bookpower Chapter 378
Chapter 378
See all
: 5.843s Scan: 0.062sThe wind starts from the end of the green duckweed and the waves form between the waves.
No one could have imagined that the economic crisis that detonated the world was actually caused by a discount promotion in a shopping mall!
However, this accident exposed the lack of domestic capital flow in the United States. A large amount of funds were taken away with investors going abroad to Europe to grab land!
Although the United States still has 4,200 tons of gold in the underground vault of the Federal Reserve.
However, this gold has long been exchanged for US dollars of equal value and circulated in the market.
And these US dollars, along with the large amount of war bonds issued by the United States after World War I, and a large number of domestic capitalists took advantage of the lowest prices of various assets in Europe to buy high-quality assets in Europe, causing the currency in the United States to have liquidity problems!
In this era, the Eagle Sauce cannot pass on the crisis by printing dollars like in later generations, because the dollar is tied to gold and implements the gold standard system, so the number of their issuance is actually fixed. Although it is not printed one to one, but at a ratio higher than 1:1, the paper money can be printed, but this ratio cannot be too outrageous.
After all, in this era, the currencies of various countries can be directly exchanged with gold. If there is no gold to exchange, the paper money issued by various countries will become a piece of waste paper in minutes and have no use value!
Originally, the number of dollars printed by the Eagle Sauce was a lot, but because a large amount of money was borrowed from foreign countries, coupled with domestic capitalists investing heavily in foreign countries, and traitors like Goldman Sachs helping Hans suck blood, these many factors combined, causing liquidity problems in the Eagle Sauce.
Of course, this is only a superficial problem. The real problem is that it is difficult for them to continue to suck blood from European countries during World War I and after the war!
Take Hans as an example. In 191, the war had just ended. Hans was devastated and the whole society was in chaos. The factory workers were busy rioting. The Weimar Republic had just been established, the military was still watching, and the Gauls were still watching!
In this situation, Hans’ domestic production activities were greatly affected. The country’s factories could not continue to maintain production during the turmoil, which made Hans’s domestic daily necessities almost all dependent on imports. At that time, there were not many countries that could export on a large scale. The largest country was Eagle Sauce.
Therefore, in the years of post-war recovery and reconstruction, Hans imported a large number of goods from Eagle Sauce, which brought a large number of orders to Eagle Sauce’s manufacturing industry!
This situation is not unique to Hans. The situations faced by European countries that have experienced wars in the same period are almost the same. Therefore, Eagle Sauce at this time enjoys its own market and can also get a share of the huge market of hundreds of millions of people in Europe!
Let alone the Eagle Sauce, even a country like China, which had very weak basic industries, had a good period of time during World War I and the early post-war period. At that time, China’s flour mills exported countless flour to Europe, which greatly developed China’s manufacturing industry!
However, after the war, as European countries came out of the war, goods from Europe began to invade the Chinese market again. Private factories in China soon became depressed or even closed down under the impact of foreign countries!
China was subject to competition from foreign goods, and there was no reason for the Eagle Sauce not to be impacted. Even if the Eagle Sauce’s own tariffs were very high, it would be difficult for European countries to dump goods to the Eagle Sauce, but as long as they resumed production, the Eagle Sauce’s market share in Europe would definitely face squeeze!
In this case, the Eagle Sauce’s bloodsucking continued, the large outflow of its own capital, the reduction of wealth and income, and Hans’s secret bloodsucking, which was the reason for the Eagle Sauce stock this time!
Capitalists are much more sensitive to news than ordinary people. Before this opportunity broke out, Goldman Sachs had already sold a large number of stocks in its hands, and they did the same thing in secret!
Therefore, the losses of these big capitalists in this stock crash were not great, but a large number of losses were suffered by the middle and lower classes, including some small capitalists.
The rapid decline of stocks has led to the rapid depreciation of the wealth of many people.
The result of the depreciation of wealth is that a large number of people have become paupers overnight. Some people may have been well-dressed and noble in the upper class the day before, but they became penniless overnight and could only wear a neat suit to receive government relief food!
The stock market crash continued. From December 1925 to January 196, in just three weeks, the stock of Eagle Sauce fell by 82%, and the stocks of many companies fell by more than 90, and some even fell by 95%!
Among them, the stock price of Eagle Sauce Steel Company fell from US$262 per share to US$21, a drop of 92%, Ford Motor Company fell from US$92 to US$7, a drop of 93%, and JPMorgan Chase fell from US$55 to US$7, a drop of 88%!
Because Citibank had a good relationship with the Treasury Secretary of the United States, it tried to invest $25 million in the stock market to stabilize the stock!
As a result, such a small amount of money invested in the stock market was like throwing meat buns at dogs, which went away without return, and even did not stir up a wave.
Affected by this, Citibank’s stock plummeted 92%, which was the most serious decline among several consortiums!
Goldman Sachs Group, as the largest trust and investment bank in the United States and even in the world at this time, was not spared when the stock price generally fell. However, Goldman Sachs Group itself was not listed. They mainly listed giants such as General Motors, Johnson & Johnson, and Mobil Oil, covering the fields of automobiles, biopharmaceuticals and petrochemicals.
These companies are the leading overlords in their respective fields, and their own financial conditions and operating conditions are very good.
However, affected by the deterioration of the overall environment, the stocks of these three companies also fell a lot.
General Motors’ stock fell from the highest point of $112 in 1925 to $22 in 1926, a plunge of 81%!
The stock price of Johnson & Johnson Group dropped from $45 in 1925 to $7 in 1926, a drop of 85%! The stock price of Mobil Oil also dropped from $76 in 1925 to $11 in 1926, a drop of 86! In just three weeks, due to the decline in stock prices, the social wealth of the United States quickly evaporated by $45 billion, a scale far exceeding the Great Depression in real history!
As a result, this financial crisis quickly evolved into a real economic crisis, and the evaporation of a large amount of wealth directly affected people’s consumption!
The shrinking wealth of all classes led to a sharp decline in social sales. In December 1925, even with the Christmas promotion, the social sales of the United States still fell instead of rising, from $3.5 billion in December 1941 to $21 in 1925, almost slashing!
Many economic experts pessimistically predicted that the domestic market of American beef would continue to shrink, shrinking by at least 60% in 1926.
Affected by this, many factories chose to shut down and reduce production lines, lay off employees on a large scale, and reduce expenses in order to reduce operating costs and survive in the economic crisis!
In order to ensure their own profits and reduce their own losses, capitalists cut off their tails and survived by laying off employees, but this behavior directly passed on the greater disaster to ordinary people!
The laid-off people lost their jobs, and also lost the means to earn money to support their families. The number of unemployed people in the whole society increased rapidly. In 1925, the unemployment rate in Eagle Sauce was only 4%, and there were only about 2.5 million unemployed people in the country.
But by April 1926, the number of unemployed people in Eagle Sauce had risen to 1 million, and a quarter of the employed population in the country had lost their jobs!
Affected by this, in major cities in Eagle Sauce, the poor people lined up for relief food for several blocks, and the large number of unemployed people receiving relief also brought great financial pressure to the government!
A butterfly in the Amazon forest casually flaps its wings, which may bring a hurricane thousands of kilometers away!
As the world’s largest economy, the collapse of the economic crisis in Eagle Sauce quickly swept the whole world!
Soon, the stock markets of European countries including the sun never sets, Gaul, Hans and other countries broke out one after another, and all followed the rapid decline!
Moreover, the crisis is still spreading further, gradually spreading from the stock market to various fields across the country!