Chapter 026 The Promissory Note

Masayoshi Kishimoto and Masayoshi Yanai could be said to share the same smell, after all, both exuded the nature that allowed capital to maximize a profit-seeking, as well as play up its greed.

So, from the beginning of the polite, and then bring the topic closer, so introduced to the topic of the Asian financial turmoil above.

At the moment, although Kishimoto justice moved to want to invest in Uniqlo idea, but does not mean that they have investment action. This one project again delay, also can be.

The capital in his hand is, after all, limited, naturally, to grasp the big and small, it is impossible to do everything. His own investment strategy is not a slapdash, but in a concentrated punch.

Google, Uniqlo each twenty years after the market value, one is 800 billion dollars, the other is less than 10 billion dollars.

It’s clear at a glance that you should put your money on that one. Kishimoto justice in the spirit of business can not be, benevolence and righteousness, but does not prevent himself and the other party to make friends.

Without his rebirth, this Yanai Masayoshi would have become RB’s richest man for a time in the future. With his own existence, then absolutely can not let this matter happen, after all, the richest man must be himself.

Whoever competed with him, would not be able to. His small goal is to first become the richest man in RB, followed by the medium goal of the richest man in Asia, and finally the big goal of the richest man in the world.

“Under this Asian financial turmoil, South Korea was hit hard. The reason why the Korean government was moved is that the foreign exchange reserves are too small.” Yanai Masayoshi voiced his opinion saying.

“You are talking about one aspect. However, the reason why the Korean government has been messed up so much at the moment, the root cause of the disease still lies above the promissory notes.

Korea’s commercial acceptances and bank acceptances have both been drastically overissued. The core of these two kinds of promissory notes is linked with Korean chaebol companies, layer by layer, gradually outward.

On the surface, there seems to be no problem, but in reality, we all know that a promissory note is a financial instrument that can be used to defer payment for anywhere from 30 to 180 days.

Theoretically, even if it is not backed up by a 1:1 margin, it should be at least not less than 80% or 90%.

However, before the outbreak of the Asian financial crisis, the situation in South Korea has been to 1:2, 1:3, or even higher.

One won can be treated as two won, three won, etc. to promissory notes instead of cash in widespread use. People have to make a cash payment for their monthly salary. After all, people need to live, and they need to pay for all kinds of expenses and costs every day.

An overheated economy is bound to cause an economic bubble. It’s as if a dog is worth a million dollars, but instead of being able to sell it and exchange it for cash, it can only be used to exchange it for two half-million-dollar cats.” Masayoshi Kishimoto stated an opinion of his own.

He paused here, smiled, and continued, “A promissory note is necessarily not cash. It can only be cashed to cash when it expires.

Korea’s industry and commerce, from large enterprises to small and medium-sized enterprises has been a large number of the use of this way to make payments, loans and other financial operations, all of a sudden it is the same as the amount of money circulating in the market to increase a lot.

The promissory note is like a drumbeat, a promissory note is like a flower, as long as through a string of people’s hands, and these people have a necessary connection.

When the drumming stops, it is as if one of the links has defaulted on this, and then it is broken, and then the dominoes will collapse, and the situation will be out of control.”

Even if Masayoshi Kishimoto knew that promissory notes would be available electronically and convenient twenty years from now, it did not mean that they could be so convenient now.

A paper promissory note could not have a crease in addition to it, and not even a single word on it could be wrong. The upper transfer to the lower, but also have to write one by one. Layer by layer, it must also be noted layer by layer.

Commercial bankers’ acceptances are superior to corporate acceptances. If you can’t wait until you need to use cash, then you need to need to discount (discount interest).

This time is different, the amount is different, the longer the time, the higher the discount, ranging from 2%-10%. It also means that the amount of $ 100 promissory notes to the hands of only 98-90 dollars in cash.

From the Asian financial turmoil, the South Korean government in order to prevent the foreign exchange reserves are too small and repeat the Asian financial crisis, is only in the future gradually and substantially increased the foreign exchange reserves, in 2018 arrived at 385.3 billion dollars.

High foreign exchange reserves, does not mean that the country is necessarily rich, the general public is equally rich, but only represents the government is rich, the ability to prevent financial risks.

This brings the bad side is to inhibit the development of domestic industry and commerce, investment is reduced, employment opportunities will follow the reduction of the ordinary people’s hands will not have much money, after all, it is difficult to find a job.

On the contrary, the United States, the national debt of 21 trillion U.S. dollars, foreign exchange reserves of only a mere 44 billion. Even if Russia’s foreign exchange reserves of 356.5 billion U.S. dollars, but also from time to time to be screwed in the face, the currency devalued significantly. Why?

Because in 1997, the international lobbying capital has been 7 trillion dollars. Also in 1997, not to mention South Korea 3.84 billion U.S. dollars, even Hong Kong has 82 billion U.S. dollars in foreign exchange reserves can not resist Soros and other international lobbying frantic attack, and then to the central government for help.

Even the Chinese mainland later peaked at more than 4 trillion U.S. dollars in foreign exchange reserves, but also at this time only 140 billion U.S. dollars. 1992, the economic overheating of the Chinese mainland, foreign exchange reserves only 19.4 billion U.S. dollars.

When countries dramatically increased their foreign exchange reserves, international lobbying was equally rapid in increasing the amount of capital. This to 2018, the total amount of predicted international lobbying has been unable to determine, at least not less than 7 trillion dollars.

If you add in five times leverage, over $35 trillion. Exactly how much is there, no one knows. Even if Hong Kong’s foreign exchange reserves have already reached US$437.5 billion, it does not mean that it is absolutely safe.

Similarly, like the various funds held by Soros, a total of US$600 billion to US$10,000 billion can be mobilized internationally These funds are roaming around the globe, with the motive of reaping high profits entirely.

Their destructive power is very amazing, can be overnight will be a country’s exchange rate system completely destroyed. 1994 Mexico’s financial crisis, the total amount of foreign debt up to 165.6 billion U.S. dollars, of which short-term debt accounted for the majority of the two days from December 20 to 21, a sharp decline of nearly 4 billion U.S. dollars.

The United States Government and the International Monetary Fund and other international financial institutions decided to provide huge loans to support Mexico’s economic rescue plan to stabilize the exchange rate, stock market and investor confidence.

Until the United States-based $50 billion in international capital assistance gradually in place, Mexico’s financial turmoil only in the first half of 1995 to calm down.

Therefore, the current South Korea is not the first country to seek help from the IMF. Before it, Mexico has had it.