Defendant: Zhang Yuyan.

Question 1: The book Currency War recently published by CITIC Publishing House has aroused enthusiastic response in the society. In the book, the author Mr. Song Hongbing tells the story that "international bankers" represented by the Rothschild family manipulated the world's 300-year history of industrialization. Are all the stories he told that sounded shocking true?

A: The short answer to your question is: I don't know. In the modern financial history of the world, the Rothschild family did have a great influence. They used to call the shots, and it is well documented. However, it is hard to say what the current situation of this family is. According to Mr. Song Hongbing, if we only calculate household assets according to the annual rate of return of 6%, it is about $50 trillion today. In what form does such a huge asset exist? It should be mainly financial assets. However, according to the estimation of the International Monetary Fund, by the end of 2006, the total value of global financial assets, including various derivatives, was about $350 trillion. In this way, only the Luo family owns one-seventh of all the financial wealth in the world. Frankly speaking, I am skeptical about this figure.

Although the figures may be different from the facts, I generally agree that the western world is ruled by a few elites. French historian Braudel once pointed out that the upper class in any country at any time is made up of 5% of the population. This phenomenon is called "Braudel's 5% Rule", especially in Europe and America. Some members of the upper class must include families like Rothschild. It is also based on this point that I think the logical framework on which the currency war is based seems to be correct. More importantly, it talks about a very critical issue. The two recommendations I wrote on the title page of this book should basically express my overall view on this book and this issue: "This book confirms an idea formed by my years of research, that is, whoever controls the currency can dominate everything; However, I also hope that the story told by the author is purely fictional, because then we can adhere to the previous belief that human beings generally live in an honest world and will not be played by a handful of international bankers. "

I feel more and more that many people underestimated the importance of money in the past, thinking that money is just a layer of skin attached to the "body" of material production, and its basic function is to serve material production, that is, to facilitate trade, speed up circulation and strengthen division of labor. As far as economics is concerned, not only does microeconomics have no place for money, but macroeconomics and international economics also have no place for money, which involves the combination of monetary policy and exchange rate policy. Money exists as an external thing, and it is not a part of the whole production process. Interestingly, according to Friedman, a monetarist economist who thinks that "only money matters", monetary policy can only exert some influence on the production process in the short term at most, while money is neutral in the long term. It is worth mentioning that institutional economics, which is popular in China recently, has almost no trace of money. In this respect, Mr Song Hongbing did the opposite. In Currency War, he clearly pointed out that in capitalist society, the truth is that financial capital not only dominates the whole material production process, but also controls the whole human historical process.

For those who accept mainstream economics, money is a kind of power, which is used by the state or financial tycoons behind it as a tool to achieve their goals. This logic is very new and even a bit shocking. In fact, this is not a brand-new or original point of view. Lenin said in On Imperialism a hundred years ago that one of the advanced stages of capitalism is the monopoly of financial oligarchs. Before Lenin, Hilferding also had a profound touch on this proposition in Capital of Finance. In addition, some non-mainstream economists and historians have also discussed the essence of money from different angles. Nanpu, a German economist, clearly pointed out in his "On the Country of Goods and Money" published by Kloc-0/924 that money is inseparable from the country, and without the country's money, it becomes passive water, while the country without the taxation right expressed in money is useless. Goodhart even shouted the slogan "Money is power" in an article entitled "The Double Meaning of Money" in 1998. Niall ferguson, a popular financial historian, argued in his book Money Connection published six years ago that the main function of money is not to make the world run, but to be a political event from beginning to end, which has formed various systems supporting modern economic life and is closely related to war. By the way, Ferguson is probably the person who knows the history of the Rothschild family best, and he is also the most profound person. It's a pity that I haven't read the Rothschild family history book that made him famous. I am very interested in this book, but I really don't have time to read it. Looks like we'll have to wait until the future.

Question 2: How should we treat the group of "international bankers"?

A: After reading Currency War, ordinary readers will be amazed. How can the world be like this? It is controlled by several big bosses behind the scenes, and even disasters such as economic crisis and world war are carefully planned by them. In the author's words, it is called "financial fixed-point blasting". Do they have that much energy? Can they really turn their hands for the clouds and cover their hands for the rain? To answer this question, we must first define "international banker". In a narrow sense, they only include the leaders of big commercial bankers, investment bankers and other financial institutions. Although the energy is indeed huge, these people can always play a supporting role in the global political and economic arena if they are not integrated with the country. Broadly speaking, "international bankers" also include central bank governors from all over the world. Once the central bank governor is included, that is, the state power is introduced into it, the "international banker" is enough to become the global master. What needs special attention is that in the world of rapid expansion of global financial assets, the dominant position of "international bankers" in a broad sense will be further strengthened.

From the perspective of human nature, bankers must want to control the world through financial power, because it will bring huge benefits, and profit-seeking is the ultimate way for them to realize their own value. However, it is very difficult for one or two families to realize this wish. After all, the global financial market is not a completely monopolized market, but an oligopoly market, which means that there are a number of powerful financial groups. In this way, in order to control the world, bankers need to form a team and take collective action. According to Olson's theory of collective action, in addition to the existence of * * * common interests, alliance or * * * collusion must also meet two basic conditions: first, the number of people should be small, otherwise there will be a "free rider" phenomenon; Second, there should be so-called "selective incentives", which is what China people often say: "carrots and sticks". There is also a condition that the time or number of competitions between groups should be long enough and enough. After these conditions are met, "international bankers" will appear as a group. In the past few hundred years, global bankers have formed alliances and played the world in their hands. This situation is true in the eyes of the author of Currency War. My point is that, logically speaking, as long as the conditions are met, "international bankers" will certainly appear.

There are two questions below. First, is their energy really that huge? I don't doubt that. When the governor of the central bank is counted as a member of the "international banker", especially when the state power represented by the central bank is regarded as a tool for the "international banker" to achieve its goals, its great energy is beyond doubt. This is more obvious today than it was a hundred years ago or thirty years ago. According to the fact that the ratio of financial assets to actual output has increased rapidly in the past half century, martin wolf of the Financial Times said that the world has entered the era of so-called "financial capitalism". Second, can "international bankers" really unite? Despite the deepening of economic globalization, the sense of identity with the nation-state has not weakened in the same proportion, and the interests have become more and more dispersed. In other words, it is probably normal for them to collude with each other and compete fiercely. From this perspective, it is hard to imagine that financiers from Europe, America, Japan, the Middle East and other countries and regions form a strong, lasting and tacit alliance. At present, European and American countries' fear of the growing sovereign wealth funds and their suppression of these sovereign funds at least reflect one aspect of the reality that international financial markets both collude and encourage competition.

Question 3: In the currency war, the Federal Reserve was described as a private bank, which surprised many people. Is that really the case?

I remember the economist Samuelson mentioned in a paper in 1988 that the three great inventions of mankind are: fire, wheel and central bank. Considering the position of the dollar in the world monetary system, people will naturally pay attention to the central bank of the United States, namely the Federal Reserve. One of the most controversial judgments in the currency war is that the Federal Reserve is a private bank, not a public institution. The reasons are as follows: the shareholders of the Federal Reserve are all private bankers, and the regional chairmen of the Federal Reserve 12 regions are recommended by these shareholders, and quite a few members of the Board of Directors of the Federal Reserve come from these regional chairmen; Although the chairman of the Federal Reserve is nominated by the President and appointed by Congress, the real decision-maker of American monetary policy is not the Federal Reserve Open Market Committee, but the Federal Reserve Policy Advisory Committee established according to the Federal Reserve Law, whose members are all private bankers. The statement that the Federal Reserve is a private bank has caused a great impact and greatly challenged the cognition that many people are used to.

Things that subvert common sense are usually controversial. In fact, when discussing the Federal Reserve, the author of this book still has a lot of room for further consideration in the detailed description, at least some stories are not fully told. In fact, the Federal Reserve was a purely private bank only in the early days. As time goes by, the Fed is still performing its public functions. In addition, it is true that US dollar bills are printed by 12 regional committees of the Federal Reserve, and it is also true that private shareholders pay dividends every year, but the number of printed bills and the level of dividends are strictly controlled. In addition, most of the seigniorage income from printing money went to the US Treasury, but did not flow into the hands of private shareholders. Among all these details, the key point that is easily misunderstood lies in the relationship between the Federal Reserve and the Ministry of Finance. Another point to mention is the exact meaning of the word "private". When the English word "private" is used to describe the nature of a company or institution, it refers to private placement and non-disclosure. This is a word used by private equity funds. Its corresponding word is "Gong", that is, "Gong". Listed companies are sometimes called public companies, which means that they are open to the public and anyone can participate. So the English of listed companies is also called go public. However, public companies are quite different from the "public" or "owned by the whole people" commonly understood in China's context.

It is said that there is a popular saying on Wall Street all the year round: the chairman of the Federal Reserve is just a puppet. This year, Greenspan published his memoir "Prosperous Times". On September 18, The New York Times published a book review entitled "An Economist's Life, Accompanied by Jazz Theme". For Greenspan's life, the book reviewer's basic evaluation is the accompaniment of a theme music rather than the protagonist, and wrote: "As the governor of the central bank, he also made the best use of his talents. The remaining question is, why can't we all look at Greenspan realistically and let him be magnified many times? " If so, that is to say, the real protagonist of the American monetary and financial drama is hiding behind the scenes, so who is the boss behind the scenes? According to the logic of currency war, they can only be "international bankers". Unfortunately, although Mr. Song Hongbing unveiled the veil covering the Federal Reserve, he didn't tell all the relevant details, and the choice of story was somewhat fragmented. I remember Martin Meyer, a famous financial writer, wrote a book called the Federal Reserve, which is very good and has been translated into Chinese. Reading this book can make up for some details of the currency war.

Question 4: This book about finance became a best seller as soon as it was published, causing a sensation. What is the reason?

In my opinion, the key to the success of Currency War is that the issues discussed by the author have touched the nerves of readers in China today. It has been almost 30 years since China implemented the policy of reform and opening up, and the important content of opening up is to participate in the process of economic globalization. It should be said that the focus of our opening up to the outside world is trade and investment, while the opening up of the financial sector is very cautious. Practice has proved that this is strategically correct. However, today, there are both positive and negative aspects, and China has begun to meet the wave of financial globalization. Our financial service industry is gradually opening up, strategic investors of foreign banks are entering China, foreign exchange reserves have accumulated to astronomical figures and are still growing rapidly, asset bubbles and market adjustments have occurred at home and abroad, and the pressure of RMB appreciation is enormous. Unconsciously, we have reached a historical crossroads: whether to actively participate in the creation of a single Asian currency or to make RMB an independent international currency. If financial liberalization is compared to a river, then we have stepped in with one foot. We don't know how deep the water is, how wide the river is, whether the road across the river will be calm, and whether the creatures in the water will be dangerous and fierce. These are all problems. It is in view of the above problems that Currency War gives a warning and brings great impact to readers.

Of course, to become a bestseller, it is not enough to just discuss serious and important issues, but also to write in a bestseller way. This requires fascinating stories, unimaginable plots and people who fascinate readers. The main reason why I can finish reading this book in one breath is that Song Hongbing is good at telling stories. He took The International Banker as the leading role and relied on historical events to form a logical framework, supplemented by many little-known behind-the-scenes stories in the historical process. Bankers chose Wilson, a professor of international politics at Princeton University, as the president of the United States, and used his ignorance of money and finance to deceive the world, reading the bill of the Federal Reserve system that was beneficial to them, and finally made Wilson himself regret it. Jewish bankers conspired with Hitler to finance the latter's coming to power in order to realize the establishment of the Jewish state. Such a story is unheard of in my life. I was very excited when I read it, because they all confirmed many propositions of political economy.

Controversy is another indispensable element for a book to attract readers' attention. As a book, there are many reasons for widespread controversy, which can be summarized as the following three aspects. The first is the authenticity and sufficiency of information and data, the second is the rigor of logical structure, and the last is some kind of "opposition" emotion aroused by core views or policy orientation in different readers' hearts. It is on these three issues that Currency War well meets the "controversial conditions" of becoming a bestseller.

In fact, I have answered questions about information and data. Many specific historical facts involved in the currency war are controversial, and my existing knowledge accumulation does not allow me to judge their authenticity. In this respect, many readers may feel the same way with me. But then again, at least for a considerable number of historical philosophers, the question of what is historical "fact" or "evidence" has been bothering them. Karl, the author of What is History, Popper, the author of Is History Meaningful, and Colin Wood, the author of The Concept of History. Although the latter two have similar views on the suspicion of "evidence", Collingwood does not agree with Popper's argument that "history is meaningless" on this basis, but replaces it with the proposition that "all history is a history of ideas", that is to say, the basic job of historians is to dig out the real thoughts of decision makers when making choices about major events that affect the historical process.

Once we discuss the thoughts of the actors, we begin to discuss motivation, motivation and all the behavioral consequences it causes, which constitute the logic of historical narrative. The basic logical structure of currency war is that the modern history of mankind for more than 200 years today is a history of "international bankers" seizing wealth and dominating the world. According to strict logic, all the major historical events we have experienced and the evolution of human daily life can be attributed to the "motivation" of "international bankers". The advantage of this logical framework is simplicity, but the disadvantage is that some important variables or links may be ignored in the pursuit of simplicity. Here I just take the relationship between the government and international bankers as an example. Since the18th century, especially in the19th century and the early 20th century, capitalist countries have generally shown that economy dominates politics, and capitalists or financiers manipulate politicians. However, in the 1930s, especially after Roosevelt became the president of the United States, the state power expanded rapidly, and the ability of politicians to control the state power improved rapidly. As a result, a group of politicians with independent consciousness and specific interests have formed in a wide range of governments, including legislation, administration and justice. Because of this change, the relationship between government and business is no longer a master-servant relationship, but a roughly equal game relationship. In other words, the government is no longer a doll of "international bankers", and the personal interests of "international bankers" can only be fully realized if they are combined with national interests. My general feeling is that the biggest logical weakness of currency war is that it pays too little attention to the role of the government.

Different viewpoints can be said to be the key factor for Currency War to become a bestseller. We might as well make a rough classification of readers. The first category is ordinary readers who are interested in monetary and financial issues, the second category is government officials, the third category is composed of monetary and financial researchers and educators, and the last category is employees of monetary and financial institutions. Faced with the shocking story told by Mr. Song Hongbing, the shocking warning given, the clear and bold response policies put forward, and the fact that this book has been at the top of the bestseller list for a long time, it is natural that different types of readers have different inner feelings and verbal reactions to the currency war, and even praise and criticism coexist. This reminds me of a sentence: for social science research, different opinions often mean the existence of value. The person who said this sentence was kindleberger, an economics professor at Harvard University who died a few years ago. He left behind a heavy academic book, Financial History of Western Europe, which is well worth reading for readers who want to know more about the background of currency war.

Question 5: One of the most important events in the world financial history is the disintegration of the Bretton Woods system. After completely decoupling from gold, the dollar began its history of overspending. Song Hongbing believes that the flood of dollars since 197 1 is quietly depriving workers all over the world of their money and aggravating the global inequality between the rich and the poor. What do you think of this problem?

A: Mr Song Hongbing's judgment is correct. People who have bought goods in duty-free shops at the airport probably have the impression that electronic products are made in Japan and South Korea, watches are mainly made in Switzerland, perfumes and whiskies are mainly made in France, leather products and sunglasses are made in France, Britain and Italy respectively, except for some brands of cigarettes, which can hardly be seen in the United States. I used to feel bored, too How can there be so few "Made in America" in such a fiercely competitive market? On second thought, I understand that the most competitive product offered by the United States in this market is the US dollar. All goods are priced and settled in US dollars. People not only use US dollar bills, but also have the striking American credit card company VISA or MASTER logo printed on their credit cards. This seems to be what Krugman said, to the effect that the global economic structure from World War II to today can be roughly described as: the whole world is trying to produce goods that dollars can buy, while the United States produces dollars. Why ... this is to answer the question you just asked.

197 1 before the collapse of the Bretton Woods system, the US dollar was pegged to gold at a fixed price, and the currencies of various countries were pegged to the US dollar. Obviously, the Bretton Woods system means that the dollar is equal to gold, and holding the dollar is equal to holding gold. In order to trade, countries must hold a certain amount of dollars. In order to have dollars, these countries must maintain a large number of exports to the United States. In other words, the United States can only provide hard currency for international trade through trade deficit or foreign aid. Countries provide goods and services, and the basic exchange pattern of the United States providing dollars is produced under such a background. The sustainability of this mechanism that facilitates the United States to seize benefits from the world is questionable. In the early 1960s, triffin, an American economist, wrote a book entitled The Crisis of Gold and Dollar. It is in this book that he put forward the famous Triffin dilemma, that is, relying on the US trade deficit to provide the world with world currency is likely to encounter two situations: either the shortage of the US trade deficit leads to a "dollar shortage", which ultimately affects global trade and economic growth, or the excessive US trade deficit leads to a surplus of dollars, which will endanger the exchange rate between the dollar and gold sooner or later. The actual course of history accords with triffin's prediction. Because European countries exchanged their surplus dollars for gold with the United States at a fixed price, the gold reserves in the United States were greatly reduced. 197 1 year, President Nixon announced that the dollar would float freely with gold.

For the sake of explanation, I introduce a concept here, which is called seigniorage. In the era of metal currency, the casting right of gold or silver coins in western European countries is in the hands of kings. In the process of minting coins, they often use the method of reducing the fineness of gold and silver to obtain additional benefits. For the receiver or user of coins, the difference between the face value of coins and the actual gold content is tantamount to paying taxes to the king again. This is the origin of seigniorage. In the era of paper money, because the printing cost of paper money is much lower than the value of gold and silver, the profit prospect of seigniorage is extremely expanded. According to "On Monetary System" published by Lawrence White 1998, the printing cost of small denomination banknotes in the United States is 3 cents, while the printing cost of the new 20-dollar and 100-dollar banknotes is only 6 cents despite the advanced anti-counterfeiting technology. This can be seen from the large amount of seigniorage generated in the process of letting other countries hold dollars.

However, it is conditional to make a profit by collecting seigniorage. The basic condition is that others are willing to hold the currency you issue, and the number of holders is increasing. From this perspective, the collapse of the Bretton Woods system is actually a dollar credit crisis. There are so many dollars that people don't want it to fall into their own hands. At that time, there was a great controversy about the preservation or abolition of the Bretton Woods system. It is said that experts on currency issues such as Friedman and Mundell were invited to attend the hearing of the US Congress. The real question that everyone cares about is whether the world's demand for dollars will increase or decrease after the current system dies. Increasing means that the United States gets more seigniorage, and vice versa. Later history seems to show that with the collapse of the Bretton Woods system, the demand for dollars increased. I'm afraid the main reason is that in the world of floating exchange rates, countries have to reserve more dollars to maintain the stability of their currencies.

Concealed, seemingly voluntary, letting other countries hold dollars is an important means for the United States to occupy other countries' resources or wealth by collecting seigniorage, which undoubtedly aggravates the inequality between the rich and the poor in the world. Having said that, I think it is necessary to add two points. First, the United States has indeed gained great benefits in the past and present international monetary system, but if it is any other country, when it has the power like the United States, I am afraid it will act like the United States. Second, the ancients said, "People don't bother, demons don't commit crimes." Those countries or regions that give the United States or Europe the monetary advantage are responsible for the fragility of their monetary and financial systems and improper policies, although some weaknesses are doomed, such as small countries and backward economies.

There is more to write later.