forum. Central banks seem to be able to create all the liquidity we need today. This is not always the case. When money is metal, people criticize its scarcity: then we can say that it is the true “iron law” of money.
After many historical failures, the First World War ended this shortage with radical innovation: the mandatory price of paper money must permanently authorize unlimited military expenditures. Without a large-scale currency reform, it is impossible to imagine the military efforts of 1914-1918.
Guns became silent, but it was still necessary to pay the price through inflation and massive devaluation, which was officially dedicated in 1928. However, this cruel return of iron laws is restricted by barriers that can be converted into precious metals, and in turn restricted by final means. After the crisis of 1929 and World War II, the above-mentioned convertibility came to an end.
About a century later, the new European currency, the euro, will become the return of the iron law. The southern countries should no longer be able to pay for German imports by printing banknotes, which is different from the French country in 1914 (a logical deficit could be simply printed paper to pay for its military expenses).
The deficit countries in the euro zone no longer have currency instruments, and they immediately have to go into debt to repay their debts.Complete set of Euro system rules [le réseau de banques centrales piloté par la Banque centrale européenne, BCE] This means that today’s debt has become the central issue, and between 1914 and 1918, the same issue was completely meaningless.