RBCT Chapter 214 Awakeness and Numbness
Chapter 214 Awakeness and Numbness
(Thanks to "Mu Shiniang who loves Lyon potatoes" for the two God-level certifications! Thank you to "Lazy Turtle" for the God-level certification! Thank you to "Dragon's Void" for the God-level certification! Thank you to ":)" for the God-level certification! Thank you to "hy9169" for the God-level certification! And thank you to all the readers who have given me rewards and support! A bonus chapter of 5,000 words is presented here~)
December 29, 1989, 8:30 a.m.
Nihonbashi-moto-ishi-cho, Chuo-ku, Tokyo.
Bank of Japan (BOJ) headquarters building. President's office.
A slightly warm airflow continuously flows into the room through the concealed brass vents, completely blocking the biting chill of the early winter morning from the thick bulletproof glass curtain wall.
Sixty-five-year-old Yasushi Mieno sat upright behind a large cherry wood desk.
This financial bureaucrat, who holds the reins of the nation's monetary system, is dressed today in a meticulously tailored dark black suit. His hands are clasped together on the table, and several bluish veins are visible on the surface of his large, bony fingers.
His gaze passed over the green desk lamp and was fixed on the continuously running market data terminal screen in front of him.
On the pale green cathode ray tube screen, a huge set of numbers remained frozen at yesterday's closing price.
[38, 950.20 points]
Mieno Yasushi's brows remained furrowed.
A few days ago, he personally issued an order to raise the official discount rate by 0.5 percent. In conventional monetary policy logic, this interest rate hike is sufficient to significantly increase borrowing costs in the market and forcibly drain excessive liquidity.
This directive, though delivered to the boiling financial markets, failed to cause the slightest ripple.
He extended his right hand and tapped a few times on the terminal's keyboard.
The screen changes. A set of macroeconomic graphs representing the M2 (broad money) supply appears.
This curve exhibits a completely distorted, steep angle of elevation.
Mieno Yasushi stared at the out-of-control curve, his brows furrowing deeply, and several deep lines appearing on his forehead.
He overestimated the effect of the interest rate hike order and underestimated the current frenzy of the Japanese economy.
The central bank's interest rate hike order only increased borrowing costs within the financial system. However, over the past few years, Japan's zaibatsu (financial conglomerates) and private individuals have accumulated an extremely large amount of cash reserves.
Money is flowing irrationally across Japan. Most notably, the Saionji family has invested massive amounts of money in infrastructure projects such as the Gokurakukan in Niseko, Hokkaido, and the Saionji Tower in Odaiba. These mega-projects have had a powerful ripple effect, with major conglomerates following suit, directly converting their vast paper wealth into tangible cash in the accounts of countless low-level workers and suppliers in the Kanto and Hokkaido regions.
Meanwhile, in the struggle for market share, a wave of price reductions, beginning with the Saionji Group's forced retention of 3% of the consumption tax, swept across the entire retail industry. This social-level price reduction thoroughly filled the wallets of millions of middle-class people.
Businesses and individuals across society have fallen into a collective state of irrational expansion. Countless massive cash flows, bypassing the banking credit system and circulating wildly directly in the real economy, have converged into a comprehensive flood. This flood has completely overwhelmed the slight tightening effect brought about by the central bank's interest rate hikes.
The Japanese economy has become a train that has completely derailed and lost its brakes, hurtling headlong into an abyss.
Mieno Yasushi stared at the terminal, remaining silent for a long time.
Since raising interest rates is not enough, we should use even tougher measures.
He opened the drawer beside him and took out a high-grade official document with the joint watermark of the Tibet Ministry.
At the top of the letter, he wrote a line of bold Chinese characters: “An Emergency Proposal on Implementing Total Regulation of Real Estate Financing.”
Since the moderate interest rate leverage had failed, he decided to request the Ministry of Finance to use the most forceful administrative order: to directly cut off all commercial banks' credit to the real estate sector, forcibly locking up this monster known as the "land myth" at its physical root.
"Knock, knock."
Two soft knocks on the door interrupted the pen's journey.
"Come in." Mieno Yasushi didn't even look up, continuing to write down the details of the proposed draft.
The heavy wooden door to the office was pushed open.
The confidential secretary, carrying a thick stack of documents in both hands, walked briskly to the cherry wood desk. He bowed slightly and neatly placed the stack of documents beside the terminal.
"President," the confidential secretary said in a low voice, tinged with barely concealed unease. "This is the joint letter from various sectors that just arrived this morning."
Mieno Yasushi stopped writing with his pen. He looked up, his gaze falling on the covers of the letters.
The top document bears the official red seal of the Ministry of International Trade and Industry (MITI). The following documents bear the logo of the Japan Business Federation (Keidanren) and the personal seals of several prominent Liberal Democratic Party politicians.
He stretched out his finger and turned to the top letter.
The letter was worded extremely euphemistically, yet it was filled with an irresistible sense of oppression.
The entire document repeatedly emphasizes that "the new era name 'Heisei' is about to usher in its first full new year." Various factions, citing the need to maintain social stability and protect corporate profit expectations, unanimously demanded that the Bank of Japan maintain a loose monetary environment during this crucial period…
Mieno Yasushi gripped the edge of the letter.
The paper made a faint crackling sound between his fingertips.
These joint letters represented the united will of the entire political and financial circles of the country. Faced with this massive interest group, his unfinished warning letter seemed incredibly weak.
He turned his head, his gaze passing over the huge floor-to-ceiling bulletproof glass window, overlooking the vast city below.
On the streets of Nihonbashi, financial professionals are hurrying about in preparation for the last trading day of the year. In the distance, on the streets of Ginza, people who have started their New Year's celebrations early are lining up in long queues in front of various promotional signs displayed by different businesses.
Beneath the surface of extreme prosperity, faint cheers pierced through the thick clouds.
Everyone is looking forward to a more prosperous New Year.
Mieno Yasushi quietly watched the revelers outside the window. His breathing gradually calmed down.
A full ten seconds passed.
He turned his gaze back to the half-finished draft of the "Total Quantity Regulation" document in front of him.
My wrist feels slightly heavy.
He put the cap back on the Platinum fountain pen.
Mieno Yasushi picked up the draft and folded it in half. He opened the bottom drawer of his desk and placed the document, carrying a fatal warning, into the deepest shadows.
Push the drawer up and turn the brass lock.
"Click."
The locking springs engaged, temporarily locking away prosperity.
He put a set of spare keys into the inside pocket of his suit.
"Go and reply to them." Mieno Yasushi's voice returned to its usual calm, devoid of any emotional fluctuation. "The Bank of Japan will fully consider the opinions from all sides and act prudently."
……
10:00 AM.
Matsuura Construction Headquarters, Chiyoda Ward. President's Office.
The air was filled with the strong aroma of Cuban cigars, and the smoke swirled in the space below the ceiling before being slowly drawn away by the exhaust fan.
President Matsuura sank into the large leather sofa. This slightly overweight real estate developer, who had been frantically hoarding land in Tokyo Bay with extremely high leverage, seemed to be breathing somewhat rapidly at this moment.
He unbuttoned the top button of his French shirt collar, his thick fingers holding a half-smoked cigar.
The finance manager stood opposite the marble coffee table, holding a data report marked with red deficits in both hands, and placed it flat on the table.
"President." The finance manager's voice trembled, and a layer of cold sweat beaded on his forehead. "The overnight interbank lending rate was adjusted upwards last night. The transmission effect of the Bank of Japan's slight adjustment to the discount rate is more intense than expected."
Matsuura's gaze was fixed on that report.
"Because all seven of our newly acquired port area land parcels were financed with short-term bridge loans..." The finance manager swallowed hard, his Adam's apple bobbing. "After the interest rate hike, the meager rental income these parcels can currently generate is no longer enough to cover the monthly bank interest payments."
Matsuura's fingers, which were holding the cigar, trembled slightly, and he could barely hold the expensive cigar.
He graduated from the Faculty of Political Science and Economics at Waseda University; he didn't get there purely by luck.
As a real estate elite who has received systematic modern business training, he can easily calculate the final loss gap even if he doesn't want to think about it.
Once assets lose their ability to generate positive cash flow, they become pure money-consuming black holes. This game, sustained by credit expansion, has been mathematically and logically sealed for failure.
The only solution is to quickly sell off these assets before the funding chain breaks, cutting off the continuous bleeding wound.
Matsuura's chest heaved violently. He raised his head, his gaze passing over the marble coffee table and landing directly on the giant electronic display screen hanging in the center of the wall.
On the screen, the Nikkei 225 index chart is rising at an extremely steep angle.
The green numbers were jumping wildly.
[38, 970 points]
The market is approaching the historic threshold of 39,000 points.
As Matsuura stared at the ever-expanding number, the bloodshot veins in his eyes spread rapidly.
No...no, no, no, what we learn in school is wrong. Japan is special...it is special.
He abruptly cut off the mathematical formulas in his mind about negative cash flow and bankruptcy liquidation.
The defenses of reason crumbled quietly under the impact of extreme greed and herd mentality.
Matsuura suddenly stretched out his right hand and grabbed the financial statement with red deficit markings on the table.
"President?"
Before the finance manager could react, he had already turned around and roughly stuffed the report into the paper feed of the electric shredder next to his desk.
"Buzz—"
The motor emitted a dull hum. Sharp steel gears meshed rapidly, tearing the report, a symbol of death, to shreds. White scraps of paper fell into the collection bin.
It was as if simply tearing that piece of paper to shreds would change reality.
Matsuura grabbed the receiver of the internal telephone on his desk.
"Get me to the Funds Dispatch Department!" Matsuura roared into the microphone, his voice extremely hoarse from being congested with blood.
He stared intently at the price quote machine on the wall with his bloodshot eyes.
"Contact Chiba Bank immediately! Get all the company's construction projects, office buildings, and all my private properties mortgaged again!"
A flurry of confirmation came from the other end of the phone.
"Don't you understand?! Borrow the last tranche of bridge financing at the highest interest rate!" Veins bulged on Matsuura's neck. "Pour every single penny you raise into the Nikkei blue-chip stocks! Buy them all!"
"The market is still rising! Breaking 40,000 points is only a matter of time!" He gasped for breath, shouting instructions into the microphone. "The country will never allow the economy to regress! As long as we get through the New Year, we've won!"
Matsuura slammed the phone down.
The earpiece struck the plastic base with a sharp, piercing sound.
……
Noon.
Chiyoda Ward, Marunouchi.
Mitsubishi headquarters building, top floor, office of the chief advisor.
Sunlight streamed through the thick, floor-to-ceiling glass curtain walls, casting large, bright patches of light on the Persian wool carpet. The indoor air was dry and warm.
Hiroya Iwasaki, the top advisor of the Mitsubishi Group, was deeply engrossed in a large Chesterfield leather sofa.
This old-money tycoon, who has experienced countless economic cycles before and after the war and built the vast Mitsubishi empire, is wearing a minimalist dark cashmere cardigan today.
He held a thick document with a red confidential seal in his hands.
Final Confirmation Letter from Mitsubishi Estate Regarding the Acquisition of Rockefeller Center, New York.
Hiroya Iwasaki's gaze swept past the edge of the document and glanced at the Bloomberg terminal placed in the corner.
The green data stream on the screen scrolled steadily. The Nikkei average was making its final push toward the 39,000-point mark.
He stared silently at the frantically jumping scale.
Whether it's the illogical market figures or the exorbitant land prices in Tokyo, the underlying real support has long been completely drained.
His reason and past experience told him that this was just a mirage built on excessive credit.
But... there's too much fanatical rhetoric surrounding "Japan's exceptionalism."
"Tokyo's land is non-renewable, and there is absolutely no physical possibility that land prices will fall."
"The 'escort fleet' model of cross-shareholding among Japanese companies is sufficient to withstand the impact of any financial crisis."
"A strong manufacturing base and the meticulous guidance of the Ministry of Finance have built a lasting prosperity that transcends common sense in Western economics."
These comments swept through every corner of the business world like a tidal wave, leaving even the battle-hardened Iwasaki with a lingering, faint doubt in his heart.
To cope with this extremely low probability of change, he devised a dual-track strategy.
While riding the wave of the times to conquer cities and seize territories, they quietly prepared air-raid shelters to withstand avalanches.
He left the cross-border acquisition agreement on the coffee table for the time being.
Extend your left hand and press the internal telephone communication button on the marble tabletop.
"Connect with the Finance Director."
Two seconds later, the line was connected.
"Immediately implement the second contingency fund plan," Iwasaki said calmly. "Taking advantage of the current social climate and the extremely high credit ratings of Japanese companies internationally, issue warrant-backed corporate bonds in the European market at full speed. Maximize the amount."
"The funds raised through this bond issuance were entirely retained overseas, converted into safe US dollar cash and yields of moderate returns..."
The conversation abruptly stopped there.
"...U.S. short-term Treasury bills."
Hiroya Iwasaki uttered the word in a low voice.
US short-term Treasury bills? I feel like I've heard that term somewhere before...
A brief silence fell over the hands-free call.
"Your Excellency, Supreme Advisor?" The Finance Director's slightly puzzled voice came through the loudspeaker, interrupting Iwasaki's thoughts. "Are you still listening? After the funds are converted, please provide further instructions regarding the trusteeship."
Hiroya Iwasaki snapped back to reality. His fingers tightened slightly on the leather armrest of the sofa.
"It's alright, let's continue." He quickly adjusted his breathing, his tone returning to calm. "Once the funds are fully converted, immediately proceed with offshore silent custody..."
After issuing the final instruction, Iwasaki released the communication button.
He picked up a bone china teacup from the coffee table and took a sip of the Ceylon black tea inside.
Oh, right, it's the Tokyo Bankers Club.
Um... Saionji Satsuki.
The seventeen-year-old heiress from a former aristocratic family spoke with deep helplessness and bitterness. She claimed that her family elders had forcibly converted a massive sum of 350 billion yen into US dollars and used it to purchase short-term US Treasury bonds with extremely low returns.
US dollar cash. Short-term Treasury bills.
Both are considered the safest havens with the highest risk resistance levels.
As Hiroya Iwasaki watched the black tea swaying in his cup, a sudden realization flashed in his eyes.
Back then, I was holding a glass of whiskey, secretly mocking the timidity of the old Saionji family.
Now, aren't I becoming hesitant and timid?
Hiroya Iwasaki shook his head and smiled helplessly. Even he had misjudged her; ultimately, he had underestimated her because of her age.
In retrospect, all the talk of family infighting and power grabs by elders was likely a hoax. She had been orchestrating this farce all along, using it as cover for the Saionji family's other actions.
Moreover, at that time, she seemed to be intentionally reminding herself.
Is he trying to do someone a favor?
"That little girl from the Saionji family... she's definitely not to be underestimated."
Hiroya Iwasaki sighed silently in his heart.
Since the other party was able to complete the withdrawal of funds and hedging arrangements so early, it means that the Saionji family had much longer and more time to prepare for this avalanche than Mitsubishi.
Beneath that seemingly forced contraction lies a far larger and more deadly ambition. Mitsubishi must remain extremely vigilant about the Saionji family's future development within the Japanese business world.
He noted down this secret favor that had been revealed in advance.
Hiroya Iwasaki's gaze returned to the document on the table.
Final Confirmation Letter from Mitsubishi Estate Regarding the Acquisition of Rockefeller Center, New York, USA.
Should I apply the brakes?
He could hear the faint sounds of street noise penetrating the bulletproof glass.
In this moment when everyone has lost their minds, anyone who tries to stand in front of the train will be mercilessly crushed by this raging tide.
Let's make this fire burn even brighter.
This blockbuster deal to buy an iconic American building will push the national fervor to its true peak. The greater the fervor, the higher the credit ratings of Japanese companies overseas, and the less resistance Mitsubishi will face in issuing corporate bonds to hoard dollars.
He pulled out the pen from his breast pocket.
The pen tip touched the paper, and he signed his name in the final signature column.
Hiroya Iwasaki pushed the documents to the corner of the table, picked up his slightly chilled black tea, and cast his gaze toward the bustling Marunouchi district outside the floor-to-ceiling window.
The early winter sun pierced through the clouds, refracting a dazzling golden patch of light onto the glass curtain wall.
Bureaucrats locked up warnings, gamblers lost their reason, and tycoons secretly dug air-raid shelters.
Faced with the abyss that had long stood between them, all those who had seen through the illusion reached a morbid tacit understanding at this moment.
They both stepped on the gas pedal, accelerating the crash.