He was acutely aware that British prices were still 10 percent too high, and that further deflation to cut them would bring further hardship. But he had become increasingly convinced that the British needed to be pushed into making the big decision–force majeure, he called it. The shock therapy of forcing Britain to compete in world markets, while painful, would bring about the neccessary realignment in prices more efficiently than a long drawn–out policy of protracted tight credit.
The Americans recognized that if Britain did go back to gold, it was imperative that the link not snap at the first signs of trouble. Otherwise, the credibility of the whole system might be called into question, throwing all the world’s currencies into turmoil.