50s: Starting with a storage ring

Chapter 683 A Slap Wakes Up the Market
Time flies when you're busy.

By the time Tong Jiajia finished her postpartum confinement, it was already mid-September, and a major event was about to happen in New York.

Since the 1980s, America's domestic economy has undergone two changes. First, the foreign trade deficit has expanded year by year, reaching as high as US$160 billion in 1984. Second, a government budget deficit has emerged.

Under the shadow of twin deficits, America raised the domestic base interest rate to attract international capital to develop the economy.

The large influx of foreign capital led to the continuous appreciation of the US dollar, which in turn reduced America's export competitiveness and exacerbated the crisis of a trade deficit.

By 1984, America's current account deficit had reached a record $1000 billion.

Under the pressure of this economic crisis, America hoped to increase the export competitiveness of her products by devaluing the dollar in order to improve the imbalance of the US international payments.

On September 22, 1985, the finance ministers and central bank governors of the United States, Japan, West Germany, France, and the United Kingdom (referred to as the G5) met at the Plaza Hotel in New York.

The five governments reached an agreement to jointly intervene in the foreign exchange market to induce an orderly depreciation of the US dollar against major currencies in order to address the US's huge trade deficit.

Because the agreement was signed at the Plaza Hotel in New York, it is also known as the "Plaza Accord".

The depreciation of the US dollar will inevitably affect countries that hold large amounts of US dollars, especially those that became America's largest creditor last year.

This matter will not have a significant impact on China, because my country holds a small amount of US dollar foreign exchange reserves, and these reserves are quickly spent.

So far this year, my country's foreign exchange reserves in US dollars have been only US$26 billion, while the US dollars held by other countries during the same period have exceeded US$4000 billion, accounting for 50% of the world's total foreign exchange reserves.

Therefore, the depreciation of the US dollar has the greatest impact on ordinary households.

Now, with a week to go before the Plaza Accord is signed, the White House has finalized its policies, and the heads of state are about to depart for New York.

At this critical juncture, he must remind those in China, and at the same time, he must prepare himself.

The Japanese yen is about to appreciate significantly against the US dollar. If he doesn't take advantage of this opportunity, he'll be letting his time-traveling identity slip by.

On the 15th, Sun Zhiwei prepared a report in advance and took his Gulfstream 3 to Washington overnight.

The next day, he once again used the "Washington Tunnel" to reach the White House underground and successfully obtained America's latest economic stimulus package from Reagan's office.

The plan explicitly mentions the content and objectives of the Plaza Accord.

With this empirical evidence, coupled with his related report, the country should be able to prepare in advance for the current dollar depreciation crisis.

Sun Zhiwei received the evidence on the morning of the 16th. In order to send the report and evidence back as soon as possible, he confirmed through his social media that Lao Han was working in his office, and then disguised himself and sneaked into the embassy.

With the space to monitor the surroundings, he easily avoided everyone and successfully arrived at Lao Han's office door.

After confirming that no one was paying attention, he quickly opened the office door, slipped inside, and then quickly turned back to close and lock the door.

While working, Lao Han was very alert. When he saw a stranger suddenly open the door and barge in, he remained calm and looked at Sun Zhiwei, who was wearing makeup, while stepping on a button on the ground.

That's the emergency alarm button in Lao Han's office. The other end connects directly to the embassy's security department, and within minutes, a large number of guards will rush in.

As for drawing a gun directly, that was simply not an option for him.

He was an old man with frail arms and legs, slower than anyone else to draw his gun. He'd rather use that time to stall for time with verbal tactics and wait for the guards to arrive. "Who are you?" Old Han asked in a calm, deep voice.

So, when Sun Zhiwei turned around after closing the door, he saw Lao Han standing ready, waiting to press the alarm button at any moment.

"It's me. You'd better take it easy with that kick. I finally managed to sneak in, so don't attract the guards again."

While verbally stopping Lao Han from stepping on the alarm, Sun Zhiwei tore off his mask to show Lao Han his real face.

Upon hearing the familiar voice, Old Han did not immediately activate the alarm. Only when he saw Sun Zhiwei's face did he angrily throw a pen at him.

"What are you doing, sneaking into the embassy directly? What urgent matter can't be communicated through the secret mailbox?"

"It's an emergency. I can't wait to send a message via email, so I have to come in person." He didn't even mention the possibility of calling to let me know.

During the previous "Jiangnan case," he mentioned in his report the "top-secret nationwide telephone wiretapping project" of the National Security Agency (NSA) in the intelligence building in New York.

The higher authorities have now issued an order that important intelligence must not be transmitted by telephone under any circumstances, so as to avoid exposing the identities of personnel in various locations.

Upon hearing that there was top-secret information, Old Han immediately asked, "What kind of information is it?"

"Take a look." Sun Zhiwei casually tossed the intelligence analysis report and related evidence of the Plaza Accord onto his boss's desk.

Old Han didn't even glance at the film that contained the evidence; instead, he immediately opened Sun Zhiwei's analysis report.

Film, that thing, produces images smaller than ants, so he didn't want to torture his already presbyopic eyes.

Moreover, the footage in the film only serves as evidence; what's truly useful is Sun Zhiwei's analysis.

This is a habit he developed after becoming Sun Zhiwei's personal contact.

Because every analysis report that Sun Zhiwei had submitted in the past was written in great detail.

By reading his analysis report, one can quickly grasp the general content of this intelligence transmission.

Sun Zhiwei, ever the friendly type, brewed himself a cup of Longjing tea and then sat quietly on the sofa next to him, waiting for Lao Han to finish reading.

Old Han quickly skimmed through the entire analysis report, then frowned and asked Sun Zhiwei:

"Isn't your prediction a bit too exaggerated? America has done similar things before, hasn't she?"

Old Han was referring to the Carter era in 77, when, in order to stimulate America's exports and reduce the trade deficit, then-Treasury Secretary Blumesa intervened in the foreign exchange market by devaluing the dollar.

As it turns out, even for the G5 countries, the resources that can be mobilized through full market intervention are quite limited.

Faced with a massive foreign exchange market worth trillions, their intervention actually has little impact, and the market will not be dictated by them.

At most, it can only serve as a "slap" or "hands-on" measure; the main changes are due to the market's own fluctuations.

(End of this chapter)