As the Reichsbank put it: ‘The currency must now underpin not an expansive power politics, but a policy of peaceful construction. Historically we have before us the same task of conversion as Frederick the Great after the Seven Years War, Prime Minister Peel after the Napoleonic War and Mussolini after the war in Abyssinia. The main task is to manage the transition from the current war economy to a peacetime economy.’ This transition would not be painless or free of risk. But there was no alternative. Any further government spending financed by monetary expansion would simply add to the
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