The World shuts down

December 18, 2016

In 1914, an European diplomat said, and I quote - "One by one, all the lights in Europe have been extinguished". The Great War had begun.

 

How did it begin? Well, a relatively small ripple that became a global tidal wave. Prince Franz Ferdinand, Emperor of the Austrian Hungarian kingdom, was assassinated in Sarajevo by anarchists. As a result, the Kingdom declared war against Serbia. Russia chose to support Serbia, and England waited in the sidelines, which infuriated the English monarch`s cousin, Kaiser Wilhelm II, the Emperor of Germany. Germany had close ties to Emperor Ferdinand, and their two emperors were related. So were the Emperors of England, Germany, and Russia. Tsar Nicholas was a direct cousin of George V and the two men were close friends.

Kaiser Wilhelm II was the grandson of Queen Victoria, the Royal English matriarch, who strived in vain to keep the peace.

 

In reality, the year when War broke out, 1914, had many similarities to 2014. There was peace and general prosperity. Transatlantic ship travel was booming. The British Empire stretched to the Far East. India was the Jewel in the Crown. America was asserting herself as a major industrial force. But London still remained the financial capital of the World.

 

But not for long. After War began, England spent her financial resources quickly. Banks in England were shut down, and so were the financial cities of Germany, such as Frankfurt and Hamburg. Only one stock exchange remained open in the western world.

New York.

All of a sudden, the NYSE became the world`s default stock exchange. The institution was not prepared for this level of volume, and actually had to shut down for a few months when the War started in June 1914. When it opened, the NYSE shot up by more than 80% in January 1915. Europe`s banks, and its nations, entered an almost decade long recession.

America`s dominance in global affairs had begun.

  

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