At the end of 1889, South America was quite unstable, on November 15, a military coup d'état occurred in Brazil, Field Marshal Manuel de Oodoro da Fonseca and the republicans surrounded the cabinet chamber and obtained the right to control the government, and the Brazilian Emperor Pedro II was forced into exile in Europe in order to avoid civil war, and the Republic of Brazil was established.

For Europeans, this is just a little talk after dinner, and as long as it does not affect their own interests in South America, Europeans are mostly indifferent to such a change of power. What happened to the Brazilians had little impact on Europe. But the case of his neighbor Argentina has left Europe in mourning.

In the mid-19th century, the dominant Argentine scholars and the rulers of the time proposed and implemented a model of economic transition. This theory refers to the experience and model of the United States and Europe, and the main content is to encourage the production of primary products such as agriculture and animal husbandry, and the model for the purpose of exporting to Europe is called the primary product export economic model or the primary export economic model. It adapted to the international conditions and environment of the time and was conducive to the economic development of Argentina at that time.

However, this model is only a theory of comparative advantage, and the over-reliance on foreign markets makes the whole system very vulnerable, and it is difficult to sustain the system by changes and shocks in the internal and external environment. However, Argentina did not advocate industrialization at this time, believing that the close relationship and complementarity between Guò and Europe, and the supply of its own market with products imported from Europe, would be enough for the Argentine development faction to gain the upper hand. As a result, due to this pattern and internal and external factors, Argentina experienced several economic crises after the 70s of the 19th century. And this time is no exception.

Since Argentina has been the capital of Buenos Aires and the local government struggle throughout the 19th century, the political turmoil caused the national debt to be unable to be repaid, and the British Bank of Bahrain as the creditor suffered several unprecedented pairs of turmoil, and the crisis of the Bank of Bahrain in turn led to the financial crisis in Argentina. With the expansion of the financial authority of the Argentine government, the borrowing of foreign debts and the issuance of non-acceptable banknotes gave a great stimulus to speculative frenzy during the period of rapid economic growth in Argentina, and capital was invested in land, because the rise in land prices was inevitable anyway. However, the Argentine government's public land speculation was triggered by the European banking crisis, which led to the bankruptcy of the financial sector and the bursting of the land bubble. And the economic crisis in Argentina is once again affecting Europe, and the more money is not paid, the more the credit system of European banks is affected, and the Germans are also deeply involved.

After the victory of the Franco-Prussian War and the establishment of the Second German Reich, Germany, which had received a large amount of reparations, established its own gold standard system in a very short period of time, and the renaissance of German capital began to set foot in the overseas bond market while developing its own industry. And the speculation of public land in Argentina caused German capital to begin to gather here. Naturally, German capital, which had bought large quantities of Argentine domestic bonds, suffered heavy losses in this crisis.

At this time in the original history, the scale of industrial construction in Germany jumped to the first place in the world, the production capacity of steel was doubled, and the new coal mining capacity was 18 million to 20 million tons. However, the onset of the economic crisis sharply curtailed the gains made, and in March 1890 the German stock market plummeted, and since then the stock price has been falling for more than two consecutive years. From 1890 to 1891, there were about 15,000 bankruptcies, and the size of the railroad construction was reduced by 60%. It coincided with a poor harvest in agriculture, which led to a more severe crisis. There was a massive loss of capital throughout Europe, which naturally led to a shortage of currency throughout Europe, followed by the 14th World Economic Crisis that swept Europe for three years.

And now because of Jochen's intervention, Germany is obviously in a much better situation, because of the trade agreement with the Russians, German industrial products can still continue to be exported to Russia, and as an industrial power, Germany imports very little industrial goods from abroad, plus Germany itself has implemented trade protection in a certain way, and the domestic industry is cartelized, and the German industry, which exists in the form of large monopolies, is not affected by the wave of speculative competition.

Overall, the situation is much better than it has historically been, but it is still not optimistic, and it is like a basin of cold water for the German economy, which is now growing rapidly, and if there is no solution, it will take longer for Germany to get back on the fast track when the economic crisis has passed. Although the shadow of the economic crisis had largely dissipated in 1893, the historical development of Germany was only restored in 1896 due to inflation caused by a large increase in world gold production. Jochen was not willing to wait 3 years.

And Germany in the 23 years from 1890 to 1913 unemployment rate of more than 3% for 4 years is in the economic crisis of 4 years, and the rise in unemployment will lead to the emergence of a large number of immigrants, although in the 60s, the tide of German immigration has basically ended, but the number of immigrants caused by the economic crisis can not be ignored, and when the whole of Europe is in the whirlpool of economic crisis, immigration is cheaper than the United States.

Of course, the only thing that can make Jochen feel a little psychological comfort in the miserable situation in Germany is that others are worse than me. The crisis in the United States is more tortuous, but it is more severe and long. The collapse of German stocks coincided with the outbreak of a financial crisis in the United States. In the first half of 1891 the production of pig iron, steel, rails and locomotives, as well as light industry, declined, but in the second half of the year it quickly improved, and in 1891 it fell into crisis again. From January to August 1893, the average market price of industrial stocks fell by nearly half. More than 600 banks and credit institutions went bankrupt in a year, and more than 15,000 bankruptcies of all kinds. In 1894, 94 railroads were auctioned with a total capital of $1.1 billion. In the crisis, steel production fell by 18%, pig iron production decreased, and rail and locomotive production fell by 47% and 70%, respectively. The price index for metals and metal products fell by 44 per cent and the price index for textiles by 26 per cent. The depression lasted until 1895, when the U.S. economy entered a recovery phase.

The situation for the British was no better, and the crisis also began in 1890, with coal mining falling by 11 percent, pig iron and steel production by 19 percent and 18 percent, respectively, ship tonnage by 32 percent, exports by 18 percent, and imports by 8 percent. Of course, everyone is unlucky, so how can you let France be left alone? So the crisis also befell the French industrial sectors. During the crisis, French rail and ship production fell by 34% and 37%, respectively, cotton consumption fell by 23% and exports fell by 18%. The French, having endured the hardships of free trade, finally joined the wave of protectionism. In 1892, the Melinay Tariff greatly increased the tariff rate on imported industrial goods, and the protective policy implemented in the Tariff was the most severe in Europe.

While watching other people's jokes can be a stress relieve, what should Germany do in the face of this worldwide Great Depression? This is what Jochen is having a headache for.

And while Jochen was still at a loss, bad news kept coming, with bank runs, falling stocks, factory closures, and workers' strikes. Although the stock market continued to fall, it did not evolve into the Black Friday of the 1929 US economic crisis, when the stock market crashed and investors jumped from the building. And because of the proper handling of last year's Ruhr coal miners' strike, coupled with the introduction of various policies and bills that are beneficial to workers, it has become relatively easy to calm the situation, and basically everyone can settle the strikes peacefully. But even so, the Imperial Government was still busy. Sure enough, Wilhelm II's forced push for the labor protection bill this year was not a whim, and Germany really couldn't afford a large-scale strike that swept all walks of life.

Since Germany itself is a cartel monopoly on industry and trade protection, even if the French implement strict regulations such as the Melinay Tariff, it will not achieve much in practice. Keynesianism, on the other hand, adopts expansionary economic policies to increase demand and promote economic growth. That is, to expand government spending, implement fiscal deficits, stimulate the economy, maintain prosperity, delay the outbreak of economic crisis, and wait for the situation to improve. This kind of soft landing method is difficult to implement in the gold standard era, and the way to increase inflation through guò large-scale issuance of public bonds requires additional monetary issuance, but in the gold standard era, even if it is overissued, the gold-to-currency ratio rarely exceeds 1:1.3, and if it exceeds too much, it is possible to get away with it. And the other countries on the gold standard will definitely be unhappy with you, and it is difficult to predict what will happen then. It is also feasible to pass on the economic crisis to foreign wars. However, Germany is in the middle of Europe, surrounded by strong enemies, and if it is going to war, it is difficult for all the countries that also want to solve the problem of the guò war to watch strongly.

The above two methods are difficult to implement in the current situation, and Joheng does not understand the economy, so he can only have a headache and a foot pain, relying on the little so-called solution to the economic crisis that he knows, and drawing a scoop according to the gourd, hoping to play a role even a little.

The problem is that the German government is not worry-free, and now it is not enough to deal with economic problems, and the situation in domestic politics is also ready to move, and if it wants to implement its own policy, it must first settle Bismarck's old stubbornness.

In the Reichstag elections on February 20, 7 million of the estimated 10 million voters cast their ballots, the Social Democrats won 1.43 million votes and 35 seats, while Bismarck's policies were opposed by more than 4 million voters. Bismarck's liberal and conservative parliamentarian groups were defeated. This meant that the "carrot and stick" policy system of "anti-socialist parties plus social security policies" pursued by the Reich government controlled by Bismarck could not be sustained.

Bismarck, unwilling to admit defeat, began to force Frederick III to solve the problem by force according to his own intentions, and Jochen had to support his father to fight with the Prime Minister again.