Blood-dripping dollars
<h1> introduction</h1>
In the 1980s, something was coming to an end.
In a "Star Wars" from the outside and an oil crisis from within, the Soviets, who were proud to be in the east, finally exhausted all their savings over the years and became destitute. Then the crisis gave rise to more crises, and poverty grew into greater poverty – and it was in this crisis, this poverty, that everyone was well aware that this mighty nation was on an irreversible path of destruction. The trees fell and scattered – it was only a matter of time before the behemoth finally collapsed to everyone.
On the other side of the world, something has only just begun.
In 1981, the 40th President of the United States, Ronald Reagan, appeared in the center of the stage. It is no exaggeration to say that what he inherited from former President James Carter was a heavy mess. For a long time in the past, in order to get the increasingly expensive oil in the Middle East, Americans had to press dollars to meet their own needs, but after that, they had to face a fierce counterattack from oil-producing countries – so oil production was further reduced and oil prices were further raised. In this way, the dollar is printing more and more, the oil is selling less and less, the dollar is depreciating more and more, and the oil price is soaring. As a result, europe's partners were angry – because most of the value of the dollar foreign exchange they had painstakingly stockpiled evaporated almost overnight; the Middle East was angry – because they made their fortunes from selling oil, they could no longer keep up with the rate of their depreciation, and they even began to threaten to kick the dollar out of the oil-denominated system; more seriously, the dilemma at home, in the panic, the American people fell into a myth: no matter how careful they were, how frugal they were, the wealth they exchanged for hard work. All are still almost worthless in the blink of an eye, today's efforts are in vain, tomorrow's life is nowhere to be found – even so, why suffer as much as it is now?
Against this backdrop, they no longer believe in hard work, they no longer believe in hard work – on the road to survival, all kinds of speculation far exceed down-to-earth diligent work. In this way, the people changed the way they lived—and the American spirit of industrial statehood naturally evaporated as the value of the dollar evaporated.
Later, there were even calls for international currencies to be replaced in many places. The Americans panicked, and in order to avoid their partners being forced to flee the dollar, the Fed suddenly decided to limit the total amount of dollar issuance to achieve the effect of appreciating its value. Through a series of adjustments and designs, after two gambling attempts, they finally did it. In the face of ultra-high interest rates, the dollar quickly returned to the United States. The circulation of the dollar was thus controlled, and the value of the dollar began to rise.
However, the ultra-high interest rate brings about an increase in the cost of lending. In the face of ultra-high costs, enterprises that want to grow and develop are at a loss. At the same time, the appreciation of the dollar has made American goods more expensive in other markets — which has directly cut sales of its exports. But on the other hand, when the dollar appreciates, foreign currencies depreciate accordingly, so that products from Japan and Germany are correspondingly cheaper in the US market. Americans, both at home and abroad, face an awkward situation — because consumers are always able to make the right choices, guided by price.
While the dollar was still halfway back, President Carter was already in the middle of the national pressure and was out of class. In this way, in 1981, the 40th PRESIDENT, Ronald Reagan, appeared in the center of the stage.
The 1980s – some things are coming to an end, some things are just beginning.
In the days when the Soviet Union was on its way to the end, its old rival, the United States, ushered in another "golden period" of its own between 1983 and 1988, when President Reagan was in full swing. In an environment of high interest rates and high costs brought about by the appreciation of the dollar, American industry fled to the outside world, and since then, the country's industrial population has never returned to its seventies levels.
This is echoed by a spike in unemployment across the country and a plummeting decline in the savings rate. In addition, according to President Reagan's vision, the United States had to continue to advance its "Star Wars" program to bring down the Soviet Union. The country has no money, but it wants money everywhere – but in the face of everything in front of him, President Reagan just smiled faintly and waved his hand with confidence .
This is not a problem.
Because he is at the center of power in the dollar empire – he only needs to overdraft the world.
First, the gold and silver war
1.
The beginning of the story , the only U.S. president in American history , Grover Cleveland , who was re-elected twice , suddenly remembered a character during his second term at a loss.
In 1894, in the streets of the United States, an economic crisis of great scale spread like a plague. Looking at the world, in the vast ocean of thousands of years of human civilization, this emerging country is still just a young hairy boy, in the face of a sudden crisis, it seems like a fantasy to let the ordinary people living here be calm.
The crisis creates chaos, and chaos leads to an even greater crisis. And so it was— and when the footsteps of 1894 came hurriedly, U.S. President Cleveland was surprised to find that the reserves of its treasury, a new continent of the Americas, had been left with less than $10 million worth of gold after a round of crazy sharp declines.
The entire country's monetary system was on the verge of paralysis at this time.
And it was in this context, and it was in this state of confusion, that the only mr. president in American history who had been re-elected twice apart suddenly remembered a person.
But it's worth noting that the character has a prominent surname.
His name was Morgan.
—John Pierpont Morgan.
Looking back at history, in that era that made President Cleveland anxious, the rising country on the American continent was really only a small word in the jungle of the Western economic system. At that time, the one who could give orders to everyone with a high-spirited attitude was the powerful island nation floating on the English Channel and invading the world, the British Empire. As the first truly industrialized country in human history, it has always occupied a crucial position in the entire Industrial Production Chain of the West. Any country that wants to participate in modern production has to trade with it, and if it wants to trade with it, it has to abide by the rules of the game it has set. The right to speak is always in the hands of the strong. As a one-to-a-hundred-to-one colonial power, as the leader of modern human civilization, the British Empire's smile and every move are destined to cause a chain reaction in the world, at least the entire Western society.
And this chain reaction is precisely the cause of the anxiety of the US president Mr. Kriveran, who lived at the end of the 19th century.
It all started one day in 1717.
From the end of the 17th century, a great scientist suddenly appeared in the Royal Mint of Britain. Mention the name of this character, people often think of a big and round apple - the apple smashed on someone else's head, in exchange for a few complaints, but smashed on his head, but smashed a large string of exquisite, deep scientific truths. The gap between ordinary people and geniuses often exists in the moment of this electric flint. A great name was born—a thoughtful man destined to become a myth to be worshipped in the temple of science. His reputation will continue to pass on through the ages—even today, more than two hundred years later, in most countries and regions of the world, people can easily guess his identity by mentioning the apple that hit him on the head.
That's right, he's Newton.
Ordinary events that provoke strange thinking. When the famous Newton finally became one of the widely regarded idle supervisors of the Royal Mint, perhaps no one realized that a major change that was about to affect the world trading system was already in the making.
One day in 1717, after twenty years of minting, we, the great scientists, finally couldn't stand a strange phenomenon that occurred in the British Empire.
After a long period of observation and reflection, Newton found that the price of silver and gold in the British territory was the same, but for these two precious metals, the eccentric British preferred snow-white silver rather than sparkling gold. In this context, although the two are both British currencies, the purchasing power of gold coins is far less than that of silver coins. What Newton could not bear was that as a member of the Mint, when he wanted to increase the flow of silver coins, thereby alleviating its rarity, and finally reversing the situation of silver and gold inferiority, and thus increasing the acceptance of gold coins, he was surprised to find that the silver coins that he had painstakingly minted by buying silverware everywhere had just been put on the market for a long time, and then miraculously disappeared.
It's so weird. The silver coins that Newton put on the market were worth about 7 million pounds. How did such a huge amount of wealth disappear inexplicably?
Great scientists are puzzled. But genius is genius after all. This thorny question did not bother his brilliant brain.
In fact, the famous 16th-century British economist Thomas Gresham found the answer to this question. He found that when two currencies with different actual values but unchanged legal prices circulated on the market at the same time, consumers would always store the currency with a higher color in case of emergency; and leave the lower color on the market. This phenomenon, simply summarized, is "bad money expelling good money".
The famous scientist Newton (1643-1727) served on the Royal Mint
Eccentric British prefer snow-white silver for reasons that may not be clear in a few words (silver is a national standard currency may be one of the reasons), but it is precisely because of this strange "hobby" that gold coins look to ordinary people like the "lower color" kind of currency. Under this premise, no matter how much silver you invest, in the end, it will still be hidden by people.
And so the time came to 1717.
After enduring it for so long, the great Newton finally couldn't stand it anymore.
Since "good coins" will eventually disappear, it is better to simply let them disappear completely.
This year, he made a major decision. After a long period of observation and reflection, he stipulated that gold with a purity of 90% was worth 3 pounds, 17 shillings and 10 pence per ounce.
More importantly, in addition, he also used the power in his hands to take a tough attitude and gave a deadly order: in his time, only gold was money.
Then, in the British Empire, the cradle of industrial civilization and the center of modern civilization, a far-reaching monetary reform slowly opened the curtain.
In 1797, the British promulgated the Mint Ordinance, which further clarified and stipulated the monetary status of gold coins as the main and silver coins as a supplement.
In 1809, as the status of gold within the empire gradually increased, the "Gold Ingot Report" drafted by the famous economist David Ricardo was adopted by the British House of Commons. The report stressed that the Bank of England, as the central bank, should guarantee the exchange of gold and imposed its exchange obligations with other banks.
Seven years later, this provision was further upgraded. A "Gold Standard System Act" was officially approved by Parliament, and a new era came - gold was officially established as the standard currency by a country in the form of a law for the first time.
In 1894, President Cleveland was agitated. In order to be able to maintain normal economic exchanges with the founders of industrial civilization, in 1880, almost the entire Western world followed in the footsteps of the British Empire and transformed itself into a completely "gold standard" country. Silver became an auxiliary, and gold became the main means of payment that dominated international trade at that time. The whole West is looking for ways to reserve gold, but in the United States, obviously, the monetary system here is in a mess.
To be continued
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