Chapter 429 Plaza Accord!
From June until the end of August now.
During these months, Finance Minister Noboru Takeshita spent almost half of his time in the United States.
Not only him, the finance ministers of Britain, France and Germany have also been gathering here to discuss currency and exchange rate issues.
In fact, their frequent appearances are also to inform the media.
What’s the wind blowing? That is, several major economies in the world have decided to cool down the US dollar.
Hey! Hey, you man! Why don't you stop it right now? !
Stop driving up the dollar, otherwise don’t say I didn’t warn you!
Well, this is mainly said to those speculators in the foreign exchange market.
Of course it would be best if we could lower the dollar exchange rate without spending any effort.
However, the opposite happened. During this period, the US dollar not only did not depreciate in the foreign exchange market, but appreciated instead.
Two months ago, the exchange rate of US dollar to Japanese yen was 1:250, and now it is almost rising to 1:260.
Obviously, the speculators hiding in the dark do not think that these countries can reach any substantive agreement.
After all, according to what the newspaper said, only the US dollar depreciated, while Japan, Britain, France and Germany all appreciated.
How is this possible? Other countries are not stupid.
So instead of believing it, people thought that these companies were just outwardly powerful but actually weak and had run out of tricks.
Speculators in the foreign exchange market have always been known for their audacity and recklessness, and they don't even take the local government seriously.
Because the foreign exchange market trading points are scattered, covering several major states in Asia, Europe, and America, they take turns opening the market 24 hours a day.
In addition, there is absolute freedom and no supervision, so even if government agencies want to do something, they have to follow the rules.
Therefore, in the foreign exchange market, national power and military power are of no use. Only market power and capital power are its driving force.
Because of these characteristics, the foreign exchange market attracts many large banks, central banks, institutional investors, currency speculators, companies, governments and other financial institutions.
The speculators who are against the United States are part of the above-mentioned institutions.
As for whether there are any domestic banks or financial institutions among the speculators, hey, guess?
Where is the world's largest dollar market? Of course, North America.
However, many things are tacitly understood by everyone and there is no need to delve into them.
But no matter what, if the US dollar continues to appreciate, it will be a blow to the US government.
Since media briefings don’t work, we have no choice but to take real action.
After several months of contact, Japan, Britain, France and Germany have basically reached a consensus on the depreciation of the US dollar and the appreciation of their own currencies.
Although the appreciation of the US dollar will bring certain impacts to the country's economy, the situation is stronger than people, and we have to compromise on this point.
However, everyone has no objection to the depreciation of the US dollar, but there is a lot of room for bargaining as to how much the domestic currency will appreciate.
According to normal thinking, countries with trade surpluses would of course hope that their currencies appreciate as little as possible.
A simple and rough understanding is that the appreciation of the local currency against the US dollar is equivalent to the discount on imported US products.
Compared to before, U.S. goods are discounted, so of course the U.S. people are buying more of them, which is good for the U.S.
On the other hand, it is not conducive to the export of domestic products.
Therefore, countries such as Britain, France and Germany do not want their currencies to appreciate too much, after all, they are countries with trade surpluses.
But unexpectedly, in recent consecutive communications, Japan's Finance Minister Noboru Takeshita has become unusually easy to talk to.
In the draft of the official agreement, the United States proposed that the currencies of the other four countries appreciate by 10% to 12% relative to the US dollar.
However, at the negotiation meeting, Takeshita Noboru took the initiative to tell US Treasury Secretary Baker that Neon could actually accept an appreciation of 10% to 20%.
This... Neon is suddenly so proactive that even the United States feels a little embarrassed.
Dog, you gave too much.
The reason why Takeshita Noboru was so confident was not only because of the domestic "strong yen" policy.
In addition, he already has the survey data on domestic industry and commerce, as mentioned before.
The ratio of the US dollar to the Japanese yen is between 1:155 and 1:180, and Japan 's export products can still withstand it.
So even if it appreciates by 20%, it is still 1:200. This exchange rate still makes Japanese products quite competitive.
In this situation, it would be a good idea to do the United States a favor and take a step back. This can not only reduce the trade pressure on both sides, but also make it easier to sell goods. Why not do it?
The three European countries were puzzled but secretly happy about Japan's initiative.
Currency appreciation, this is a very simple math problem.
As long as the yen appreciates enough, it doesn't matter if the currency of Ouzhou appreciates a little less.
After all, discount coupons require relative value.
For example, the yen and the mark both appreciated against the dollar.
The yen appreciated a little more, say 15%, while the mark appreciated a little less, say 5%.
Then the mark appreciated by 10% less than the yen, which is equivalent to the mark depreciating against the yen.
At this time, selling West German goods to Japan was equivalent to having a 10% discount coupon.
Although West Germany's exchange rate with the United States increased by 5%, on the whole, if the East is dark, the West will be bright.
Look at the adjustments between currency exchange rates, the game between countries is everywhere.
The negotiations between June, July and August were a game between the United States and the other four countries.
It’s just that because of Neon’s initiative, the difficulty of the game was greatly reduced, so everyone basically reached a consensus by September.
The final draft of the Plaza Accord stipulated that the currencies of Britain, Germany and France would appreciate by 10-12%, and Japan would appreciate by 10-20%.
Of course, this is the range of exchange rate changes proposed by the five countries. How it will be implemented will depend on market performance.
The next game will be between the five governments and the foreign exchange market.
In short, the first round has ended, everyone has reached a consensus and is ready to start signing the agreement.
On September 22, the finance ministers of the five countries gathered at the Plaza Hotel in New York.
The media reporters who had already received the news surrounded the place.
They don't understand professional knowledge such as currency or exchange rates, but they also know that this is good for the United States.
Facing the flash cameras of reporters, the finance ministers of the five countries all talked about the concept of globalization with smiles on their faces.
What this agreement is aimed at deepening the trade relations between the two parties, what globalized trade is the trend of the future, etc.
They seemed to be getting along harmoniously, without any of the intrigues that had occurred at the negotiation table before.
Especially Japan's Finance Minister Noboru Takeshita, who was laughing so happily.
It seems that once the agreement is signed, Japan will become the second pole in the world, and super beauty is just around the corner.
Because everything had been communicated in advance, at the public signing ceremony, everyone wrote down their names tacitly.
As the five people held up their respective agreement texts and showed them to the public, a new chapter in history began.
However, the Plaza Accord was just a .
The content basically just said that the five countries should work together to lower the exchange rate of the US dollar.
As for how much the reduction had been agreed upon previously, the communiqué itself did not mention a word about it.
The reason for doing this is that the five countries hope that speculators in the foreign exchange market will stand on their side.
The range of the dollar exchange rate reduction in the communiqué was deliberately blurred to make everyone feel that it was profitable.
This is the only way to attract more foreign exchange speculators to stand on the side of the five countries, and then work together to bring down the US dollar.
As mentioned before, the central banks of the five countries do not have any clout in the foreign exchange market, and they cannot force the US dollar to depreciate.
If the five central banks want to achieve their goals, they can only take action themselves and play games with investors in the foreign exchange market.
The foreign exchange market transaction volume in 1985 was at least hundreds of billions per day.
The five countries are prepared to mobilize 18 billion US dollars to fire the bullets within a month.
In terms of size, there is a gap in power between the two. Of course, the foreign exchange market is not all copying the US dollar. The transaction volume of hundreds of billions can only be said to be unclear about the enemy and ourselves.
However, facing thousands , the central banks of the five countries are not sure of victory.
At this time, they need more speculators to stand by them and sell the US dollar together.
This is the fundamental reason why the Plaza Accord does not specify the specific exchange rate range.
But the five countries overlooked one point: the market is never rational. The more ambiguous it is, the more likely it is to generate speculation.
In the end, it may even lead to excessive speculation, creating another unimaginable situation.
Of course, this is a later story. At this time, everyone’s goal is to devalue the US dollar.
However, it’s not that no one was aware of this. Paul Volcker specifically included the words “orderly depreciation of the US dollar” in the agreement the day before.
"Orderly depreciation" is the key point. It seems that there is no shortage of wise people with unique vision among the two parties who signed the agreement.
Unfortunately, neither the United States nor the other four countries paid any attention to these details.
The Plaza Accord has been signed, and now all we have to do is implement it according to plan.
After signing the agreement, Finance Minister Noboru Takeshita walked out of the Plaza Hotel and stood at the door with his hands on his hips, looking at the many reporters below with a slightly smug expression on his face.
"I can't help it. It's bound to go up. After all, my name is Deng (Sheng)."
Standing next to him, Toyoo Gyoten had a subtle expression, "You're right."
The character "登" in Takeshita Noboru is pronounced "noburo" in Japanese, which is the same as "升".
So the great Tibetan minister was making a pun here.
Being able to play with memes shows that you are in a pretty good mood.
It can also be seen from here that Japan is actually very happy to see the appreciation of the Japanese yen.
As mentioned before, Neon is a country with scarce resources.
If the Japanese yen appreciates and the US dollar depreciates, it will become cheaper to import large amounts of resources into the country in the future.
Exports are unfavorable, imports are favorable. Comparing the two and taking a comprehensive look, there is actually no difference.
The proud Noboru Takeshita and his accompanying officials went to accept interviews from the media.
When Shirakawa Feng, who was far away on the other side of the ocean, heard the news, he almost jumped up with excitement.
Is the big one finally coming?
"Quick! Quick! Arai-san, get all the funds moving.
Shirakawa Holdings and Kitato Bank must ensure that all accounts have sufficient funds before the 23rd."
What Baichuan Feng and the others have to do now is load the ammunition and turn on the safety.
The real time to start the attack is tomorrow.
Why? Because the central banks of five governments are preparing to sell dollars tomorrow.
In this second game, Shirakawa Feng decided to stand together with the five governments and buy the yen to rise! The US dollar fell!
