Reborn Tokyo Golden Age.

Chapter 495 Signs before great changes
89 was a special year in the history of neon bubbles.

This year the bubble has entered an unprecedented expansion, and people's carnival has reached a new level.

The stock market is rising day by day, setting new historical records every day.In contrast, the property market, which is even more exaggerated, is also skyrocketing.

Nowadays, land prices in Tokyo have far exceeded what ordinary salarymen can afford.

However, although land prices have skyrocketed, no one is in a hurry.Even the higher it goes, the happier people are.

Because everyone’s money is in the stock market and property market, if they go up, their assets will also go up.

Since a few years ago, we have watched the stock and property markets rise all the way.

Unable to resist the temptation of friends and various reports, everyone slowly moved their savings previously deposited in banks into the stock market and property market.

Today, Neon has entered a hot stage of stock and real estate speculation.

Not only them, but those overseas hot money companies also want to come in and get a piece of the pie when they see the booming situation of Neon.

So with the blessing of overseas capital, Neon's twin bubbles expanded even more.

According to the latest statistics from the Ministry of Finance, in the first quarter of this year, the total market value of the neon stock market was 686 trillion yen.

686 trillion yen, calculated at the current exchange rate of 128, is 5.36 trillion US dollars.

Is this number an exaggeration?Just look at Neon’s GDP last year.

Last year, Neon's GDP was US$3.07 trillion, and this year it is almost within this range.

That is to say, the total stock market value of Neon is now about 1.7 times the GDP. Even in the 20s, Neon's GDP was around US$4 trillion.

Such a comparison shows how crazy Neon's stock market is now. Its total value is higher than the GDP of Neon in any period in its history.

However, this is not the most exaggerated thing. The real estate industry is even more exaggerated. Its total value is 1500 trillion US dollars!It is 500 times the current Neon GDP!
1500 trillion U.S. dollars, not Japanese yen~!

No wonder the outside world is saying that Bai Chuanfeng, the richest man in the world, does not deserve his title.

Based on land value, Yoshiaki Tsutsumi is worth one trillion US dollars!Nearly one-third of Neon’s GDP.

Such a huge amount of wealth cannot be compared with Shirakawa Kaede's 300 billion US dollars. The difference between the two is more than an order of magnitude.

"One Tokyo can buy the entire United States!", "Chiyoda Ward in Tokyo can buy the entire Canada!".

These jokes passed down to later generations are the true portrayal of neon today.

Some experts even calculated that if the entire Neon was taken into account, it would be possible to win four American countries.

The land area of ​​Neon is about 25/100 of that of the United States. In other words, the average land price of Neon is now [-] times that of the United States!
The stock market and property market all exceed GDP values, and they are all calculated on a multiple basis.

Especially the latter, which is hundreds of times different from GDP.

Compared with the price of land in the United States, the difference is a hundred times higher. All of these can really feel the state of neon fire cooking oil at this time.

GDP cannot catch up with the stock market and property market, which shows how weak the economic situation is at this time.

So is Neon’s government aware of this?

Neon seems to have weathered all the various trade wars one by one now.

The semiconductor agreement signed a few years ago has not shrunk much in the global market share.

Just looking at the surface data, everyone can still enjoy a luxurious life with confidence.

Although the yen has appreciated and the real industry has suffered setbacks, these are within the government's tolerance.

So now it seems that Neon seems to have passed through the exchange rate crisis safely this time.

However, no matter how you look at it, the phenomenon that the stock market and property market exceed GDP is abnormal.

The Neon government also realized this, so internally, especially the Ministry of Finance, began to discuss raising interest rates again.

In the past, interest rates were cut to stimulate domestic demand and to create a loose economic environment to allow funds to flow into the real manufacturing industry.

However, contrary to expectations, the financial industry and real estate industry, which generates quick money, are obviously more attractive than the real industry with large investment and long return cycle.

As a result, hot money, bank funds, overseas hot money, and household deposits all entered the property market and stock market.

The overheated market performance of these two companies now makes the Neon government a little scared.

Therefore, after weighing the matter, the word "rate increase" has returned to the eyes of the Neon government again after 27 months.

In addition, the international environment at this time also prompted the Neon government to consider this.

In the late 80s and early 90s, the world situation changed dramatically.

The Cold War is coming to an end, the two Germanys are reunifying, and the world is moving from bipolarity to multilateralism.

Those international hot money began to look for the next target.

In order to alleviate the impact of capital flight, the Federal Reserve raised interest rates.

The Federal Reserve increased the amount, and Britain also began to increase the amount.

Others have joined, do you Neon follow?

If you don't add, then there is a risk of domestic funds fleeing.

In addition, domestic real estate prices were out of control at this time. In order to curb its expansion, the government was also quarreling about raising interest rates.

"The current neon economy is like sitting on dry firewood. Gentlemen, it's time to cool down the overheated economy.

At current land prices, ordinary people simply cannot afford to buy a house. "

In the National Assembly Hall, Mie Yeyasu stood up and made an impassioned speech.

He is an authentic "austerist" and hates inflation in his economic views.

Back in 85, when the United States asked Neon to appreciate the yen, Mie Yeyasu strongly opposed it.He struggled for a while, but in the end due to international pressure, Neon finally compromised.

Now taking advantage of the international environment and the overheated economic situation here, Mieyeyasu once again advocates his own tightening policy, which is to raise interest rates on the yen.

The current Minister of Finance, Renio Murayama, also realized that there was something wrong with Neon’s economy.

Despite the general jubilation among the people, the general international consensus is that the neon economy is already full of bubbles, and it is getting bigger and bigger.

As the country's decision-making body, how could they be unaware of this?

So now that I hear Mie Noyasu's old words mentioned again, the opposition in the National Assembly Hall is no longer as fierce as before.

Renxiong Murayama, the Tibetan minister, wanted to discuss this issue with Mie Yoshiyasu.

However, thinking that the latter was likely to be the next president of the Bank of Japan, Renio Murayama hesitated to communicate again.

Alas, the relationship between the Bank of Japan and the Ministry of Finance is really hard to describe~

The struggle between the two, or the Bank of Japan's road to independence, began in the 70s.

For 100 years, the Bank of Japan and the Ministry of Finance have always been in love with each other.

In particular, the emergence of a strong man, Shoto Tenmanda, known as the "King of Dharma", brought the original Bank of Japan to a whole new level.

Under his leadership, the Bank of Japan can even sideline its legal superior, the Ministry of Finance.

However, because of his appearance, the Ministry of Finance began to restrict the Bank of Japan everywhere.

For example, by parachute into the bank president, to strengthen the control of the Bank of Japan.

But the Bank of Japan itself is not a vegetarian. It unites internally to fight against the president who parachuted in from the Ministry of Finance.

As time passed, finally, with the compromise between the Tanaka cabinet and the then president of the Bank of Japan, the "reciprocal personnel transfer system" was started.

Just by looking at the name, you can tell that everyone takes turns taking the position of President of the Bank of Japan.

This term is the Ministry of Finance, so the next president must be selected from within the Bank of Japan.

However, most of the time, due to airborne reasons and internal confrontations within the Bank of Japan, CEOs from the Ministry of Finance are often at risk of being sidelined.

The Mie Noyasu in front of him is a direct descendant of Nichiyen himself, and he is also a loyal believer of Tenmanda Naoto.

Yes, what Mie Noyasu has always wanted to do is to make the Bank of Japan independent and implement its own austerity policy.

Thoughts were racing in his head, and Renio Murayama raised his hand to stop the dispute between the Ministry of Finance officials and Mie Noyasu.

“Sanshengyemulang, Neon’s inflation is still within controllable range.

However, considering the unusually active property market, the Ministry of Finance agreed to raise interest rates.However, interest rate hikes need to be carried out in multiple steps and should not be rushed. "

Alas, there is no way. Neon’s domestic bubble is a problem and it always needs to be solved.

Moreover, both the United States and Britain are raising interest rates, and Neon can only follow suit.

If you don't follow suit, capital will flee, and the neon stock market is likely to have a hard landing.

Therefore, under the dilemma, the Ministry of Finance decided to explore the road first with a small amount of water.

As for the grievances between the Ministry of Finance and the Bank of Japan, let’s put them aside for now.

After receiving Murayama Renxiong's affirmative reply, Mie Yeyasu finally showed a victorious smile.

Only by raising interest rates on the yen can we curb the banking industry's lending to the stock and property markets, which will further curb the continued influx of hot money into these two markets.

As less capital enters the market, investment enthusiasm in real estate and other industries will decrease.

Eventually, house prices will fall, and ordinary people will be able to afford houses.

What a perfect plan. Mie Yeyasu has long wanted to take action against Neon's extremely high commodity and land prices.

Although the Ministry of Finance has not completely relented, at least this is a good start, right?
Yes, although Mie Noyasu is the next president of the Bank of Japan, what he wants in his heart is that he hopes that people can really afford housing.

From this point of view alone, his starting point is good, and he really wants to do something for Neon's economy.

However, economic regulation, especially economic regulation involving the international environment, has always been unpredictable.

Maybe his original intention is good, but the final result may not be beneficial.

Mie Yeyasu has his own ambitions and an idealistic side.

However, the impact of these has not been reflected yet.

At this time, he was arguing with officials from the Ministry of Finance about how much the Bank of Japan should increase interest rates.

Mie Yeyasu naturally hopes that the more the better, at least to ensure that Neon can withstand the impact of the US dollar and pound interest rate hikes.

However, as the current vice president of the Bank of Japan, he also knows that he cannot take too big a step, otherwise something may happen easily.

After several rounds of confrontation between the two sides, the Bank of Japan and the Ministry of Finance finally reached an agreement:
The Neon government plans to raise interest rates on the yen at the end of May, with the expected target being to adjust the interest rate from the original 2.5% to 3.25%.

After the Plaza Accord, in order to implement loose financial policies and stimulate domestic demand, there was a series of interest rate cuts.

Now in order to curb the continued expansion of the bubble, Neon is beginning to prepare to raise interest rates again.

The interest rate hike discussed today is just a signal. Others may not know what will happen next, but Mie Noyasu is very clear.

He has made up his mind that when he takes over the Bank of Japan will continue to raise interest rates until the bubble is suppressed.

Mie Noyasu, who is considered to be the person who burst the neon bubble in later generations, is also the famous "Ghost of Heisei".

His ambition and radicalness are far more than what is revealed now.

In 89, the first year of Heisei, great changes were already quietly brewing.

(End of this chapter)