The rise of heroes begins with Hong Kong movies

Although Huo Wenyao had long known that the Asian financial crisis would break out in 1997, this was the real world after all, and investigations still needed to be done.

This is his way of doing things.

Not just this time, but from the Plaza Accord, to the global stock market crash in 1986, to the bursting of Sango’s economic bubble in 1991, to the attack on the European currency in 1992.

He does this all the time!

As early as 1996, when Huo Wenyao devoted himself to scientific research, he had already ordered people to secretly collect economic data from various countries in East Asia and Southeast Asia.

There is no need to worry about Yan State, because except for Hong Kong Island, Aomen, and Treasure Island, the mainland is almost unaffected.

Sangguo and Goguryeo are the focus.

Of course, Southeast Asia, which is in the eye of the storm, is the focus.

At the end of 1996, Fok Wenyao put down all his scientific research work and secretly returned to Hong Kong. He began to study the information on Fok's investigation, and browsed through all the information in just two hours.

It was from then on that he concluded that the Asian financial crisis would definitely break out again!

And it will definitely detonate from Taiguo!

When international hot money is like a shark that smells blood, swarming up and attacking the Thai baht, causing the country's economy to collapse instantly, this storm will sweep across East Asia and Southeast Asia!

This is a historical trend and an economic law.

No one can stop it!

So what did Taiguo, the one who triggered all this, do to cause such serious consequences?

Is it just because of Soros and other international hot money?

No!

They are just introductions!

Just like Huo Wenyao met with Soros not long ago, Soros said that even without him, the crisis that should break out would still break out. He just moved the time forward.

So what fatal mistake did the Taiguo government make?

Because - they do not have a correct understanding of the three-yuan paradox of exchange rates, and thus are severely punished by economic laws!

So what is the ternary paradox?

The so-called"trilemma" refers to the fact that the independence of the country's monetary policy, the stability of the exchange rate, and the complete mobility of capital cannot be achieved at the same time.

Only two goals can be met at most!

Of these three major factors, the first to bear the brunt is the stability of the exchange rate.

For example, the Thai baht is currently pegged to the US dollar!

Assume that 1 U.S. dollar can be exchanged for 25 baht. To facilitate understanding, the baht can be converted into objects, such as pens, which means that 1 U.S. dollar can be exchanged for 25 pens.

If the market supplies a large amount of pens, 30 pens can be purchased for 1 dollar. At this time, the price of one pen must be brought back to the price of 25 pens, which is 1 dollar.

Solution?

Simple, the government spends money to buy pens, and if it can swallow 5 pens, there will only be 25 pens left on the market. In this way, 1 dollar can buy 25 pens.

What if the price of pens goes up?

For example, out of 25 pens, 5 are broken, or someone hoards them maliciously, leaving only 20 pens on the market. One dollar can buy 20 pens.

Solution?

It's simple. The government sells 5 more pens, bringing the total number of pens on the market to 25. At this time, the price of 25 pens will naturally return to 1 US dollar.

Before 1997, the Thai baht was strictly tied to the US dollar. When the US dollar appreciated, the Thai baht appreciated, and when the US dollar depreciated, the Thai baht depreciated.

In the past few years, due to the weakening of the lighthouse country's economy, the US dollar has depreciated a lot, and the Thai baht has also depreciated. This has greatly stimulated Thailand's economy, and exports have increased sharply every year!

But in recent years, the US dollar has continued to rise, and the Thai baht has appreciated accordingly, and the pressure has come!

As the Thai baht appreciates, Thai products lose their price competitiveness, which is not conducive to exports. This ultimately leads to a sharp decline in exports, forming a huge trade deficit.

And trade deficit will consume foreign exchange reserves!

This is the most intuitive performance!

Another problem is to prevent international hot money giants like Huo Wenyao and Soros, which also means that Taiguo also needs a large amount of foreign exchange reserves to intervene in the market.

In the 1990s, a large amount of foreign capital came to Taiguo, but instead of setting up factories, they speculated in real estate!

From 1993 to 1996, Taiguo real estate prices increased by 400%!

Beginning in 1996, Taiguo real estate began to experience problems, and the stock market also plummeted. As a result, foreign capital saw that the situation was not good and immediately withdrew funds and chose to retreat.

A large amount of foreign capital fled the country, and the market sold a large amount of Thai baht, which made the Thai economy even worse!

This is the disadvantage of having to forcibly maintain a fixed exchange rate when the country's economy is not doing well!

In fact, it is not impossible to do this. At this time, it is necessary to strictly control the entry and exit of capital, just like the White Bear Country in 1998. But the problem is - Taiguo is not a White Bear Country!

Facing European and American capital, they really don't dare to play like this.

If you really dare to default on your debt, maybe at some point, the cannons from the Lighthouse Country will come over.

History is always surprisingly similar.

You see, Southeast Asia now is very similar to Europe in 1992, and the situation in Taiguo is very similar to that of Britain. They are all trying to make a fool of themselves.

The only difference is that the pound is pegged to the mark, the European Exchange Rate Mechanism.

The Thai baht is pegged to the US dollar!

……

……

The cracks in the egg are exposed, and of course what is about to come is a storm-like attack!

At the end of 1996, Taipei's foreign debt reached as high as 93 billion U.S. dollars, and at this time, Taipei's GDP was only about 190 billion U.S. dollars, which is already equivalent to 50% of the country's GDP!

What’s worse is that of the US$93 billion in foreign debt, short-term foreign debt is as high as 60%!

Taiguo's fragile financial system has exposed fatal flaws!

Huo Wenyao, Soros and other international hot money are taking action!

Before we get started, by the way, 15% of Taiguo's 60% short-term foreign debt comes from the Huo Group.

This is naturally Huo Wenyao's deliberate layout.

Unlike Soros, most of Huo Wenyao's assets come from financial investments, but the entire Huo family is also good at doing real things, because the real economy is the foundation.

Without the real economy, so-called financial assets are just castles in the air!

Those rich people who have made it to the Forbes list just by relying on their shares in listed companies often experience sharp increases and decreases in their net worth because finance accounts for a large proportion of their asset structure.

Unlike Soros, Huo Wenyao not only wants to make a lot of money by attacking the Thai baht, but he also wants to take advantage of these financial crises to sweep up cheap high-quality assets in Southeast Asian countries!

This battle that shocked the world and had a profound impact on future generations has officially begun!