Beiyang reactionaries

"Prime Minister, at present we still have too little intelligence and too little US economic data to fully judge the situation in the United States. But judging from the US economic intelligence we have obtained before, this time things will be very serious. Because The U.S. stock market has performed very well in recent years, so ordinary Americans like to invest in the stock market these years. Many Americans’ assets are actually stocks. But as the stock market plummeted during this period, many people’s assets instantly became bubbles. It has become waste paper. But in recent years, in order to stimulate consumption and sell the cars and household appliances they produce, the United States has encouraged American people to consume in the form of installment payments. At present, the amount of installment payments in the United States is very large. Once these people The assets are flying in the stock market, and they have no way to pay back the money. This is not a small amount. Once the payment cannot be made, a group of American banking institutions will go bankrupt at that time. The United States is financially developed, and there are tens of thousands of large and small financial institutions across the country , once a chain reaction occurs, it will be a very serious economic crisis. It will be far more serious than the previous financial crisis in Japan."

"kindness."

Duan Xun nodded.

The Great Depression in the United States was the first time the U.S. government encountered a Great Depression of this scale, so their response was much slower.In other words, the U.S. government has no experience at all and has no idea how to respond.In fact, in the face of such a Great Depression, everyone slowly began to gain experience, so the solution of many governments was to inject water.

The 2008 subprime mortgage crisis, such a serious crisis, caused far less consequences than the Great Depression.The reason is that the U.S. government began to rescue as soon as the crisis broke out.Large sums of money flowed into financial institutions, stabilizing finances.So the subprime mortgage crisis in the United States is actually two or three years, and then it came out.

Compared with the current U.S. government, in the face of such a great depression, there is no way to do it, and it doesn't know how to rescue it.They still don't know how to quantitative easing to stimulate the economy.

It is commonly known as the money printing machine.

But speaking of it, not only is the current U.S. government inexperienced, but in their current situation, it is impossible to open a money printing machine.Because the current currency of the United States is on the gold standard and is linked to gold.And gold is bought and sold freely, so there is no way to turn on the money printing machine.Once the Federal Reserve turns on the money printing machine, those Americans immediately exchange these dollars for gold.Such a result will empty out the gold reserves of the United States, which will affect the credibility of the US dollar.

So the United States can't start the money printing machine at all.

There is also a reason why the Great Depression in the United States was not rescued immediately.When Roosevelt came to power, the first thing he did was to freeze gold trading and gold exports.Private possession of gold is not even allowed, and once discovered, they will be jailed and fined.This immediately solved the original worrying problem, that is, not worrying about the problem of gold reserves.

After solving this problem, the Fed immediately started printing money.The Federal Reserve holds a lot of money and supports the banks in the United States.Just like that, the financial institutions in the United States that had been squeezed survived.

But that's still early.

The United States began to rescue the market, but it had to wait until Roosevelt came to power.It was not until 1933 and 1934 that the U.S. government began to take action.

"So have you thought about what will happen to the world economy if there is any problem in the US economy?"

"Yes."

Zhang Jiaao nodded and said: "Prime Minister, we have analyzed the current world economic situation. European countries, including Britain, France and Germany, owe a lot of money to the United States, and have a lot of investment from the United States. Once the backyard of the United States catches fire, those funds must be returned to China for rescue. Once this is the case, That is to say, the United States will take away a lot of funds from Europe, which will cause chaos in the European economy. Japan is a big exporter. Once there is a problem in the world economy and Japan’s exports decline, it will also affect the Japanese economy. That is to say, once the US economy If a major problem occurs, it can easily cause turmoil in the global economy."

"Global economic crisis?"

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"Global economic crisis?"

"We judge that this is very possible. If the economic crisis in the United States is really serious, it will definitely affect the global economy."

Zhang Jiaao nodded.

Duan Xun didn't speak, because Duan Xun understood the result of the Great Depression better than anyone else.It was really tragic, and countries all over the world were affected.The industrial output of many countries did not return to the peak in 1928 until the beginning of World War II.

Zhang Jiaao and the others are good.

Being able to have such an analysis and judgment made Duan Xun very satisfied.Zhang Jiaao’s analysis is good. The European economy is actually very fragile.They came out of the devastation of the First World War, and the contribution of the United States is really not small.Because the large amount of loans from the United States and a lot of direct investment have played a huge role in the recovery of the European economy.

Like Germany.

The funds invested by the United States every year are much more than the annual war reparations that Germany has to pay back.It is precisely because of this that Germany was able to quickly restore its economy.

But America is no philanthropist.

Investing is about making money.Now that there are problems in the United States, these funds must be returned to the country for rescue.Once the funds are withdrawn, Europe will immediately lack liquidity, which will affect their economic operations at once.

It will also bring economic crisis to them.

Historically, in the 90s, Japan followed the path of the United States as its exchange rate increased and its funds were abundant.Large sums of money are invested abroad to increase their overseas assets.However, Japan is not comparable to the United States, and its overseas investment capabilities are far worse than that of the United States, so their overseas asset investment has suffered heavy losses.

One is to invest heavily in the United States. Unfortunately, when the Japanese real estate bubble burst, those funds returned home in a hurry for rescue.It is precisely because of their panic that the investment failed very badly.Amidst the clamor and praise of "buy the United States", Japanese capital took over at a high level.By the time they fled the United States, prices had hit rock bottom.Investing in the United States can be said to be a big Waterloo for Japanese capital.

The other is to invest in Southeast Asia.

At that time, the world was saying that the "Asian Century" was about to come.Because the economies of China and Southeast Asia were developing rapidly at that time, plus Japan, South Korea and India, Asia at that time was known as the most promising place.Therefore, Japan took advantage of the opportunity of the great development of Southeast Asia, and large sums of money flowed into Southeast Asia.But an Asian financial crisis turned all these funds into bubbles.

These two investments later became the laughing stock of the investment industry.

In fact, the current situation is very similar.Once any problems occur in the country, those funds abroad will be transferred back.Large sums of money in the United States will soon choose to return home from Europe.

"What about us? How will it affect our economy?"

Duan Xun asked Zhang Jiaao directly.

What happens to the world economy is their business.What Duan Xun cares about is China, what to do with China's economy.

"Prime Minister, our country has been a major exporter of raw materials in the world in recent years. But once the world economy is not good and the industry has problems, then these industrial countries will definitely reduce the import of raw materials. Once this happens, it will seriously affect the price of raw materials and the export volume of raw materials. I can’t see it, but we are worried that there will be an impact soon. The production of cars in the United States has dropped a lot this year, and the price of rubber in the world has also begun to drop. Once there is a problem in the car market in the United States, the global rubber Prices will definitely fall accordingly. The same is true for other raw material prices. my country is a major exporter of raw materials. If the price of raw materials falls and the export volume declines, it will definitely seriously affect my country's export volume."

"kindness."

Duan Xun nodded.

China is the world's largest exporter of raw materials, all of which are minerals and agricultural products.Many are industrial raw materials.Not to mention those minerals, soybeans, tung oil, and rubber among agricultural products are all essential things in industry.Once there is a problem in the world economy, it will inevitably affect China's exports.

What has China relied on to develop its industry these years?

It is by importing a large number of machinery and equipment from the great powers.But those machines and equipment all cost money, so where is there any foreign exchange in China that can be used.

China's foreign exchange is obtained by selling those raw materials.But once China's exports are restricted and exports decline, the first thing is that it will not get enough foreign exchange.Without enough foreign exchange, there will be problems with imports.With the development of China's economy, the quantity of industrial products China needs also rises linearly.

Industrial products are the best things to improve living conditions.

After everyone has money, they must consume industrial products.At present, China cannot provide enough industrial products by itself, so it can only import them.That's a lot of money.

What if there is no export?

Of course, this is one, and what is even bigger is that if there is a problem with exports, what should the original export-oriented factories do?For example, China's tungsten placer currently exports more than [-] tons a year.But once exports drop, the country cannot digest these things, so what about those factories?

Continue to produce, not sell.If there is no production, what will those workers do?

It's all a chain reaction.

"Prime Minister, we need to make preparations as soon as possible. It is very likely that from the second half of next year, orders will drop rapidly. In 1928, in order to increase exports, we increased investment in the mining industry. At present, my country's mineral output ranks first in the world They are all at the top of the queue, once the orders drop, many factories cannot sell their products, which will cause a huge backlog, and big problems will definitely occur.”

Zhang Jiaao was very worried.

Duan Xun nodded, understanding Zhang Jiaao's worry.However, although Duan Xun himself was a little worried, he was completely different from Zhang Jiaao.Duan Xun is not afraid of a decline in exports.

Because there will be problems in one or two years.

When Germany and the Soviet Union developed their industries in the 30s, they would still need a lot of resources from China.Although the Soviet Union is rich in resources, it also has many things that cannot be produced.

Such as tung oil, rubber, and pig bristles must be imported by the Soviet Union.Even the coffee that China currently grows in Guangxi and Hainan is a key product that China exports to the Soviet Union.

Even tungsten placer is needed by the Soviet Union in the future.Although the Soviet Union also has tungsten ore reserves, but their large-scale industrialization, the output of the Soviet Union's own tungsten ore can't meet it, so it has to import a lot of tungsten ore.

So Duan Xun was not in a hurry.Duan Xun was thinking about how to take advantage of this opportunity.

So he said to Zhang Jiaao: "How much gold reserves does our country currently have?"