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View Diary: Another war that we are losing (27 comments)

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  •  "Beggar Thy Neighbor" Strategies (8+ / 0-)

    Such currency manipulation was common among the world's nations during the period of The Great Depression.  One could even argue that the Reichsbank's decision to enable the great hyperinflatino which traumatized the German middle class during the mid-1920s was a precursor to the currency wars which broke out wholesale in the following decade.  Today, few remember that the world's great powers tried to return to the gold standard after the insanity of WW1 and then learned that the policy's inanity condemned their economies to the trash heap when applied.  

    The perfect example of just how the currency wars and the gold standard affected various countries is France's experience during the 1920s and the 1930s.  The French returned to the gold standard during the 1920s and their conservative economic approach forced them to continue as The Great Depression unfolded.  Even as their nominal ally Great Britain ditched the gold standard in the early 1930s and Germany opted for extensive fiscal stimulus, the French persisted in opting for the gold standard and hard currency.  Naturally, they found that they could not pursue aggressive rearmanent policies in the mid-1930s, producing a gap between themselves and their sworn enemy across the Rhine.  French industrialists made out like bandits due to the expensive franc and liberal currency transfer polices, but it left the nation dangerously exposed.  Too dangerously exposed, as they learned to their sorrow.

    "Love the Truth, defend the Truth, speak the Truth, and hear the Truth" - Jan Hus, d.1415 CE

    by PrahaPartizan on Sat Feb 09, 2013 at 08:46:38 AM PST

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