Chapter 95 Appendix This station after Japan's fiasco: the currency war is pressing China closely

Song Hongbing Today, almost the same prescription has been introduced to China by enthusiastic and eager American financial doctors. The difference is that China's economy is far less robust than Japan's back then. Unfortunately, the early symptoms in China today are very similar to those in Japan from 1985 to 1990. The essence of financial opening is actually a currency war. The lack of awareness and preparation for war is the biggest crisis in China at present! It is extremely dangerous to take the opening of the financial field as the opening of ordinary industries for granted.

Money is a commodity, and it is different from all other commodities in that it is a commodity that every industry, every institution, and every person in society needs. The control of currency issuance is the highest form of all monopoly. China's currency issuance was originally controlled by the state, and only by the state controlling the currency can the basic fairness of the social structure be guaranteed.When foreign banks enter China, China's currency issuance rights will be in jeopardy. Foreign banks will introduce a large number of dazzling innovative financial products, create and monetize debt instruments in various ways, which is the analogue liquidity of currency.These financial currencies fully possess the purchasing power of currencies in the real economy. In this sense, foreign banks will participate in the currency issuance of Chinese renminbi.

If the total amount of renminbi credit created by foreign banks exceeds that of state-owned commercial banks, they will actually take over China's central bank and control the right to issue Chinese currency!They will have the ability and intention to maliciously create fluctuations in the money supply, thereby bloodwashing the wealth of the Chinese people through inflation first and then deflation, just like the economic crises that have repeatedly appeared in history. When foreign banks become more and more powerful, through the transaction of money and power, and the transaction of money and money, the strong alliance of financial super special interest groups will be realized, and the local government will be wooed by funding local economic development, identifying and focusing on cultivating potential companies. A new generation of political stars for long-term political returns.Control state-owned monopoly industries such as telecommunications, petroleum, and military industry through investment. After all, there is no law that state-owned monopoly industries can only borrow from state-owned banks. When these industries mainly rely on funds from foreign banks, their capital chains may suddenly break.

Foreign-funded banks will also establish various foundations to gradually penetrate China's education, news media, book publishing, judicial law enforcement, medical and pharmaceutical industries, and even the military system.They will donate extensively to social welfare projects, extensively cultivate personal connections, and silently promote social values ​​that are beneficial to them with the patience and care that nourish things silently. The strategic risks faced by financial opening up are far from being as simple as the financial industry itself. It covers all levels of Chinese society, and if there is a slight mistake, the consequences will be disastrous.

It is suggested to form a national financial security committee to unify the functions of the China Banking Regulatory Commission, the China Securities Regulatory Commission and the China Insurance Regulatory Commission, directly reporting to the highest decision-making level.Increase the financial intelligence research department, and strengthen the research and analysis of personnel background, capital mobilization, and war case collection in foreign-funded banks.Establish a national financial security classification system, and important financial decision makers must pass the system review.

Currency sovereignty or currency stability? Currency sovereignty should be higher than all external factors, including all international practices and agreements, as well as external political pressure.Currency sovereignty should only serve the fundamental interests of its own people. Maintaining currency stability refers to maintaining the stability of the national currency in the international monetary system in order to provide a good and stable ecological environment for economic development to domestic industries.As far as China is concerned, it is currently adopting a policy of pegging to the dollar.

At present, China's predicament is that monetary sovereignty and currency stability can only choose one or the other. China's current policy is to pursue currency stability for the sake of economic development, thereby giving up currency sovereignty.The crux of the problem is that the Federal Reserve actually controls China's money supply to a large extent. Since China adopts a compulsory foreign exchange settlement system, the United States can force China's central bank to issue additional base currencies by increasing its trade deficit with China, and these base currencies After the amplification of commercial banks, it will produce several times the effect of additional currency issuance, resulting in a flood of liquidity, pushing up the stock market and real estate bubbles, and greatly deteriorating China's financial ecological environment.

In order to hedge against such additional currency issuance, the government and the central bank can only be forced to issue additional treasury bonds and central bank bills to absorb excess liquidity, but this will increase the government's debt burden, and these debts will have to be repaid with interest sooner or later.Conversely, if the United States needs to create China's money supply deflationary effect, of course the more serious problem is the former. Such a completely passive financial strategic posture is extremely unfavorable to China.As long as the US dollar is the world's reserve currency, China cannot escape this situation.Fundamentally speaking, only by promoting the re-monetization of gold can we create a free, fair and harmonious financial ecological environment for all countries in the world.If it is difficult to achieve it in one step, we should also vigorously promote the diversification of international reserve currencies and adopt a divide-and-conquer strategy.

Currency Appreciation and Disorder in the Financial System If there is anyone who can be used as a negative teaching material for the rapid appreciation of the currency, Japan is undoubtedly the most appropriate candidate. The author of Japan's "Financial Defeat" Mototada Yoshikawa lamented that in terms of the proportion of wealth loss, the consequences of Japan's financial defeat in 1990 were almost equal to the loss of the defeat in World War II. Japan, like China, is a typical example of honest and single-handed efforts to create material wealth, and has always been skeptical of the idea of ​​illusory financial wealth.

From 1985 to 1990, Japan's domestic economy and export trade were booming, the stock market and real estate skyrocketed year after year, and a large number of overseas assets were acquired. The self-confidence of the Japanese also reached an unprecedented level. It seems that it is only ten years away from surpassing the United States. . From the exchange rate of one U.S. dollar to 250 yen when the Plaza Agreement was signed in 1985, it depreciated sharply to about 200 yen within three months, and the U.S. dollar depreciated by as much as 20%. One U.S. dollar depreciated to 120 yen, and the yen doubled in just three years. This is the most important external ecological environment change in Japan's financial industry.

Financial doctors in the United States have long understood that forcing the yen to appreciate sharply in a short period of time has the same effect as forcing Japan to swallow a large dose of hormones.Then coerce Japan to maintain two.The curative effect is better if the ultra-low interest rate of 5% lasts for two years. Sure enough, Japan's economy was stimulated by financial endocrine disorders and large doses of hormones. Fat tissue in the stock market and real estate rapidly proliferated, and muscle tissue in the production and export industries atrophied severely. It has caused the financial system to suffer from heart disease and coronary heart disease. In order to induce these complications more easily, in 1987 international bankers at the Bank for International Settlements developed a new type of special medicine for Japan, the Basel Accord, requiring banks engaged in international business to have a capital ratio of 8%.The United States and the United Kingdom signed the agreement first, and then coerced Japan and other countries to abide by it, otherwise they would not be able to conduct transactions with the American and British banks that occupy the commanding heights of international finance.Japanese banks generally have the problem of low capital, which can only be met by relying on off-book assets generated by high bank stock prices. The Japanese banking system, which is highly dependent on the stock market and the real estate market, has finally exposed its weakness to the sharp sword of the US financial war.On January 12, 1990, the United States launched a remote non-contact strategic attack on Japan's Tokyo stock market by using the Nikkei index put warrant, a new type of financial nuclear weapon, in the New York stock market. The heart disease and coronary heart disease in the Japanese financial system could not withstand such a strong stimulus, and finally suffered a stroke, which then led to the hemiplegia of the Japanese economy for seventeen years. Today, almost the same prescription has been introduced to China by enthusiastic and eager American financial doctors. The difference is that China's economy is far less robust than Japan's back then. Unfortunately, the early symptoms in China today are very similar to those in Japan from 1985 to 1990. Peripheral combat under peer-to-peer openness International practice is a very fashionable term at the moment. It seems that following the international practice, the world will be peaceful from now on, and the financial opening is as beautiful and comfortable as an idyllic song.I am afraid that such a naive idea will mislead the country and the people. The formation of international practices is completely under the control of international bankers who have formed a monopoly position. Under certain conditions, it is very possible to tailor a set of international practices for China that completely block the survival and growth of China's banking industry. The American and British banks, which monopolize the commanding heights of the financial industry, are an effective weapon to block competitors. The old Basel Accord, which successfully defeated the expansion momentum of Japan's financial industry, has been upgraded to the New Basel Capital Accord in 2004. It is entirely possible that it will be used on the head of the Chinese banking system, thus becoming a barrier to prevent the overseas development of China's financial industry. important obstacle. If Chinese local banks have not yet implemented the Basel New Capital Accord, it means that the branches of these banks in the United States and Europe may be restructured or even closed, and the overseas financial network that China has worked so hard to build is in danger of being wiped out. Come and not reciprocate China's countermeasure is, and can only be, external operations under the principle of reciprocal opening.If the host country uses whatever international practices to block China's overseas bank branches, China will follow suit and formulate banking regulations with Chinese characteristics to restrict or even shut down its banks' operations in China. Looking back at the history of the United Kingdom and the United States becoming the leading force in the international banking industry, it is not difficult to find that the establishment of an international banking network is the only way to go.Instead of only being in line with international standards in China, China's banking industry should implement external operations, directly acquire European and American banks or expand branches, establish China's own financial network all over the world, and learn from wars in wars. It is better to hide money from the people than to hide money from the people Faced with the long-term depreciation of the US dollar, many scholars proposed to store foreign exchange with the people in order to share the risk of the loss of the country's foreign exchange reserves. It is better to hide money from the people than to hide money from the people.Any foreign exchange will depreciate against gold in the long run, but the speed of depreciation is different.In order to preserve the purchasing power of the huge wealth that China has created, the only way is to convert foreign exchange reserves into gold and silver reserves.The fluctuation of international gold price is actually just an illusion. If you see through this layer, even if it causes thousands of waves in the exchange rate market, China has its own 10,000 tons of gold as the magic needle. Storing gold in the people fundamentally protects the wealth and security of the people, and inflation, whether in the form of commodities or assets, cannot erode the real purchasing power of the people. This is the cornerstone of economic freedom that is indispensable to the construction of a harmonious and equal society. . As China's national treasure, gold has the highest level of liquidity among all currencies.Gold has not only been recognized as the highest form of wealth by societies of different civilizations, races, regions, eras, and regimes in the five thousand years of human history, it will also be the most basic measure of economic activities in the future society important historical task. In the history of the world, people have tried four times to abandon gold as the cornerstone of the monetary system and try to invent a smarter monetary system. The first three have failed, and our world today is experiencing the fourth failure.The inherent greedy nature of human beings dooms the attempt to calibrate objective economic activities with human subjective consciousness to fail. Gold is stored in the people to wait for changes in the world. The Chinese Yuan, backed by gold, will stand tall amidst the ruins of international finance caused by excessive debt and greed, and the Chinese civilization will have its day.