Chapter 1759: Trade deficit

In fact, without Qin Guan, many people are already aware of this. Now, Eagle Country and many countries have a trade deficit.
The fundamental reason for the trade deficit lies in the fact that the eagle country’s currency is the currency in circulation in the world, and any commodity settlement can be done through the eagle dollar. This is actually the essential reason for the eagle country’s trade deficit.
In fact, the people of Eagle Country benefited from it.
This appeared after 1970. Prior to this, the Eagle Country had a surplus. This was due to the collapse of the Bretton Woods system at that time. The Eagle Dollar was linked to gold and other currencies were linked to the Eagle Dollar, which ultimately led to a stable international Trade, however, the eagle people continue to issue eagle dollars, which leads to depreciation and cannot be linked to gold. In this way, this system collapses.
The Eagle Yuan is still the world currency, but it is already relying on the credit of the Eagle Government. At the same time, they abandoned gold and found oil. They demanded that oil be settled with Eagle Yuan and continue to maintain the dominant position of the Eagle Yuan.
In this way, the Eagle Country can continue to print banknotes and come to the world to buy things. Of course, they are taking advantage. Since they continue to spend the Eagle Dollars, of course they are in deficit.
In order to trade, all countries need to reserve the eagle dollar, an international currency. Eagle people only need to print currency. If all the eagle dollars in the world flow back, the eagle country will definitely inflate to the point that the eagle dollar becomes waste paper.
To put it simply, for example, this year, the Eagle Country’s trade deficit is 160 billion, which means that the Eagle people printed 160 billion eagle dollars, and then exchanged 160 billion dollars from countries around the world. Really real products, they are empty gloves white wolves, are they not happy?
The Eagles are really unhappy. In their eyes, this deficit is harmful to the Eagle’s economy. If the deficit continues to increase, it will cause a large amount of international funds to enter the Eagles and purchase the Eagle’s national debt and other financial assets. These hot money are flooding. Entering in is a threat to Eagle Nation’s economy. If Eagle Nation’s companies want to increase their competitiveness, they can only invest and build factories overseas, and then ship the products back, so that they all make money. The domestic manufacturing industry will become "hollowed."
You export less and you import more. This is a trade deficit. This situation must be changed. Just look at it. The country with the largest trade deficit is an island country!
After the island nation was defeated, it began to engage in economic activities. Although Qin Guan was quite disgusted with the island nation in terms of consciousness, he still admired them in terms of ability. When the war ended, the island nation was also maimed, but no After a few years, the island nation’s economy has developed, and now, the island nation has developed into a giant.
Look at Eagle Country. The most sold car is not Ford or General Motors, but Toyota, Honda, and Mitsubishi. Then look at the electronic game consoles of every household. They are all from the island country. Copiers, televisions, and washing machines are also from the island country. The products of the island country are the main products sold in Eagle Country, and their industrial products occupy a large part of the Eagle Country market!
"In the process of international trade, the value of the Eagle Yuan has been overvalued. Therefore, only by devaluing the Eagle Yuan can the current trade deficit and fiscal deficit be resolved," Qin Guan said.
After Qin Guan finished speaking, one person immediately clapped his hands: "Yes, that's it. This suggestion is the most correct way to solve the current problem!"
This person clapped his hands, picked up the wine glass, and walked over to Qin Guan: "I am very happy to meet you. I am James Baker, the Minister of Finance of the Eagle Country. Are you an islander?"
Qin Guan's face turned black immediately: "I am a native of Han."
In foreign countries, people of the same yellow race are easy to be mistaken. Watching Qin, this is a serious offense to himself. However, considering the huge application value of this person in front of him, Qin Guan can only bear it temporarily. , After all, he still has his own mission.
A small leak will sink a great ship.
"This is Mr. Qin, the general manager of North Industries Corporation. Currently, he is planning to acquire our Douglas Company." Little MacDonald hurriedly introduced that this opportunity is too rare, so you must seize it.
"Mr Qin, I've heard of it a long time ago, but I didn't expect you to be so young." Baker said: "Your proposal is very good, but now, we still have concerns because we have done this before. This led to an Eagle Yuan crisis."
Since the 1970s, the Eagle Nation began to enter a deficit. Of course, the Eagle Nation had to save it. Therefore, the Carter government at that time began to produce moths.
At that time, the Minister of Finance declared that the island countries and Hans State had a large trade surplus, and they had to decide to intervene in the foreign exchange market, hoping to stimulate the Eagle country’s exports and reduce the trade deficit through the devaluation of the eagle dollar.
As a result, the market really came true. His speech caused investors to sell the eagle dollar frantically, and the eagle dollar depreciated sharply against the currencies of major industrial countries.
For example, at the beginning of 1977, 1 Eagle dollar was worth 290 island dollars. In the fall of 1978, it fell to 170 island dollars at its lowest, a drop of more than 40%.
All of a sudden, it was not the problem of them getting rid of the fiscal deficit, but the rhythm of Yingyuan’s credit system breaking down. Who would dare to store a depreciating currency? What should I do if everything becomes waste paper in the end?
As a result, President Carter hurriedly rescued and launched a "save the Eagle Yuan package" to support the Eagle Yuan price. This incident is definitely shooting himself in the foot.
Now, what does a layman like Qin Guan mention here to devalue Yingyuan, what if he is uneasy and kind?
"Last time it was not controlled by the government, it was entirely market behavior. This time, it can be carried out slowly under the control of the market. For example, you and the island country, Hans country, and the countries of these countries. The finance ministers sit down and hold a meeting. In one year, how much will the depreciation be, and how much will the depreciation be in the second year, and the fluctuation cannot exceed how much. As long as they follow this plan, what will happen? And, after a slow depreciation , They are also willing, their own money is worth it, and they can buy it all over the world."
The West is too free. I think everything can be solved by the market itself, so won't you control it? Apart from other things, at least the island country and the Hans country are defeated countries, they dare not obey?
"Yes, well said, this is the best way for us to solve the problem now." Just then, another voice came from behind. When they heard this voice, everyone turned their heads and shouted. To: "Mr. President, are you here?"
The President of the Eagle Country has finally made his debut. Qin Guan's timing is quite accurate. That's for sure, because he has already figured it out. The words just now are meant for the other party.