Chapter 243 Who makes money and who loses? (Please subscribe!)

Chapter 243 Who makes money and who loses? (Please subscribe)

The federal government's budget deficit has reached an unprecedented level, so the Reagan administration has to do something to reduce the fiscal deficit. Reagan borrowed money from Lin Yu this time to pull Lin Yu into this matter and use Lin Yu's money to create jobs. Although 5 billion is not a lot, it is enough to attract the attention of many people. You should know that Lin Yu is the most opportunistic person and is also recognized as the most toxic person. What would it be like to use money to invest in the United States?

Those big names may not be fooled, but Reagan doesn’t want them to be fooled either. Reagan wants those small and medium-sized companies. The more such a company is, the more beneficial it will be for the recovery of the US economy.

In addition, in order to resolve the budget deficit, the Reagan administration borrowed a large amount of government bonds from domestic and foreign countries. By the time of Reagan's second term, the private government bonds had increased significantly from 26 GDP in 1980 to 41 in 1989, the highest record since 1963. In 1988, the total treasury bonds totaled US$2.6 trillion, and the total amount of debt borrowing from abroad exceeded that of the country. The United States also transformed from the world's largest creditor country to the world's largest debt borrowing country.

It can be said that the current economy of the US government is considered good on the surface, but only they themselves know that the current US economy has some signs of economic crisis, so they try every means to borrow money and grab money.

This is why Japan's "Platform Agreement" has been caused. Since 1980, there have been two changes in the US domestic economy. First, the foreign trade deficit has expanded year by year, reaching US$160 billion in 1984, accounting for 3.6 of GNP that year. Secondly, the emergence of the government budget deficit. Under the shadow of the double deficit, the US government introduced international capital to develop the economy by raising domestic basic interest rates. The large inflow of foreign capital has caused the US dollar to continue to appreciate, and the US export competitiveness has declined, thus expanding to the crisis of the foreign trade deficit. Under the pressure of this economic crisis, the United States hopes to strengthen the foreign competitiveness of US products by depreciating the US dollar to reduce the

Trade deficit. In 1977, the Treasury Secretary of the United States Carter administration, Brummesa, made verbal intervention in the foreign exchange market based on the trade surplus between Japan and the former federal Germany, hoping to stimulate US exports and reduce the US trade deficit through measures to depreciate the US dollar. His speech led to investors' crazy selling of the US dollar, and the US dollar depreciated sharply against the currencies of major industrial countries. In early 1977, the exchange rate of the US dollar against the Japanese yen was 1 US dollar against 290 yen, and the lowest in the fall of 1978 fell to 170 yen, which shocked the US government. In the fall of 1978, President Carter launched a "Save the US dollar package"

, used to support the dollar price. From 1979 to 1980, the second oil crisis broke out in the world. The second oil crisis caused a sharp rise in US energy prices, and the US consumer price index rose accordingly. The United States experienced severe inflation, with inflation exceeding double digits. For example, in early 1980, the actual yield at the end of the year was negative. Paul Volcker took office as chairman of the US Federal Reserve. In order to curb severe inflation, he raised official interest rates three times in a row and implemented a tight monetary policy. The result of this policy was that the United States had an official interest rate of up to double digits and 20

Market interest rates, short-term real interest rates, that is, the actual rate of return after deducting inflation rose from an average of nearly zero between 1954 and 1978 to 3-5 between 1980 and 1984. High interest rates attracted a large amount of overseas funds to flow into the United States, causing the US dollar to soar. From the end of 1979 to the end of 1984, the US dollar exchange rate rose by nearly 60, and the exchange rate of the US dollar against major industrial countries exceeded the level reached before the collapse of the Brettonson system. The sharp appreciation of the US dollar led to a rapid expansion of the US trade deficit. By 1984, the US current account deficit reached a record 100 billion US dollars.

100 billion, this is just the fiscal deficit that appears on the surface. Coupled with the domestic economic situation in the United States, various data indicate that a new round of economic crisis is coming.

The US fiscal deficit has increased sharply and the foreign trade deficit has increased significantly. The US hopes to increase the export competitiveness of products through the depreciation of the US dollar and use it to improve the imbalance of the US balance of payments, but this hope is based on Japan's pain.

On September 22, 1985, the finance ministers and central bank presidents of the United States, Japan, the Federal Republic of Germany, France and the United Kingdom (G5) held a meeting at the Plaza Hotel in New York to reach an agreement to jointly intervene in the foreign exchange market and induce the exchange rate of the US dollar to depreciate in an orderly manner against major currencies to resolve the huge trade deficit problem of the United States. Because the agreement was signed at the Plaza Hotel, the agreement is also called the "Square Agreement".

But that was all later. Before the Plaza Agreement, the United States borrowed a lot of money from people, and most of them were wealthy people from all over the world, and then attracted businessmen to invest and increase jobs. It has to be said that this measure in the United States once eased the employment pressure in the United States.

Reagan was able to come to Lin Yu to borrow money because he was attracted by Lin Yu's influence in the world. Lin Yu has a good relationship with China and Britain, and has a relationship in Italy. In the United States, Lin Yu has a friendly relationship with the Rockefeller family's little Rockefeller, and has some relationship with other families. In addition, the most important thing is that Lin Yu has an indescribable relationship with the little princess of the Welf family, which is what really makes people value.

"Mr. President, I don't know why you asked me to borrow money? I'm very curious." Lin Yu said with a smile.

"Mr. Lin should also know the current situation in the United States, the government's fiscal deficit is serious, the domestic employment pressure is too great, and for some other reasons, the United States urgently needs a sum of funds to relieve domestic pressure. In addition, we also value Mr. Lin's influence in the world, so it is completely reasonable to ask you to borrow money." Reagan shrugged and said.

Lin Yu smiled and said, "Mr. President was joking. What influence can I have in the world. However, since Mr. President said that, I don't think I can agree."

Although 5 billion US dollars is a lot, it is not much for Lin Yu. The whole world knows that the current US government belongs to the Republican Party, and it is quite good to use 5 billion US dollars to show that its friendship is pretty good. Besides, the 5 billion US dollars is not a return. If you think about it this way, you can't tell who makes a profit and who loses.
Chapter completed!