Chapter 585

Almost at the beginning of every year, it's the busiest time for western finance departments, because the new year's budget is coming soon. The so-called budget is to estimate how much the government will spend in this financial year. The Department responsible for budgeting in western countries is usually the Ministry of finance.

The Ministry of finance will make a detailed financial statement according to the budget of each department of the government, which is still only a plan. Whether the plan can be carried out smoothly or not, it has to go through the cooperation of the other two important joints, the Congress and the central bank.

In some western countries, the central bank is subordinate to the Treasury, but in the United States, the Federal Reserve is independent of the Treasury. Instead of being responsible to the government, the Federal Reserve serves the U.S. financial institutions represented by the Federal Reserve.

The first hurdle for a budget designated by the Treasury is Congress. Now Reagan's Republican Party firmly holds the majority of seats in Congress. As long as there is no internal disagreement within the Republican Party, the budget will not meet any twists and turns in Congress. On the contrary, the Federal Reserve has some difficulties. In this series of processes, the Treasury only estimates how much the government will spend, while Congress decides whether or not to agree with the government to spend the money. The Federal Reserve is here to help the government raise the money.

The U.S. government's budget is definitely the largest in the world, and the Federal Reserve has to find ways to raise this money every year. Most of this money comes from the rich investment banks and financial institutions on Wall Street. The deal between the Federal Reserve and Wall Street is mainly through US Treasury bonds.

Whenever the government needs to issue treasury bonds, it will consult various financial institutions through bidding, so as to determine the overloaded interest rate and the scale of issuance. If there is no one to pay attention to the Treasury bonds of the United States next year, it will be a major event affecting the government's finances next year.

Just last year, under the influence of the Plaza Agreement. U.S. bond yields continue to decline. However, although inflation has stimulated exports, it has not improved the tax and fiscal expenditure of each government. The United States has always been under great pressure from the Soviet Union. Military spending will only increase. However, the current high inflation rate makes the large financial institutions in the United States extremely dissatisfied. If the US dollar continues to depreciate, the financial institutions will never pursue the US national debt.

Paul Walker, the current chairman of the Federal Reserve, is obviously on the side of Wall Street. His aversion to inflation is well known in the financial sector of the United States. More than once, he called inflation a public nuisance to the American economy, and Paul Walker's action proved that he was a firm opponent of the Plaza plan.

It is against this background that the bidding of American bonds in 1987 is facing many difficulties. At this time, Xie liaosha intends to enter the bond market. Sherius asked Mikhail to consult Bill Gross. To his surprise, Bill Gross seemed to have full confidence in the 1987 treasury bond yield.

"Sir, Paul Walker, the chairman of the Federal Reserve, is well known for his attitude towards inflation. Under such circumstances, he will make full use of his right to recover the surplus funds in the market. Therefore, the amount of treasury bonds issued this year will be unprecedented, and the interest rate should be very attractive!" Bill Gross said confidently.

"But now the dollar is devaluing!" Mikhail asked back, still not quite at ease.

"Sir, Paul Walker is not obedient to President Reagan. He is extremely conceited and has always been known for his tough attitude. It is absolutely impossible for him to cooperate with the government's fiscal policy. Only the Ministry of finance can cooperate with him! Therefore, I judge that the depreciation trend of the US dollar will soon make the government have to intervene. The Treasury will certainly respond to Paul Walker's tightening of liquidity. "

After listening to Bill Gross's explanation, Mikhail relayed Bill Gross's argument to sherius, who stood on Bill Gross's side almost without thinking.

"Mikhail, we are not short of money. What we are short of is talents. What we are short of is safe and stable capital circulation channels. What we are short of is the means to keep and increase the value of this wealth. So we need to change our thinking. We need to participate in national debt with stable income and fast consumer companies with stable cash flow, Infrastructure investment like BG is also a good way to preserve our wealth! So, Mikhail, no doubt about people, no doubt about people, support bill gross and Blackstone Group with all his strength

With this sentence of Xie liaosha, Mikhail naturally felt relieved. Only a week or so later, Bill Gross's prediction came true.

Just as the world's capital continues to pursue Japan's economy, the U.S. Treasury Department is finally unable to sit still. On February 22, 1987, the finance ministers and central bank governors of the United States, the United Kingdom, France, the Federal Republic of Germany, Japan, Canada and Italy signed a new agreement at the Louvre in Paris. According to the agreement, the seven countries will jointly intervene in the exchange rate market to prevent the continued depreciation of the US dollar. As soon as the news came out, the yen began to depreciate significantly due to the positive effect of the US dollar. Xie liaosha, who has long escaped from the Japanese market, successfully escaped the disaster and kept the fruits of his victory.

Bill Gross's bond investment has also been rewarded handsomely in recent days. The short-term treasury bonds held by the Bank of Columbia rose one after another. Although the rise was not big, it was a signal for the Treasury bond market. Bill Gross took the opportunity to sell the profitable short-term treasury bonds to the market. After recovering part of the funds, he entered the Japanese foreign exchange market again.

Xie liaosha has been paying attention to Bill Gross's trading methods. Although Bill Gross thinks that the Japanese market is beginning to suffer under the guidance of the Louvre agreement, it is still an attractive investment target. However, the amount of capital of Xie liaosha is too large. If he makes a move, it will have a significant impact on the market. Therefore, Xie liaosha does not intend to follow bill gross to re-enter the Japanese market this time.

Through Mikhail, Mr. seryosha offered Blackstone new advice on how to acquire Volkswagen from the federal government at the lowest cost.