Rebirth of England.

Chapter 672 Long-term Plan
"Your Highness, our short positions in Japan and South Korea have yielded good returns..."

After accepting Sun Zhengyi's hospitality, Barron met Phelan O'Neill who was in Tokyo at the time.

After completing the short selling of the subprime mortgage crisis in the US market through the Black Swan Fund, Phelan O'Neill, after receiving a generous share of the profits, also gladly accepted another task, which was to cooperate with other Wall Street capitals to carry out short selling operations against Japan and South Korea.

After all, this time Wall Street capitalists suffered heavy losses in the subprime mortgage crisis and needed to make up for their losses in other places. Their first target was Japan and South Korea - after all, colonies were meant to be plundered.

Of course, if short selling is carried out in Japan and South Korea at this time, the rate of return will naturally not be as good as the Black Swan Fund's short selling in the United States.

But there are also advantages, that is, in these two regions, at least they can act more without scruples and have more means at their disposal.

This time, in addition to the approximately US$23 billion raised by Barron through IE Fund, Rich200 Capital and other channels, plus other Wall Street capital, the total funds they used for short selling amounted to as much as US$500 billion.

According to Ferran O'Neill, their profits have exceeded $100 billion so far, and this is still not the final result...

"We have already formulated a comprehensive long-term plan. Even if the short selling is completed this time, it will still be difficult to continue to make profits in these markets when the Japanese and South Korean markets enter the recovery period."

Ferran O'Neill excitedly introduced to Barron.

It can be said that what they have formulated is a long-term plan with a cycle of several years or even more than ten years!

Taking the Japanese market as an example, Ferran O'Neill and those Wall Street capitals will use the principal and profits from this short selling to purchase corporate bonds of some large companies in the United States through Wall Street banks. You know, after the subprime mortgage crisis, even if the Federal Reserve is about to launch a quantitative easing policy, the financing channels of many companies have not yet fully recovered, so the interest on these corporate bonds will be above 5%.

Then, they used these corporate bonds as collateral to issue a large number of bonds in Japan. As we all know, the interest rate in Japan is very low. These 5-year Japanese yen bonds often have an interest rate of less than 0.5%!

The interest rate for a 30-year long-term bond is only 1.5%, which is almost free!
At the same time, in addition to Japan's launch of quantitative easing policies and injecting a large amount of funds into the market, in order to further improve the efficiency of monetary policy transmission, the Bank of Japan has carried out a series of innovations, one of which is to expand the scope of asset purchases.

Generally, when a central bank implements quantitative easing policies, it basically only purchases government bonds or bonds with government credit - for example, the Federal Reserve purchased more than $3 trillion in government bonds, agency bonds and MBS during the subprime mortgage crisis.

In addition to purchasing a large amount of Japanese government bonds, the Bank of Japan also purchased risky assets such as corporate bonds, commercial paper, exchange-traded funds (ETFs) and real estate investment trusts (REITs). The main purpose is to reduce risk premiums and long-term interest rates and improve the corporate financing environment.

Then these Wall Street capitals will be able to get the Central Bank of Japan to buy the bonds they issue, so that they can obtain sufficient funds, or Japanese yen funds!

At that time, because the Japanese stock market had been shorted by them, they would be able to use the yen obtained from issuing bonds to buy the bottom of the Japanese stock market and buy a large number of shares of their five major trading companies and other large companies. In the future, after the start of quantitative easing, the yen will enter a long-term depreciation channel, and the yen will depreciate greatly against the US dollar. The key point is that the funds for their large-scale purchase of Japanese stocks come from the yen obtained from issuing bonds in Japan, and their own funds are used to buy corporate bonds in the United States. When they need to repay these bonds issued in Japan, because the yen has depreciated against the US dollar, repaying them in US dollars is equivalent to a huge discount!

And their US dollar principal has been wasted on high interest for so many years!
After Japan's economy recovers, in addition to being able to make a profit and leave, they can also find opportunities to short sell again!

So ideally, they would be able to repeat this process over and over again.

Moreover, Japan's financial policies will also cooperate with their entire action process... It's not that they are willing to do so, but mainly because if they don't do so, a mysterious department of Japan will be dispatched - the Special Investigation Department of the Tokyo District Public Prosecutors Office. Those politicians who disobedient will inevitably be found to have accepted bribes and committed fraud, and thus step down.

In Japanese politics, the Special Investigation Department of the Tokyo District Public Prosecutors Office is very powerful, because behind the entire department, there is always the figure of America. It can even be said that they are a knife of America stuck in Japan.

Because the Tokyo District Public Prosecutors Office's Special Investigation Department and ordinary Japanese politicians are "two trees growing from different roots."

The origins of the Special Investigation Department are closely related to the US military stationed in Japan.

During World War II, when the Japanese army was defeated, they hid a large amount of supplies. On the one hand, this may have been to allow the Japanese army to make a comeback if possible, and on the other hand, it became the private property of powerful people.

In order to search for various supplies hidden by the Japanese army, the Allied Command headed by MacArthur established an organization called the "Range Force", most of whose members were former Japanese staff of the American Consulate and Japanese employees of the Allied Command.

Most of them are fluent in English and admire and accept Anglo-American social concepts.

After special training, this group of personnel put into work. Relying on their advantage of being much more familiar with Japan than Americans, the rangers seized many hidden assets for the US military and made great contributions.

Since then, this organization has been retained to investigate corruption and bribery in Japan's political and financial circles. This is the predecessor of the Special Investigation Department.

To this day, the Special Investigation Department of the Tokyo District Public Prosecutors Office is still a way for the United States to exert influence on Japan - this is not difficult to understand. After all, in order to "please" the United States, this department once seized countless hidden properties of the Japanese nobles and conglomerates, which greatly offended the local forces in Japan. So in order to continue, they can only get closer to the United States.

In addition, after becoming the "direct line" of America in Japan, the Special Investigation Department of the Tokyo District Public Prosecutors Office also gained "privileges" that surpass many bigwigs. The taste of this power will also make it difficult for those in it to give up.

And even the Prime Minister of Japan is servile to the United States. For the members of the Special Investigation Division of the Tokyo District Public Prosecutors Office, there is no psychological barrier at all to act in this way.

(End of this chapter)