Henry Williams, as the CEO of KY Investment Fund, was no less concerned about the Japanese financial market than David. He asked, "Boss, although we all know that the degree of overheating in the Japanese economy has exceeded imagination, how can you predict that this stock market crash in Japan will last for several years?"
Yang Jing smiled, looking at the company executives who were all curious, knowing that he had to explain their doubts today, so he said: "Actually, this is very simple. Judging from Japan's own economy and the global environment, it is easy to find the key points, and then analyze them, and you can roughly guess the time of the Japanese stock market crash."
"First, the Japanese economy started to develop rapidly after entering the 1970s, which is a good thing, but the arrogant character of the Japanese added fuel to this wave of rapid economic growth. We all know that a stagnant economy is definitely not good, but overheated economic development is not necessarily a good thing. In fact, Japan's economy has been a little overheated in the past 20 years. But the Japanese did not realize this, and they even disliked that their country's economic growth was not fast enough. In the eyes of the Japanese, the ultimate result is that Japan's economic output exceeds that of the United States."
Hearing this, everyone at the table laughed. The boss was right. Japan's economy has developed rapidly in the past 20 years, but it is simply wishful thinking to catch up with the United States.
"The Japanese did not realize that their economy had actually entered a dangerous period since 1985. Uncontrolled rapid economic growth is actually a very dangerous thing. If the Japanese had realized this at that time, they could have used policies to regulate the economy and strive to make Japan's overheated economy have a safe soft landing. But unfortunately, the Japanese have been completely blinded by this unprecedented prosperity. Not only did they not regulate, but they allowed the situation to continue to accelerate."
"It's a very simple data. The Nikkei index rose from 0.05 in February 1985 to 0.06 in September 1987. It nearly doubled in two and a half years. This is incredible. Of course, at this point in time, our federal economy was growing as fast as the Japanese economy. Our S&P 500 and Dow Jones indexes were also so crazy. So, the stock market crash broke out uncontrollably two years ago."
When they heard Yang Jing talking about the stock market crash, several people showed very uncomfortable expressions on their faces. On the one hand, their country was severely damaged in the stock market crash, and on the other hand, the KY Investment Fund where they worked made a fortune in the stock market crash, which really made them feel conflicted.
Yang Jing saw their expressions, and of course he would not explain this matter. The people present were all financial elites, and they could distinguish the difference between personal feelings and work.
"The Japanese stock market also suffered a lot during the stock market crash two years ago. I remember Cesar also made a lot of money from the Japanese stock market during that stock market crash, right?"
Cesar smiled and nodded, "Boss, that's all thanks to your guidance."
Yang Jing nodded slightly and continued, "In theory, the stock market crash in 1987 should have sounded the alarm for the Japanese, but unfortunately, Japan not only failed to learn lessons from the collapse of the US stock market, but also immediately recovered. After the index hit the bottom that year, it immediately began to rise. I remember a few data. At the beginning of 1988, the Japanese stock market continued to rise, and at the end of the year, the Nikkei index had exceeded 30,000 points. Last year, the Japanese Nikkei index hit a new high and reached points on December 19, which was more than three times the lowest point in 1985. In 1989, the market value of Japanese stocks reached 630 trillion yen, which was 1.6 times the GNP of that year, while in 1985 it only accounted for 60% of Japan's GNP. Are my data correct?"
David Anderson nodded.
Yang Jing continued, "Such bizarre data should not appear in a mature market like Japan, but it did. The emergence of such bizarre data has actually sounded the prelude to the avalanche in the Japanese financial market. However, before the last trading day of last year, some external conditions are needed to completely trigger this avalanche."
Henry asked curiously: "Boss, what are those external conditions..."
"Middle East!" Yang Jing smiled slightly, "To be exact, it should be Saddam in Iraq!"
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