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Volume 2 Beijing Story Chapter 140: After passing this village, there is no such store

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    Update time: 2012-08-05

    "Old Lin, let's not talk nonsense about declaring war on Germany. China mobilized and sent 3 million troops. It only mobilized and trained an expeditionary force of 300,000 people, plus sorting out Beijing banknotes. Tell me what I have to do.  How much fiscal gap is there? Using the four countries¡¯ ten-year moratorium on the Boxer Indemnity as collateral, the Ministry of Finance can only issue 380 million ten-year public bonds. How much borrowing share does Japan want for these 380 million public bonds as secondary mortgages?  Tell the truth!"

    Wang Geng stared at the fifty-seven-year-old Lin Quanzhu and wondered how he maintained himself.  How could I be so young at the age of fifty-seven?

    "So! 380 million! Wang Sang, your appetite is really crazy! President Yuan's large loan for the aftermath was nominally 25 million pounds, but the actual receipts were only 9.98 million pounds, which is 105 million pounds."  It¡¯s just an ocean, and you need to borrow 380 million now?¡±

    Lin Quanzhu was obviously really surprised. He didn¡¯t expect Wang Geng¡¯s appetite to be so big!

    "Times have changed, Lao Lin. Once the European War started, which country, Britain, France, and Russia, would not owe billions of dollars in foreign debt? Can a mere 380 million oceans scare you, Japan? China has a population of 450 million, and each person has to pay 8  Mao 4! And this is a ten-year national bond. Is it comparable to Lao Yuan¡¯s extremely long forty-year national bond?¡± Wang Geng brainwashed Lin Quanzhu.

    Damn, the total of the eight Nishihara loans between the Duan Qirui government and Japan in the previous life was 145 million yen. When Japan realized the gold standard for the second time in 1897, this yen contained almost 0.75 grams of gold, which was the most before.  At that time, two yen were exchanged for one dollar.

    As World War I progressed, the gold-silver ratio dropped from 1:39 in 1915 to 1:25 in 1917. The exchange rate of the Japanese yen against the ocean, which maintained the nominal gold standard, also continued to decline. At this moment, one pound was about the same.  It is equal to 10 silver dollars = 4.88 U.S. dollars = 10 yen. Little Japan made a fortune by taking advantage of the First World War. Now they really have a lot of funds. I guess they can borrow 380 million yen from them!  , Wang Geng thought in his mind.

    "Wang Sang, according to your statement, in the future, your government's Ministry of Finance will issue these 380 million public bonds with the Boxer Indemnity as collateral, but it will withdraw 380 million funds from the market, and then use these public bonds as collateral to borrow money from us.  "Isn't this a second mortgage? There is something wrong with your algorithm. When the payment is due, your government will not repay 380 million, but it will be doubled!" Lin Quanzhu came to his senses and said!  Breaking into a cold sweat!

    "Old Lin, aren't you talking nonsense? Using public bonds as collateral to borrow money from you is of course a second mortgage. If I exchange cash with you for Japanese yen, will I still borrow a cent? Then the whole thing is foreign exchange, isn't it? It's worth 380 million  The Gengzi compensation is the guarantee for the payment of the public debt, and this public debt is the collateral for me to borrow money from you. Don¡¯t you understand this?¡± Wang Geng was a little angry!

    "Wang Sang, Wang Sang, don't worry! I'm really confused. What you said seems to make sense, but why do I just find it a bit mysterious!" said a senior diplomat who came to China thirty years ago.  Japanese Minister Hayashi Kwonsuke was completely confused by Wang Geng.

    "There's really nothing I can do about you. Your Japanese government has suffered a loss and didn't let you be the Minister of Finance. Why can't you figure it out like this? Well, I'll tell you again, just once!" Wang Geng pinched him angrily.  He put out the cigar in his hand, pulled it off the table a few times, pointed at a green plate and said,

    "This green plate can be regarded as the Gengzi reparations for the next ten years. This red plate can be regarded as the public bonds to be issued by the Ministry of Finance in the future. These two white plates represent the current currency in the market and the new banknotes to be issued by the Bank of China.  Understand?" Wang Geng raised his eyes and asked Lin Quanzhu.

    The Japanese minister looked at the plates in front of him and nodded in confusion. He did not dare to express his position for fear of showing cowardice. He just waited for Wang Geng to explain.

    "This green saucer, because it is the Boxer Indemnity for the next ten years, can only be used as options and credit collateral at this moment, and cannot be used as currency to buy things directly in the market. Is this easy to understand?" Wang Geng explained patiently.

    Hearing this, Hayashi Gonsuke nodded, thinking that if I couldn¡¯t understand this, then I wouldn¡¯t be a top student who graduated from Tokyo Imperial University in Japan. I would live like a dog at the age of fifty-seven!

    "Isn't the Chinese government short of money? If it prints banknotes randomly to advance money to the government as it did before, the printed banknotes will be what happened to the Beijing banknotes. They will be devalued wildly and there will be no ocean to pay for it, because there are no corresponding products and products after printing the banknotes.  Is collateral used as an anchor for money? A shortage of things and an abundance of money in the market will inevitably lead to inflation and financial disorder. Is this easy to understand? "

    Lin Quanzhu nodded, and Wang Geng continued,

    "The Chinese government uses the green disk Gengzi reparations as collateral and sells the red disk public bonds to the market in exchange for directly usable currency. It is these two white disks, China's oceans and banknotes. Is it understandable? The public bonds have been issued domestically.  Finally, the government and the Treasury had two blank slates to do their own thing.The market has public bonds and is waiting for the annual interest return on investment. Of course, this public bond is still a trading product listed on the exchange and can be traded on the market for redemption, do you understand?  "

    "Well, it's easy to understand. Everyone is doing this. Wang Sang, do you mean to use these public bonds that will be listed in the future as collateral to exchange for another white plate with us?" Lin Quanzhu said hesitantly.  .

    "That's it. This 380 million public debt actually means financing 380 million from the domestic market and borrowing 380 million from foreign markets. The government should essentially obtain 380 million in cash flow and 380 million in foreign exchange borrowings.  The collateral of the money is two yuan of capital, otherwise what is it called a loan! Of course, the external borrowing part is mainly used for the purchase of overseas machinery and equipment and raw materials!" Wang Geng said with a smile.

    "Wang Sang, you are so cunning and your conscience is so unreliable! I understand now, but when the Empire of Japan borrows money from China, you must have the first priority in repaying the second-mortgage national debt when it matures!" Lin  Quanzhu suddenly realized that the public bond issuance and mortgage strategy of Wang Geng, the second daughter of a married woman, was essentially just using one dollar of collateral to make a two-dollar business!

    According to Wang Geng¡¯s strategy, the Ministry of Finance used the Green Plate (the Gengzi Indemnity that has been deferred for the next ten years) as collateral to exchange the Red Plate (the ten-year Gengzi Indemnity Bond issued by the Ministry of Finance) for two white plates on the market.  (now the ocean and newly issued banknotes). At this time, the holders of the red plate were China's domestic banking consortium and social investors, but then the Ministry of Finance used the sold red plate to exchange it for a third party from a borrower in Japan or the United States.  The fourth white plate (foreign exchange borrowing), so the Ministry of Finance has one green plate and four white plates, the Chinese banking syndicate and social investors have one red plate that can be listed on the market, and foreign banking groups such as Japan or the United States still have  A red saucer that is not publicly traded!  The final collateral was just the green plate.

    "No problem, Lin Sang, just be aware of this. We will use the ten-year Boxer Indemnity Bonds with an annual interest rate of 6% that the Bank of China is planning to issue as a secondary mortgage for the loan from Japan. What do you think!  "Wang Gengcheng is trying hard to force Lin Quanzhu to express his stance!

    "I have to ask the country for instructions on this matter. Ask the country for instructions. 380 million yuan is almost a loan of 380 million yen. This amount is too big too big There may be a big quarrel in the country! Wang Sang, you  Are you sure that the Ministry of Finance and the Bank of China are both under your leadership? You must know that borrowings between China and Japan have always gone through the channels of the Bank of Communications and the Ministry of Communications. That is Xu Youzheng's world. How can he let Wang Sang do so in China?  Banks and Treasury flex their muscles?¡±

    "You don't have to worry about this at all. Xu Youzheng and I are both brothers under the Prime Minister. Is there anything wrong with being united? Lao Lin, you really need to hurry up and ask for instructions from the country about the loan. Don't forget that I came back from studying in the United States. I will go back to the United States."  I can't be merciful when people come to me. The Morgan family has hundreds of millions of dollars waiting to be invested in the Chinese market through me!

    When the time comes, half or more of the loan will be given to the Americans, but don¡¯t blame me for not giving Japan a chance!  With a ten-year interest rate of 6% per annum and the Boxer Indemnity as collateral, where can I find such a good investment opportunity?  "

    Wang Geng patted Lin Quanzhu, who had his eyes wide open, and spoke with a heartfelt expression.

    "So! I have learned a lesson! Wang Sang, I hope we can unite sincerely and push the Sino-Japanese relations and friendship to a broader future. I am optimistic about you! Premier Duan has a subordinate like you. China is really lucky!" Lin  Kwonsuke held Wang Geng's hand with a sincere and expectant look on his face.
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