1759: C1759 Trade Deficit

C1759 Trade Deficit

In fact, even without Qin Guan's explanation, many people had already realized this. Right now, the trade between Y Country and many other countries was reversed.

The fundamental reason for the trade deficit was that Y Country's currency was the currency that circulated in the world. Any transaction settlement could be done through Eagle Yuan. This was actually the intrinsic reason for the trade deficit in Y Country.

In fact, the people of Y Country benefited from it.

This appeared after 1970. Before this, the Y Country was in a favorable situation. This was because at that time, the Breton Forest system collapsed, and Eagle Yuan was linked to gold. Other currencies were linked to Eagle Yuan, which eventually led to a stable international trade. However, the people of Y Country kept releasing Eagle Yuan, causing the value to depreciate. If it could not be linked to gold, then this system would collapse.

Eagle Yuan was still the world's currency, but it was already reliant on the credibility of Y Country Government. At the same time, they gave up on gold and found oil. They requested for oil to be settled with Eagle Yuan, and continued to maintain the dominant position of Eagle Yuan.

This way, Y Country could continue printing money to buy things all over the world. Of course, they would take advantage of the situation. Since they were constantly spending Eagle Yuan, of course, it would be a deficit.

In order to trade, each country needed to reserve Eagle Yuan, an international currency. The people of Y Country only needed to print the currency. If all the Eagle Yuan in the world went against the flow, it would be fine. Then the inflation in Y Country would definitely be so high that Eagle Yuan would become useless paper.

Simply put, this year's trade deficit in Y Country was 160,000,000,000. This meant that the people of Y Country had printed 160,000,000,000 Eagle Yuan. Then, they exchanged 160,000,000,000 hawk dollars from the various countries in the world. They were like white wolves without gloves. And they weren't happy about this?

The people of Y Country were really unhappy. In their eyes, this... Reversing the deficit was harmful to the economy of Y Country. If the deficit continued to increase... It would cause a large amount of international funds to enter the Y Country and purchase financial assets like the Y Country's national debt. The influx of hot money was a threat to the Y Country's economy. If the businesses of the Y Country wanted to increase their competitive strength, they could only invest overseas and build factories. Then, they could transport the products back. That way, they would be able to make money. However, the manufacturing industry in Y Country would be "empty."

You don't export much, but you import a lot. This is a trade deficit. This situation must be changed. You just need to look at it and you will know that the country with the biggest trade deficit is R Country!

After the defeat of R Country, they started to develop their economy, although in terms of awareness, Qin Guan was quite disgusted with R People. But in terms of ability, he still admired them. When the war ended, the R Country was also crippled. However, it didn't take long for the economy of the R Country to develop. And now, the R Country had become a giant.

Looking at the Y Country, the car with the biggest sales volume wasn't Ford. It was Toyota, Toyota, Mitsubishi, and then at the electronic game consoles of every household. They were all from the R Country, the photocopy machines, the television, and the washing machines. They were also from R Country. The products from R Country were the main sales products in Y Country. Their industrial products occupied a large portion of the market in Y Country!

"In the process of international trade, the value of Eagle Yuan was overestimated. Therefore, only by depreciating Eagle Yuan could we solve the current trade deficit problem and solve the financial deficit problem." Qin Guan said.

After Qin Guan said that, someone immediately clapped his hands. "That's right, that's right. This suggestion is the most correct way to solve the current problem!"

After this person clapped his hands, he raised his wine glass and walked towards Qin Guan. "I am very happy to meet you. I am James Baker, the Minister of Finance of Y Country. Are you R People?"

Qin Guan's face immediately darkened. "I am Han people."

In other countries, they were all the same kind of yellow people. It was easy to be mistaken. In Qin Guan's opinion, this was a serious offense to him. However, considering the huge value of this person in front of him, Qin Guan could only hold it in temporarily. After all, he still had his own mission.

A little bit of patience would throw the bigger picture into chaos.

"This is President Qin, the General Manager of North Industrial Company. Currently, he is planning to purchase our Douglas Company." Wheat Kenna quickly introduced him. This was a rare opportunity, he had to seize it.

"President Qin, I have heard of him a long time ago, but I didn't expect him to do so. You're so young." Baker said, "Your suggestion is very good, but right now, we still have our concerns. Because we've done this before, and in the end, it led to an eagle-shaped crisis."

Since the 1970s, Y Country had entered a deficit. Of course, Y Country had to be saved. Thus, at that time, Carter's government had started to stir up trouble.

At that time, the Finance Minister had announced that there was a huge trade deficit between R Country and Hans Country. They had decided to intervene verbally in the foreign exchange market. They hoped to stimulate the exports of Y Country through the depreciation of the Eagle Dollar and reduce the trade deficit.

In the end, the market had come true. His words had caused investors to sell Eagle Dollar crazily, and Eagle Dollar had depreciated the currency of the major industrial countries.

For example, in early 1977, 1 Eagle Dollar against 290 Island Dollars. In autumn of 1978, the lowest price fell to 170 Island Dollars, which fell by more than 40%.

This time, it was not about them getting rid of the financial deficit, but about the collapse of Eagle Dollars' credit system. Who would dare to store a currency that was constantly depreciating? What if it turned into scrap paper in the end?

In the end, President Carter quickly saved them and launched a "Save Eagle Dollar Package" to support the price of Eagle Dollar. This was definitely a matter of lifting a stone and smashing his own feet.

Now, Qin Guan, a layman, what was he trying to say to make the Eagle Dollar depreciate? What if he did not have good intentions?

"Last time, there was no government control. It was completely the behavior of the market. This time, it could be slowly carried out under the control of the market. For example, your side and R Country, Hans Country, and the finance ministers of these countries. It was a meeting. How much would it depreciate in a year? In the second year, how much would the value depreciate and how much would it fluctuate? As long as they followed this plan, what else would happen? Furthermore, after the value depreciated slowly, they were also willing to do so. Their own money will be worth a lot of money, and they can buy and buy from all over the world."

The West is too free. If you feel that everything can be handed to the market and settled by yourself, won't you control it? Other things aside, at least R Country and Hans Country are defeated countries. Would they dare to be disobedient?

"Yes, that's right. This is the best way to solve the problem." At this moment, another voice came from behind. When they heard this voice, everyone turned their heads. They all called out: "Mr. President, you're here?"

The president of Y Country had finally made his debut. Qin Guan was very accurate with his timing. That was for sure because he had already planned it out. What he said just now was meant for the other party to hear.1

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