Chapter 1154 Plaza Agreement 2
Since everyone has no objections and has expressed full cooperation with the U.S. Treasury Department’s resolution. Then there is nothing to be polite about. Japan and West Germany are both extremely rich. If they don't take advantage of this moment to get more out of their wealth, they may not necessarily encounter such good opportunities in the future.
The United States surpassed the United Kingdom and became the world's economic hegemon, which itself is not very glorious. In fact, this is normal. After all, capital has always been bloody.
James Baker: "Since you all have no opinions, I will express the opinions of the United States."
"Finance ministries and central banks of various countries should verbally intervene in the dollar exchange rate."
"The U.S. dollar against the Japanese yen currently fluctuates around 250 yen per U.S. dollar. Within 3 months after the signing of the agreement, the U.S. dollar should fall to around 200 yen per U.S. dollar, a drop of 20%. And then by analogy, ensure that the U.S. dollar is consistent with the Japanese yen. The exchange rate ratio of yuan is 1:120.”
Hearing this, Japanese Finance Minister Noboru Takeshita almost stood up. Executing entirely in accordance with the American plan will mean a substantial devaluation of the U.S. dollar, and the existing U.S. dollar wealth in various countries will also be reduced.
Japan is the world's largest creditor country, and it purchases the most U.S. Treasury bonds. In other words, the US dollars earned by Japanese companies over decades of hard work have shrunk by half in the blink of an eye; who can bear this? If he really signs an agreement according to these conditions, it is estimated that the heads of major domestic companies will beat him to death when he returns.
The appreciation of the yen is a good thing, but it cannot appreciate too much all at once. There should be a smooth transition. A substantial appreciation in a short period of time will inevitably increase domestic costs, which is very detrimental to exports. The island country’s own market is limited and its own resources are limited. How to survive if you lose your competitive advantage in the international market.
Therefore, we absolutely cannot agree to it, and at least a discount must be made during the implementation process.
The Germans are not having it easy either. The depreciation of the US dollar against the Japanese yen means that the German mark will also appreciate. Fortunately, the Germans already have a response strategy, but it is difficult to implement it.
Although it is very difficult, as long as it succeeds, it also means that Germany's strength will make a qualitative leap. At this time, when Germans deal with international relations issues, they definitely belong to the existence of their little daughter-in-law. No one dared to offend, and the United States and the Soviet Union did their best to meet their demands.
Seeing that everyone was silent, Takeshita Noboru was really angry. Can't we unite and make the Americans a little scrupulous, at least not so blatantly? What is the difference between this moment and direct robbery?
They are all in a state of being unconcerned with matters that have nothing to do with themselves. Isn’t this putting Japan on fire?
Five years ago, the world's mainstream media reported that Japan's economic scale would surpass the United States by the end of this century and become the world's largest. This has led to some expansion in Japan, believing that as long as the economic scale increases, the right to speak will naturally increase. Noboru Takeshita is no exception. He is Japan's finance minister, not a subordinate official of the United States. Others could remain silent, but he could not. At least we have to fight for Japan. If it doesn't work, we should think of other ways.
Noboru Takeshita: "To ensure that the U.S. economy does not collapse, it is not just an exchange rate issue. Hasty intervention in the exchange rate will seriously hinder the development of the world economy; therefore, it should be considered from multiple aspects."
"The yen is steadily appreciating, and Japanese, West German, French, and British companies can invest in the United States. Economic development cannot be entirely determined by the government, and companies must also play a role in it."
"The scale of the domestic economy increases and the unemployment rate of the people decreases; the economy will naturally get better."
After hearing Takeshita Noboru's words, the finance ministers of the other three countries wanted to stand up and beat him. In the past, the United States invested, but he could not figure it out. Unlike Japan, the three countries do not have so many companies developing abroad. Moreover, companies that invest in the United States must be high-end, sophisticated, and cutting-edge.
It is estimated that no one would dare to build a factory in the United States for serious polluting companies. That would be no different than seeking death.
This time, we mainly want to take advantage of Japan and West Germany; this is the tone set by the United States, Britain and France long ago.
French Finance Minister Pierre Berger knew that he was asked to express his attitude, so he said directly: "It is a good choice for companies from various countries to invest in the United States. But water from a distance cannot quench the thirst for nearness, and investing in and building factories requires a process."
"If countries are allowed to use funds to boost the growth of the U.S. stock market, property market, or futures market, the data will be good-looking at most, but it will have no practical significance for U.S. economic growth. At least the American people will not get benefits, and the capital must come here to make money."
“No one’s money comes from the strong wind, and it cannot be given away in vain.”
Hearing this, the West German and British finance ministers agreed very much. It takes a process to invest here. At this time, the Americans' intention is very clear, and it must bring benefits in the short term.
British Finance Minister Nigel Lawson echoed: "What Minister Berger said makes sense. The most effective way in the short term is government intervention in the exchange rate."
"As for corporate investment, we are just the Minister of Finance. It is even more difficult for us to intervene in matters that neither the head of state nor the prime minister can intervene and decide. Enterprise development requires a high degree of freedom, and the government plays a more supportive role and must not interfere. That would It is very detrimental to business development and may even lead to a rebound.”
Among the finance ministers of five countries, the United States is the well-deserved leader. Japan and West Germany have sufficient economic strength; as for France, they are not weak in either economic strength or military strength. In comparison, the former empire on which the sun never sets appears to lack stamina. If he doesn't brush up his presence, no one will take him seriously in the future.
The Falklands War made the British see the reality clearly. It takes the whole nation to deal with an Argentina; and winning is very difficult. This is also the reason why they made concessions on the Hong Kong issue. They feel that if they confront China with real swords and guns, they will definitely not be their opponents.
Hugging the thighs of the United States has become a true portrayal of the British after World War II. Although it sounds a bit embarrassing, it has nothing to do with national security.
West German Finance Minister Gerhard Stodenberg thought for a moment and said: "Since the U.S. government wants the dollar to depreciate, the Federal Republic of Germany will fully cooperate and can use administrative means to intervene if necessary."
The German's statement left Japanese Finance Minister Noboru Takeshita with no ability to resist. When did the Germans have such soft bones? No wonder they were defeated in World War II. There is no reason to be invincible by forming an alliance with such a country.
There is no point in resisting anymore. At this time, we must act according to American orders. If he really wants to break up with the Americans because of this matter, he will definitely be handed over as a scapegoat.
Noboru Takeshita: "Since everyone has this idea, Japan will try its best to cooperate."
There is room for truth in what he said, but it may still be difficult to accept it for a while. No one's money comes from the strong wind. It is really unacceptable to pay for the mistakes of Americans for no reason.
Now that the finance ministers of the five countries have reached a consensus, they must sign an agreement.
It was from this time on that the five governments jointly intervened in the foreign exchange market to make the U.S. dollar fall in an orderly manner against major currencies in order to solve the huge U.S. trade deficit. Because the agreement was signed at the Plaza Hotel, the agreement was also known as the "Plaza Agreement." The agreement stipulates that the yen and mark should appreciate significantly in order to restore the overvalued dollar price. After the signing of the "Plaza Accord", various countries began to sell US dollars, which then led to a selling frenzy among market investors, leading to a continued substantial depreciation of the US dollar.
Looking at the development of Japan's economy in the past thirty years, the Plaza Accord in 1985 was a turning point. Some analysts pointed out that after the Plaza Accord, Japan's export competitiveness was severely affected by the appreciation of the yen, and its economy has been in slump for more than ten years. Even in the economics community, a considerable number of people believe that the Plaza Accord is a huge conspiracy laid by the United States to bring down Japan.
But it’s useless to say anything now. You have to agree even if you don’t want to. Americans don't give you a chance to refuse at all. At least Takeshita Noboru doesn't have the capital or courage to refuse.
The goal has been achieved, and as a host, even if the economy is difficult, we cannot be too stingy. The U.S. Treasury Secretary asked the hotel to start preparing a buffet. Today is definitely a day worth celebrating. The United States has achieved all its goals. As for how much Japan and West Germany would lose as a result, Americans have never considered it.
James Baker was even more high-spirited and finally gave an account to President Reagan; he even gave an account to major consortiums and companies in the United States. Although this achievement cannot directly affect the development process of the United States, it can at least leave his name in history. There is definitely a chance to impact one of the most accomplished Treasury secretaries in the United States. This is an amazing honor.