The Rise of Australasia

Upon hearing Minister Grey’s remarks on the market gap caused by the collapse of Germany’s economy, Prime Minister Millerlan of France was somewhat persuaded.

At present in Europe, France is undoubtedly the largest importer of cheap German industrial products, with a much higher proportion of imports from Germany compared to the United Kingdom and Italy, due to its geographical advantage.

As a result, France currently heavily relies on cheap German industrial goods, as they are not only of good quality but also extremely cheap.

If the collapse of Germany’s economy leads to a substantial reduction in the output of German industrial products, can French ones fill the market gap?

The answer is quite clear: if the development of French industry had truly been that successful, it would have already recovered to pre-war levels; instead, it remains at a standstill.

At present, France absolutely cannot fill the void left by Germany’s industrial products, even with advanced preparation.

Seeing Prime Minister Millerlan of France remaining silent, Minister Grey knew that his persuasion had been effective and continued, "Prime Minister Millerlan, we only need to reduce the loan by 50 billion pounds and reduce the German government’s share of reparations for the next three years to save Germany and thus avoid the consequences of an economic crisis.

I understand that reducing reparations would cause losses to your country, but there are things more valuable than reparations, aren’t there?

A stable Germany can generate more benefits, and saving Germany is a good thing for both of us, as only a stable Germany can guarantee the successful repayment of reparations.

If Germany collapses, whether the reparations can be repaid becomes questionable – a situation I trust your country does not want to see."

One of the important reasons for Germany being able to pay reparations smoothly, besides the military threat from Britain and France, is that the current German government still has the ability to compensate for reparations.

But if Germany’s economy truly collapses and even triggers an economic crisis, will Germany still have the ability to pay reparations? The answer is obvious.

At that time, Germany would have a reason to default, as the country would already be bankrupt, and defaulting would be justifiable.

Prime Minister Millerlan pondered in silence, but he could not deny that there was some truth to what Minister Grey had said.

Compared to the protagonists of this conference, Britain and France, Italy and Australasia seemed indifferent, watching the British and French performances quietly.

Finally, after vigorous reasoning by Minister Grey, Prime Minister Millerlan of France agreed to reduce Germany’s reparations from 20 billion pounds to about 15 billion pounds and to reduce the share of German government reparations for the next three years to save the German government from the current crisis.

Of course, the British had to pay a considerable price to persuade the French.

First, the British had to unconditionally support the French policy in Alsace and Lorraine and tacitly allow France to exert further control over the trustee republic on the France-Germany border.

Second, the British had to support the French in naval scale divisions, in other words, increase the French naval size as much as possible.

Luckily, the British government could accept both terms, and an agreement affecting the situation in Germany emerged with a handshake between Minister Grey and Prime Minister Millerlan.

Why Prime Minister Millerlan agreed to the reduction of German reparations proposed by Minister Grey can be explained more profoundly as him considering France’s best interests.

After their defeat, the situation in Germany and other defeated countries worsened, but this does not mean that victorious countries like Britain and France had it easier.

Britain was in a better position, with no impact on the mainland and an acceptable level of economic loss, which is why the devaluation of the pound was not too drastic.

However, the situation in France was different. The losses suffered by France during World War I and the various post-war policies led to an extreme devaluation of the French franc.

According to French civilian statistics, before World War I, one franc could buy about 7 kilograms of flour, but now one franc can only buy less than 4 kilograms of flour, with a devaluation rate of as much as 47.1%.

Before World War I, 1 pound was equivalent to about 25 francs, but now 1 pound is worth 53 francs.

Although the devaluation of the franc is not as severe as that of the mark, France’s policy towards banknotes is quite loose, and the franc’s devaluation continues to worsen, resulting in greater inflation.

If Germany’s economy were to face a severe crisis at this time, France, as a neighbor, would undoubtedly suffer serious repercussions.

Moreover, abundant German industrial products are flooding France—these German industrial products might be valuable treasures during normal times, but they could become deadly scythes during an economic crisis.

The French economy could not bear major turmoil, which is the real reason behind Prime Minister Millerlan’s agreement to compromise.

It has to be admitted that World War I was purely a war of attrition among European countries. After the war, Germany and Russia were on the verge of collapse, while France had suffered significant losses.

Only Britain was still struggling, but except for Britain, the only European power to have any prestige at all was France.

This is the real reason behind America’s rise in history: all European countries were heavily consumed, and even without any action from the United States, its comprehensive strength ranking would naturally rise.

Of course, the current situation is quite different from that in history. The Americans were blamed for the flu, and their international status and influence did not increase much.

On the other hand, Australasia has now become the universally recognized fourth world power (ranking only after Britain, France, and the United States). There is neither the oppression and occupation of colonies by the old powers like Britain and France nor the dirty tricks of the Americans (i.e., the flu). They still have a good reputation in the international community.

This is why Britain is able to control much of the post-war discourse. British loss during the war was minimal, their biggest competitor in the post-war years—the United States—bore significant blame, and there is no single country that poses a threat to Britain anymore.

Furthermore, with the support of their ally Australasia and the entire World Alliance, it should be the most glorious moment for the British Empire since the 20th century, with Britain’s authority even rivaling that of the Victorian Era.

However, this does not mean that there are no problems in the British mainland. The strength of Britain at this time is not due to its own power, but rather the weakness of other countries.

Currently, the United States should be the second most powerful country in terms of comprehensive strength, but it is far from being as strong as Germany was before World War I.

To put it bluntly, the threat posed by the United States to Britain is not as intense as that of Germany before World War I. This is why Britain supports Australasia to confront the United States instead of directly confronting the United States.

With France’s compromise, the conference went smoothly. In just one day, the four countries present reached an agreement, unanimously agreeing to reduce the proportion of German reparations and planning to propose this at the upcoming World Alliance conference and vote on it together.

As permanent and elected members of the World Alliance Council, the four countries together have enough control over the entire World Alliance.

As for the interests of other small and medium-sized countries, they are no longer within the scope of Britain and France’s considerations.

After all, compared to these small and medium-sized countries, saving Germany’s economy is the most important thing.

Arthur wasn’t surprised by this outcome of the conference. After all, the British couldn’t let Germany’s economy collapse, which also meant that reducing the proportion of reparations was a necessary agreement.

The only question is how much Britain and France will step back, but this is already completely unimportant compared to the outcome.

Arthur is quite concerned about the situation in Europe, so naturally he knows that France cannot refuse a compromise, especially since France’s economy is not in good shape.

In fact, historical France abandoned the gold standard due to its inflationary currency policy in 1926.

In the following decade, a large number of countries also abandoned the gold standard, which led to the rise of the US dollar in history.

However, currency devaluation is not always a bad thing. Although the Franc devalued significantly, the benefits of currency undervaluation led to the relative appreciation of other countries’ currencies, resulting in imported deflation.

It is precisely because of this deflation that France’s economy remained relatively stable after the start of the Great Depression.

According to historical statistics, after the start of the Great Depression, Germany had about 4.5 million unemployed people, and Britain had about 2 million unemployed people.

Logically, France must have been severely affected as well, but at that time, France had only about 200,000 unemployed people, which is why France chose to devalue its currency actively.

It can only be said that not all national governments are fools. Although sometimes the policies of some countries may seem outrageous, they do have their own advantages as powers.

The United States is currently the undisputed world leader in industry and economy. It is impossible to overtake this formidable gap with only one’s own efforts.

After pondering for a long time, Arthur set his sights on the famous real estate policy of the later generations.

At present, money compared to the future is still very valuable, which leads to the fact that housing prices in various countries are not high.

For example, in the British Empire, London’s housing prices generally range from dozens to hundreds of pounds, and a standalone villa can usually be bought for 200 pounds, which is quite cheap.

According to the per capita income of the British Empire, a person working hard for about four years should be able to fully pay for a standalone villa in London, having a foothold in a world-famous city.

Although this estimate is not precise, for people with secure income, the actual situation will not be much different.

House prices in the United States are even lower than those in Britain, after all, the area of the United States is much larger than the British mainland.

As the world’s most economically and industrially developed country, the average house price in the United States is generally less than 700 dollars, with remote areas and small-town prices below 400 dollars. This is something Arthur is unwilling to see.

As the world’s most economically developed country, the United States must set an example, such as raising its own housing prices.

After all, the real estate industry can drive the development of various industries and contribute to the rapid development of the economy.

Out of kindness to the American people, Arthur feels it is necessary to actively raise housing prices in the United States to help Americans develop better and play the role of a major country.

Of course, he would never admit that speculating on real estate is just for making money for himself. After all, what does Australasia have to do with speculating on American real estate?

As long as the real estate industry in the United States thrives, those capitalists will see great business opportunities.

As long as the capitalists enter the market quickly, others will not think that the real estate boom was driven by Arthur.

By the time the real estate market genuinely takes off, it won’t be easy even for the American government to control it.

The huge profit brought by real estate speculation is enough to make the capital go crazy. And in this capitalist country, the influence of capital cannot be avoided. Whether the US government can control housing prices depends on whether American capitalists agree.

After all, after the rise of the real estate industry, there are countless employees in the industry. The unemployment issue of these people is also a reason why the real estate industry must be maintained.

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