Chapter 1366: The Abacus of the Yen's Appreciation

Fok Kin-ning quickly assembled a think tank on this side. After Xia Yu had reviewed the list, the meeting was held as soon as possible.

After three days of intense and meticulous research, the final action plan was released.

In Europe, the main body is the Bright Foundation, and the base is still in the UK.

The assets of the Bright Foundation in the UK do not need to be moved, and as much capital as possible is mobilised and invested in the stock market. At the same time, the reverse short position of the US dollar is taken, and after the pound sterling is returned, it is also invested in the stock market.

The companies in Canada and Australia also follow this method while ensuring stability.

In European countries outside the UK, while ensuring the safety of the company, they took out mortgages to the greatest extent possible, and took out loans in US dollars to obtain loans in US dollars, and invested the loan funds in the UK stock market, the French stock market, and the Italian stock market.

By the second half of 1987, Xia Yu then cashed out all this money and entered the island financial markets, which had doubled or tripled in size by then. Of course, Xia Yu did not say anything about this for the time being, but he just secretly kept it in mind.

In the United States, the main player was Polaris Capital, while other companies with no apparent connections included Bridgewater Associates and Tiger Management.

Because there were so many banks involved, it was necessary to ensure that there was secure capital, and that no single bet was placed.

So the bank's capital was first invested in buying gold to preserve its value, and then the rest of the capital entered the island country. Some only went long on the yen, while some went long on the island country's stock market.

The wholly-owned companies under Polaris Capital then took the vast majority of the liquid capital directly.

For those non-wholly owned companies, they went to suck the blood of other shareholders, lending the liquid capital to their financial companies at normal interest rates. The financial companies invested in accordance with the general direction, and the losses from the depreciation of the US dollar were borne by them, while they borrowed money to make money.

The Jiuding consortium, on the other hand, is acting even more resolutely.

Since the Hong Kong dollar is pegged to the US dollar at a fixed exchange rate of 6.1, most of the Jiuding consortium's assets are in Hong Kong dollars, and its situation is the same as that of Polaris Capital's US dollars. It is not as secure as Bright Fund's British pound assets.

Therefore, Xia Yu decided that in the next few years, the companies under the Jiuding consortium will change their development approach. Expansion will continue, but it will rely more on funds from banks outside the consortium.

As for the funds of these companies, they will be lent to the major financial companies under the Jiuding consortium as much as possible, and these financial companies will invest the funds in the island stock market.

As for domestic companies in the island country, it is even simpler: if they can get a loan, they will take it; after all, the interest rate is so low. If they can borrow US dollars, they will borrow US dollars; if not, they will borrow Japanese yen. The loan funds and their own working capital will all be invested in the stock market.

The major banks and Sunshine Credit Company raised deposit interest rates to attract deposits, and invested the funds in the stock market while ensuring the safety of the company.

Those real estate companies, on the other hand, increased their efforts to acquire land, using leverage to acquire land and other banks' funds to develop.

As for Xia Yu's Galaxy Fund, there is no need to say anything more, as all the tens of billions of dollars are ready to enter the island country.

...

The action plan was very detailed and the content was very long.

But in summary, there is one core.

One's own money is invested and increased in value by all means, while other people's money is used for investment and expansion.

After the action plan was formulated, the family office immediately cooperated with Xia Yu to dispatch various first-level companies worldwide.

Apart from the family office level, people like George Berkeley, Peter Lynch, and Julian Robertson did not know the overall plan, and only knew the action plans in their respective areas of responsibility.

As for the companies at a lower level, the orders they received were also fragmented tasks. On the surface, it appeared to be completely normal management decisions, and the possibility of leaks was reduced to an infinite degree.

Soon, each company began to take action, and huge amounts of capital began to flow through what could be described as the world's largest banking system.

And just as Xia Yu was taking action,

as time passed, the top echelons of the island's political establishment also made a clear decision regarding the devaluation of the US dollar after repeated studies and analyses.

That afternoon,

After the meeting, Deputy Prime Minister and Finance Minister Takekami Noboru went to the Prime Minister's Office with the results of the meeting and reported to Prime Minister Yasuhiro Nakasone.

'Takekami-kun, you're here, please sit!'

'Hi!'

After a slight bow, Takekami Noboru sat down opposite Nakasone Yasuhiro.

Without being told, the Prime Minister's secretary immediately brewed tea at the side.

'Mr Nakasone, the Ministry of Finance has just finished a meeting, and this time, everyone's opinions are more unified.'

Takeshita immediately reported to Yasuhiro Nakasone in a low voice.

The latter's gaze sharpened, and he sat up straight: 'Oh? Tell me the details.'

Takeshita immediately described the situation as it had been discussed at the meeting: 'The Ministry of Finance's opinion is to actively cater to the policy of devaluing the US dollar and allowing the yen to appreciate.'

'First, the US trade deficit has reached an all-time high, and one-third of it is with our country. Whether we agree or not, the US wants to devalue the dollar. If we cooperate, we are automatically restricting exports to the US and making concessions. If we don't cooperate, the US is likely to impose trade sanctions.'

'Since the beginning of this year, major US companies and associations have submitted more than 300 proposals to the US Senate and House of Representatives to sanction us!'

'And we rely on the United States politically and militarily. If the United States collapses due to its high fiscal deficit and trade deficit, then our backer will also disappear. Therefore, it is politically correct to appropriately meet the demands of the US government.'

'Second, we are already an industrial power, but we lack various basic resources. Oil is settled in US dollars. The appreciation of the yen against the US dollar is beneficial to our purchase of natural resources, strengthening our industrial manufacturing industry chain, and also beneficial to our domestic enterprises going abroad to expand through mergers and acquisitions worldwide.'

'Third, although the appreciation of the yen against the US dollar will hurt export-oriented enterprises, according to think tank analysis, as long as the appreciation of the yen is controlled between 10% and 20%, it will not have a significant impact on our large domestic export enterprises.'

'Especially for large manufacturing enterprises that consume relatively large amounts of natural resources, the appreciation of the yen will reduce the cost of industrial raw materials. Even if the yen appreciates by 20% against the US dollar, our products will still be price competitive.'

'The reason for the recommendation to control the appreciation of the yen to 10%-20% is to take into account the smaller manufacturing enterprises that are less reliant on imported industrial raw materials.'

'Fourth, our island nation is already the world's second-largest economic power. A strong island nation needs a strong yen to support it. We can take this opportunity to push up the yen's status in international transactions as much as possible. We don't expect to challenge the hegemony of the US dollar, but we can impact the status of the British pound.'

'These are all the opinions of the Ministry of Finance.'

After listening, Yasuhiro Nakasone nodded with satisfaction and said, 'Very good, the opinions of the Ministry of Finance are similar to my thoughts.'

'Our country's economy has reached a bottleneck in its development.'

'In 1978, our country's gross national product exceeded one trillion U.S. dollars, accounting for 11.8% of the world's gross national product.'

'But in the past six years, our GDP has reached only 1.32 trillion US dollars, and our share of the world's GDP has dropped to 10.83%.'

'This is partly due to our own factors, but a bigger factor is because the United States has continuously restricted us over the years.'

'Compared to the United States, during this time, our share has increased from 27.4% to 33.1%.'

'This time, the appreciation of the yen against the US dollar is a golden opportunity. As long as our domestic enterprises go global, the gross national product will no longer represent the true strength of our country!'

'The US can print US dollars to reap the world, and we can also issue yen to buy foreign assets with the influence of the US dollar.'

Takeshita Noboru laughed and agreed, 'Nakasone-kun, what you said is so reasonable.'

'Haha...'

Nakasone Yasuhiro couldn't help but burst out laughing.

'Take your time, Takeue-kun, but you need to take care of this matter. Communicate with the other four countries as soon as possible, and make sure nothing goes wrong.'

'This is the perfect opportunity for the rise of our great island nation!'

'Yes!' Takeue Noboru solemnly replied.