Chapter 357: "Platform Agreement" Yin to make a theory? (Please subscribe! Please give me monthly tickets!))

Chapter 357: "Platform Agreement" yin conspiracy?

In 1971, after changing from a fixed exchange rate to a floating exchange rate, the dollar-yen exchange rate plummeted from 1:360 to 1:170. However, after President Carter announced the dollar protection policy in 1978, the exchange rate rose to around 1:250. During the Reagan administration, due to the continued rise in the US dollar, exporters obtained considerable returns through the exchange rate difference.

Before September 21, 1985, people were panicking about buying the entire United States.

After the announcement of the news of the signing of the "Platform Agreement", the whole United States was once in a hurry, especially those companies related to export products, which were even more happy. Before the signing of this agreement, the United States was the largest exporter. In 1985, it replaced the United States as the world's largest creditor country, and its products flooded the world. The crazy expansion of capital made the Americans exclaim that "will peacefully occupy the United States!"

Good and cheap goods have made many Americans unemployed, such as Detroit, the American car city, because of the competition for automobiles, a large number of workers have lost their jobs, which has caused dissatisfaction among many Americans.

So, when this news came out, although it was impossible to say that the whole of the United States was happy and excited.

But will the result be as big a blow to the industry as they thought?

No, at least Lin Yu knows, no, because history will prove this.

After learning about the United States, Lin Yu held his head with his hand, and imagined the situation a few years later. A dangerous curve appeared on the corner of his mouth. Thinking about the purpose of the Americans forcing the yen to appreciate, he suddenly felt as if the Americans were just sending money to him.

In this incident, the United States can not only curb exports to a certain extent in the manufacturing industry, but also allow the consortiums behind them to take the opportunity to make a fortune. On the surface, they are indeed the biggest beneficiaries of this time.

However, they absolutely cannot think that there is another person in this world who can not only make profits from exchange rate changes, but also estimate the extent of the appreciation of the yen and its absolute impact on the future. Therefore, Lin Yu has been destined to be able to eat meat in this game. As for whether the United States can drink soup, it may, of course, it is not possible. It depends on Lin Yu.

In fact, when it comes to the Plaza Agreement, Lin Yu had studied it for a long time in his previous life. Lin Yu studied economics and finance in his previous life, so when he was fine, Lin Yu always liked to study some classic examples, and the Plaza Agreement is exactly one of them.

Square Agreement? What is the "platform agreement"?

The simplest and intuitive and logical statement is: in the 1980s, the US economy recovered, the US dollar rose, and a large number of foreign products, especially from and Germany, were imported into the United States. Therefore, the American people believed that foreign products had squeezed out the domestic market of the United States and deprived the employment opportunities that "should" belong to Americans, resulting in a significant increase in the unemployment rate in the United States. Similar inferences put huge pressure on the Reagan administration through public opinion and Congress. They had to invite the financial heads of the world's five major economies (g5, the United States, the Federal Germany, France and the United Kingdom) to New York to persuade them to jointly commit to the depreciation of the US dollar. The understanding finance ministers of the five countries immediately agreed and issued a joint statement, namely the "Platform Agreement".

A few hours after the statement was published, the US dollar began a crazy depreciation process. The international foreign exchange market began to sell the US dollar wildly for two years, and there was still no sign of stopping, so that these five amazing gentlemen (or their poster) had to gather again to discuss measures to prevent the US dollar from falling further. This is the Louvre agreement reached in 1987, which is a later story.

After the "Platform Agreement", the Japanese yen and the Mark began to appreciate significantly. Since the implementation of the floating exchange rate system in 1971, the US dollar began to depreciate against the Mark and the yen. After the 1980s, the US dollar steadily strengthened. This slow-moving trend was interrupted again in mid-1985, and the Japanese yen and the Mark began to appreciate significantly. In about three years after 1985, the US dollar depreciated sharply. The appreciation level of the Mark returned to the level in the early 1980s, while the yen rose to a record high after the war. This is an important reason why the yen became the focus of the "Platform Agreement".

In fact, speaking of this, "lost decade" is not the fault of the "Platform Agreement".

After the Plaza Agreement, the economy began to stagnate. It is generally believed that the Plaza Agreement caused the economy to stagnate. However, it is far-fetched to blame the "lost decade" on the "platform agreement".

The biggest impact of exchange rate changes is not the output and input of products, but the flow of capital and the corresponding wealth effect. The economy is most affected by the "Platform Agreement" and also comes from the latter.

In the 1980s, compared with the huge transaction volume in the international currency market, the funds that the five governments participating in the "Platform Agreement" could call for public operations were extremely limited, and they were almost "swallowed by the market in the blink of an eye". To use the classic metaphor of Samuelson, the economics master before Lin Yu's rebirth, just like "the greatest king of mankind is unable to change the currents in the ocean", the government cannot interfere in the international currency market at will.

What's more, the various policies promised by the five participating countries on the "Platform Agreement", especially those measures linked to domestic financial and fiscal policies, have not been actually implemented and implemented in a substantial manner.

In fact, for a long time after the "Platform Agreement", the trade surplus with the United States not only did not decrease, but increased significantly. The appreciation of the Japanese yen did not open up a broad market for American goods, because the products had strong structural differences with the local American products and could not form price competition. Even after the collapse of the bubble economy and the most tragic era of the economy, there was no evidence that products, whether they were electrical appliances, automobiles, or intermediate machinery products, had lost their international competitiveness. Therefore, in terms of reducing the US trade deficit with Japan, the "Platform Agreement" was a complete failure.

Therefore, it is obviously not the fault of the "Platform Agreement". But there is also an indisputable fact: after the "Platform Agreement", the US dollar depreciated by more than 40% against the Japanese yen and the Mark. This change is not only huge, but also continues until the 21st century.

The only persuasive explanation for this issue is the so-called "slap theory". The core content is: the price of a certain commodity, especially financial commodity, in the market, may deviate from its "real price" for some reason, but it is still popular. But the bubble will eventually burst. The process of bursting may be very rapid. Fictionally speaking, the market is sometimes like "Fan Jin passed the exam", and it requires a big slap from Hu Tuhu to wake up. After the bubble burst, market participants often ignore their fear, which leads to a plummeting and avalanche of asset prices. For example, the bursting of the stock market bubble.

I don’t know who thought of the saying “slap in the face”. However, it is understood that the earliest statement came from American economist Krugman, who should be unlikely to get inspiration from Fan Jin.

According to this theory, the US dollar should have depreciated a long time ago, and the "Platform Agreement" only played a fuse "slap" role. Otherwise, if the decline of the US dollar is contrary to the market's wishes, then government intervention will be temporary and cannot last for too long. The reason is simple. The government cannot repeat the same market operations for a long time. Once the government stops intervention, the market will eventually return to its reasonable price range.

After the "Plaza Agreement", the US dollar fell rapidly. A large number of market participants sold the US dollar in irrational fear, which was why leaders of countries at the Louvre conference had to slap their other half in the face.

Who sets up the set, is it the United States or yourself

The "yin theory" of the Plaza Agreement is basically not worth refuting.

September 22, 1985. It was a practice for governments to choose Sunday to announce major news. Because the financial market was closed, the announcement of the news could give the market sufficient time to respond. September 23 was the autumnal equinox, which was a public holiday, while Europe and the United States did not rest. According to the then financial officer of the Otagita Province, Tomomi Oba, recalled that the President of the West German Central Bank, who represented West Germany at the time, believed that it was the first country to face the market after the "Place Agreement" because the Tokyo foreign exchange market was in the easternmost time zone. Later, I learned that the next day was a public holiday, and West Germany became the first market to start business. Peer was very displeased and believed that he had fallen into a trap laid in advance.

Even though Takeshita Do not take the initiative to propose to hold a square meeting, he was the most popular at this meeting. One detail is that in the G5 of the participating countries, the media specifically called the United States and G2. There were too many small episodes around Takeshita Do. For example, in order to keep the meeting confidential, Takeshita Do’s appointment with someone to play at a golf course near Narita Airport before going to the United States, and then flicked a shot straight to the airport and got on the plane wearing a golf jersey. The president of the Central Bank who was on the same plane wore a large mask to prevent being recognized by the media. At the press conference after the agreement was published, a reporter asked: "Why are the appreciation of the yen to be tolerated?" Takeshita Do’s answer was: "Because my name is 'Den'." ("Den" and "Sheng" are homophonic in Japanese).

It can be seen from this that it is better to say that the "Platform Agreement" is a big plan that the Americans slapped in the face, rather than a big plan that people have planned for a long time.

But it is obvious that the people are not benefited by the square agreement, and the consortium is the most benefited force.

However, it is obvious that they rarely counted Lin Yu, because Lin Yu, their planning was destined to be wasted.

After staying for two weeks, Lin Yu planned to go to the United States, but Lin Yu had not seen Evra for a long time. However, a sudden incident forced Lin Yu to change his plan to go to Southeast Asia.
Chapter completed!