Chapter 419: Financial Warfare

[Chapter 504: Yes, This Is War]

The concept of financial warfare long existed, but it is rather obscure. Essentially, the U.S. dollar was the only settlement currency. All the U.S. had to do was simply plunder, without needing complicated schemes.

Exiting the Bretton system was a blatant act of mischief. If the euro had existed back then, the U.S. would certainly not have dared to do that.

The current situation can be considered a financial war. You could say it was, or you could say it wasn't. Forcing the yen to appreciate was part of it, but collapsing the yen's financial system wasn't.

However, in terms of results, it truly was a war. Since the Plaza Accord, the U.S. had been scheming against the yen. They hoped to slow down its development.

As for the so-called currency war, the real puppeteer was the Federal Reserve.

Someone might ask, "Isn't that all the same? Doesn't the Federal Reserve represent U.S. interests?"

Ha, that's not entirely true. They only represent a portion of the privileged class, not everyone.

Forget about the rivalry between the Democrats and Republicans; even within their ranks, various factions were intertwined.

The interest groups led by Morgan Stanley and Goldman Sachs only took advantage of the Plaza Accord. As for their purpose, they didn't care about the yen's development speed; they only needed profit.

"Did William White buy puts?" This question wasn't just being asked by Morgan Stanley; Goldman Sachs was also curious. They knew that the shares they could offer were quite limited, and Mr. White must have been very dissatisfied.

Not wanting to let this guy take advantage was one thing, but adding a variable was another. William White's choice not to participate indicated a stance. This guy definitely wasn't going to cooperate.

I had to say these bastards were overthinking things. Even though William White was unhappy, he had no intention of aiding the yen. A relatively weak yen actually served his interests.

As land prices went up, home prices and rents naturally followed suit. To retain employees, companies had to raise salaries. With all sorts of expenses rising, the prices of OEMs lost their advantages.

If their prices were high, why would William White bother placing orders? That would only increase his costs.

By 1989, the yen's banking system had gone off the rails. Banks did anything necessary to lend more money, including fabricating depositor information.

Most of these loans went into real estate. The stark contrast was with operational loans for businesses. On one hand, credit was extremely loose; they could offer loans at a 130% premium. On the other hand, credit for business operations was tightening significantly.

In an extremely extreme timeframe, this portion of loans accounted for less than 30% of the total loans.

...

"Sir, I have a friend who wants to visit you?" On the other end of the phone, Fujita sounded quite nervous. Though he had a good relationship with his boss, he wasn't looking to stir the waters. However, as a Japanese person, he couldn't shake off certain connections.

"Ha, Fujita, the situation is pretty complicated now. There are too many eyes around. If your friend is nearby, you can have him take the phone," the boss replied.

Fujita hesitated, then said, "The visitor is the head of Sumitomo Corporation. He usually looks out for me."

"Well, just let him answer the phone."

Not all Japanese people were naive; they certainly knew that William White had not shorted the yen. Many had begun to regret their foolishness in following Goldman Sachs' advice.

"My advice? Ha, Mr. Hasegawa, I do have suggestions. If you don't restrict short selling, you might face big trouble. Don't think a few hundred billion dollars will save the day; even a few trillion wouldn't be enough."

"You're right. We cannot allow this behavior due to concerns of interfering with the securities market."

"Interfering? Are you kidding? If this were happening in the U.S., those short-selling firms would be strictly regulated as well. Also, a friendly tip: banks lending to foreign investors should pull back a bit. As long as that money doesn't leave Japan, the economy will pick up."

"Thank you for your guidance. We hope to see you again in Japan."

William White, who had no desires of his own, was naturally a source of irritation for others. The yen's lending restrictions had just come out a tad late. Had they come out a few months earlier, a bunch of fools in the U.S. would have faced a tough time.

Damn, wasn't it just absurd? They had already harvested the equity market, and now they were taking from the banking system. That was just too comical.

William White had no intention of helping, however, Morgan Stanley and Rockefeller had shown no goodwill; he didn't mind giving a reality check to those ignorant fools.

...

On the other end of the line, Hasegawa hung up looking pale. It wasn't that he had anything against William White; relatively speaking, this foreign guy was rather principled. Morgan Stanley and Goldman Sachs were truly despicable.

He had already envisioned the dreadful outcome. The stock market had crashed, yet real estate prices and land had barely changed. In many areas of Tokyo and Osaka, property prices were even showing a rising trend.

What if these foreigners mortgaged all their land and real estate to the banks?

Fine, he didn't dare to think further. He hoped to come out of this unscathed. No matter how other consortiums planned, Sumitomo Corporation would definitely not do that.

"Fujita-kun, I can't thank you enough this time. Rest assured, if there's anything needed from Legendary World, we will do our utmost," he said.

Fujita didn't quite understand what exactly his boss meant, wondering why this old man was being so courteous.

"Really, really, we'll need your help in the future," Fujita replied.

Hasegawa internally chuckled softly; how could he provide assistance? It seemed he was the one in need of guidance, and that guy was truly fortunate.

After exchanging pleasantries, Hasegawa hurriedly left. He could hardly sit still anymore; this was a major matter that required cooperation among several Japanese financial groups.

As for Goldman Sachs -- huh, they would not regain our trust.

...

Feeling elated after doing something bad, William White was all smiles. His motto was clear: if I can't make a buck, neither should you.

His gloomy mood lifted entirely as he went home to play with his sons. His chubby little boys were so adorable. As for how Japan would respond --

Ha, why should I care?

His oldest son was digging into his food, while the other one was clearly dissatisfied. Even held by his dad, he kept kicking and fussing.

Looking at the food on the table, William White couldn't help but smirk. Though his eldest son had grown, it was still evidently insufficient.

"Tsk tsk, still a bit small; don't let my boy go hungry," he said.

The little beauty shot him a glance and replied, "Don't you worry; those two might have drank empty already."

"Ahem, I just wanted to taste it, you know, food safety is very important," he added.

*****

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