating. To enhance the competitiveness of a hairy commodity?

Do you want to compare and see whose currency depreciates faster? If it is really useful, the franc depreciated rapidly after World War I. Has the competitiveness of French industrial and commercial products really increased?

Except for a little effect at the beginning, once the foreign exchange market reacts, it immediately recovers. You can’t play depreciation every day, right?

The biggest function of currency depreciation is to make 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's not that their economy can't support it, but that the government owed too much debt during the world war.

Want to solve the debt problem, is there a better way? The situation of the British is similar now. The war in Southeast Asia has consumed a lot of their funds, and the high domestic welfare expenditures have weighed down the government's finances.

Solving the economic crisis and creating jobs all require money. Where do these jobs come from without money?

Including Roosevelt's New Deal to engage in construction projects, don't these require government investment? Investing always takes money, right?

One of the reasons for the economic crisis is that the capital chain of some industries is broken. Apart from printing money, where else can the government get money?

The consortium is rich, but isn't it good for people to keep it for bargain hunting? Want to take it out and fill the bottomless pit for you?

You must know that the currency circulating in the market is far smaller than the theoretical wealth value. After the bank run crisis broke out, in fact, the bank's funds are not much. In order to protect themselves, they must shrink their money!

Including the government bonds created by Ferdinand, he used government guarantees to allow these bonds to circulate in the market like currency, which is essentially printing money.

It’s just that in people’s minds, bonds are not regarded as levs, so people don’t think that the government has issued additional currency, and they use everyone’s confidence in the market to prop up the value of the currency.

It was originally a currency supplement when gold was insufficient, but now it has become a credit currency.

As long as the government's credit has not collapsed, it can be circulated in the market, and the bank is willing to endorse the debt, then is there any essential difference between the debt and the Lev?

The only pity is that this kind of bond cannot be issued in large quantities. Once it exceeds the market capacity, it will impact Lev's position and cause unmanageable consequences.

History is always full of coincidences, but MacDonald's cabinet still adopted the same policy to deal with this 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 subject to a super high tariff of 50%.

On October 16, the London government announced that it would abandon the gold standard, and the value of the pound was no longer pegged to gold. The world was in an uproar!

sofia

After receiving the news that the British raised tariffs, everyone in the Bulgarian cabinet did not feel better. Obviously, the most worrying situation still happened.

"Prime Minister, since the British have raised tariffs, are you ready to deal with it?" Ferdinand asked casually

"Your Majesty, we have decided to raise tariffs on imported British goods as well in retaliation!" Constantine said with a livid face.

Now the British Empire is Bulgaria's second largest trading partner, and Bulgaria is the largest trading partner of the British Empire. Once the two sides quarrel, everyone will have a bad life.

However, the British still raised tariffs, so it became inevitable for them to confront each other, and the trade between the two countries was almost interrupted.

"Then let's improve together! Anyway, we are not a country that relies on foreign trade. As long as we stabilize the domestic market, we can afford it without the British market!" Ferdinand thought for a while and said

Losing the British market is actually not that terrible. Even if tariffs are raised, it is impossible to block all products from the door.

Bulgaria's products do not rely on volume to win, and many high-profit commodities can also be sold. This is the difference between a strong industrial country and a strong copycat country.

The profit of resisting goods is not high, and now they cannot enter the British market. However, Ferdinand's high-end products specially produced for the rich can also enter and exit freely.

Just like in later generations, imported cars in a certain country have to pay a 40 to 50% tax, and the result is that they sell well, which is nothing more than adding the tax to consumers.

Now is no exception, ordinary commodities cannot be sold anymore. In fact, even if the British don't raise tariffs, they won't be able to sell them anymore, and the people have no money, so what can they buy?

On the contrary, the impact on the sales of luxury goods is not very great. In the stock market crash, some people lose money, and some people make money, and there are not a few upstarts.

Shorting the stock market is not a big news anymore. How could there be no smart people doing it? No matter how bad the economy is, there are still plenty of rich people.

The one million people with the most purchasing power have not actually decreased much. With the advantage of information, these people can always be one step ahead and avoid crises.

However, Ferdinand was still in a very upset mood. For a long time, overseas trade was unprofitable, and he might have to lose a sum of money.

The profits gained from the export of high-end commodities must be used to make up for the losses in other fields, and enterprises need to invest in production reduction and transformation.

The world economy will not be very good in the next three to five years. It is impossible for him to shut down factories and wait for the market to recover. He must enter new industries to grab profits. This is the instinct of capitalists.

"Your Majesty, in addition to raising tariffs, we can actually retaliate in other ways, such as North America!" Foreign Minister Megeve suggested

"You mean to instigate the independence of the three North American countries? I'm afraid it will be difficult. The British are not stupid, so how could they be unprepared?" Ferdinand shook his head and said.

"Of course not, but we can add obstacles to the British. The three North American countries have their own government teams. We don't need to do anything else. We just need to create momentum in public opinion and let them raise tariffs!

Including several other major dominions can also do the same, let them increase the tariffs within the Commonwealth, after all, according to the current situation, some states are actually suffering economically! "Megeve analyzed

The circulation of goods within the Commonwealth is also subject to taxation, but for example, the outside world is much lower, and there are a series of preferential policies.

Now Megeve's plan is to take advantage of the uneven development and uneven distribution of benefits among the states to encourage them to formulate tariffs. Regardless of whether they succeed in the end, the London government can be in a hurry for a while.

"Then try it, I will let the intelligence department cooperate, if you want to do it, do it bigger!

There are independent organizations in the three countries of North America. We subsidize them secretly and give them a set of independent nation-building cheats. Let them make trouble! "Ferdinand said lightly.

If they don't stab each other, is that still an imperialist country?

The British raised the tariff all of a sudden, which caught Bulgaria by surprise, and no news leaked out beforehand. It was clearly hiding evil intentions, and Ferdinand naturally wanted to retaliate.

"Your Majesty, actually making a fuss about the currency will hit the British even more severely!" Chancellor of the Exchequer Kennedy suggested

"You mean, we start a currency war now?" Ferdinand asked suspiciously

"Of course not, as long as the British Empire remains the world's hegemon, the position of the pound will not be easily shaken.

Now that the British have given up the gold standard, the pound will definitely depreciate, so let's let the pound depreciate faster! ’ suggested Kennedy

Ferdinand nodded. It is indeed not easy to immediately destroy the position of the pound, but it is easy to make the pound depreciate faster.

As long as the market loses confidence in the pound, the rate of depreciation of the pound will be beyond imagination. After such a toss for a while, are you still willing to hold a large amount of pounds?

Just like the last devaluation of the franc, according to the French plan, the franc depreciated slowly, reducing the value of the currency by half within three years, and finally depreciated by three times in one year.

The market's confidence in the franc collapsed. Governments of various countries sold the franc one after another. The French government had to take over.

Now the feng shui is turning, and this time it is the turn of the British. If the pound depreciates by ten times, Ferdinand will not need to do anything, and the status of the international currency will naturally collapse.

Anyone who sees holding a currency that has depreciated so much at one time would not dare to hold it for a long time?

Whether the governments of various countries are willing or not, for safety reasons, they must reduce their holdings of British pounds and exchange them for international currencies with more stable currency values.

If there is no currency that can compete, then that’s fine, everyone will admit it after gnashing their teeth, but is there still Lev?

Everyone knows that the currency value of the Lev is terribly stable. Unlike countries such as Britain and France, their people have no savings in their hands, and the currency depreciates.

The people of Bulgaria have not yet given up the tradition of deposits, let alone the concept of advanced consumption. If anyone dares to depreciate the Lev at this time, they must first ask them whether they agree!

Against this background, the international market has always had strong confidence in the lev, and it is now the second largest currency system in the world.

"Your Ministry of Finance will be responsible for this matter. Be cautious. The British may be on guard at this time. Do not hesitate to bring together a few allies!" Ferdinand said after thinking for a while.

"Yes, Your Majesty!" Kennedy replied

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