QUESTION: Marty; You so casually mentioned that Britain closed the share market during World War I and that such a risk exists in Europe. Can you elaborate on this at all?
Thank you for all you contribute to society
ANSWER: The entire period leading into World War I was a period of extreme socialism. This is when the world was enamored with Karl Marx. That lasted until the Russian Revolution in 1917 and the murder of the Czar and his family. The Romanov family were shot, bayoneted and clubbed to death in Yekaterinburg on the night of 16-17 July 1918. This demonstrated the hatred that Karl Marx unleashed upon the entire world. Only then did people in the West begin to look at this Marxist rebellion as something serious rather than a fashionable liberal change of mind.
Most people are ignorant about how the world economy functions no less its history. They assume that today this is a “Global Market” for the first time in history. That notion is completely wrong. Prior to World War I, the world economy was open and global. It was this openness of global financial markets prior to the war that led to the closure of stock markets. Europe will do the same so beware. It is important to understand what took place because history will REPEAT going forward in Europe.
Before World War I, financial capital was free to move from one country to another without exchange controls. All the major countries of the world were on the Gold Standard. People assume this meant that money was real and stable. That is just propaganda for the world currency markets were still arbitraged despite the gold standard. The differences in exchange rates were arbitraged back then through the buying and selling of international bonds that were listed on the world’s stock exchanges. Russia would issue a bond that was then listed on the St. Petersburg stock exchange as well as the major world stock exchanges in London, New York, Paris, Berlin, and Amsterdam. Differences in exchange rates between countries were arbitraged according to the shifts in CONFIDENCE with respect to nations by buying and selling bonds in different markets. In reality,