Rebirth of Hong Kong's tycoons, shorting Eagle Sauce

March 1996.

On the streets of Bangkok, Siam, Robert and his men are enjoying the bustling exotic scene.

It seems that the capital withdrawal has not had much impact on the country's economy.

"Boss, Siam's stock market has plummeted for days. Why don't I feel fear on the faces of the public?"

"Because Dongzhou has developed well in recent years, a group of four little tigers and four little dragons have emerged, giving them an illusion that the economy will continue to grow.

In addition, the official blocked the news channels, so people naturally don't know what happened."

"But all this is temporary. With capital fleeing, Siam's officialdom can't stay stable for long."

Thinking of this, Robert asked casually:

"How is the work I asked you to do?"

As early as half a year ago, Robert began to let his men borrow Thai baht by mortgaging US Treasury bonds.

"We have mortgaged nearly 15 billion US dollars of national debt, and the funds are enough to fight a crushing war."

"Very good, start selling Thai baht on a large scale!"

At this time, capital fled and the stock market plummeted. There were all kinds of signs that something bad might happen. The first thing that Siamese officials thought of was to take the initiative to lift the fixed exchange rate with the US dollar.

But the Siamese top leaders hesitated at this time, because lifting the fixed exchange rate would cause the Thai baht to depreciate, and domestic debt would be worse.

The depreciation of the Thai baht would also cause large-scale bankruptcy of domestic enterprises, large-scale layoffs of workers, and reduced international credibility.

They found themselves in a dilemma for a while, because the bubble in the stock market and real estate in recent years was too big. Unbinding would also be dead, and not unbinding might still be able to fight.

"Chief, according to statistics, our foreign debt has reached 93 billion US dollars, equivalent to half of GDP!"

This shocking figure scared the people who came to the meeting.

In the past, they only saw the rapid development of Siam, and did not realize that such a big bubble had been created.

"This is not the most dangerous thing. Of the 93 billion US dollars, short-term debt accounts for 60%!"

Even people who don't understand economics know what this number means.

"If we don't lift the fixed exchange rate, what other methods can we use to deal with this crisis?"

The currency expert from the United States thought for a while and responded:

"Of course, raise interest rates!"

"Once in the Sakura Island bubble crisis, Wang Lei, the son of finance, once used this method to tie with Cayman Capital."

"Just a tie?"

The expert from the United States felt that his expertise was questioned, and he smiled:

"Of course, the situation is different. There is a large amount of Japanese yen circulating in the Sakura Island market, which reduces the effect of raising interest rates.

But as long as your country raises the deposit and loan rates of domestic financial institutions at the same time and further reduces the Thai baht circulating in the market, this battle will still be fought."

The words were rough but the truth was not rough. The Siamese senior officials immediately understood what the experts meant.

In order to deal with the upcoming Cayman Capital, the Siamese government borrowed billions of dollars in foreign exchange.

The day after Robert arrived in Siam, the Siamese government announced an increase in deposit and loan rates.

Reached an unprecedented 12% and 13.5%!

Not only is it the highest in East Asia, but it is also more than twice the international average.

Robert just wanted to laugh at this. The Siamese government would only tie itself up in knots if it did this.

People deposited all their money in banks, which would further suppress consumption.

Moreover, if people only deposited but did not lend, banks would have to bear high costs and lose their source of income.

This would further expand the deficit of domestic commercial banks.

At the same time, Robert's people began to sell off Thai baht on a large scale in the foreign exchange market, and the actual value of the Thai baht began to depreciate significantly.

In order to stabilize the fixed exchange rate, the Siamese government began to invest huge amounts of US dollars to save the market.

A contest of foreign exchange reserves began!

One side was a big short that had been planning for many years, and the other side was one of the four little tigers with a large amount of foreign exchange reserves.

Lao Suo and Tiger Fund watched the two sides fall into a fierce battle and chose to stand aside.

Facing the call from Big Brother inviting him to join the game, Lao Suo said bluntly:

"Boss, it's not that I don't want to help, it's just that you are a little impatient. We estimate that next year is the best time to take action. This time you can only pray for good luck."

Robert knew Lao Suo's plan, which was to make Cayman Capital and Siamese officials fight each other and then reap the benefits.

Without other troublemakers, Robert simply turned the exchange rate attack to the public.

In the interview, he claimed that the exchange rate of the Thai baht was far higher than the actual situation.

Facing the open declaration of war by the big shorts, the central banks of the East Asian countries unanimously agreed to jointly conduct multilateral or bilateral interventions when encountering currency crises!They realized that they could not resist the short selling of Cayman Capital with their own capabilities.

As soon as the news was announced, the stock market and the housing market immediately began to rise slightly, and the price of Thai baht in the black market also increased.

This was not the worst. Siam raised interest rates again and announced that it would never devalue the Thai baht!

In response to this set of combined punches from the Siamese officials, Cayman Capital responded by selling another 50 billion baht!

In contrast, Siam spent 3 billion US dollars to stabilize the national exchange rate.

At this time, the Siamese officials were still confident because their foreign exchange reserves were still as high as 20 billion US dollars.

They were so inflated that they had the illusion that they had an advantage over me.

Time quickly came to two months later.

These two months were a bit too long for the Thai banking industry, because the deposit interest rate of up to 15% made all the liquidity flow to them.

The same high borrowing interest rate of 13% made some companies that were already heavily in debt successfully go bankrupt.

These bankrupt companies have exacerbated the bad debts of banks, and non-performing assets have reached 2.78 trillion baht, with a non-performing asset rate as high as 45.8%!

The Siamese officials, who thought Cayman Capital would not last long, found that Cayman Capital had changed its target of attack at this time.

Another new report was released, revealing the bad debts of several major banks in Siam.

And some gossip began to spread in the streets.

When the Siamese officials wanted to intervene by force, it was already a little late.

Even the financial officer was asked tentatively by his lover after returning home:

"Dear, is our country's bank going bankrupt? I took out all my savings today. Now my house is full of cash. I have no place to put it, so I can only put it in the refrigerator."

Only then did he realize that the apartment he sold to his mistress was full of Thai baht.

"Something is wrong."

His lover was arranged to work in the bank, so naturally he had some privileges and could take out cash first.

But ordinary people are not so lucky. If the rumors of bank bankruptcy continue to spread...