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There are two fundamental factors: one is that the increase in US dollar issuance is too large; the other is that the scale of industrial investment is too large. Two factors have led to Coolidge-style credit and investment prosperity. When this prosperity exceeds a certain level, it is a bubble, and if it exceeds too much, it is a global economic crisis.

After the end of World War I, China also faced the same situation as the United States. First, the scale of internal investment expanded sharply, second, the speed of international capital influx increased, and third, the national fiscal surplus was huge.

The lessons of the destruction of the Qing Dynasty in Shanghai's rubber crisis are still in sight. The empire is extremely cautious and careful about this. In order to avoid excessive prosperity and bubbles, Ouyang Geng's cabinet has always adopted cautious monetary tightening and financial regulatory policies, and has adopted the method of transferring the country's fiscal surplus to the United States to invest, passing the danger to the United States.

Therefore, the Far East Consortium is the flagship of the Empire. It is precisely because of the Far East Consortium's substantial intervention in US investment that, on the one hand, left a broad investment space for other domestic consortiums, and on the other hand, it also diverted the risk of the imperial economy overheating. The Far East Consortium's own profit level has also remained at a high level for a long time in the process, and its own technical and scientific research strength has been greatly improved, which can be said to be a kill of four birds with one stone.

As the Far East Consortium and the Central Reserve Bureau shrank sharply in the United States, more than US$7 billion contracted from capital markets at all levels in the United States within half a year. In addition, China, Britain and France adopted high interest rates to increase gold reserves, the US securities market began to show a precarious situation at the end of 1928.

In the second half of the 19th century, leveraged trading appeared in the London securities market in the UK, and this kind of transaction was first widely used in the Coolidge prosperity in the United States. From the end of World War I, a large number of financial derivatives such as leverage and credit trading appeared in the US capital market.

The market value of the stock market is always an illusory number. Even if the market value of New York securities exceeds the $100 billion mark, because behind this number is a large number of leverage and credit transactions. One dollar can buy dozens of dollars of stocks and make huge profits by using the price increase and overflow.

Similarly, stocks can be sold short, borrowed stocks from securities companies and sold, and waited until they were bought at a low price before repaying them to securities companies.

After the withdrawal of the Far East Consortium and the Central Reserve Bureau, coupled with the sharp retreat of China-Europe capital under the influence of high-interest policy, the US stock market is actually at a very high risk. With a secret and weird short selling, the US New York stock market, which has maintained a ten-year bull market, suddenly ushered in the darkest day in history.

Tuesday, January 8, 1929.

A sudden sharp drop in the New York market occurred, and almost all index stocks were falling across the board. Several stocks with the largest decline fell by more than 40 in a day. The Dow Jones 65 fell from 377 points to 335 points. The entire securities market was panic. No one knew the reason. All investors were selling stocks to reduce losses.

On January 14, the United States fell into an unprecedented panic, with unprecedented pessimistic news spreading everywhere in the securities market, and rumors spread everywhere, and frightened investors kept ordering brokers to sell their stocks. The U.S. stock market suffered heavy losses and began to plummet every day when the market opened.

On January 22, US President Hoover issued an announcement claiming that there is no problem with the US economy and that there will be no problems with the US stock market. In the following week, the US consortium led by the Morgan consortium began to implement a large-scale market rescue.

However, the old Jewish consortiums in Europe and the emerging Far East consortiums are still selling short selling quickly, and most American securities investors are still panicking. They only lasted for a week. On Tuesday, January 29, New York Securities ushered in a new round of plunge.

On Wednesday, January 30, the New York securities market once again ushered in a panic selling. The most powerful Morgan consortium and the American consortium were no longer able to save the market. All investors were selling stocks frantically, causing the Dow Jones Index to hit 27 and set the darkest new record in the history of US securities.

Since then, no funds are willing to enter the market to save the market.

...

The New Year has just passed and I have returned from the snow.

This period of time should have been a national holiday and the cabinet also had a holiday. However, the plunge in the securities market in New York and the bankruptcy of dozens of American banks made the central government afraid to take a holiday at all. All financial-related staff have to continue working overtime during the Spring Festival.

Song Biao returned from the Eight Great Places of the West Mountain. On the morning of the morning when he returned to Xuanzheng Park of the Central Palace, he quietly flipped through newspapers in the General Office. The New York Times and the American News were the most frequently read newspapers. The Central Intelligence Administration always sent all the manuscripts to the country in the form of telegram the next day.

Therefore, neither of the two newspapers that Song Biao saw yesterday were original, but translated versions compiled and printed by the Central Intelligence Administration.

During this period, what Song Biao is most concerned about is definitely the latest news about the US financial crisis.

If it is necessary to hold accountable, Song Biao can undoubtedly be one of the main culprits. When the US stock market plummeted, it was already the general trend and unstoppable. In order to make up for the huge losses caused by the Far East consortium being involved in the US economic crisis, under Chen Guangfu's proposal and Song Biao's decision, the Far East consortium shorted US stocks in the United States in advance, hoping to make up for the consortium's losses in the entire stock market plunge by shorting profits.

To keep it confidential, the Far East Consortium chose to merge a French credit company in advance and then shorted the stock index in the United States in the name of this company. The credit was secretly guaranteed by companies such as Agricultural Credit Bank, Oriental Huili Bank and other companies.

Kill one thousand enemies and lose eight hundred of them.

This is an unbreakable truth, but in the financial market, sometimes there is no need to exchange such tragic exchange for winning chips. Killing one thousand enemies and earning eight hundred by yourself is very likely to be achieved.

After minimizing losses and shrinking the front as much as possible, the Far East consortium chose to go directly to the market and shorted the US stock market, and used more than $200 million in capital to significantly short 65 stocks in the Dow Jones stock index.

Others do it, so why not do it yourself?

Song Biao never likes waiting for the trip. He prefers to take the initiative to force a crisis to happen and use the crisis to win more benefits as much as possible. Whether China can seize the opportunity and become the most powerful country in the world depends on the development trend in recent years.

After reading all the latest situations in the United States, Song Biao can only say that the east coast of the Pacific Ocean is simply terrible. Many once prominent bankers were forced to commit suicide. There were hundreds of small and medium-sized banks that went bankrupt. The trend of the entire crisis spreading is getting deeper and worse.

Song Biao lit a Yuxi cigar and sucked silently for a moment before calling the Prime Minister Ouyang Geng to come over in person. During the period of waiting for Ouyang Geng, he sat alone in front of the balcony of the office.

The wind is fierce outside the window and heavy snow is flying.

Song Biao was so quiet that he was not panicked at all. Two days ago, Zheng Guiting from the Far East Consortium had just reported that in the short term, although the Far East Consortium had no profit, there was no definite loss. However, in the long run, the Far East Consortium's losses in the United States will be huge.

However, compared with consortiums such as Morgan, America, Mellon, Rockefeller, the Far East consortium of foreigners must have suffered the least amount of losses. The US gold reserves have dropped sharply from 4,124 tons to 3,055 tons. Among the large amount of gold assets withdrawn by international capital, the Central Reserve Bureau accounts for half of the amount.

Before we knew it, China's total gold reserves naturally ranked first in the world.

This is the death knell of the gold standard. The total amount of newly mined gold in the world is less than 900 tons each year, which is only about 600 million US dollars. The simultaneous development of the Chinese and American economies, coupled with the recovery of Europe and the development of South America, the gold standard cannot support this growth trend at all. If small countries such as the Netherlands, Belgium, Switzerland, and Sweden can only choose to reserve foreign exchange to solve the problem of their own currency preparation, which intensifies the tightening of the US dollar and the British pound. In order to solve the tightening of their own currency, Britain and the United States can only increase the supply of money. In the gold reserve market, China, as a trade exporter and surplus country second only to the United States, is also the country with the fastest absorption of gold reserves, and has been in a fierce reserve race with Britain, the United States, France, Japan and other countries.

While the US gold reserves were significantly reduced, China's gold reserves broke through the 5,000 tons mark for the first time. Although the withdrawal of investment from Europe and the United States also faced the risk of another decline, the basic risk rate was relatively low in terms of total volume.

Starting this year, the China Yuan will gradually start a year of becoming an international currency and increase gold supply in the domestic market. If the UK and the United States adopt competitive measures of currency depreciation, China will also depreciate accordingly and will never pay for this world economic crisis.

Without sufficient interests, China will not bear any responsibility.

By gently dusting off the ashes, Song Biao's inner world was extremely peaceful. He was not worried at all about the destructive impact this crisis could have on China. It was a tragedy for the United States and a crisis for China. There were naturally great opportunities in danger.

After Song Biao finished smoking the Yuxi cigar, Ouyang Geng happened to arrive in Xuanzhengyuan. Accompanied by Colonel Chen Jiayou, the first-class eunuch, walked into the office and bowed to the emperor. His face was very stiff and even felt an inexplicable sense of tragic.

Song Biao raised his hand and signaled Ouyang Geng to sit at his desk, threw the latest summary report on the latest news compiled by the CIA to Ouyang Geng, and said: "How bad is the situation in the United States? You should be very clear in your mind. Do you have any general solutions now?"

Ouyang Geng immediately replied: "Reporting to the emperor, my subordinates have ordered the temporary closure of their own joint securities market, ordered the central bank to provide emergency reserve funds to deal with possible domestic runs, and at the same time raise the country's deposit interest rate again. From the current perspective, this financial crisis is spreading to other international regions, and British and American capital is retreating significantly from South America and Asia. Our country has obviously suffered a lot of shocks. In the past ten days, the large-scale withdrawal of British and American capital has caused huge fluctuations in the country's gold reserves, but in terms of total volume, it will definitely be maintained at a scale of 4,500 tons, and the national financial system is also safe."

Song Biao thought about it, took out an emergency proposal he had previously drafted from the drawer, and threw it to Ouyang Geng again, saying: "It is not enough to do this alone. The crisis is spreading very quickly and it is likely to expand into a global financial crisis. For my country, the worst situation is the large-scale shrinkage of foreign markets, which leads to hindering exports and affects the normal production of domestic industry and agriculture. The economic downturn is not a problem. If even employment cannot be guaranteed, it is a problem. The central government should promote some new national industrial and agricultural plans as soon as possible, as the addition of the Fourth Five-Year Plan and increase water conservancy, transportation and energy construction. The national urban electrification project that has not been effectively promoted before should be accelerated. Domestic workers and farmers

All industries need to reduce taxes significantly and increase credit expenditures, and use these series of ways to increase the employment and domestic demand market. In addition, investment in overseas colonies cannot be reduced, but instead increases. Send people to South America and Australia. If necessary, our country can directly purchase government bonds and increase short-term debts. Brazil and Australia are the two major key points. The markets in Indonesia and the Philippines must also stabilize. Use the leverage of national and bank credit to take the opportunity to pull some countries into our sphere of influence. If Britain and the United States want to shrink, we must expand. Of course, we should not do things in a hurry. We should continue to look at the situation and wait for the crisis to grow bigger and bigger and fall to the bottom. Let's make a decision when the situation is most beneficial to us."

Ouyang Geng refused to comment. He always felt that these things would have to be discussed after the cabinet reconsideration. He did not dare to rush to answer. He carefully read the emperor's emergency supplement plan and felt more pressure.

Song Biao took the opportunity to carry out large-scale domestic construction, railways, highways and water conservancy facilities together, and was required to build more than 30,000 small and medium-sized water conservancy projects across the country, almost completely renewing the water conservancy irrigation conditions across the country. There are as many as 20 large-scale hydropower station projects. According to such a plan, the national hydropower scale will exceed the entire global market.

Seeing that Ouyang Geng seemed very hesitant, Song Biao did not want to explain more, and ordered in a simple manner: "The cabinet will handle it according to this proposed program, make comprehensive research plans and forecasts, estimate the demand for power growth, and make up for the insufficient water and electricity. In recent years, it can only rely on internal investment and stimulating domestic demand to drive the country's development. Tax cuts are a must. If the central government has financial pressure, it must withstand it. How much surplus has been used up in the past few years, and ensuring economic growth and development is your top priority."

Hearing these words, Ouyang Geng knew that the matter was no longer subject to discussion, and he had to do it even if he didn't do it, so the emperor had made up his mind.

He could only solemnly put away the proposal and replied to Song Biao: "Please rest assured, the ministers must live up to the emperor's trust and must complete these major tasks!"
Chapter completed!