Start 1861: I Just Inherited the Dutch Throne

William IV said slowly at this time: "Actually, what Senator Sackham said is not detailed enough. Next, I will give you a general introduction to the impact of exchange rate on import and export."

Naturally, Sackham did not dare to object. His ears were perked up, as if he was all ears.

When others saw this, they knew that Sackham, the world's top financial expert, obviously agreed with the professionalism of William IV's next speech.

I saw William IV saying: "Generally speaking, the decline in the Dutch guilder exchange rate, that is, the depreciation of the Dutch guilder's external currency value, can promote exports and inhibit imports.

However, if the Dutch guilder exchange rate rises, that is, the Dutch guilder's external currency value rises, it will be beneficial to imports and detrimental to exports.

Of course, the impact that exchange rate changes may have on imports and exports must have an accompanying condition, that is, the demand for imports and exports is price elastic, and changes in the prices of imports and exports will have an impact on the demand for imports and exports.

If import and export demand is sensitive to changes in exchange rates and commodity prices, and demand elasticity is high, then a decline in a country's exchange rate and a corresponding reduction in export prices can effectively suppress the demand for imported goods, thereby reducing the quantity of imports.

To put it simply, if the sum of the demand elasticity of export goods and the demand elasticity of imported goods is greater than one, then a fall in the exchange rate can improve a country's trade balance.

As far as export commodities are concerned, there is also the issue of export supply elasticity. That is, whether the volume of export commodities can increase after the exchange rate drops is also restricted by the possibility of supply expansion. "

Seeing that these people were listening carefully, William IV was very satisfied. Although the words he just said can be easily searched online in later generations, in this era of the 19th century more than 100 years ago, they were the most popular words in the financial world. Wise words.

Therefore, what William IV said became the learning content for the 20 Privy Council members present.

“In real life, the effect of exchange rate on import and export is mainly realized through competition in the international market. For example, if the domestic purchasing power of a country’s currency remains unchanged but the external exchange rate declines, the country’s exporters can benefit from the depreciation of the exchange rate. Extra profits provide the possibility of lowering the price of export products in foreign markets, which increases competitiveness in the international market, and thus may expand one's market share and increase exports.

But this also requires that competitors have not taken or have not yet had time to take countermeasures. When competitors counterattack by devaluing the exchange rate of their own currency, the advantage of competitiveness no longer exists.”

After waiting for thirty seconds in the conference room, everyone couldn't help but put down the pens they were taking notes on, and then looked up at William IV excitedly, especially those who were not members of the Dutch Federal Reserve. Obviously, this was their first contact with finance. Professional knowledge, especially what William IV just said so clearly.

The Minister of Industry also benefited a lot. He suddenly asked at this time: "Your Majesty, what if the United Kingdom or other countries strengthen or lower their currencies to enhance their domestic industrial products in the market or enhance their export competitiveness?"

"This concern is right," William IV said: "When the Netherlands faces such an opponent, it needs to take appropriate measures. For example, if the industrial products of England and Germany are able to compete with us overseas, then it needs to use currency with a wider scope than the opponent. To attack the opponent's global usage share, and then use the Dutch guilder advantage to expand local interest groups and link it to the rise and fall of the Dutch guilder. A black cat or a white cat that catches mice is a good cat. Our purpose is to attack opponents in a country.

As for the market competition in the host country, we can suppress the principle of half alliance and half alliance, and use commercial interests to bring together the other side's government and interest groups to implement policies that are in our interests."

William IV suddenly changed the subject and said: "Prime Minister Linden (leader of the Christian Party, the largest party in the ruling coalition), Deputy Prime Minister Jules (leader of the Socialist Party, the second largest party in the ruling coalition), Excellency Gerrit (leader of the opposition Liberal Party), In fact, at this point, I would rather see the top three political parties in the Netherlands work together and form alliances among various factions in each country.

I hope to see you form this kind of alliance in these countries. Anyway, winning or losing means changing factions for the Netherlands. In other words, the party among you who formed the alliance will come to power, and the party you bet on will take the opportunity to exert influence in this country. force"

William IV said coldly: "Currently, the three parties are doing well in the United States, but they also have shortcomings. The Liberal Party has a good relationship with the Republican Party. This is why the Liberal Party has been able to maintain an alliance with Hu Washington during the 16 years in power. .

In addition, the current relationship between the Netherlands and the United States is neither good nor bad, or even bad. The relationship between the Christian Party-Socialist Alliance and the Democratic Party is the reason why it has not reached the level of the Liberal Party and the Republican Party.

This is where the Christian-Socialist coalition can improve. Of course, part of the reason was also caused by the opposition to the Netherlands after the Democratic Party Stephen came to power. The Christian Party-Socialist Alliance is not entirely to blame. "

"The Christian Party-Socialist Party ruling coalition also has a good point, that is, on Latin American issues, the Netherlands has done a good job in penetrating various countries."

If the three parties expand their power or cooperation partners to the major European and American countries, especially the North and South of France in Europe and the North and South of the United States, for example, the Socialist Party is now closely related to the Southern Confederate States of America that broke away from the United States, and use this to deal with the North. When Washington is bargaining, it does a good job.”

"Also, the Socialist Party contacted Thiers in the Third French Republic, which split from the rule of Napoleon III in Paris, and allowed Dutch arms dealers to become suppliers of the country's Ministry of Defense. Just like the recent Paris Napoleon III was very angry and began to adopt a soft policy toward the Netherlands, and he did not dare to lean too heavily on Britain."

William IV's public admiration for Joseph Beit, the second-largest figure in the Socialist Party, the foreign minister, once again made other members of the two parties feel strange.

Clearly, the Socialist Party's foreign policy scores high marks. However, other departments did not get recognition from William IV. This makes it more likely that the royal family will support the Socialist Party in the Dutch general election next year.

Linden and Grit looked at each other again, and both saw the wariness in the other's eyes.

William IV's provocation was enough, but he knew that too much was not enough.

He knows that next year's general election will be more intense than before. Will the Socialist Party break away from the Christian Party and run for elections independently? Will the Christian Party join forces with the Liberal Party to block the Socialist Party? These are all big dramas. As for the fear of internal chaos in the Netherlands, hey, today's meeting is just to set the rules, isn't it?