In 1971, after changing from a fixed exchange rate to a floating exchange rate, the exchange rate of the US dollar against the yen plummeted from 1:360 to 1:170. However, after President Carter announced the dollar protection policy in 1978, the exchange rate rose to around 1:250. During the Reagan administration, exporters such as Japan benefited considerably from exchange rate differentials as the dollar continued to rise.

Before September 21, 1985, the Japanese were clamoring to buy the whole of the United States, which panicked the Americans.

After the announcement of the signing of the "Plaza Accord," the entire United States was boiling, especially those companies related to Japanese exports, and the United States was Japan's largest exporter before the signing of the agreement. And in 1985, Japan replaced the United States as the world's largest creditor, and Japanese products flooded the world. The pace of the frenzied expansion of Japanese capital caused the Americans to exclaim, "Japan will occupy the United States peacefully!" ”

Japan's high-quality and low-cost goods have caused many Americans to lose their jobs, such as Detroit, the motor city of the United States, because of the competition of Japanese automobiles, a large number of workers have lost their jobs, causing many Americans to be dissatisfied.

So, when the news came out, although it was not possible to say that the United States as a whole, more than half of Americans were happy and excited.

But will the result be a huge blow to Japanese industry, as they thought?

No, at least Lin Yu knows, no, because history will prove it.

After learning the news from the United States, Lin Yu dragged his head with his hands, and imagined the situation in Japan a few years later, and the corners of his mouth couldn't help but pull a sinister arc, and then thought about the purpose of those people in the United States to force the yen to appreciate, he suddenly felt as if the Americans were asking the Japanese to send him money.

In this case, the United States can not only curb Japan's exports in the manufacturing sector to a certain extent, but also allow the consortium behind them to take advantage of the opportunity to make a lot of money, and on the surface they are indeed the biggest beneficiaries of this time.

However, they absolutely could not imagine that there could be a person in this world who could not only make profits from changes in the exchange rate, but also estimate the magnitude of the appreciation of the yen and the absolute impact on Japan in the future, so it was already destined that Lin Yu could eat meat in this game from the beginning, and as for whether the United States could drink soup, maybe, of course, it was impossible, it depended on Lin Yu.

In fact, speaking of the Plaza Agreement, Lin Yu studied it for a long time in the previous life, Lin Yu studied economics and finance in the previous life, so when he has nothing to do, Lin Yu always likes to study some classic cases, and the Plaza Agreement is just one of them.

The Plaza Accord? What is the Plaza Accord?

The simplest, intuitive and logical way to put it is this: in the 80s, the US economy recovered, the dollar rose, and a large number of foreign products, especially from Japan and Germany, were imported into the United States. As a result, the American people believe that foreign products crowd out the domestic market and deprive Americans of jobs that "should" belong to Americans, resulting in a significant increase in the unemployment rate in the United States. Similar reasoning put enormous pressure on the Reagan administration through public opinion and Congress, which had to invite the financial leaders of the world's five major economies (the G5, the United States, Japan, the Federal Republic of Germany, France, and the United Kingdom) to New York and persuade them to work together on the depreciation of the dollar. The empathetic finance ministers of the five countries immediately agreed and issued a joint statement, known as the "Plaza Accord".

A few hours after the statement, the dollar began a frantic process of depreciation. The international foreign exchange market began to sell the dollar frantically for two years without any signs of stopping, so much so that these five amazing gentlemen (or their successors) had to meet again to discuss measures to stop the dollar from falling further. This was the Louvre Accord of 1987, and that's a story for later.

After the Plaza Accord, the yen and the mark began to appreciate sharply. After the implementation of the floating exchange rate regime in 1971, the dollar began to depreciate against the mark and the yen. After entering the 80s, the dollar steadily strengthened, and this slow upward trend was interrupted again in mid-1985, when the yen and the mark began to appreciate sharply again. In the three years or so after 1985, the dollar depreciated sharply. The level of appreciation of the mark returned to the level of the early 80s, while the yen rose to a new all-time high after the war. This is one of the main reasons why the yen has become the focus of the Plaza Accord.

In fact, speaking of which, Japan's "lost decade" is not the fault of the Plaza Accord.

After the Plaza Accord, Japan's economy began to stagnate, and it is widely believed that the Plaza Accord brought Japan's economy to a standstill, but it is far-fetched to blame Japan's "lost decade" on the Plaza Accord.

The biggest impact of exchange rate changes is not the export and import of products, but the flow of capital and the corresponding wealth effect. The Japanese economy has also benefited the most from the Plaza Accord, which also comes from the latter.

In the 80s, the funds that the five governments participating in the Plaza Accord could mobilize to carry out public operations were extremely limited compared to the huge turnover of transactions in the international currency market, and they were almost "swallowed up by the market in the blink of an eye". To use the classic metaphor of Samuelson, a great economist before Lin Yu's rebirth, just as "the greatest king of mankind is powerless to change the currents in the sea", the government cannot intervene in the international currency market as it pleases.

Moreover, the various policies promised by the five participating countries in the "Plaza Accord," especially those measures linked to domestic financial and fiscal policies, have not been substantively implemented and implemented.

In fact, for a long time after the Plaza Accord, Japan's trade surplus with the United States increased sharply rather than decreased. The appreciation of the yen has not opened up a broad Japanese market for American goods, because Japanese products are structurally different from those of the United States, and there is no price competition. Even in the most tragic era of the Japanese economy after the collapse of the bubble economy, there is no evidence that Japanese products, whether they are electrical appliances, automobiles, or intermediate machinery products, have lost their international competitiveness. Therefore, the Plaza Accord was a complete failure in terms of the goal of reducing the U.S. trade deficit with Japan.

Therefore, it is clear that Japan's economic stagnation is not the fault of the Plaza Accord. But it is also an indisputable fact that after the Plaza Accord, the dollar depreciated by more than 40% against both the yen and the mark, a change that is not only huge, but also continues into the 21st century.

The only convincing explanation for this problem is the so-called "slap theory". The core content is that the price of a certain commodity, especially financial commodities, in the market may deviate a lot from its "real price" for some reason, but it is still sought after. But the bubble will eventually burst. And the process of disillusionment can be very rapid. Figuratively speaking: The market is sometimes like "Fan Jinzhongju", and it takes a big slap from Hu Butcher to wake up. After the bubble bursts, market participants often act irrationally out of fear, which leads to a collapse in asset prices and an avalanche. For example, the bursting of the stock market bubble.

I don't know who actually came up with the term "slap". However, it is understood that the earliest formulation came from the American economist Krugman, who should not have been inspired by Fan Jin.

According to this theory, the dollar should have depreciated a long time ago, and the Plaza Accord only played the role of a "slap in the face" of the fuse. Otherwise, if the fall of the dollar is against the will of the market, then the government's intervention, if it works, will be temporary and unlikely to last long. The simple reason is that the government cannot repeat the same market operations for a long time, and once the government stops intervening, the market will eventually return to its reasonable price range.

After the Plaza Accord, the dollar fell sharply. A large number of market participants irrationally sold the dollar out of fear, which is why the heads of state at the Louvre had to slap the other half in the face.

Whoever sets the trap is the United States or Japan itself

The "conspiracy theory" of the Plaza Accord is basically not worth refuting.

September 22, 1985. It is a common practice for governments to choose a Sunday to announce major news, as financial markets are closed, giving the market plenty of time to react. September 23 is the autumn equinox, a public holiday in Japan, and Europe and the United States do not have a holiday. According to Tomomitsu Oba, then finance minister of the Japanese Ministry of Finance, who attended the Plaza Conference, Pell, the governor of the Central Bank of West Germany, who attended the meeting on behalf of West Germany, thought that Japan was the first country to face the market after the "Plaza Accord" because the Tokyo foreign exchange market was in the easternmost time zone. It was later learned that the next day was a public holiday in Japan, and West Germany became the first market to open. Pell's face was full of displeasure, believing that he had fallen into a trap planted in advance by the Japanese.

Even if Noboru Takeshita did not take the initiative to convene the Plaza Meeting, he was one of the most high-profile at the meeting. One detail is that among the participating countries' G5, the media specifically referred to the United States and Japan as the G2. For example, in order to maintain confidentiality before the meeting, Noboru Takeshita made an appointment to play at a golf course near Narita Airport before going to the United States, and then went straight to the airport with a false shot and got on the plane wearing a golf suit. The governor of the Bank of Japan, who was on the same plane, wore a large mask to prevent him from being recognized by the media. At a press conference after the agreement was announced, a reporter asked, "Why does Japan tolerate a stronger yen?" Noboru Takeshita's reply was, "Because my name is 'Nobori'." ("Noboru" and "sheng" are the same sound in Japanese).

It can be seen from this that the "Plaza Accord" is not so much a slap in the face by the Americans as a big conspiracy that the Japanese themselves have been planning for a long time.

However, it is clear that the Japanese people did not benefit from the Plaza Accord, and that the Nippon Foundation was the force that benefited Japan the most.

However, it is obvious that they undercounted Lin Yu, because of Lin Yu, their plan was destined to be in vain.

After two weeks in Japan, Lin Yu planned to go to the United States, but Lin Yu had not seen Evra for a long time. However, a sudden incident forced Lin Yu to change his plan to go to Southeast Asia.

Because, a family controlled by a country in Southeast Asia was ostracized by the local government.