Chapter 779 The precursor of the “Plaza Agreement”

"First put political pressure on Japan and force the other party to relax exchange rate controls. Whether it is regulated by the international market or artificially increased, the appreciation of the yen will lead to a decline in the efficiency of Japanese companies!"

This weekend, in a leisure area on the 58th floor of the Red Hat Building in New York, where Vision Capital is located, next to the large floor-to-ceiling windows, Carter, Rick, Julian, Rogers, and Manager Powell of Black Flag Commercial Bank, so

Several people were sitting together.

"The first step is to put an end to the current rapid development momentum of Japanese companies. The second step is to relax exchange controls. As long as a large amount of Japanese yen can be exchanged without restrictions, there will be plans for many Japanese companies, including Hitachi Manufacturing.

possible!"

"But it is worth noting that, with Hitachi Manufacturing as a representative, I have recently focused on observing the trends of the New York Stock Exchange. The trading volume has not increased much."

Putting down the coffee in his hand, Carter brought up a somewhat unusual situation.

After Hitachi Manufacturing was listed on the New York Stock Exchange in 1982, its financing situation has not been optimistic until now. Of course, this is only in the United States. Hitachi's performance on the three stock exchanges of Tokyo, Nagoya and Osaka is very good.

.

"I heard from friends in Japan that Hitachi seems to be planning to be listed on the two Japanese stock exchanges in Sapporo and Fukuoka recently to broaden its financing channels."

"It won't be that fast, even if the situation is as you two young men expected. The federal government needs to take action, and it will take a year or two to negotiate with the Japanese, come up with a plan, and implement it. This matter will not be solved at all!"

Julian shook his head in amusement, looked at the two eager young men next to him, and then looked at Jim Rogers. As if to say, you don't care about your juniors?

Jim Rogers just shrugged and didn't answer.

"One or two years"

In the past environment, only product transactions required the use of Japanese yen, and unless a large number of runs occurred in the short term, there would not be any strong obstruction in the exchange of Japanese yen. But now, it is judged that the U.S. federal government will most likely politically

After putting pressure on Japan to force the yen to appreciate

It will be more expensive to exchange for Japanese yen in the future. So now, can you take advantage of the low level of the Japanese yen to exchange for more, and then sell it after it appreciates?

Nowadays, a large amount of currency is used to suppress the value of the yen, but it will also cause the amount of currency in circulation to increase greatly. And isn't this a precursor to another phenomenon?

Too much money chasing too few goods in the market

inflation!

The speaker has no intention, the listener has intention.

Two years later, wouldn’t that be the Plaza Accord?

Could it be that this Morgan report is just a prelude to, or a trigger for, the Plaza Accord?!

"I understand this, but before this big wave comes, I wonder if some small waves will come early."

This logic is easy to understand. As long as more investors know and believe that the Japanese yen will appreciate and rise! Then.

This will cause the exchange volume to rise sharply in the short term, and even directly trigger Japan's current exchange controls. For example, after a certain number of yen has been exchanged, Japan will suspend exchange exchanges.

"That's right, if there are no consequences for retail investors, purely institutions should not bet on this risk. Even if there is a short-term run on the yen, causing Japan to stop the exchange of yen, there will always be more or less yen still circulating in the market.

Some, don’t forget about Europe! The room for short-term appreciation may not be big!”

After the Plaza Accord, perhaps the public's attention was mainly focused on land prices and stock prices, but commodity prices. Carter believed that Japan's commodity prices must have skyrocketed during that period!

"Speculation?"

Moreover, foreign exchange is always a relative concept. Take the US dollar and the yen as an example. The appreciation of the Japanese yen means the depreciation of the US dollar. This is like a seesaw, or leverage!

"Speculation!"

"Oh? What little wave?"

Once this circuit breaker-like mechanism is triggered and Japan stops the outflow of yen, which means that the supply chain is cut off, then when there are still a large number of speculators in the United States who want to hoard these yen, those yen currencies will

Won’t it appreciate in value?

Most likely!

In today's environment where there are quantitative controls on the exchange rate of the Japanese yen to the US dollar, and due to the existence of a trade deficit, the United States is relatively short of Japanese yen!

Looking at Carter again, Julian seemed to have guessed something.

"Even if you have some inside information or some resources to hype up this wave of emotions, I still suggest you not to do it. Because, if I were the Bank of Japan, even if the government is forced to compromise, before the formal agreement is introduced,

I will definitely turn on the money printing press to maintain the low advantage of the yen. I will fight for as much time and space as I can for my own company!”

After thinking carefully about Carter's words, Jim raised an objection.

"I don't think it works. The emotional aspect of this matter may not be that big! In other words, except for some people in related industries who may be interested in this report, a large number of retail investors should not pay too much attention to this report.

One piece. Especially, there are not many retail investors in the foreign exchange market.”

"And the policy risks are too great. If Japan suddenly releases water, the high price range will be too short. The window period will also be extremely short. In such speculation, some gains outweigh the losses. A little delay may mean that a large number of days return to normal values.

Yuan currency is thrown into your hands! There may not be a book loss, but the time cost is wasted!"

Is the current situation of the US dollar reasonable?

"The additional issuance of Japanese yen currency is to keep the price of the yen at a low level and to help domestic companies gain a competitive advantage in the market. But in this way, these currencies"

"For example, the short-term appreciation of the yen, strictly speaking, is the short-term appreciation of the yen in the U.S. market!"

It’s also unreasonable!

The Federal Reserve, led by Volcker, an American ruthless man, has been raising interest rates crazily. Not only are the federal funds interest rates frighteningly high, but the interest rates on long-term U.S. Treasury bonds are also ridiculously high!

The ten-year treasury bond interest rate is as high as about 13% and peaks at more than 15%. You may not feel much by looking at the numbers alone. You can compare it with the interest rates in normal years, which are a few percent and a few percent.

This number is a bit scary!

High government bond interest rates attract a large amount of funds to flow back to the bond market. This will lead to a reduction in the number of dollars circulating in the market, that is, too little currency chasing too many commodities.

Deflation! A stronger dollar!

On both sides of this seesaw right now, the Japanese yen is undervalued and the U.S. dollar is overvalued. At this time, if Japan prints a large amount of currency, it will wait until the value corrects.

Carter is enlightened!

No wonder the Japanese chant the slogan "Buy America"!

For an island country as big as Japan, domestic demand cannot be that big at all. This domestic demand refers to both commodity demand and currency demand.

So now, if the Bank of Japan turns on the money printing press.

To find a way to maintain price stability means that there is a large amount of Japanese yen that cannot circulate in the Japanese consumer market. If it does not circulate in the consumer market, this money can only go to a few places:

Stock market, property market, and foreign investment!

A big net is quietly spreading
Chapter completed!