The rise of a great power: starting with military industry

Chapter 526 G5 Finance Ministers Meeting
Southwest Associated University (Panlong Campus).

At this time, the new batch of students are undergoing military training.

This class of students can be said to be the chosen ones. They are the first class of students after the reconstruction of Southwest Associated University. Each of them has excellent results in the college entrance examination in their respective provinces.

There are even top scorers in liberal arts and science in fifteen provinces!
Before the college entrance examination, the admissions office of Southwest Associated University organized school professors to give speeches at major high schools across the country and even placed recruitment advertisements on CCTV.

This meant that although Southwest Associated University was recruiting students for the first time after its reconstruction, it was extremely well-known.

Liu Tao came to the campus of Southwest Associated University and watched the students undergoing military training.

The military training will last for a whole month, with military training during the day, housekeeping and ideological classes at night, and military theory classes on weekends.

Although this month is only the beginning of a college student’s college life and a very short segment of their life, it is definitely an unforgettable segment for every college student.

At this time, some classes were taking a break, and the military training instructor was teaching the students to sing military songs.

The "Tiger Brigade" was responsible for the military ranks of Southwest Associated University this time. The soldiers of the "Tiger Brigade" were all covered with medals.

In front of these medals, these chosen ones were suppressed and had no temper at all.

Because these chosen ones are facing soldiers who have won many battles.

Looking at these students with immature faces, Liu Tao has infinite expectations in his heart, because these people will contribute to the future prosperity of China.

Perhaps among these people, some will become excellent teachers, teach and educate people, and cultivate more outstanding students; some will enter the official career, work hard for the rejuvenation of China, and benefit the people; some will become scientific researchers, do things that ordinary people cannot do, and solve problems that most people cannot solve; some will enter the business world, struggle in the tide of the times, and become entrepreneurs.
Of course, maybe some people will end up selling pork and then live a different life from other pork sellers.

Although the conditions are still limited now, Liu Tao saw a spark, and a spark can start a prairie fire.

While Liu Tao was visiting the military training of Southwest Associated University students, the finance ministers of the United States, Japan, Britain, France and Germany gathered again at the Louvre in France.

In the afternoon in Paris at this time, the blue sky is intoxicating.

The white clouds rolled and swayed in the breeze, just like the French girls in various poses on the streets.

The Seine River sparkled in the sun, as if a few handfuls of gold were scattered. In the distance, the spire of the bell tower of Notre Dame de Paris pierced the sky, overlooking the vicissitudes of the world for hundreds of years.

On this sunny afternoon, U.S. Treasury Secretary James Baker was feeling gloomy.

A year ago, in order to get the US economy out of its sluggish predicament, the finance ministers of five countries formulated the "Plaza Accord" at the Plaza Hotel in New York. Under pressure from the United States, West Germany and Japan significantly appreciated the West German mark and the Japanese yen, and devalued the US dollar to promote the development of the US export industry.

But no one expected that the yen would appreciate wildly at the beginning, catching all parties off guard. Although Japan later took strong measures to stabilize the yen and allow it to appreciate in an orderly manner, to date, the yen has appreciated by 33% compared to when the Plaza Accord was signed.

Under that stable exchange rate, Japan suffered considerable losses.

The depreciation of the dollar did not solve the problem of inflation in the United States. Instead, due to high oil prices and the sharp increase in the prices of raw materials imported from abroad, the US industry has not yet enjoyed the benefits of the depreciation, but has fallen into the dilemma of having no money to buy raw materials. In addition, the two operations this year, "Prairie Fire" and "El Dorado Canyon", seemed to have severely beaten Libya and almost killed Gaddafi, and the United States had a great sigh of relief, but it suffered a great loss, and the oil price rose sharply during that period.

The result was that a large number of American companies went bankrupt, banks fell into crisis, stocks and bonds began to shrink sharply, and the entire US economy fell into serious shock.

Under tremendous pressure, many American companies have closed their factories in the United States in order to avoid bankruptcy, and have chosen to open factories in China or directly purchase Chinese goods to reduce production costs.

James Baker was under tremendous pressure. Some people had already criticized him as the worst Treasury Secretary in American history and Reagan as a worse president than Hoover.

Before Reagan came to power, the US economy was facing double-digit inflation and a 20% bank interest rate. Nearly 800 million people were unemployed, and the average hourly wage of workers had fallen by 1976% compared to 5. The average personal tax rate levied by the federal government was as high as 67%, and the national debt was nearly $1 trillion.

After Reagan came to power, he was a libertarian who implemented free economic policies, advocating tax cuts, reducing the size of the government, and reducing regulations on business.

However, over the past few years, inflation in the US economy has been hovering around 10%, bank interest rates have also exceeded 10%, the number of unemployed people has exceeded 1500 million, and the national debt has approached 3 trillion US dollars.

The Reagan administration's new military strategy allocated a large amount of military budget, significantly increased military spending, and increased the purchase of various weapons.

Now the United States is no longer the world's largest creditor country as it used to be, but has become the world's largest debtor country.

Even Reagan invested a lot of money every year to fight HIV. So far, the investment in fighting HIV has reached 570 billion US dollars, but HIV has not been eradicated. Not to mention eradicating HIV, even the number of people infected with HIV is increasing rapidly, which is terrifying.

By now, James Baker and others have realized that in order to solve the current problems in the United States, in addition to devaluing the dollar, a key solution is to lower oil prices.

If the price of oil can drop to $20 per barrel or even $10 per barrel, then the current inflation rate in the United States will certainly be greatly reduced, and the country may even be able to get out of the economic crisis.

This G5 finance ministers' meeting is a new opportunity. We must once again reach consensus with our allies and let them formulate appropriate policies to protect the smooth recovery of the US economy.

Of course, this is a nice way of putting it. To put it bluntly, the United States now has to suck blood from its allies.

In recent years, South America, or the entire Latin America, has already fallen into an economic crisis due to the tide of the US dollar and can no longer produce any oil.

Those third world countries either followed the Soviet Union and stood in the Soviet camp, or were extremely poor and had no money.

Among the countries in the Third World, the only one that still has some money left is China. However, China is an important strategic fulcrum for the United States, and China's military strength is not weak and its autonomy is extremely strong, so the United States does not dare to make such a request.

Moreover, the RMB exchange rate against the US dollar is depreciating rapidly, allowing the United States to import a large number of goods from China. If it were not for the large number of goods from China, the current inflation rate in the United States would probably be much higher than it is now.

Now among all the major countries, the money that the United States can make in trade is actually from China.

As for other countries, whether it is Japan, West Germany, France, etc., the United States is in a trade deficit.

The Plaza Accord did not completely solve the problems of the United States! This G5 Finance Ministers' Meeting is an opportunity for the United States.

(End of this chapter)