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Chapter 73 – The Late 1920s American Economy

Around the time I confronted Ishiwara Kanji, the Tanaka Cabinet—under the guidance of Finance Minister Takahashi—returned Japan to the gold standard, following France’s lead in restoring its own.

The goal was to disperse the attention of those targeting gold.

Preparations had already been underway since the previous year, so the fact that Japan managed to act without missing France’s timing was quite impressive.

Moreover, they implemented a devaluation.
The Tanaka Cabinet, rather than worrying about Japan being perceived as economically weak, chose a policy aligned with the actual state of the Japanese economy, as strongly recommended by Finance Minister Takahashi.

Given that Tanaka Giichi was a former military officer, he probably had no choice but to nod in agreement with Takahashi Korekiyo.

Even the financial circles, faced with the persuasion of Takahashi and his protégés, were unable to voice strong opposition.
If Prime Ministers like Hamaguchi Osachi or Wakatsuki Reijirou—both from the Ministry of Finance bureaucracy—had been in power, things would likely not have gone this way, as shown in the history from my previous life.

They would have set the exchange rate too high, increasing the outflow of gold from Japan.

And since there would be little gold left within Japan, they wouldn’t have been able to increase the issuance of paper currency, leading to a probable contraction of the overall Japanese economy.

Besides, the Rikken Minseitou (formerly Kenseikai) had a platform based on cooperative diplomacy and fiscal austerity, which simply didn’t fit the times unless the era was more peaceful and stable.

The people at the top were admirable, and their policies were idealistic—but ideals don’t put food on the table.

It’s better to spend money than to tighten the purse strings.
After being reincarnated and studying economics, I believe that this is the better approach in this era.

That aside, the exchange rate was adjusted from the previous 100 yen = 49.85 dollars to approximately 46.46 dollars, in line with actual conditions.
It may look like a small numerical difference, a mere slight change—but it shows just how poorly Japan’s economy was performing within the global economy.

This was partly due to the impact of the Great Kanto Earthquake, but more so because the aftereffects of the massive wartime economic expansion from the last World War were still lingering.

It also serves as proof that even if I—or rather, Ootori—take some action, it wouldn’t have much of an impact.

On the other hand, America was continuing to enjoy its golden age as usual.
Starting around the summer of 1928, the Dow Index in the U.S. began a ferocious climb once again.

If it follows the same path as in my previous life, this rise would plateau around the spring of ’29, at just over $300, before one final surge toward its peak about half a year later.
Considering it was around $90 back in 1924, this was a staggering rise over just five years.

That peak would be reached on September 3, 1929, when the index hit $381.17.
This number wouldn’t be surpassed until the mid-1950s.

The beginning of the crash—“Black Thursday”—came on October 24. 

At that point, the Dow Index was around $320.

And the true plunge into the abyss came five days later, on October 29—on the infamous “Black Monday.”
The Dow Index plummeted to $230, and a staggering $14 billion vanished in a single day. 

A drop rate of 30%—it’s honestly insane.

What’s worse, just about two weeks later, on November 13, it hit $198.60.
In that short period, over $30 billion disappeared from the world.

That’s roughly 35 years’ worth of Japan’s national budget at the time, excluding debt.
It’s not a simple comparison, but in 2010s values, it would be around 225 trillion yen in Heisei terms. 

And that’s based on the size of the world and Japanese economies at the time—if we convert it into figures that a 21st-century person can comprehend, the scale would be even greater.

And this wasn’t a one-time drop.
The decline in stock prices continued—interspersed with brief recoveries—dragging on and on for about two and a half years. 

Eventually, on July 8, 1932, the index hit its lowest point: $41.22.

This was the lowest value in the 100 years following the economic boom that began with World War I.

At that point, having both body and soul go completely numb still wouldn’t be enough.

But even so, I’m trying to ride this intense historical rollercoaster—this American stock bubble—to bring Ootori to prosperity.

And for now, I’m achieving great success.
Even if a collapse of the same scale were to occur in the fall of 1928—one year earlier than it did in my previous life—my, no, Ootori’s victory would already be assured.

After all, I started buying in 1924 when prices were still around $90, and I increased holdings when they were in the $140 range.
There’s no leveraged debt left, and at this point, there’s no way I could lose.

For Ootori, the only question is how much we can win.

At the cost of many people and nations.

But this course of events is beyond my power to stop.
Even if I tried to say something, it would just sound like the idle talk of a little girl. 

Even if Ootori raised the alarm with all its resources, it would probably be laughed off.

That’s how invincible American stocks seemed at the time.

Let’s talk a little more about money.

Between 1924 and 1929, America’s GNP increased by 122%, and corporate profits rose by 183%.
As for stock prices, I started buying at their lowest, and the difference between that and the peak was more than fourfold. 

On average, about triple annually.

The total market capitalization of U.S. stocks ballooned from about $27 billion in 1925 to a peak of around $90 billion by September 1929.
But the speed at which it deflated was even faster than the speed it rose.

By the low point in July 1932, it had fallen to just $15.7 billion.

America’s GNP, which had been 104.4 billion dollars in 1929, dropped to 56 billion dollars by 1933—nearly cut in half.
This shift in numbers flows like a grand, majestic river, and so far, it’s perfectly tracing the history I remember from my previous life.

And in order to recover even a fraction of the dollars lost in the Great Depression, America begins relentlessly collecting dollars and gold from around the world.

The whole world plunges into chaos, and even the “have-not” nations are forced to act impulsively just to survive.
Looking at the path from here to World War II, and even into America’s prosperity in the 1950s, it honestly feels like a monstrous match-pump scheme orchestrated by the U.S.

But Ootori uses the knowledge from my past life—reframed as prophetic dreams by the “Dreaming Miko”—to its advantage.

I had studied modern economic history at university in my previous life, and thanks to this body’s refined intellect, that knowledge is unexpectedly useful.
I can’t help but find it a little ironic.

“Tokita, once the new year starts, we’re going to start selling stocks aggressively.”

“Yes, Mistress Reiko. Preparations are already well underway.”

Tokita gives a courteous bow, just as one would expect from a villainous noble’s butler.
So I, too, respond in a manner befitting someone lounging elegantly on a luxurious sofa.

“There’s no shortage of buyers, is there?”

“Everyone seems to believe that stock prices will rise forever.”

“…Even though no dream lasts forever.”

“Indeed.”

The two of us gaze off into the distance for a moment.
Especially me—because I know the history from my previous life, all the more so. 

And in my case, I’ve experienced another financial crisis first hand afterward.

I was a child when Japan’s bubble economy burst around 1990, so it only meant my allowance got cut a little—nothing directly impactful.
But during the 2008 Lehman Shock, I had a tough time, not to the point of dying, but it was painful enough. 

The recession worsened due to the change in political administration that followed.

So, thinking about the Great Depression that will happen next year, I’ve wondered more than once if I could at least soften the blow, even if I couldn’t stop it once we started profiting off stocks.
But after looking at all the numbers and realities, I gave up. 

Every time I checked, I gave up again.

No matter how much I know about the future, this is something that simply can’t be stopped.
If it could be halted midway, things might turn out better—but there’s no sign of it stopping.

Even though I—well, Ootori—am managing a few percent of the total stock market, looking at the trends, it only registers as a margin of error.
The think tank at Ootori even gave me a forecast simulation showing that even if I were to suddenly sell everything, it would still only fall within the margin of error.

Even though I’m managing an amount exceeding Japan’s national budget and giving myself a constant stomachache over it, there’s just no sense of satisfaction.

But still, just a little more patience.

“By the way, how far has the rumor spread?”

“We’ve received reports that the rumor about Phoenix ‘pulling back’ around ’29 has become quite widespread.”

“Well, we haven’t been buying aggressively in ’28. It’s only natural that others would take that as a sign of retirement.”

“Yes. And on top of that, we’ve already spread word that Phoenix has started seeking actual cash—not debt—for a large-scale business expansion in Japan, just as planned.”

“Then once we hit 320 dollars next year, let’s start selling in earnest.”

“Understood.”

Why not sell all at once?
Why not sell at the absolute peak?

Of course, we’ll sell a bit near the peak.
But the main reason we’ll sell slowly and steadily in increments is to avoid causing unnecessary turmoil in the stock market through Ootori.

No—more precisely, in case anything goes wrong, it’s to avoid being blamed.

After all, Phoenix is handling stocks on the scale of billions of dollars.
If we suddenly dumped them all in one go, we could very well end up setting off the massive landmine that is the Great Depression with a giant leap.

That’s why I’m spreading rumors that I’m quitting the stock game and shifting focus to legitimate business, while steadily selling off stocks—at a pace of one to two hundred million dollars per month.

I’ll convert only a small portion into yen, and bring only the bare minimum of dollars back to Japan.
I’ll exchange some into gold, but not excessively. 

Even so, I’d like to repatriate at least 10%, ideally 20–30%. 

But my primary objective is to go shopping in America.

Construction equipment to build all kinds of facilities. 

Machine tools to manufacture more machine tools. 

Equipment for entire factories to produce cars and tractors. 

Royalties for various patents.
If possible, the patents themselves. 

There’s no end to what I want to buy.

The public reason is that the Ootori Group is aiming to become the strongest heavy industry company in Japan.
And since Ootori is already a corporate group heavily focused on oil and heavy industry, that explanation will be easy for others to accept.

Even in the U.S., Ootori has close ties with Ford, so it’s unlikely anyone will suspect anything strange.

They’ll almost certainly—no, definitely—express regret on the surface that I’m leaving the stock trading game, while mocking me behind my back.
But the one who’ll be laughing loudest and most elegantly… will be me.

I will turn this easy money into something of real value and proudly bring it back to Japan.

According to the rumors, I plan to begin serious purchasing in America starting in the winter of ’29.
But in my actual plan, the stock market crash will cause a temporary delay. 

Real purchasing won’t begin until at least the following year, even in the best-case scenario.

And once the bottom falls out of the economy, everyone will gladly sell their goods to Ootori, flush with cash.
Since I’ll be spending dollars in America, there’s no reason for the U.S. government to complain.

In fact, they might even roll out the red carpet for me.

However, it seems that the one expected to offer hospitality first… is me.

About a week after my scheming with Tokita, we already had visitors from New York.

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Black Monday

One of the greatest man-made disasters in history. Pretty much as described in the main text.

It was intense enough to make the next world war feel inevitable.