Chapter 92 4. Financial Industry: The Strategic Air Force of the Economy

The status of the world's reserve currency is the highest level of currency issued by all sovereign countries. It represents unparalleled authority and it has universal trust.For the economy of a reserve currency country, its benefits will be unlimited. People often wonder why China lacks pricing power in international markets.Wal-Mart can squeeze the profit margins of Chinese companies' products to heartbreaking levels, economists explain. Because it is the largest consumer and represents the largest consumer market in the United States, consumers have pricing power.Some people also explained that Wal-Mart controls the sales channels in the US market, and the channel rights determine the pricing power.

What about iron ore?What about oil?What about medicines?What about airliners?What about Windows software?China is almost one of the largest markets in the world, and it also completely controls the sales channels of the Chinese market. As the largest consumer, how can others say that the price goes up, and how much China has to honestly pay for it? In fact, the key problem of China's lack of pricing power is that it does not have financial strategic air power! China's economic development has relied on foreign capital for a long period of time. Without the policy of opening up and introducing foreign capital, there would be no economic development in China today.But foreign capital can choose China, and it can also choose India. Foreign capital can choose to enter or withdraw.The party that controls the flow of funds is the real owner of pricing power.

Whether it is the top 100 or the top 500 companies in the world, and no matter what the overlord of the automobile industry or the giant of the computer industry, all companies must carry out financing. Money is like air and water for companies, and it cannot be taken for a moment. Or missing.The financial industry is the absolute master of all walks of life in the whole society.Whoever controls the flow of money can determine the survival of any business. For international bankers who monopolize the right to issue U.S. dollar currency, if Australia's iron ore company needs to cut prices, one phone call is enough.Do you still want financing?If it does not agree, this company will hit a wall everywhere in the international financial market.It is simpler to subvert the price of its stocks and bonds in the international securities market until the company kneels and begs for mercy.The killer feature of the financial industry is that it can cut off the food channel of the enterprise at any time to force the opponent to submit.

The financial industry is like a country's strategic air force. Without the support of air strikes, all walks of life on the ground are bound to fall into tragic hand-to-hand combat with other countries, or even kill each other.Compete for low prices, resource consumption, and harsh working conditions. In a word, in the international market, if there is no financial supremacy, there will be no product pricing power, and there will be no initiative in economic development strategies. This is why China's currency must become the world's reserve currency. So, what kind of currency is worthy of being the reserve currency of the world?Both the British pound and the U.S. dollar were once leaders among the world’s currencies. The history of their becoming reserve currencies is actually the fact that the domestic economies of the United Kingdom and the United States have developed rapidly in material production under the economic coordinate system established by stable currency weights and measures, and eventually gradually dominated world trade. History of settlement systems.The cornerstone of the good reputation of the pound and the dollar is gold and silver.During the rise of the two countries, their banking networks gradually spread all over the world. The British pound and the US dollar can be freely and conveniently converted into gold internationally, and are highly sought after by the market, so they are called hard currencies.At the end of World War II in 1945, the United States once owned 70% of the world's gold, so the US dollar was hailed as the US dollar by the world.The stable measure of wealth provided by the gold and silver standard is not only the guarantee for the rise of the British and American economies, but also the historical premise for the British pound and the US dollar to become the world's reserve currency.

After the world monetary system was finally decoupled from gold in 1971, the purchasing power of the currencies of various countries, under the brilliant light of gold, was irretrievably melted away like a popsicle.In 1971, an ounce of gold was worth $35. By 2006, an ounce of gold was worth $630 (November 23, 2006).Over thirty-five years, relative to the price of gold: The purchasing power of the Italian lira has dropped by ninety-eight.2% (converted into euros after 1999) The purchasing power of the Swedish krona has dropped by 96% The purchasing power of the British pound has fallen by ninety-five.seven%

The purchasing power of the French franc has fallen by ninety-five.2% (converted into euros after 1999) The purchasing power of the Canadian dollar has dropped by ninety-five.one% The purchasing power of the dollar has dropped by ninety-four.Four% The purchasing power of the Deutsche mark has fallen by eighty-nine.7% (converted into euros after 1999) The purchasing power of the yen has dropped by 83.three% The purchasing power of the Swiss franc fell by 81%.five% The ultimate collapse of the dollar system is a logical necessity. If the debt-denominated dollar is unreliable, why should the world believe that other debt currencies can eventually do better than the dollar?

Of all modern debt currencies in the West, none is stronger than the Swiss franc.The reason why the world trusts the Swiss franc is extremely simple. The Swiss franc was once 100% backed by gold and has the same reputation as gold.With a population of only 7.2 million, its central bank's gold reserves were as high as 2,590 tons (in 1990), accounting for 8% of the total gold reserves of all central banks in the world. It is second only to the United States, Germany, and the IMF in the world.When Switzerland joined the International Monetary Fund in 1992, the IMF prohibited member countries’ currencies from being pegged to gold. Switzerland was finally forced to delink the Swiss franc from gold. In 1995, only four or three remained.two%.By 2005, there were only 1,332 left in Switzerland.A ton of gold is still more than double China's official gold reserves (600 tons).As the gold backing of the Swiss franc has declined, the purchasing power of the Swiss franc has gradually declined.

Japan's gold reserves were only 765 in 2005.Two tons, it is not that Japan is unwilling to increase its gold reserves, but that it is prohibited by the United States from increasing its gold holdings. The reason is that Japan has to obey the will of the United States to defend the dollar.Ferdinand, an expert on world gold issues.Lipps is a famous banker in Switzerland. Together with the Rothschild family, he established Zurich Rothschild Bank and has been in charge of the bank for many years. In 1987, he established his own bank Lipps Bank, which is regarded as an international bank. Insiders of the financial empire.In his book "Golden Wars", it was revealed that at the annual meeting of the World Gold Council in Paris in 1999, an unnamed Japanese banker complained to Lipps that as long as the US Pacific Fleet Still in Japan to protect their safety, the Japanese government was banned from buying gold.

At present, China already has one trillion US dollars of foreign exchange reserves, and the correct use of this huge wealth will be related to China's century-old national destiny in the future. This is by no means a simple matter of diversifying financial risks.What is important is that China should consider how to win the strategic initiative in the coming international financial war, and finally achieve currency hegemony in an international post-dollar system. At the end of 2006, China will open its financial sector in an all-round way. International bankers have already sharpened their knives, and a currency war without gunpowder is imminent.This time, people can't see foreign guns and cannons, and they can't hear fighting on the battlefield, but the final outcome of this war will determine China's future destiny.Whether China is aware of it or not, and whether China is ready or not, China is already in a state of undeclared currency war.Only by clearly and accurately judging the main strategic goals and main directions of international bankers can we formulate effective coping strategies.

There are two fundamental strategic goals for international bankers to enter China on a large scale, to control China's currency issuance rights, and to create a controlled disintegration of the Chinese economy, and ultimately to establish a world government and world currency dominated by the London-Wall Street axis. One last hurdle. As we all know, whoever can monopolize the supply of a certain commodity can realize super profits.Currency is a commodity that everyone needs. If anyone can monopolize a country's currency issuance, he will have unlimited means of earning super profits.This is why for hundreds of years, international bankers have racked their brains, deliberated, and tried their best to monopolize a country's currency issuance rights.Their highest level is to monopolize the right to issue currency all over the world.

From the perspective of the overall situation, international bankers are in an obvious state of strategic offensive. Whether it is financial concepts, human resources, business models, international experience, technical infrastructure, and supporting legal systems, China's banking industry is in line with the industry that has been playing with money for hundreds of years. International bankers are orders of magnitude worse.If you want to avoid total defeat, the only choice is that you fight yours and I fight mine. You must not fight according to the rules set by the opponent. This is an out-and-out currency war, and there are only two ways out for the war, the victor and the loser.Either China was conquered by the new Roman Empire in this war, or in the process of defeating the opponent, a reasonable new world currency order was established.