How much money (capital) we have, how big the war will be; how much resources (human, material and productivity) we have, how long the war will last. The former depends on the war financing capabilities of the belligerents, while the latter determines the war continuation capabilities of the belligerents.
This is not about whether Russia or NATO is more durable. Let’s first summarize the impact of financial warfare on the success or failure of the war. These include World War I, World War II and the Central Soviet Area. Let’s look at it one by one according to the timeline.
Let’s first look at the comparison of data during World War I:
Total population: about 144 million for the Allied Powers and about 665 million for the Allied Powers; number of people who can be engaged in the war: about 25 million for the Allied Powers and 30 to 4000 for the Allied Powers Ten thousand; global manufacturing output share: 19% of the Allied Powers and 28% of the Allied Powers; industrial potential: 1:1.5 compared to the Allied Powers and the Allied Powers. These figures do not include the United States.
In his book "Money Relations", Niall Ferguson wrote in a cruel tone: "The decisive factor in World War I was not only the flow of blood, but also the flow of capital, and the significance of both was equally important. . "For any country, blood and capital are its two kinds of blood, and they are also the two abilities of the country to conduct war. The former refers to the country's ability to mobilize war resources, while the latter refers to the country's war financing capabilities: issuing banknotes and borrowing are important means for the country to support war.
The financial war almost started earlier than the roaring artillery shells of World War I. In July 1914, on the eve of the outbreak of war, "the Bank of England raised the discount rate from 3% to 10%. There was no discount center in Berlin, and there was an immediate panic in funds." There was a run on the Deutsche Reichsbank, which reduced deposits by 20% in one month.
Germany first "decoupled the mark from gold and stopped paying for gold", and then incorporated three-month government bonds into the monetary system, which is equivalent to de facto issuance of additional currency. In the gold standard era, China announced that its currency would be decoupled from gold, thus cutting off its own credit channels. In 1915, Germany's import level had dropped to 55% of the pre-war level." At least 60% of the overseas investments held by Germans between 980 million and 1.37 billion pounds were investigated and punished by Britain, France, Russia, and the United States, which later joined. and confiscation. The German shipping sector was hit particularly hard, with the loss of 629 merchant ships totaling 2.3 million British tons due to sinkings and confiscations.” How much money you can get will determine how large, how long, and how intense the war is. This is almost the iron law of modern warfare.
War’s deterioration of the economy always starts with finance. Because finance is the most sensitive thermometer of economic life. When the war comes cruelly, its unbridled consumption and endless demands on the economies and finances of the participating countries have become a reality that no one can avoid.
The meat grinder-like war with no end in sight has dragged every country into the abyss of debt. "As of 1917, Russia's foreign debt amounted to 824 million pounds, and the net foreign debt of Italy and France was equally huge. By 1919, Britain had provided loans to the Commonwealth Dominions and wartime allies totaling 1.8 billion pounds, equivalent to the GDP of 32% of its value and borrowed 1.3 billion pounds (equivalent to 22% of GDP) from the United States and other countries." This means that all countries not only have to bear the burden of debtor countries, but also have to endure the gnawing and suffering of severe inflation without exception.
The United States, a debtor country before the war, generously opened its wallet to its former creditors and lent the United Kingdom US$4.7 billion and France US$4 billion respectively, beginning to play the role of "the war's lender of last resort." History has proven that whoever can play this role will be the final winner of the war.
By 1919, after the end of World War I, the total investment of the United States abroad reached more than 7 billion U.S. dollars, and the loans from the Allied countries to the United States also reached 10 billion U.S. dollars." Correspondingly, the United States' Gold reserves are also increasing rapidly, accounting for 40% of the world's gold reserves. Since then, the international financial center has gradually shifted away from London and began to shift to New York.
Germany first defeated the financial war and then lost one. War. The United States established its position through the First World War.
In the two years and three months from July 1932 when the Soviet Area coins were issued to October 1934 when the Red Army withdrew from the Central Soviet Area, more than half of them were sold. At that time, the Soviet area coins could not be cashed in fact.
As the situation of the anti-encirclement and suppression war worsened, the area of ??the Soviet area was shrinking, and the originally weak economic foundation was further weakened. A large number of silver coins reserved by the banks in the Soviet area were used. They went to the White Area to purchase supplies. At the same time, the printing volume of Soviet Union currency continued to increase to support the expenses of the war and maintaining the regime. While the circulation area was shrinking, the circulation volume of banknotes tripled, causing prices to rise rapidly and the currency value to continue to increase. The central Soviet area's banknotes were openly refused to be used or used at a discount. As a result, the financial situation of the Soviet area began to deteriorate. As a result, a vicious interaction between the currency battlefield and the real war was formed.
With the failure of the fifth counter-encirclement and suppression campaign, the currency war in the Soviet area also failed, which also verified a more fundamental economic principle-monetary sovereignty disappears before political sovereignty.
During the Anti-Japanese War, Shandong was the only province in China that fully controlled strategic key points. At the time of the victory of the Anti-Japanese War, the area of ??Shandong's liberated areas had reached 125,000 square kilometers, accounting for 92% of the total area of ??the province. , accounting for 13% of the total area of ??liberated areas in the country; the liberated areas have a population of 24 million, accounting for 90% of the total population of Shandong.
At the same time, in 1935, the Nationalist Government began to issue legal currency based on the gold exchange standard, prohibiting the continued circulation of silver coins - the plot setting of issuing silver coins to the death squads in the movie "Taierzhuang" is inconsistent with historical facts. So far, the silver standard era has basically ended in China. After the Japanese army invaded China on a large scale, it was impossible for the banknotes issued by the puppet government in enemy-occupied areas to be exchanged for precious metals. In essence, both legal currency and counterfeit currency were already classified as "credit currency"
The Communist Party once The base area maintains the currency status of the Kuomintang's legal currency, which is actually tantamount to handing over monetary sovereignty to others, and will also cause the economic operation of the base area to eventually fall into big inflation. At the beginning of 1942, Liu Shaoqi returned to Yan'an and passed through Shandong to guide the work, criticizing the Shandong branch for "lack of independence and self-reliance". The Finance Committee of the Shandong Branch accepted this criticism, changed its previous attitude of maintaining legal tender, and clearly stated that it would be the stated goal to eliminate the circulation of legal tender in the base area. Then, there was the famous "Beihai coin" during the Anti-Japanese War and the War of Liberation.
In the late period of the War of Liberation, Chiang Kai-shek, Song Ziwen and others did not hesitate to issue gold yuan coupons indiscriminately in order to accumulate gold and US dollars, which paralyzed the economic operation of the Kuomintang-controlled areas. . Financial collapse precedes battlefield collapse.
In the War of Liberation, the Communist Party avoided the use of heavy artillery at the cost of huge casualties in order to preserve industrial facilities. It also ensures the financial foundation, which Russia does in Ukraine.
In May 1945, a few days after Hitler's Germany surrendered, the U.S. military seized a German military truck carrying more than 20 boxes of pound banknotes near a small town in the Austrian Alps, and found a large number of them floating on the Enshi River. of banknotes. After hearing the news, the Allied Command in Frankfurt, Germany, sent troops to protect the huge car of money and organized the salvage of banknotes on the river. At the same time, it quickly notified London of the matter. Soon, an expert from the Bank of England arrived in Frankfurt, and the verification result surprised everyone present: this huge sum of about 21 million pounds was all fake! Linked to the incidents of counterfeit pound notes discovered one after another since 1943, London immediately realized that this was an organized operation carefully planned by the Nazis. As a result, the British government had to declare that all 5 pound and above 5 pound banknotes circulating in the market were invalid and had to be exchanged for newly issued banknotes before they could be used.
In 1944, its gold reserves accounted for 60% of the world's gold reserves, its total industrial production was equivalent to 50% of the world's, its manufactured goods accounted for 35% of the world's total, and its military industrial capacity was Twice that of the Axis powers. On July 22, 1944, the final plan emerged. The US dollar won the title of king of international currencies in Bretton Woods at the foot of Mount Washington. The German Mark Reich collapsed. On May 9, 1945, Germany was defeated.
A short-term quick battle and a long-term battle require completely different abilities, just as a sprint champion cannot win a long-distance running championship.
Military equipment determines short-term success or failure, finance determines mid-term success or failure, and resources are lasting capabilities. In this regard, no country exceeds Russia.
China, on the other hand, can only sustain a medium-term war based on its industrial capabilities. Long-term war must come after the energy revolution.
Everyone must have a clear understanding of this.