Rebirth 76: Industrial Internet Empire

After the fund lending channels were re-opened, the attacks of international speculators on the foreign exchange market not only did not slow down at all, but intensified their attacks because they knew that the HKMA would not resort to such measures unless it was a last resort and try to intervene through administrative intervention. Cut off their access to funds!

Faced with the crazy attacks by international speculators in the foreign exchange market, the Hong Kong Monetary Authority also showed its thunderous tactics and charged punitive high interest rates on commercial banks that repeatedly borrowed Hong Kong dollars through the liquidity mechanism. Bankers' overnight lending rates soared from 9% to 300%...

Although this move has temporarily suppressed the crazy attacks of international speculators, the foreign exchange reserves of the Hong Kong Monetary Authority have almost bottomed out. Ren Zhigang knows that the real decisive battle has not yet begun!

Under pressure, Ren Zhigang took advantage of the market break to go north again to seek help...

The Hong Kong Monetary Authority's request for help from the north achieved unexpected results. The leaders publicly declared in the media that the central government will maintain the stability of Hong Kong's financial market at all costs and will not allow the Southeast Asian financial crisis to spread. Neither the RMB nor the Hong Kong dollar will depreciate in the short term... …

The central government's announcement gave many ordinary investors hope of a comeback. The Hong Kong Monetary Authority took advantage of the situation and launched a counterattack, once again raising the Hong Kong dollar exchange rate to 7.8:1.

The SAR government began to lobby the major wealthy families in Hong Kong to carry out self-rescue. In addition to several real estate companies such as Cheung Kong Holdings, the major wealthy families in Xiangjiang all spent real money to repurchase their own stocks, and the Hang Seng Index returned to 8500 points.

The international hot money led by Quantum Fund did not choose to act recklessly, but turned around and turned to Southeast Asia again. This time, the international hot money targeted Indonesia and South Korea.

97 10 Month 24 Day.

Standard & Poor's downgraded South Korea's rating from AA- to A+...

A week later, Julian Robertson arrived in Seoul.

It has to be said that the cooperation between Tiger Management and S&P can be said to be seamless!

The timing they chose was also very good. Since the outbreak of the Southeast Asian financial crisis, in just a few months, Korean chaebols such as Hanbo Steel, Jinro Group, Kia Motors, and Daewoo Group have entered bankruptcy and liquidation procedures.

The bankruptcy of these large chaebols made major commercial banks miserable and had to carry out self-rescue to reduce losses. Major commercial banks began to tighten loans to enterprises. The manufacturing and banking industries began a vicious cycle of hurting each other. Banks tightened Money has led to the rupture of corporate capital chains and bankruptcy, and the bankruptcy of manufacturing companies has caused more bad debts in banks, and the financial crisis has become more and more severe...

But at this time, it was too late to tighten money. The average asset-liability ratio of South Korea's top 518 chaebols has soared to [-]%.

Julian Robertson still used the tried-and-tested method of borrowing Korean won from major commercial banks, then selling it in the foreign exchange market, acquiring US dollar assets, and then borrowing Korean won from the bank as collateral, and so on in an endless cycle...

As long as the Korean won exchange rate falls more than the bank interest rate, this is a guaranteed profit-and-loss-free deal!

It only took a month for the Bank of Korea to give up resistance, but this is also their old tradition...

On November 11, after the Bank of Korea announced that it would give up maintaining the exchange rate, the exchange rate of the Korean won against the US dollar fell from 16:986 to 1:1008.6 in just one day, and the Korean won fell.

On December 12, the eve of Christmas Eve in the West, the exchange rate of the Korean won against the US dollar fell to a record low of 23:1962. It only took more than a month for the Korean won to complete a decline that far exceeded that of the Thai baht. The so-called Korean nationalism, in Vulnerable in the face of interests, the major chaebols will only trample on each other to escape...

Zongheng Investment, which was the first to enter the Korean market, under the instruction of Yang Mo, began to buy Korean won against the trend in the foreign exchange market, return it to major commercial banks, and leave the market with a profit.

Almost at the same time, Lin Xi also bought long Korean won spot contracts on the SGX and closed out a large number of short Korean won positions. The Korean won began to rebound briefly in the foreign exchange market...

January 1998, 1, just after New Year's Day.

The financial turmoil continues to rage in Southeast Asia. Zhu Kenmiller personally arrived in Jakarta and lent a large amount of Indonesian rupiah from major foreign banks to sell in the foreign exchange market...

Faced with the crazy attacks by international speculators, Indonesia's foreign exchange reserves quickly bottomed out. The rescue measures provided by the International Monetary Fund for Indonesia, except for the rising debt, had no effect at all.

A month later, the exhausted Indonesian government hoped to temporarily implement a linked exchange rate system binding the Indonesian rupiah to the U.S. dollar with the support of the International Monetary Fund to stabilize the Indonesian rupiah exchange rate. This move was categorically opposed by the International Monetary Fund and Threaten to withdraw aid...

Indonesia is still too naive and regards sheep shearing as aid...

How can the International Monetary Fund and its sponsors (European and American governments) sincerely rescue a developing country?

In mid-February, the Indonesian central bank, which had persisted for a month, was unable to resist. The Indonesian rupiah fell below 2:10000 against the US dollar, and the wealth accumulated over the years was wiped out.

Affected by this, the financial turmoil in Southeast Asia intensified, and the foreign exchange market became turbulent again. The Singapore dollar, ringgit, Thai baht, Philippine peso, etc. followed suit.

The comeback of international speculators caused the Thai baht to suffer another heavy setback, with the exchange rate against the US dollar once approaching 40:1. The stock market was also not spared, falling unilaterally. The Thai SET stock index shrank by half, and was in danger of 250 points!

Amid the misery in Southeast Asia, Qianhai Asset Management has quietly begun to close positions and withdraw funds.

International hot money led by Quantum Fund began to slowly stop after a few months of raging in Southeast Asia.

...............

1998, April 8.

An ordinary day can no longer be ordinary.

Soros made a high-profile appearance in Hong Kong.

In an interview with the media, he publicly declared: With tens of billions of dollars in chips accumulated from shorting the pound, mark, and yen and ravaging Southeast Asia, Quantum Fund is expected to defeat Hong Kong’s weak financial system within 10 days. The Hong Kong dollar is the next Thai baht and Korean won. …

August 8, early trading.

International hot money has exposed its fangs, allowing Hong Kong investors to see what a real market crash is. Almost every Hang Seng Index component stock has a large number of short orders. Countless short orders are pouring down like an overwhelming amount of money, causing panic. They trampled on each other to escape.

The Hang Seng Index fell sharply in response, with all 9000, 8500, and 8000 points falling...

Almost at the same time, the long-dormant foreign exchange market also became turbulent again. Hong Kong dollar selling orders emerged one after another. Under the crazy attack of international hot money, the Hong Kong dollar exchange rate once hit 7.95:1, and the integer mark of 8.00:1 was in danger.

At this point in the situation, the Hong Kong Monetary Authority has also resorted to desperate measures, spending all its wealth and buying a large amount of Hong Kong dollars in the foreign exchange market. The decisive moment has officially begun...