The Son of Finance of the Great Age

  Chapter 225 Bangkok Clouds (3)

   It was getting dusk, on the crowded streets of Bangkok, a bald old white man was accompanied by two men in black suits, watching the bustling and busy.

   This bald white man is called Alemio Fraga, a senior partner of Quantum Fund, and graduated from the famous Princeton University. Before joining Quantum Fund, he worked for the Central Bank of Brazil as the governor.

   In other words, this dark and thin old man wearing a pair of thick glasses once took charge of the central bank of a big country and mastered the country's monetary policy. From this point of view, it is not an exaggeration to say that he is a great big man.

   Therefore, the Bank of Thailand sent a vice president to receive it, and the two sides had a seemingly open and honest conversation. In the conversation, Fraga bluntly pointed out that there are various problems in Thailand's economy. On the one hand, if the government is determined to protect the currency exchange rate, it must maintain a high interest rate to attract enough funds; on the other hand, because Thailand A large deficit in the international trade account, combined with the instability of the banking system, makes currency depreciation and lower interest rates more attractive, so Thailand must strike a good balance between the two, or it will fall. into a more dangerous situation.

   Perhaps it was Fraga's scholarly demeanor, or his experience as the governor of the Central Bank of Brazil, which made the deputy governor of the Bank of Thailand who received Fraga relax his vigilance. Facing Fraga, who had completely forgotten that he was an economist working for a top Wall Street predator, the deputy governor freely admitted that Thailand would accept any currency that was proven to keep its exchange rate within the specified range. Interest rates, but now because of the big troubles in the banking system, the government is starting to give more priority to interest rates.

These seemingly irrelevant conversations gave Fraga a lot of information. He seemed to see a huge opportunity to short the Thai baht. In the crevices of the banknotes, as long as he stretches out his hand, he can receive a steady stream of banknotes.

  Fraga, who pretended not to hear the message, changed the topic, and after discussing with the official for a few minutes, he suddenly brought up the topic just now, indicating that he did not fully understand. Out of courtesy, the Thai official, who had no idea that he had revealed a huge amount of information, reiterated what he had just said.

  Fraga and his colleagues have fully understood that the Thai government can do nothing about the current exchange rate policy, and no matter how many official statements to ensure the stability of the exchange rate policy are issued in the future, the Thai baht will eventually depreciate. This is only a matter of time.

  Why can’t Thailand take the initiative to choose devaluation? In addition to being able to attract foreign capital stably, there is also political pressure from other countries or regions in Southeast Asia. We must know that the so-called four Asian tigers and four tigers all follow the path of export-oriented economy to stimulate growth.

  This model mainly relies on the inflow of foreign capital and technology. In this case, maintaining the stability of the currency value becomes inevitable. No capital is willing to invest in a country with an unstable currency for a long time, because they have to worry about exchange rate risks. This is why Huaxia stopped changing the currency value easily after announcing a one-time devaluation in 1994.

  After the fixed exchange rate is determined, foreign capital and technology also enter, and then the economy takes off. In this process, the exchange rate system still cannot be easily changed. In addition to continuously attracting foreign funds, there is also pressure from neighboring countries.

   As we all know, once a country's currency is devalued, the country's goods will become more competitive in the international market. But in Southeast Asia, almost all countries rely on exports as the driving force for domestic economic development, and Thailand, the only country with the largest market share, is even more necessary to maintain the integrity of the exchange rate system, because once they announce devaluation, other countries will be driven by their own countries. For economic considerations, they will follow the trend and choose currency devaluation to start an export price war. At that time, the economic situation of the entire Southeast Asian region will fall into chaos. Therefore, out of regional economic considerations, it is also necessary for Thailand, a "big country" in the entire region, to maintain its own exchange rate stability.

   This is why when the Thai baht is under attack, other countries in Southeast Asia are lending a helping hand.

  At this time, Fraga was standing on the streets of Bangkok, looking at the busy crowd around him, but he couldn't bear it. He is different from those mercenary financiers on Wall Street. He has a more scholarly atmosphere and a little more compassion.

  In fact, within the Quantum Fund, there is also considerable opposition to the attack on the Thai baht. Strange to say, the source of this opposition comes from Soros himself.

  Hungarian-born Jew Soros was lucky enough to escape the massacre of Jews in World War II. He went to study at the London School of Economics and Political Science in the UK, then went to the United States to develop, and finally founded the famous Quantum Fund.

  Compared with his famous name in the financial market, Soros values ​​his achievements in the field of thought more. He once established funds in socialist countries such as Eastern Europe to help these countries move towards the modernization of civilization. There was even such a foundation in Yenching, China, but it was forced to close around 1987.

   It was a famous British philosopher Karl Popper who influenced Soros's thinking. He wrote the book "The Open Society and Its Enemies". Many of Soros' behaviors are deeply influenced by this book. Naturally, this kind of thinking has also influenced many people within the Quantum Fund.

  As early as 1992, when Druckenmiller attacked the British pound, he sold a total of 10 billion U.S. dollars worth of British pounds, and established a total of about 15 billion U.S. dollars in positions. Now, Quantum Fund's position in Thai baht is only 2 billion U.S. dollars. With huge differences.

Rodney Jones, an economist based in Hong Kong, for example, questioned the attack on the Thai baht. He believed that if the Thai currency collapsed, it would destroy the country's economic foundation and millions of innocent people would be forced to Falling into hunger and cold, this will be a situation that people who believe in the philosophy of "The Open Society and Its Enemies" do not want to see.

   Fraga is naturally one of them.

   "Sir, let me have a watermelon, it's guaranteed to be sweet and crisp." When Fraga wandered outside a shop on the side of the road, the stall owner next to him was selling his agricultural products inappropriately.

   Fraga was taken aback for a moment, and then looked at the stall owner who spoke suddenly. This is the streets of Bangkok, and it is at peak hour. The sound of three-wheeled motorcycles, the sound of car horns, the sound of people talking, and all kinds of noisy sounds are mixed together, making Fraga not sure who the stall owner is. You are talking to yourself.

   "Watermelon!" Seeing Fraga looking over, the stall owner showed a flattering smile on his face, quickly picked up a watermelon, and said watermelon in English in a blunt tone, followed by a series of Thai language.

  Fraga understood now. He looked up at the sunset glow that had turned half of the sky red, then wiped the sweat from his forehead with a wave of his hand, and muttered in a low voice, "It's really hot here."

  Thailand is near the equator, and the climate is hot all year round. At this time, it is summer again, and the temperature is even higher. Fraga from New York was not used to the hot summer, so he subconsciously complained. But when he glanced at the two guards behind him from the corner of his eyes, he couldn't help but feel a little guilty. These two were staff members of the Thai government. Hearing that Fraga wanted to take a walk on the streets of Bangkok, the two of them They were sent as guards, and they could have enjoyed sufficient coolness in the air-conditioned room. But if you want to tip them, they won't accept it, so you can only add something else.

"One!" Fraga first said to the stall owner, then remembered that the other party might not understand what he said, and raised a finger again, "This is money for you." He took out a 10 dollar bills.

  Although Fraga is used to using checks, he still worked hard before coming to Thailand, knowing that the transactions here are all in the form of cash, so he withdrew a lot of banknotes in advance.

The stall owner was overjoyed, quickly took a bag and filled it with watermelon, and while handing it to Fraga, he took the banknote in his hand, flicked it casually, put it under his nose and smelled the scent of the ink, and confirmed that it was the money. After a real note, he reached into the satchel at his waist and fumbled for it.

   "Keep the change for yourself." Fraga took the watermelon, weighed it, handed it to the black suit behind him, and then said to the stall owner who was still busy.

  The stall owner obviously didn't understand what Fraga said, and was still looking down for the change on his own. After he managed to collect enough change, he looked up and found that the customer who bought the watermelon just now had walked more than ten meters away. into his hands.

"..." Fraga was speechless for a while. Looking at the messy baht in his hand, he suddenly felt a little helpless. These currencies will depreciate rapidly in the near future. Although they are not worthless, they will not be like today. strong. And the stall owner just now will become the biggest victim of the depreciation of the Thai baht.

   Having experienced the financial crisis in Mexico, Fraga is well aware of the impact on Brazil at that time. Although international hot money did not attack Brazil, he will never forget that period of anxiety and anxiety.

  Fraga looked up, and the originally gorgeous sunset turned into a setting sun like blood. He just stood quietly like this, stunned in the crowded streets of Bangkok, and for the first time began to examine whether what he was doing was correct.

   Thanks to book friends pet, dongdajie, and not very fat sheep for their monthly votes!

  (end of this chapter)