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February 1987. Pen "Fun" Pavilion www.biquge.info

The finance ministers and central bank governors of the United States, Britain, France, Germany, Japan, Canada, and Italy reached an agreement at the Louvre in Paris to adopt joint measures to strengthen close coordination and cooperation in both domestic macroeconomic policies and foreign exchange market intervention, so as to stop the decline in the value of the US dollar and maintain the basic stability of the US dollar exchange rate.

In the two years or so since the Plaza Accord, the U.S. foreign trade deficit has continued to deteriorate in the two years or so since the Plaza Accord and despite the sharp depreciation of the U.S. dollar against non-U.S. currencies such as the Japanese yen, the U.S. government's failure to take effective measures to improve its own fiscal situation has continued to deteriorate.

Last year, the US trade deficit reached $168 billion, or 3.6 percent of GDP, of which three-quarters of the deficit came from the current-account surpluses of Japan and West Germany. The deterioration of the US trade balance and the sharp increase in foreign debt have affected the inflow of foreign capital into the United States, the market's confidence in the US dollar has declined, and the continued depreciation of the US dollar has obviously done more harm than good, and the US trade frictions with Japan and West Germany have intensified again.

At the same time, due to the appreciation of the yen and the mark, the foreign trade exports of Japan and West Germany declined, and the economic growth rate declined. Japan's economic growth rate fell from 4.2 percent in 1985 to 3.1 percent in 1986, and West Germany's economic growth rate hovered around 2 percent from 1985 to 1987. Japan and West Germany expressed dissatisfaction with the failure of the United States to effectively reduce its fiscal deficit in accordance with the Plaza Accord.

In addition, the sharp and excessively rapid depreciation of the US dollar has also caused a big shock in the international foreign exchange market and the world economy, and the major developed industrialized countries obviously feel that it is necessary to stop the decline of the US dollar as soon as possible and maintain the basic stability of the US dollar exchange rate, which is conducive to the common development of all countries in the world.

Actually,

The United States can also choose to raise domestic interest rates to attract international capital inflows and slow down the rapid depreciation of the dollar. However, fearing that this would lead to a recession in the domestic economy, the United States was reluctant to raise domestic interest rates, preferring Japan and West Germany to lower interest rates.

Under the leadership of the United States, in order to stabilize the international foreign exchange market, prevent the US dollar exchange rate from declining too much and too quickly, and solve the policy problems faced by developed countries through international coordination, the finance ministers and central bank governors of the G7 countries reached an agreement at the Louvre Museum in Paris, and unanimously agreed that the G7 countries should strengthen "close coordination and cooperation" in domestic macro policy and foreign exchange market intervention, so as to maintain the basic stability of the US dollar exchange rate at that level.

The agreement at this meeting is known as the "Louvre Agreement".

One of the purposes of the Louvre Accords was to curb the growth of the exchange rate between the yen and the mark and the dollar.

Honestly-

For this purpose alone, it is clear that the Louvre Accords have failed – the yen did not rise until 1989 before it began to fall back in the last life.

But-

It cannot be said that the Louvre Agreement has no effect on foreign exchange speculators -- before the signing of the Louvre Agreement, under the leadership of the G5, the world's currency markets were selling dollars, and as long as you have yen or marks in your hands, you don't have to worry about not being able to exchange dollars. Now, although it is possible to exchange for dollars, it is not realistic, at least not easy, to change to dollars in large quantities after the sell-off is over. All in all, it is far more difficult to escape now than it was before the Louvre agreement was signed.

But-

None of this had anything to do with Xu Cun - because Xu Cun had completely escaped before the Louvre agreement was signed. Now, in addition to the necessary yen reserves for double, all the yen in Xu Cun's hand has been digested.

In this battle, Xu Cun also made a net profit of more than $33 billion thanks to his loans from Citibank, Mitsubishi Bank, Mitsui Bank, and the Central Bank.

And then the egg-

Xu Cun spent more than $13 billion to buy Standard Chartered Bank, and spent another $1.5 billion to consolidate the stake in Standard Bank.

In addition, Xu Cun also invested 20 billion Hong Kong dollars (2.56 billion U.S. dollars) in Shekou Industrial Zone, and spent 1.05 billion U.S. dollars to buy the entire Husky Energy.

Xu Cun, an upstart who had gone so far as to spend $15 billion to buy 1,200 tons of gold from the precious metals market -- at present, 500 tons of this 1,200 tons of gold are stored in the vault under the Baye Building, 200 tons in the hidden vault on Necker Island, 200 tons in the vault of Shek O Manor, 200 tons in the vault of the Baicunju in Beijing, and 100 tons in the hidden vault on Musa Island.

You must know that as the old note-issuing bank in Xiangjiang, HSBC and the original Standard Chartered Bank together only hold more than 100 tons of gold in Xiangjiang (Standard Chartered Bank only holds less than 30 tons).

Of course, this is not to say that HSBC and the original Standard Chartered Bank cannot store more gold, but rather than a large amount of gold, they prefer to store foreign exchange:

First of all, as the world's largest gold import port, influenced by the Chinese people's preference for gold jewelry, since the 80s, Xiangjiang has imported 100 to 2,300 tons of gold almost every year for consumption. Therefore, as long as you have money, it is very easy to buy and sell gold in this place in Xiangjiang, and there is no need for HSBC and the original Standard Chartered Bank to deposit a large amount of gold.

Second, after the failed gold speculation of the sixties and seventies, few private banks have eaten large quantities of gold to preserve their value, except for central banks.

Thirdly, with the development of the banking industry, gold trading has become far less convenient than foreign exchange.

As for why Xu Cun has such a large amount of gold reserves, he has his own reasons:

First of all, Xu Cun has burned a lot of money, he can't put more than 10 billion dollars in the bank and sleep forever, right?

Second, it is almost an all-time low for gold prices – the average price of gold bought by Xu Cun is less than $320 per ounce.

Thirdly, with this 1,200 tons of gold, Xu Cun, who holds the two major banks of Baye and Standard Chartered, can arbitrarily withdraw the deposits of the two major banks, Baye and Standard Chartered, and no longer has to go through the trouble of mortgaging his property to his own bank because of the concern of accounting problems -- it is convenient.

Secondly, Xu Cun's purchase of these gold is also in the layout, and he will be of great use to this gold in the future.

All in all, after painstaking management, Baye Bank and Standard Chartered Bank have become the wealth engines of Xu Cun - Xu Cun has the ability to mobilize a huge amount of funds in a very short time.

Moreover, if the resources of the two banks are fully integrated by the complete merger of Baye Bank and Standard Chartered Bank, the ability of Xu Cun's wealth engine to mobilize funds will definitely be stronger!

……

(To be continued.) )