96 – Episode 96 Payback
Once the war ended, a serious problem arose.
It was a problem of large-scale unemployment.
The government, which spent a huge amount of money on war expenses during the war, was unable to solve their job problems.
Of course, there was no way to solve this problem.
I called in Schacht, who had become ‘unemployable’ due to the discontinuation of the counterfeit project, and discussed the idea of supplying government-guaranteed bills to finance public expenditures.
As you can see, what I was trying to make was a pseudo-mepo note.
Of course, this was more similar to the Weimar Republic’s foreign currency bill than the Nazi’s Mepo bill in that it invested in the civilian economy and infrastructure rather than munitions factories.
“Your Majesty wants to suppress inflation while enjoying the effects of issuing government bonds.”
It may sound unconscionable, but it is so.
“It is not a difficult problem. “If you can just create credit, how difficult is it to distribute it?”
“What if the central bank guarantees it?”
“You would think that it would be no different from government bonds.”
The problem was that it was not necessary to stamp a note or two.
It is a typical pay-as-you-go economy, but the problem is that everything is wiped out when the Great Depression breaks out.
Well, I’ll have to think about it then.
First of all, what we can think about is providing subsidies to convert military factories that increased during wartime into private businesses.
The bomber factory manufactures passenger planes, and the tank factory manufactures tractors, right?
We also need to build highways.
The Autobahn.
The manufacturing industry that can increase jobs the most is the automobile industry. Anything that can help revitalize the automobile industry is the expansion of transportation infrastructure, and the Autobahn was at the peak of this.
‘Car subsidies cannot be left out.’
In the 21st century, if subsidies are used carelessly, a trade war will ensue, but such ‘common sense’ was not yet in place here.
Considering the competitiveness of the automobile industry, which was inferior to that of the United States, automobile subsidies were essential.
And, radio.
The most excellent propaganda tool that allowed Hitler to take power.
The radio industry, whose demand will explode in the future, also needed to be nurtured with government subsidies.
“Connect with the President of the Imperial Bank.”
If you have to pay back anyway, it was better to start early.
If you don’t even know how long the delay will be until the Great Depression.
If I fail, I’ll have to go measure the water temperature in the Rhine River.
Anyway, this too is war.
Economic war.
I pushed the German economy into debt.
*
“The German central bank has started supplying bills.”
“Well? “You mean printing bills?”
“To be exact, it guarantees the credit of the bill.”
Isn’t that what it is?
Walter Cunliffe, Governor of the Bank of England, could not believe his ears.
The central bank prints bills and supplies them?
Does that make common sense?
“Just print government bonds, what nonsense.”
Walter Kerniff was about to click his tongue when a thought crossed his mind.
“Wait a minute. What happens if you print a bill of exchange? “The debt ratio.”
“Well, wouldn’t it vary depending on the method?”
“They took notes to prevent inflation.”
Baron Cunliffe clicked his tongue at Germany’s trick.
“Is that the way to go? “The interest burden must be significant.”
“I guess they thought that was the limit for Germany’s credit, which was heavily in debt anyway.”
Whether it is compensation or stolen colonies, Germany’s problem is that it does not have any cash at hand right now.
However, if government bonds are issued, the money supply increases, making it difficult to avoid inflation.
So, a bill of exchange was printed.
“Will that work?”
“If the current economy is maintained, it won’t be impossible.”
But it is not as easy as it sounds.
The economy generally repeats recessions and booms every 10 years.
If the economy takes a downward curve, the debt inflated by bills will become unbearable debt and will weigh down Germany.
It may not be something the UK would want, but German economists are not fools, so it may be a game they take after weighing the odds.
“Keep an eye on Germany’s movements going forward. “You can’t miss a single movement.”
“Of course.”
Even if we did not use any special policies, we always had to check what the hegemony of Europe was doing.
The Bank of England took a wait-and-see attitude toward Germany’s economic policy.
However, there were countries in the world that wanted to quench their thirst by drinking sea water.
This was the case for France, which was currently weighed down by a debt of 132 billion marks.
Georges Pallain, President of the Bank of France (Banque de France), has been the top official of French finance, responsible for the central bank since 1897.
The French government sent an inquiry to this seasoned bureaucrat, who had previously served as an official in the Ministry of Finance and the head of the Customs Service, asking if it would be possible to imitate the German government’s policies. The governor immediately gave a negative answer.
“Not only do we not have that kind of credit, we also don’t have the ability to repay the debt.”
Germany had minimal collateral even if it had to repay the debt and turn its economy around. Vast raw materials coming from the vast new colonial empire (mainly Eastern Europe) ensured industrial competitiveness, while reparations, colonial assets, and status as a European hegemon guaranteed the credibility of the German central bank.
But that wasn’t possible in France.
France, which lost all of its colonies, had its limbs cut off, and was saddled with 132 billion francs in compensation and enormous war costs it could not afford, is returning the bill?
Even if they tried to increase the weight class by paying back, there was a high possibility that they would not be able to handle it.
First of all, they will not even try to accept bills with low interest rates like in Germany.
“We have no cash. “You can turn the economy around only by returning bills.”
The governor was also unable to refute the claims of Finance Minister Louis-Lucien Klotz. He couldn’t even talk about printing government bonds. Isn’t it necessary to have trust in order to sell government bonds or not?
Government bonds are a synonym for currency.
With gold and foreign currency being withdrawn as compensation, there was a possibility that hyperinflation could occur if more government bonds were printed.
“But how can we supply bills with our government’s credit?”
Hitler was determined and prepared for war to get revenge, but France was not even up to it.
Since there were no scapegoats like Austria or Czechoslovakia who would willingly hand over their gold reserves, it was obvious that if they tried to repay the money and turn the economy around, they would soon reach a limit.
“Let’s issue a bill using state-owned land as collateral.”
Bills are issued in large quantities in proportion to the total amount of land.
This way, we could gain credit and circulate money.
“Since inflation is happening anyway, wouldn’t it be better to protect the value of the currency?”
“No. “Now the bill comes first.”
The Minister of Finance’s will was firm.
The fallen French nation could not be revived without taking risks now.
Only when the economy is restored to some degree will countries that were torn away from French territory be willing to return to the republic.
After confirming that the minister’s will was strong, the governor knew that he could no longer oppose.
“I understand. However, this note should not become a second asinya. Please keep in mind that you should never allow your credit to be destroyed.”
Acigna is a land bond issued by the French revolutionary government during the Great Revolution. Considering how much damage these bad loans had to the French economy, the same thing should not have been repeated.
“Of course, Mr. Governor.”
With the consent of the French Bank, large quantities of bills began to be supplied.
The ‘note’, in which the French central bank guarantees credit using French state-owned land as collateral, was highlighted as a good product for French people who lost their investments due to the defeat in the war.
France called this bill the ‘Thierry bill.’
This contained the ambition to create a French republic by replicating the feat of Adolf Thierry, who paid off Germany’s reparations within five years.
The Thierry note immediately opened a hole in the French economy when it was issued.
“Now that I have money, I think I’ll buy something. “With this, let’s cover the insufficient compensation interest and convert military factories into private factories.”
Most of Germany’s policies became the subject of benchmarking by the French Ministry of Finance.
Is Germany building highways?
France also built highways.
It wasn’t a problem that there weren’t many cars.
It didn’t matter as long as there was an excuse to pump money into the economy.
However, subsidies were not the only thing followed.
“No, the state supports civilians by giving them money to purchase goods? “That’s crazy.”
“Well, let’s exclude that.”
Even so, France was a country that was short of money.
France, unfortunately, imitated Germany and poured priming water on the economy.
Thanks to this, we were able to avoid the disaster that left millions of soldiers who returned from the battlefield unemployed.
But they could not give a pension.
“If we give that much, the French state will be bankrupt.”
In response to the staunch opposition of the Minister of Finance, the Cabinet drastically reduced pensions to be paid to disabled veterans.
“How can you treat us like crap like this?”
When disabled veterans protested demanding pension payments, the French government responded sternly.
“Those guys are rioters. “Punish firmly.”
The French National Military Police were dispatched and immediately began suppressing the situation.
From Noble mtl dot com
“Oh my!”
In front of the national military police, who wielded clubs and mercilessly beat them, the disabled soldiers scattered and ran away.
However, in France, there were many people other than these people who demanded money from the state.
Winter in France was still in progress.