205. gale
Korea has continued to grow rapidly from the mid-1980s to the present, 1995.
In the background, the sacrifice and efforts of the people who worked hard despite the low wages played a big role, and the ‘Plaza Agreement’ between Japan and the United States played a major role.
The Plaza Agreement refers to the discussions held at the Plaza Hotel in New York by the finance ministers of the five countries of the United States, Japan, Britain, Germany, and France in 1985. To put it simply, the values of the Japanese yen and the German mark were devalued. It was an agreement to raise the dollar and lower the value of the US dollar.
As a result, the value of the yen increased by 8.3% in one week, and doubled two years later in 1987.
As the United States, which imported a huge amount of goods and home appliances from Japan, the ability to purchase Japanese products was reduced by that much, and thanks to this, Korea, which was still adopting a fixed exchange rate system, was able to reap benefits.
And from then on, Japan slowly begins to sink, continuing the beginning of the Great Depression.
‘Of course, I applied the brakes to some extent now.’
On the plane heading to Japan, Hoyoung thought while looking at the clouds outside the window at a lower height than the plane.
According to its original history, Japan in 1995 was the time when the bubble collapsed and it had to show the worst economic growth rate and unemployment rate ever.
However, the worst situation was fortunately avoided as Ho-young saved banks that should have gone bankrupt by releasing foreign currency, and Japanese large corporations lined up to send money to the country because of Ho-young’s aggressive investments.
“senior. Have you studied the economics I mentioned?”
“Oh no, don’t talk. What’s so complicated… Although I am running Amman business, I am comfortable with Gongdori.”
Ho-young was with Kim Joo-jung after a long time.
The other day, when I took over a bank and numerous companies in Japan, the person who was entrusted with the business was Kim Joo-jung, so I went to Japan today.
“Why do you do that when you are doing well? haha.”
“phew. I have to work hard to not catch my ankle, what should I do?”
Ho-young had asked Kim Joo-jung to study the Plaza Agreement and the world situation after that, and Kim Joo-jung said that she was sick, but she had been studying steadily, so she already had an understanding of this matter.
“What do you feel the most about while studying?”
“me? Well···. In fact, what I felt while looking for it was… This agreement was a really crazy opportunity for us. At this time, if the value of the yen had not soared, Korean exports would not have been exported to the United States as they are now.”
Hoyoung nodded slightly.
“You know me very well. Thanks to that, the current yen-dollar exchange rate has fallen to almost 100 yen. It is likely to go down further in the future.”
“So. But what I don’t know is what’s next.”
“What next?”
“Why did I have to study this? And why are we going to Japan?”
Hoyoung smiled.
If Kim Joo-jung had heard the story without any background knowledge, he would have had to explain everything from beginning to end, but now he could speak simply.
“If a reverse plaza agreement is reached, how will it affect us?”
“Reverse Plaza Accord?”
“yes. To put it simply, if an agreement is made that lowers the value of the Japanese yen and raises the dollar.”
Kim Joo-jung couldn’t hide her bewildered eyes for a moment.
Because it was something I hadn’t even thought of.
“The Plaza Agreement is an agreement that the United States signed to secure export competitiveness. But why break it, no… Do you mean to go beyond breaking and do the opposite?”
Kim Joo-jung’s suspicions were valid.
This is because the United States, a huge capitalist country, had no idea why it would sign an agreement against its own interests.
“The justification is simple. Are you stopping this huge yen appreciation phenomenon and bringing about Japan’s financial crisis?”
“right···. Because we were able to bring banks and corporations over to us because of it.”
“To stop this financial crisis and prevent the Great Depression from spreading around the world. That is the cause of the United States.”
Even after Hoyeong’s words were finished, Kim Joo-jung did not loosen her frown.
“That’s a cause, sounds like there’s a real cause, right?”
“Oh, that is correct.”
Hoyoung made a pleasant expression.
Like Kim Joo-jeong and Lee Jin-chan… Hoyoung felt good when he talked about this with his seniors.
It’s always been fun to talk with people who have the ability to get to the point.
Hoyeong put on a serious expression once again and continued.
“The United States is experiencing rapid economic growth in decades. It’s because the IT industry started to boom, centering on the PC industry. Thanks to the PC industry and IT devices, the manufacturing industry is also booming, and the scale of the value-added industry is growing day by day.”
“right. Sales of H&H and Hermes, both of which have entered the US, are increasing day by day. Dell Computer, HP, and IBM are also recording astronomical sales.”
Hoyoung nodded.
Kim Joo-jung was also well aware of the current US market situation.
“The United States does not want to pour cold water on this rapid economic growth.”
“ah!”
Even though Hoyoung had said this far, Kim Joojeong had a face that realized something.
Hoyoung laughed inwardly and continued.
“Japan is on the decline, but it still has a huge market that cannot be ignored. If a financial crisis occurred in Japan, it could not block the economic growth of the United States, so the United States cannot stand by and stand by the Japanese financial crisis.”
“That’s why I’m trying to keep Japan from collapsing…!”
“Exactly.”
The current U.S. Treasury Secretary, Robert Rubin, was from Wall Street and is considered the most outstanding Treasury Secretary in American history.
And that brilliance could simply be said to be someone who knew what was in the best interests of the United States.
He always had something to say.
‘The United States benefits only when the dollar becomes stronger.’
Rather than lowering the value of the dollar to obtain small profits in manufacturing and trade, the strategy was to increase the value of the US dollar to make the dollar the central currency of the global economy, and as a result, to bring the center of the world to the US.
Ultimately, this argument was that the United States should strategically focus on the financial sector rather than manufacturing.
And one of the reasons was that the trade deficit would be resolved after the Plaza Agreement, but it was not resolved at all.
“Then, as opposed to the plaza agreement, the inverse plaza agreement would benefit Japan reflexively enormously.”
“On the contrary, our exports will be hit hard by the weak yen. Still America… No, even in Korea, there will be more consumers who would say they would use Japanese products for the same price.”
Kim Joo-jung trembled.
Thinking about the impact this agreement would have on the Republic of Korea made me unknowingly shudder.
“therefore···. What can we do in Japan now?”
“We have to stop it.”
“What?”
“The Station Plaza Agreement.”
Hoyoung said with a nonchalant expression.
It was a calm expression, like when you said you were going to play next door.
“how?”
“When you go to Japan, senpai, please go around our bank and set a policy of limiting loans for a while from now on.”
“and?”
“And tell companies that there will be other routes of investment. Last but not least.”
“much?”
Hoyoung said with a spleen expression.
“Please spread the rumor to the stock market that ‘Gaia Investment’ will invest in companies that do not take loans from the bank.”
.
.
.
a few hours later.
Hoyoung was sitting face-to-face with Japanese Prime Minister Kiichi Miyazawa in a hotel suite in Tokyo.
Originally, he should have taken responsibility for the collapse of the Japanese economy long ago and resigned immediately, but thanks to Ho-young, he was re-confidenced and was still able to stay in this position.
“Hoyoung-sang…. Of course, I know very well how much you have been of great help to me and to Japan. But it is unreasonable to tell them not to sign the agreement.”
Prime Minister Kiichi, who had been briefed by Hoyoung on the agenda to be discussed at the G7 summit, finally opened his mouth after pondering for a long time.
In fact, Prime Minister Kiichi already knew about it.
Even if an agenda comes up at a summit meeting, there is no such thing as a first talk on the spot and a decision right there.
It is safe to say that the G7 summit is a kind of show where countries have already decided on the outcome through countless discussions before the main meeting begins, and take action accordingly.
And, of course, Prime Minister Kiichi had no reason to reject the agreement.
“Why?”
“I···. He is the prime minister of this country. You told me not to sign an agreement that would absolutely benefit the national interest. I think Hoyoung is an outstanding person, but I think he is just as reasonable. I hope you will understand what I mean.”
Hoyoung carefully examined Prime Minister Kiichi’s face and expression.
Hoyoung saw only one thing.
Is Kiichi really trying to make a choice for Japan, or is he trying to betray himself like a bat?
It was because he thought that the latter might be the case due to the characteristics of some Japanese people Hoyoung knew.
But, fortunately, there was no sign of that.
He seemed to think of it as a choice for his country, where he had lived his whole life and will live until the day he dies.
‘This is good enough.’
Hoyoung let out a sigh of relief.
Even if it was the latter, it is not that there is no way.
Even if there was no cooperation from the Japanese government, there would have been more if we found a way to block the IMF as one Korea.
But it would have been a longer and more difficult way back.
“Prime Minister.”
Hoyeong called Prime Minister Kiichi and looked at him.
“Do you really think that this treaty, which lowers the value of the yen and raises the value of the dollar, will bring enormous benefits to Japan?”
“That’s right.”
Prime Minister Kiichi had a confident face.
Currently, thanks to the collapse of the bubble economy, Japan’s domestic market has long since been hardened, and it has relied on exports.
However, the yen-dollar exchange rate was close to 100 yen, and there was a high possibility that the 100 yen level would collapse soon.
In the meantime, even if the value of only 150 yen fell through this agreement, the price of Japanese products would be reduced by 30% from the point of view of Americans even by simple calculation, so it was obvious that exports would increase.
“There is a saying. If you chase immediate gains, you end up missing something big.”
“I beg your pardon?”
“It is as you have heard. If you make that choice simply to increase exports, the spear will eventually come back and stab the Japanese economy.”
Prime Minister Kiichi did not have an easy answer.
It was because I didn’t think that Hoyoung was saying anything in vain.
After thinking for a while, he struggled to open his mouth.
“Explanation… May I ask for an explanation?”
Hoyoung chuckled and laughed.
I thought Prime Minister Kiichi would definitely listen to the reason.
“If the value of the yen falls, almost all Asian countries that depend on exports to the United States will see current account deficits.”
Prime Minister Kiichi nodded.
It is said that Japanese products are selling well, because it means that products from other countries are not selling well.
“If that happens, short-term external debt will increase in the country to preserve the current account balance. But will borrowing foreign debt bring back the current account balance? will never go back And the dollar exchange rate will go up endlessly on the contrary. In order to defend the exchange rate, the remaining foreign exchange reserves will be exhausted again. If that happens, the short-term foreign debt will no longer be able to be repaid, which will eventually lead to the country’s foreign exchange crisis.”
Kiichi’s eyes widened in shock.
“Then will that be the end? Absolutely not. The huge capitals that were investing in the country of foreign exchange crisis will inevitably lose money. If that happens, they will try to rob their hands by quickly converting the remaining money into dollars as soon as possible. And the sentiment of such investors will spread to other Asian capitalists who are experiencing a similar situation. It’s like an epidemic.”
Hoyoung added a decisive word to Kiichi, who was already unable to keep his mouth shut.
“Southeast Asia, which has no supporting capital, will go over first, and then it will gradually move over to our East Asia side. If Korea and Taiwan fall… Where will it be next?”
“Japan···. I guess.”
Hoyoung nodded.
