The Kyoto Bubble Era: It started with selling off hundreds of millions of property

1. How did the RB bubble economy form?

The signing of the Plaza Accord in 1985 means that the father of the United States forced his son to appreciate the currency. The so-called currency appreciation means that the yen is more valuable. In the past, 1 meter of gold = 240 yen, but now 1 meter of gold = 120 yen. So what are the consequences.

Advantages: The Japanese yen is valuable, and you can exchange the same amount of Japanese yen for more rice gold. Then you will tend to exchange for rice gold to spend, shop, and buy. Your money is better than that of other countries. Money is worth money and you can enjoy more when you go to that country.

Therefore, the most obvious thing about the appreciation of the yen is that citizens have become richer and overseas consumption has been stimulated.

Disadvantages: Exports are restricted, and all exported goods will be restricted, because to the importing country, their money is worthless. Originally, 1 meter of gold bought you a bag of rice, but now it costs 2 meters of gold, and they are unwilling. Bought.

As a result, for RB, which is a big manufacturing and exporting country and relies on trade for a living, those manufacturing industries will be very difficult to deal with, because after all, their products cannot be sold.

So for capitalists, I have more money, but my products cannot be sold, what should I do? Then you have to put money into investments, such as bonds, stocks, real estate, overseas investments, etc. The more money pours in, the bigger the bubble will be and the more powerful the false prosperity will be.

Conclusion: The yen appreciates - I have money - I trade stocks and buy houses - countless people trade stocks and buy houses (especially big capitalists), stock prices and house prices rise - I am richer - I continue to consume and invest - foam formation

Problems arising:

Housing prices in the stock market are so high that ordinary people cannot afford to buy a house.

The manufacturing, real-world, and export industries will collapse if they do not transform. The market is full of real estate, loan, and securities companies.

People are extremely consuming, and society has a serious money worship atmosphere. It seems that anyone can make money easily, and overseas consumption is huge.

Banks lend large amounts of money to individuals and businesses, allowing them to invest their money in the housing and stock markets, and then mortgage their houses to form new loans.

2. How does the consortium make money through bubbles?

The way for overseas consortiums to make money was to convert a large amount of rice gold into Japanese yen before the Plaza Accord (because the agreement did not limit the amount of exchange). At that time, for example, 100 rice gold could be exchanged for 24,000 yen, and then after the Japanese yen appreciated, it would be exchanged again. Come out, now your 24,000 yen can be exchanged for 200 meters of gold! Come and go, you just roll your money into the RB stock market and double your profit!

The news of the RB consortium lags slightly behind the overseas consortium, but it can still enter the market with the large amount of funds it controls, drive up the stock market and real estate market, and make money together with the overseas consortium.

The difference between the two is that the overseas consortium knew everything before the bubble and was well prepared; the RB consortium entered the market after the bubble occurred and relied on me to have enough money to make money.

There is an important question here: we did nothing (no research and development of technology, no production of goods, just the prices of things like land and stocks increased, and I made money by reselling them), so whose money did I make?

The answer is: all the leeks’ money that they didn’t have time to run away after the bubble burst, their lives and futures! They have to work all their lives to pay you back the money you earned during this period.

If the entire country suffers and a small number of people get rich, isn't it an overdraft of the country's life?

This is the strategy of American father.

Ideally, capitalists would do their best to make money and sell their assets for money before they pop the bubble.

People who sell slower will make big profits, small profits, no losses, small losses, big losses, and those at the bottom of the information chain will suffer big losses (leeks).

Then because too many people suffered huge losses, the manufacturing industry you relied on for a living all went bankrupt, and the country collapsed.

3. What impact will the bubble burst prematurely?

Neon in history, Mie Noyasu used the interest rate increase to forcefully burst the bubble in advance, so that no one in the entire RB was spared, and only overseas consortiums such as the United States were enriched.

Because rising interest rates will make it more difficult to get loans (higher interest rates make it harder to make money with loans), and the government controls land prices and the number of mortgage loans, borrowers will start to pay back the money one after another, which means they have to put themselves out there. The money is withdrawn (withdrawn from the stock market, real estate market, etc., usually the stock market is chosen first).

At the same time, rising interest rates will lead to less hot money, curb consumption, etc., which will depreciate the yen.

And Mie Noyasu's behavior caused the Japanese yen to temporarily depreciate, which will make these overseas consortiums the first to withdraw their investment!

They have less money, and each share earns the price difference just mentioned.

When the stock market bubble bursts, banks and companies will suffer huge losses on their books, and many companies will directly delist and go bankrupt.

Your stocks have been lost, your money is worthless, you can no longer afford the loan, you are in debt, you cannot afford the mortgage on your house, you have no desire to invest, and you have to sell your house. House prices will also fall.

House prices lag behind the stock market's decline.

Conclusion:

Raise interest rates, control the number of mortgages - the yen will depreciate - overseas consortiums are making less money, and they have to withdraw their capital and run away - it is also difficult to get loans, I have to pay back the money, my money is worthless, I will also divest from the stock market - The stock market plummeted, more people lost money and could not repay their loans - banks and companies collapsed with huge losses - the housing market also plummeted - and the national economy was doomed.

Problems that arise:

Forcibly bursting the bubble means instant death.

The ideal state of the RB consortium: to slowly withdraw capital together with overseas consortiums, gradually reduce the stock market and housing market, and continue to harvest leeks. In this way, the RB economy will be greatly damaged, but it will not be completely destroyed.

The result is that the consortium and some upper-class people have become rich, and the people and the country have suffered huge losses, but the country has not died. Anyway, the workers can continue to work and create value.

Boil the frog in warm water, let the bubbles expand, and then slowly burst them, which is best for the RB consortium.

If Mie Noyasu forcibly exposes it, only the overseas consortium will become rich. At this time, regardless of whether the RB consortium follows suit and withdraws its capital, RB will be finished.

And because of Mie Noyasu's behavior, they were unable to react and suffered huge losses. Therefore, the consortium and the government would try their best to rescue the market and delay the collapse. Otherwise, the consortium would also withdraw at this time and RB would be gone.

After all, they cannot retreat as unscrupulously as the overseas consortium. No matter how much mess the other party leaves behind, the consortium and the government will have to fill it.

4. Is what Mie Noyasu did right or wrong?

On the surface, it seems that it is to let RB commit suicide directly and the economy collapses, but in the long run, it is indeed much better than letting the bubble expand and finally being boiled in warm water. But is the reason why he exposed it related to the overseas consortium, the internal struggle of the RB consortium, the Ministry of Finance and Japan? It is unknown whether it is related to the silver struggle.

Judging from the fact that he is still alive, he should have the support of the majority.