The rise of heroes begins with Hong Kong movies

In 1997, the leader of Thailand was named Tsawali Yongchai, and the governor of the central bank was named Soeng Kapao.

The president of Bank of Singapore is named Li Mingyan.

Why mention Singapore when targeting the Thai baht?

That’s because the financial systems of the entire Southeast Asia are also connected. Countries such as Thailand, Indonesia, and Singapore also cooperate, and among these countries, the central bank of Singapore is the strongest!

Time flies, and two months have passed since the meeting between Huo Wenyao and Soros.

The attack officially begins!

……

……

On February 4, 1992, Soros took the lead, but at the same time, it was not just Soros but also countless international hot money.

They launched a tentative attack on the Thai baht!

Soros is very talented in investing. Even throughout the modern history of mankind, his business sense is among the best. It is no accident that he can seize opportunities again and again.

He will take action, it's nothing, this is expected by everyone.

What about other international hot money? the reason is simple.

Soros is extremely good and has extremely keen business acumen. Even if other outstanding investment geniuses are not as good as him, they are not inferior to him. They are all masters of the same level.

The current economic conditions of countries in East Asia and Southeast Asia have long been seen by them.

I didn't take action just because the time hadn't come yet.

Furthermore, the details of the countries in Southeast Asia have not been fully understood. Once the details are fully understood, all the international hot money is needed is a signal, and all the international hot money will take action with full firepower!

In this tentative attack, international investment institutions first borrowed up to US$15 billion in multi-month forward baht contracts from Taiguo Bank!

The forward baht contract means an agreed period.

For example: 6 months!

Now they are buying US$15 billion in Thai baht contracts and will pay them back six months later.

Then it’s clear how to make money.

The current exchange rate of US dollars to Thai baht is: 1:20, 1 US dollar can be exchanged for 20 baht. If the Thai baht depreciates in 6 months, the exchange rate of US dollars to Thai baht becomes 1:40.

That means you only need to spend $7.5 billion to repay the original $15 billion contract.

This is short selling!

A major premise for short selling is that you are extremely confident in your judgment. By the end of the contract, the Thai baht will only depreciate, not appreciate.

Otherwise, you will suffer a big loss!

By the way, Soros's subsequent attack on the Hong Kong dollar ended in failure, but he did not suffer much loss.

Because as early as the early stage, he earned enough, but now he just cannot completely defeat the Hong Kong dollar and earns less.

After international investment institutions obtained US$15 billion in chips from Taiguo Bank, they immediately converted them into Thai baht and sold them on a large scale to the foreign exchange market, which ultimately led to significant changes in the Thai baht exchange rate.

A financial turmoil has begun!

This is the first time that a large-scale baht selling trend has occurred in the financial market. The exchange rate of the baht against the US dollar has fallen to the lowest point in 10 years -

26.18:1!

The Central Bank of Thailand immediately invested US$2 billion to stabilize the situation.

Yes, just $2 billion, not $15 billion!

This is how difficult it is to snipe short-selling. The Thai baht short contract offered by Soros and others was as high as 15 billion U.S. dollars, but the Central Bank of Thailand settled it with only 2 billion U.S. dollars.

Because after all, the foreign exchange market is not just two players of international hot money such as the Central Bank of Thailand and Soros, but also countless hot money and retail investors.

They are equally important, even crucial!

As long as they have confidence in the Thai baht and the Thai government, do not follow the trend, and resolutely do not sell the Thai baht in their hands at low prices, then all the actions of Soros and other international hot money will be in vain.

In the end, it can only end in failure.

This is the importance of market sentiment!

Market sentiment cannot determine the final direction of the whole thing, nor can it determine the state of the country's economy, but it can determine the market situation in a short period of time!

Thai President Tsawali Yongchai and Thai Central Bank Governor Songen Kapaao breathed a sigh of relief.

At the same time, their nerves were also highly tense!

Because they are very aware of the current situation in Southeast Asian countries and the current situation of the international capital market. They know that this is only a short-lived and small victory.

Soros and other international hot money will never give up!

Oh, I almost forgot.

The most important and core super player, Mr. Huo Wenyao, the Asian overlord, has not made a move yet!

Don’t be careless at all!

It is not only Thailand that feels this threat, but also Indonesia, Singapore, Malaysia and many other countries.

They were all shocked!

So - on February 14, 1997, Southeast Asian countries held a super heavyweight meeting. The heads of central banks of various countries gathered together and unanimously agreed to take action when encountering a currency crisis!

They should jointly carry out bilateral or even multilateral intervention!

On the Thai side, the country has once again raised the lending interest rate, and at the same time emphasized to the world that its fixed exchange rate will not change and the Thai baht will not depreciate!

Raising lending rates is, of course, an attempt to curb malicious lending.

This cannot be said to be unhelpful in curbing international hot money, but the disadvantages are also great. This will lead to many domestic companies not to lend money to Taiguo Bank and instead look for other channels.

Taiguo's response strategy is not just this.

On March 4, 1997, the Central Bank of Thailand required nine financial companies and one housing loan company that had liquidity problems to increase their capital by 8.25 billion baht, or US$317 million.

At this time, the exchange rate of US dollars to Thai baht is almost 1:26.03!

At the same time, the Central Bank of Thailand also ordered banks and other financial institutions to increase their bad debt reserves from 100% to 115%-120%. This move increased the reserves of Thailand’s financial system by 50 billion baht.

That’s $1.94 billion!

Taiguo did this to strengthen the stability of the financial system and enhance people's confidence in the financial market.

However, what I never expected was that not only did this fail to have the stabilizing effect it should have, but it unexpectedly deepened people's distrust of the banking system, and runs began to occur - real estate plummeted!

The stock market plummeted!!

On the second day after the order was issued, the 10 financial companies with problems experienced a liquidity crisis, and the stocks of banks and financial companies all plummeted.

In the foreign exchange market, the Thai baht also experienced downward pressure.

Soros is waiting!

Other international hot money is also waiting!

They are all waiting for a one-hit kill!

Huo Wenyao?

Of course he is waiting even more, because he has not figured out the trump card of Taiguo or even Southeast Asian countries. The best thing to do at this time is to let Soros and other international hot money help him explore the way.

They can also wait like Huo Wenyao, it depends on who is more patient.

Facts have proved that Huo Wenyao is even better.