Okay so the US doesn't like something about how Japan's economy was doing in the 90s, what was the beef? I know Japan was manufacturing a ton of stuff, but I thought the US wanted consumer products manufactured overseas.
So they're not happy with this, so they do a run on Japan's currency. What does this mean? Like how do they do it?
The run on the currency causes the value of the Yen to go up. This is bad for some reason, even though your currency is worth more? Like can't you get more for a Yen? But clearly it's bad because it destroyed their economy, I'd like to understand why or how.
Because right now the best I was able to explain it to someone was "America did some money magic bullshit and destroyed Japan's economy", but I would like to be able to answer some follow up questions.
Money is traded on markets just like anything else. There’s a real demand source for foreign currencies as you have to use it to buy imported goods. So if you buy up all the yen, the supply shrinks but demand stays the same so the currency gets more expensive.
Now, for Japan this causes exports to fall, since for countries buying stuff from Japan everything Japanese gets more expensive— a 100 yen item still costs 100 yen, but because the yen appreciated you need to spend more of your domestic currency to buy the same amount of yen. So domestic stuff, stuff made in other countries gets more competitive
In general if you are an export economy you want your currency to stay cheap, and the opposite if you’re an importer
This is so hard for me to wrap my head around for some reason. Just none of it is intuitive. You can just buy a country's money on mass to make it so people wanting to buy their exports have to pay more for the yen to buy them with so they can't sell them.
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I don't think I'll get the bonds thing today, maybe another time
It’s all bullshit tbh money isn’t real it only works bc we believe in it
It’s superstition
Money is very much real, just because it's not a social construct doesn't mean it's not real. Tell your landlord that money's not 'real' and see what that gets you. And even if we all 'stopped believing in it" and it vanished as a social construct we would still need a means of account to determine what goes where and how much, money is just the particular form of this that takes place in capitalism.
That’s simply not true
If the concept of money vanished overnight we would still be able to provide goods and services for each other. People lived for much much longer without the concept of money than with it. There’s no need to account for anything
That's not what I said. I said that just because money is a social construct doesn't mean it isn't real, it serves a very real function that has material impacts on the world and in this way we make it very real. Those societies did not use money in the modern sense with all the intricacies and nuance that this implies, but they did use some means of account to allocate labor and goods be it something abstract as socially recognized honor or a system of credit between people, otherwise there was no way to properly measure and distribute goods. Debt by Graber is a good primer on this, even hunter gatherer societies had systems of account.
Money's first use was probably even as a material object that could serve as an accounting unit. This is why early currency was made of durable metals, which could be counted and set into piles to represent e.g. a measure of grain. It gets hard to remember how much you've got or to move it around on clay tablets, but coins you can just put into different piles and keep track of things.
What do you mean by 'real' here?
It’s no different than state sanctioned bitcoin
It has no intrinsic value, other than serving as a medium of exchange, which is unnecessary
It has a very real exchange value by virtue of the fact that it is used as a means of exchange, no?
This is similar to how a word gains it's meaning from how it is used. Just as the meaning of a word is not contained in the physical sound, the value of a $1 note is not contained in it's paper (if it were we'd be discussing it's use value, perhaps as tinder).
Ok, but why Japan agreed to this if it was doing so well before?
What was the "or else" that US pulled? Did South Korea got the same treatment?
Would the US do that again against another competitor like China?
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It's also important to keep in mind that part of the Japanese miracle was that the USA had set the Yen at an espcially low rate back after the war. This was done for several reasons, 1) as a means to boost the Japanese economy in the face of communism and a strong japanese communist party, 2) a sop to the Japanese bourgeois to get them on side and play ball as a subject state in the American empire, 3) so that japan could act as a manufacturing hub in asia for the US military. In a sense this was the USA going "alright no more special deal, you are starting to bit the hand that feeds."
The future of the japanese economy was basically already bankrolled on the superconductor industry at that point and the accords pulled the rug out from under that by making their exports more expensive. At that point they basically switched to real estate... and well.... Thats the reason Silicon Valley was the main tech hub and not Tokyo, or whatever equivalent in Japan.
I don’t know anything about this particular scenario but it doesn’t require anyone to “sign on” to anything, it’s the same reason the US malds about China doing “currency manipulation” ie keeping the RMB low to favor its exports vs the US