"It is a profound fallacy to suppose that there is anything to be regretted in a fall in the exchange rate. A fall in the exchange rate mirrors one or both of two things. It either mirrors a decline in our real terms of trade, or else, or also, it mirrors differential inflation in this country compared with inflation in the other countries with whose currencies we are comparing the exchange value of our own. On neither of those grounds is a fall, if there be a fall, in the exchange rate a sign that something is wrong with us or that the fall ought to be suppressed and forcibly reversed. If a fall in the exchange rate reflects a fall in the real terms of trade—if it really means that an item we are producing at the moment exchanges in Toronto or Timbuctoo for less than it formerly did—that is due to an alteration in the economic pattern of the world as a whole. The sooner and the more accurately we know about it, the sooner and the more accurately we shall adapt and alter our behaviour and productive efforts to fit those changes in the real world of which, in the end, we are the servants and not the masters, whether under a Labour Government or under any other sort of Government in this country."