Chapter 524 Is this going to be a one-on-one fight?
When talking about the current situation in France, the words that come to mind are not good ones: "yellow vest riots", "France", "debt crisis"...
Ultimately, it’s all because of the bad economy.
The most daunting issue is France's debt. France's total national debt now exceeds €1.9 trillion! This means 93% of France's GDP is debt. Coupled with high welfare benefits, this debt burden is practically suffocating the French government, and the burden is only growing.
Everyone knows that China holds a lot of American Treasury bonds. I often hear people in China ask why they should buy American Treasury bonds. This is a waste of the money earned by the Chinese people.
People who say this should read more.
Even with all the trouble the US is having, China remains its largest trading partner. How can this be possible without sufficient foreign exchange reserves? Where does a country's daily import and export transactions, trade in goods and services, come from? Relying on cash flow is a joke! Where does it find hundreds of billions of dollars in cash every month?
Therefore, a significant portion of foreign exchange reserves is held in short-term government bonds, much like how Chinese people currently deposit their money in Yu'e Bao. Furthermore, foreign investment in China generates over $100 billion in annual profits. Is this money converted into cash and shipped back in containers? It all depends on foreign exchange reserves! After all, the US dollar is an international currency; what else can one buy if not it?
Currently, the countries with the largest foreign exchange reserves in the world are China and Japan. The nickname "world production base" is not for nothing. China's foreign exchange reserves are more than half of Japan, which ranks second!
Even though the current international trend is "de-dollarization", China has launched negative interest rate euro bonds in order to pay attention to the European market and weaken the status of the US dollar. These euro bonds are mainly purchased from Germany and France... Alas, one can only sigh.
France was really not like this back then.
France surrendered so early during World War II that it wasn't significantly affected. As a result, it developed rapidly after the war and was undoubtedly one of the richest and most powerful countries in the world, even far surpassing Britain for a long time. However, it took less than 40 years for it to become what it is today.
Now many people say that France’s decline is related to their “high welfare policy”. In fact, this is not the most direct reason. The most direct reason is to “thank” a great president in French history, Georges-Jean Pompidou.
There's a famous modern art museum in Paris called the Centre Georges Pompidou, dedicated to this great president. The Chinese also have a favorable impression of him, as he was the first sitting head of state from a Western European country to visit China. However, this guy did something that would make all the French people embarrassed: in 1973, he enacted the Banking Law, in line with international standards.
Who was Pompidou's predecessor? Charles de Gaulle, the World War II hero! De Gaulle's governing philosophy was simple: a nation consisted of three parts: the state, the army, and the currency. After his ascension, France experienced rapid economic growth. At the time, the French economy was still state-controlled, especially the financial sector. Private banks were required to provide a 20% margin deposit with France, allowing the state to control the financial system and drive economic development.
In other words, France and China at that time were basically exactly the same, and France at that time was so rich!
However, de Gaulle's policies severely harmed the interests of the bourgeoisie. France's relatively independent monetary and banking systems, under his leadership, became the last bulwark against international financial consortiums' attempts to regulate the financial sovereignty of various nations. Coincidentally, the US dollar was being decoupled from gold at the time. De Gaulle realized that without the backing of gold, the French economy, with its vast foreign exchange reserves, would be severely damaged. He publicly challenged the US's excessive money printing and formally proposed exchanging its US dollars for gold! He even dispatched several warships to the US to transport the gold.
The Americans were no pushovers either. They directly launched a "color revolution," the "May Storm" of 1968. The brave French people stood up and forced Charles de Gaulle to step down, and then elected Pompidou, who "represented the interests of the people," to come to power.
After Pompidou came to power, in order to "keep pace with the international community" and learn the "advanced financial system of Britain and the United States", he promulgated a new "Banking Law". The main content of the law was: the French government used to have to go to their "central bank" Bank of France to borrow money for national construction at low or no interest. However, after the new law was promulgated, the French government was prohibited from borrowing money directly from the central bank and had to obtain interest-bearing loans from private banks.
The reason for doing this was to limit the country's unlimited borrowing and prevent hyperinflation. It sounds high-sounding, but France at that time had no worries about inflation at all.
Anyway, after the passage of this law, things got interesting for France. What if the country needs to borrow money? First, the French central bank lends the money to private banks at a tax-free 1% interest rate. The private banks then lend it back to the state at 4%. Don't underestimate this 3%, but the amount a country borrows is a huge sum, with interest compounding. Currently, the largest portion of France's national budget is used for debt repayment, not principal repayment, but interest. The annual interest repayment exceeds the budget for education, defense, and other areas.
They never considered that the Americans dared to do this because they could print money as much as they wanted and dilute their debts by linking the US dollar to oil. At the very least, the US dollar is an international settlement currency that can make countries around the world pay for them, but can France do that?
Why did the UK leave the EU? The UK probably saw that France was likely to become the next flashpoint, following in the footsteps of Greece, Portugal, Italy, Spain, and others.
France has always been competing with Germany for the top position in the European Union. If it continues to play by this method, there is no point in competing. It will only kill itself!
There are also many "experts" in China who call for the abolition of the central bank's status every day. People like this should be dragged out and shot for half an hour. What they do is like giving birth to a child without an anus, harming future generations!
It was impossible for such a large yacht to stop at such a fast speed. Xiao Peng watched helplessly as the 'Hammer of Ogrin' circled their ship twice before slowing down. Then it stopped not far from their ship and he saw a small boat lowered from the boat. Billy hurriedly came to the rescue in the small boat.
Xiao Peng was sharp-eyed and noticed that Billy was carrying a hunting rifle on his back.
What's this for? Are you planning a one-on-one fight with me?
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