The Rise Of Australasia

Chapter 870: Chapter 649: Preparing to Shift the Crisis@@novelbin@@

William’s every move in London was clear to Arthur, and he naturally understood the reality that the London Stock Exchange was on the brink of collapse.

This period could be long or short; it could be controlled by man or left to run its course freely.

If there were human intervention, the crisis in the London Stock Exchange could be postponed for several more years, which is the real reason why many consortia have not yet withdrawn. After all, the stock market still had several years of profitability, and the British Government would not let the stock market collapse.

Moreover, compared to an economic crisis erupting in London, Arthur would prefer to see it break out in the United States.

After all, the wheel of history cannot be changed, and the American people have a larger scale and are better able to withstand the damage caused by an economic crisis.

Arthur was giving it serious thought, but under the current world situation, if an economic crisis were to explode, what kind of impact and harm would it bring to various countries?

Because an economic crisis was inevitable, it was a certain rule of the capitalist market, and human control could not avoid it, only advance or delay the time of the economic crisis’s outbreak.

The capitalist economic market is like a person, and the economic crisis is like this person’s death, which is something that current scientific methods simply cannot change.

It’s just that the economic market will still welcome revival, but once a person dies, there is nothing left.

When considering the impact of the economic crisis on various countries, the economic scale of those countries and the bubble beneath become especially important.

As the two most populated urban cities, London and New York, these twin stars, undoubtedly have the largest economic scales.

London is backed by the entire British Empire, New York is backed by the entire United States, both supported by a tremendous market.

The reason London is able to surpass New York is simply that most of the enterprises from Britain’s various colonies also go to London to be listed, indirectly adding to London’s prosperity.

Apart from London and New York, other stock markets are too small to have a ripple effect that affects the entire world.

That also means, to minimize the impact of the economic crisis on Australasia, the crisis must erupt in the United States as it did historically; perhaps New York is the only answer.

Because once a crisis breaks out in London, the major stock markets of Europe would be unable to avoid it. The destruction that would bring on Europe is immense; the United States would smoothly become the world’s leading superpower, and it might not even need World War II to become that behemoth country.

This was something that Arthur simply could not accept. Once the United States became powerful, they were destined to stir up trouble everywhere, which would not only disrupt the colonial systems of Britain and France but also the rule of Australasia across the Southern Hemisphere and on the opposite shore of the Pacific Ocean.

Even in a bold conjecture, if an economic crisis were to destroy Europe, Europe might directly lose its competitiveness without the need for the baptism of war.

Because the capital ties between European Nations are quite close, once there is a problem in London, all Europeans playing the stock market would be affected, most of Europe’s industries would go bankrupt, and Europe’s age of prosperity would come to an end.

“Your Majesty, I think we need not worry too much about the economic crisis, because our economic situation is different from that of Europe and America,” said Minister of Finance Hunter, speaking earnestly to Arthur during the Cabinet Meeting.

“What we should be worried about is the severe contraction of imports and exports after the economic crisis and the onset of winter for international trade. I’m afraid that apart from some grain and meat trade, all our exports will have to stop, and there will be nowhere to buy our imports.”

For the current world economy, the stronger the country, the less able it is to avoid the impacts of an economic crisis.

To give a simple example, a powerful country will definitely occupy more market share and create more import and export trade.

But even if the economic crisis does not affect the country itself, it will reduce the purchasing power of other countries, and the value of export trade will naturally shrink.

Goods can’t be sold; for the country’s industries and sectors, this is a heavy blow because it faces the risk that enterprises will have to lay off staff, creating a new wave of unemployment.

Can one say that it’s unethical for enterprises to lay off staff at this time? If enterprises don’t lay off staff, then it is the enterprises that will be finished.

But the problem is, once enterprises start laying off large numbers of staff, those people who rapidly lose their jobs and sources of income will not only give rise to a large number of criminal cases but will also increase public dissatisfaction with the government.

How to solve the impact on Australasian exports of goods after the economic downturn in other countries is what Hunter believes Australasia should be concerned about.

Arthur nodded, what Hunter said was not far off from what he had anticipated. Australasia’s economy didn’t have much of a bubble; it was mostly driven by real economic growth propelled by various infrastructures.

As for those sectors prone to bubbles such as real estate, stock markets, and finance, although Australasia had them, they were nowhere near as serious.

Even in the highly populated cities of Sydney and Melbourne, they had not reached the overcrowded scenario of London.

Australasia was still in a state of vast lands and sparse populations, so naturally, there was no shortage of land for self-built housing, and house prices naturally would not soar too much.

As for those speculators in the stock market, Australasia was not without them, but their number did not reach the exaggerated levels of London.

The entire number of stock market participants in Australasia was only several hundred thousand, with the combined funds entering the Sydney and Melbourne stock markets each day not exceeding a million Australian dollars, so even if the stock market collapsed, the impact would not be that significant.

Moreover, the stock market in Australasia was primarily composed of Australasian enterprises, with very few foreign enterprises. Thus, the possibility of a collapse was not great.

This was also because Australasia was too distant from Europe and America; these enterprises had better options such as New York and London, and naturally would not choose the faraway Sydney or Melbourne.

Sydney and Melbourne were more attractive to enterprises from Southeast Asia; there were quite a few European-founded rubber and mining companies, as well as a small number of agricultural product companies, which mostly chose to list on the Sydney or Melbourne stock exchanges.

Add to that the Native Land enterprises of Australasia, and that was what made up the stock market in Australasia.

Under the premise of controlling the rubber industry, it was almost impossible for the Australasian stock market to face a collapse, especially considering the substantial presence of the Royal financial group, and Arthur would not allow the Royal financial group or other consortiums to collapse.

It was very simple for Australasia to mitigate the impact of the economic crisis: by reducing production shares and providing some relief to the unemployed, they could receive income and grain through work-for-relief programs.

Given the output of grains and meats in Australasia, an internal collapse of the nation was impossible, especially with Arthur in charge.

It wasn’t an exaggeration to say that Australasia could nearly avoid the harm brought by the economic crisis; it was merely a matter of facing some economic stagnation for a while.

However, out of consideration for the interests of the royal family, the economic crisis still had to have some impact on Australasia.

After all, William, the heir to the throne, had grown up, and he needed opportunities like the economic crisis to enhance his reputation and increase the People’s fondness for him.

Since the economic crisis was under his control, letting William boost his reputation while under his guidance meant there was no need to worry about any accidents occurring.

Even if the situation became unmanageable in the future, Arthur was there to ensure that Australasia’s economy would not suffer severely.

This was essentially laying the groundwork for the next King; high as Arthur’s prestige might be, his rule could not possibly last for hundreds of years.

The throne must be steadily passed down from one generation to the next, which is vitally important for the cultivation of the successor: not just his capability but also his prestige and status.

After ensuring that the economic crisis would not significantly impact Australasia, Arthur then turned his attention to other countries, casting his gaze towards the noticeably growing Hunter and inquiring, “If the economic crisis were to break out in the United States, what impact would it have on the current Europe?”

After carefully contemplating, Hunter continued, “Your Majesty, based on the current industrial situation in Britain and France, they would inevitably shift a major part of the crisis onto Germany once the economic crisis erupts.

Long before, the Allies had placed some of the heavily polluting factories in Germany. This allowed German industry to recover quickly and for German exports to grow continuously.

After the outbreak of the economic crisis, regardless of where it erupted, Germany would face severe repercussions. Judging by the number of factories Britain and France currently have in Germany, at least a million German Workers would be displaced, and Germany’s economy could collapse overnight.

However, if the economic crisis is not severe, perhaps they would attempt to absorb it themselves. Especially for the British, they likely would not wish to see a collapsed Germany.”

Arthur nodded, quite satisfied with Hunter’s speculation. No country wanted to bear a severe crisis alone. Given the chance to shift the crisis onto another country, Britain and France would undoubtedly do so without hesitation.

After all, the previous issue with Loan repayments had already led Britain and France to transfer some of their heavy-polluting Industry.

Although these industrial operations hastened the revival of German industry, they have tied the German economy more closely to Britain and France.

Once an economic crisis arrives, it would be simple for Britain and France to blame Germany. While they couldn’t completely escape the crisis’s impact, having Germans take the brunt was no issue; at least they could bear the majority of the harm brought by the economic crisis.

Because the essence of the economic crisis was industrial overcapacity, causing a large backlog of industrial products. When products accumulated too much, and the economy failed to recover costs, it led to shortages in the economic chain and ultimately companies going out of business.

Following company closures, a large number of Workers were laid off, and these Workers and their families lacked income to buy everyday items, further reducing consumer power, with even less money to purchase industrial products.

How this repeated, forming a vicious cycle, was the process by which economic crises occurred. It was also the great crisis that the Capitalist world could not avoid.

Germany’s current industrial capacity was undoubtedly in a state of overcapacity, exporting a large number of cheap industrial products annually to Britain, France, and other European Countries.

If Britain and France decided to reduce their imports, Germany’s industry would face a devastating blow, and the number of unemployed in Germany would certainly be in the millions.

Even Britain, which wanted to support Germany against France, would definitely choose to shift the crisis onto Germany when facing an economic crisis that could affect their own economy. After all, self-preservation was the utmost priority.