What impact did the war have on the finances of the warring countries?

A new round of financial crisis broke out in 2008 and swept the world. The Rand Corporation, an American think tank, submitted a "war bailout" report to the Department of Defense, believing that instead of using US$700 billion to bail out the market, it would be better to use this 700 billion to launch a war would be more effective. For a moment, there was a global uproar. If adopted, the worst consequence of the financial crisis - war would break out.

1. The relationship between world war and financial crisis (economic crisis)

(1) Financial crisis does not necessarily trigger a world war

Economic crisis is a private ownership production system trade an inevitable product of competition. When cyclical economic crises occur, governments of various countries come up with unique strategies. For example, the government leads large-scale construction projects to increase employment opportunities and stimulate consumption; the application of new technologies and inventions in production has led to a new round of economic take-off, etc. wait. The safe landing of the four major economic crises after World War II all illustrate the self-regulating function of the economy.

(2) The outbreak of world wars is always caused by financial crises

Looking back at history, all modern wars in the world have the shadow of finance.

Before the First World War in 1914, economic crises occurred in European and American countries, and domestic conflicts became acute. The major powers launched foreign aggressive wars to deflect domestic crises. Due to the imbalance of interests, it developed into a global war. Before the Second World War in 1939, the industrial output of the entire capitalist countries dropped by 40%, 290,000 companies in the United States, Germany, France, and the United Kingdom went bankrupt, and more than 30 million people were unemployed. If the major powers cannot find new economic breakthrough points during the crisis, they will try their best to provoke wars and transfer the domestic crises to other countries. As a result, a world war breaks out.

2. Financial promoters in the raging war

(1) The arms business is booming

Arms groups and financial groups were involved in both world wars. Realize the huge benefits of making war fortune. If both warring parties want to have an advantage in the war, the advanced nature of equipment is a key factor. Many developing countries require large amounts of arms due to their own geopolitics, defense needs, and even arms races. The major arms countries have obtained high profits through arms sales, and American arms dealers have even "kidnapped" GDP. In addition, arms production can also stimulate the economy, promote employment, and alleviate the pressure of the economic crisis. Statistics show that for every US$130 billion of products produced by U.S. military factories, it can boost GDP growth by 1 percentage point, and for every US$1 billion of additional military production, tens of thousands of new jobs can be created.

(2) Financial War---A battlefield without gunpowder

In war, the skillful use of financial tactics can also lay the cornerstone for victory. When the Sino-Japanese War officially broke out in 1937, President Roosevelt immediately united with the United Kingdom in an attempt to force Japan to surrender by blocking Japan's trade lines. In 1941, when the U.S. Pacific Fleet moved to Hawaii, it boycotted Japanese goods, banned U.S. oil imports into Japan, and froze Japan. Deposits in the United States, these two financial measures are enough to collapse Japan's affordability.

Compared with resource-poor Japan, financial war accounted for half of the "peaceful" disintegration of the former Soviet Union. In 1960, heavy industry in the Soviet Union accounted for 72.5% of GDP. Under the seriously deformed heavy industry and light agriculture, , the economy of the former Soviet Union relied heavily on imports. When gold reserves were most scarce, the United States quietly used its oil pricing power to significantly reduce the Soviet Union's oil revenue. Such an economic crisis caused by internal and external troubles made the Soviet flag over the Kremlin come to an end.

3. The thrilling post-modern financial war

(1) Using military means to control the flow of capital around the world

Because of the Internet, the whole world has changed It has become a "global village", online transactions have become commonplace, and trillions of funds can be quickly transferred or evacuated through the Internet. How can we firmly control the flow rate and direction of global capital? The United States has used military means for this purpose and established a "Global Rapid Strike System", which it claims can strike across the world in 28 minutes.

This means that when a region is threatened by long-range missiles, asset owners in the region will evacuate capital to a safe zone as quickly as possible. This safe zone is of course the country with the strongest military. Therefore, military means become The core of capital flow control. The entire capital flow operation process takes about 28 minutes. It is conceivable that with this strike system, once a war breaks out, Wall Street can win over the world's capital flows with a roar.

(2) Using local wars and financial means to plunder the wealth of various countries

The United States uses local wars to support the development of the financial industry, holds high the flag of justice, and attacks Iraq and Libya at all costs . causing global oil prices to soar. Because oil transactions are settled in U.S. dollars, rising oil prices mean more U.S. dollars are needed. The Americans created global demand for U.S. dollars through war, and thus once again justifiably printed more U.S. dollars. That is to say, the United States provides paper dollars to the world, and the world provides physical products to the United States. In this way, wealth flows into the pockets of the United States quietly. At the same time, in order to stabilize other countries' confidence in the U.S. dollar, the Americans issued treasury bonds to the world. This undoubtedly provided another insurance for the U.S. dollar, and the U.S. dollar became the "World Dollar".

After the 9?11 incident, out of doubts about the safest investment environment in the United States, a large amount of funds evacuated the United States. In order to regain the confidence of investors around the world in the United States, after the 9?11 incident, Months later, the United States began the war in Afghanistan. As soon as the cruise missiles landed on the soil of Afghanistan, the Dow Jones stock index soared, and Wall Street applauded. As the war continued, a large amount of evacuated funds gradually returned to the United States. Currently, 70% of the employed population in the United States is engaged in finance and financial services—finance has become the lifeblood industry of the United States.

(3) The outline of the financial colonial empire

In 1944, relying on 80% of the world’s gold reserves, the United States established the “Bretton Woods System”, in which the U.S. dollar became the world’s currency. The universal currency, the U.S. dollar is locked in gold and can be exchanged for one ounce of gold for every 35 U.S. dollars. In one fell swoop, the hegemony of the US dollar was confirmed. In the following 27 years, the United States was the country with the best development momentum, the richest, and the most stability in the world.

But using war to solve financial problems will bring many uncontrollable risks. The United States spent US$800 billion during the 17-year Vietnam War, and its gold reserves were also dwindling. In 1971, President Nixon broke the trust of the world and openly announced that the U.S. dollar was decoupled from gold. This meant that the U.S. dollar was not limited by gold reserves and could be used to print money without any restrictions. In order to prevent the dollar from depreciating and ensure its dominance, the United States, in addition to relying on its strong technological innovation and strong military strength, also made full use of the war in the Middle East to link the dollar to the world's bulk commodity, oil. In this way, after the U.S. dollar is separated from gold, it can still circulate unimpeded around the world as a hard currency. Over the next 40 years, a new species in the history of human empires - the financial colonial empire emerged. The Hiroshima Agreement in 1985 and the Asian Financial Crisis in 1998 were both "masterpieces" of the financial colonial empire - wiping away the economic development achievements of various countries over the years.

Financial warfare and military means all serve to achieve certain political goals. Pure financial war may not be able to achieve the desired goal. The military itself is a highly comprehensive and huge system project, involving all aspects of the country. In today's "economic globalization", not only financial wars, but also network information wars, public opinion wars, etc. are ongoing all the time. What we must be aware of is: we are always preparing for war.