Author: quiet thoughts

Neon and the United States jointly signed a currency report aimed at further accelerating the opening of Neon's financial market.

What does that mean? It means that Neon will be fully integrated with international standards in the financial industry, such as banking, stock markets, securities markets, insurance, trusts, futures, funds, etc.

In layman's terms, there will be fewer and fewer restrictions on overseas capital entering Neon in the future.

Perhaps in the future, the number of purely foreign banks in Tokyo will explode in a short period of time.

As for such financial liberalization, it was only through the efforts of many parties that the agreement was reached.

From the outside, before the 1980s, Neon's financial system required the implementation of strong financial administration, mainly indirect finance and the main banking system.

On the eve of Hongchuan Kaede's acquisition of Hokuto Bank, Professor Yamada also explained this point to him.

That kind of financial system is jokingly called the "escort fleet" model outside the industry.

It provided guarantee for Neon’s economic recovery and development in those decades, and also shaped the post-war myth of Neon’s “bank not failing”.

However, since the late 1970s, especially since the 1980s, the international environment has undergone significant changes.

The United States promulgated the "Financial System Reform Act" to accelerate the opening up of local finance.

At the same time, it also begs other countries to open their capital markets. Neon, which has always been in a vassal relationship, is naturally outside the scope of its goals.

In addition, with the large-scale export of electronic products such as automobiles and home appliances, Neon's overseas corporate strength is also constantly increasing.

The club's own funds continue to increase, and financial institutions are facing a situation of excess funds and a narrowing of the market.

If you say it is popular, then the bank will have too much money and cannot even lend out a loan.

As for why there is such a phenomenon, it is because everyone is not short of money.

The income from the North American market has brought a large amount of funds to the company. Even if the funds for various projects such as R&D and investment are included, the money in my own pocket cannot be spent all.

For example, the club in front of Hongchuan Kongguaizhi has been buying land in batches recently, so why would it think of going to the bank for a loan?

So, what should financial companies represented by Mitsui, Mitsubishi, and Sumitomo do? If you have too much money, just spend it. Otherwise, how can banks make profits?

Since companies outside the group do not want loans, then invest overseas. There will always be companies in need of loans in the vast overseas market. No matter how difficult it is, it is okay to participate in the investment.

In short, only when the money in the bank flows can it bring profits to the bank.

But at this time, Neon's various conservative financial policies were stumbling blocks. The chaebol's funds also faced various scrutiny if they wanted to go overseas.

Are financial institutions represented by chaebols jointly seeking government lending financial supervision and accelerating financial liberalization?

That is the external reason why the Neon government signed a financial liberalization agreement in May.

Chaebol, perhaps we can also call them capital.

When their own interests are at stake, they will become persuasive and force the government to issue relevant policies and laws.

If there are external factors for financial liberalization, there will be external factors.

As for where the external cause comes from, of course it is an American father.

From the 1970s to the 1980s, the United States experienced two oil crises and suffered severe inflation.

Although after Volcker became chairman of the Federal Reserve in 1979, he continuously raised official interest rates, which allowed the United States to completely overcome the impact of inflation last year.

But a series of measures will also have another impact, which is the appreciation of the US dollar.

From 1979 to next year, that is, 1984, the US dollar appreciated by as much as 70%.

The surge in the U.S. dollar is not conducive to U.S. product exports, especially manufacturing exports, which have been severely hit.

According to the international news Hongchuan Maple learned, the U.S. fiscal deficit may reach as high as 100 billion U.S. dollars next year.

The main reason for this is the trade deficit of the United States, Britain, Germany, Gaul and other countries.

There is no doubt that among those countries, the United States has the largest trade deficit.

According to statistics, Neon predicts that the U.S. surplus will reach more than 40 billion U.S. dollars next year, accounting for almost 35% of the U.S.'s total deficit.

The long-term trade surplus also caused Neon's GDP to soar from US$44.3 billion in 1960 to US$1.123 trillion in 1984.

With an increase of nearly 25 times, there is no doubt that the development speed of neon in those twenty years far exceeded that of the United States.

Of course, neon's export trade also relies heavily on the United States, which can also be seen from the fact that Hongchuan Electric's annual overseas revenue is three times that of the domestic market.

Because the trade surplus has brought a large amount of tax revenue, the foreign exchange reserves held by the Neon government have increased significantly.

Most of that money was used to purchase U.S. government bonds, so that created an interesting situation.

The United States sold a large amount of national debt due to its fiscal deficit, making it the world's largest indebted country.

Because Neon's trade surplus and foreign exchange reserves have increased, most of the money has been used to buy U.S. government bonds, so Neon will become the world's largest creditor country.

Neon, who had been following him in the United States as his little brother, now has the money earned from him.

Then turn around and lend it to him, and then become his biggest creditor.

Is that so intolerable?

It doesn't matter if the development speed is fast, after all, the starting point is low.

But now that his own financial deficit is almost gone, I am constantly sucking blood from him.

His American father didn’t teach me a thing, and I almost forgot who was the dog and who was the master.

In response to the wave of trade protectionism in the United States, the U.S. government is seeking to open up its capital markets and achieve financial freedom.

That would be the external cause of Neon’s financial liberalization. The Neon government compromised due to the combined efforts of foreign and domestic forces.

Of course, the report signed now is just a warning, and the real storm will come next year.

Opening up the financial market is one of the steps. In the final analysis, it is the trade deficit problem that needs to be solved.

How to improve the export competitiveness of U.S. products? Of course, it must not depreciate the U.S. dollar.

At the same time, it would be better if we further restrict the export of products from Neon, Germany and other countries.

By working together on both sides, the U.S. government's fiscal deficit problem will soon be solved.

Of course, that's something to talk about later.

At this time, the manufacturing industry in the United States and abroad is already collectively lobbying the government to investigate or restrict neon-related products.

If you say it's red, there will be no sanctions.

So at this moment, even the former Minister of International Trade and Industry, Urye Eil-woo, is trying his best to persuade Congress to independently restrict Neon’s semiconductor exports.

But it was already too late. The storm did not come overnight.

Its condensation started a long time ago.

The general trend of the times, the wheel of history, and sometimes a country can just follow the trend.

"Arai-san, starting from tomorrow, Hokuto Bank will also speed up its international business layout.

In addition, they also ask for more preparations regarding overseas accounts." Hongkawa Kaede handed the newspaper in her lap to Yu Arai.

After looking at the appearance, a flash of understanding flashed in the latter's eyes.

"He will keep an eye on that aspect personally."

From Hongkawa Kaede's sometimes shining, sometimes cautious eyes, Arai Yu saw something unusual in it.

"Wrong. Regarding the foreign exchange market, Beidu Bank will also open relevant accounts in New York, London, Frankfurt, Xiangjiang, Lijiapo and other cities as soon as possible."

The modern foreign exchange market has developed sufficiently since the 1970s.

At that time, the Bretton Woods system gradually collapsed, and the exchange rates of various countries gradually converted from fixed exchange rates to floating exchange rates.

Because changes in exchange rates also bring about financial interest differentials, there is also a foreign exchange market.

The huge trading volume of the foreign exchange market has made it the world's largest asset class and the world's most liquid market.

And because the foreign exchange trading city is geographically dispersed, it operates 24 hours a day.

If the foreign exchange market is clear, I think it is the closest to a perfectly competitive market.

Even if the central banks of various countries sometimes intervene in foreign exchange, it still cannot change that fact.

Only a market with sufficient operational freedom can facilitate Donglai Beidu Bank to do things.

After hearing Hongkawa Kaede's explanation, Arai Yu became more and more certain that there was something going on.

"President Hongchuan."

Hongchuan Kaede interrupted his question by swinging her leg, "Arai-san, he knows what I want to ask. But if the time has not come, they just need to be prepared."

It seems that core secrets are involved. No wonder it has been visited by the royal family and the Ministry of International Trade and Industry recently.

It turned out that the government was personally involved, and since it involved outside information, Arai Yuya stopped asking any more questions.

I believe that more specific news will be conveyed to me by then, and that will be the time for him to attend the Arai Yutaka Arena.

Yu Arai, who admitted that he had never known outside information, suddenly became more secretive and stopped mentioning what happened just now.

While Hongchuan Feng was worrying about his own bank, Hongchuan Electric's new generation handheld ODS was also released as scheduled.

The handheld game console, known as the third generation, attracted widespread attention from society upon its launch.
To be continued...