novelones Chapter 290 The hardest bone in history
Chapter 290 The hardest bone in history
XNUM X Year X NUM X Month.
On the streets of Siam Bangkok, Robert and his men were admiring the bustling exotic scenery.
It seems that the withdrawal of capital has not had much impact on the country's economy.
"Boss, Siam's stock market has been plummeting for days. How come I don't 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 the illusion that the economy will continue to grow.
Coupled with the official blocking of news channels, people naturally don't know what happened. "
"But all this is temporary. Capital is fleeing and Siam officials cannot be stable for long."
Thinking of this, Robert asked casually:
"How's the thing I asked you to do?"
As early as half a year ago, Robert began asking his subordinates to borrow Thai baht by mortgaging U.S. Treasury bonds.
"We have mortgaged nearly 150 billion US dollars in national debt, which is enough money to fight a crushing war."
“Very good, start selling the baht massively!”
At this time, capital fled, the stock market plummeted, and there were various signs that something bad might be about to happen. The first thing Siamese officials thought of was to actively lift the fixed exchange rate with the US dollar.
However, Siam's top leaders hesitated at this time, because lifting the fixed exchange rate would cause the Thai baht to depreciate, and domestic debt would be worsened.
The depreciation of the Thai baht will also cause large-scale bankruptcies of domestic companies, cause large-scale layoffs of workers, and reduce international credibility.
They found themselves in a dilemma, because the bubbles in the stock market and real estate in recent years were too big. Untying them would mean death. If they didn't untie them, they might still get a beating.
"Chief, according to statistics, our foreign debt has reached 930 billion US dollars, which is equivalent to half of GDP!"
This shocking number shocked those 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 was created.
"This is not the most dangerous thing. Among the US$930 billion, short-term debt is as high as 60%!"
Even people who don’t understand economics know what this number means.
“How else are we going to deal with this crisis without unfixing the exchange rate?”
The currency expert from the beautiful country thought for a while and responded:
"Raise interest rates, of course!"
"During the Sakurajima bubble crisis, Wang Lei, the son of finance, once used this method to draw a tie with Cayman Capital."
"Is it just a tie?"
The expert from Beautiful Country felt that his professionalism was being questioned. He smiled and said:
“The situation between the two is of course different. There is a large amount of yen circulating in the Sakurajima market, which reduces the effect of raising interest rates.
But as long as your country simultaneously raises the deposit interest rate and loan interest rate of domestic financial institutions and further reduces the baht circulating in the market, this battle will still be fought. "
The words were crude but not crude. Siam's senior management immediately understood what the expert meant.
In preparation for the incoming Cayman capital, Siamese officials borrowed billions of dollars in foreign exchange.
The day after Robert arrived in Siam, Siam officials announced an increase in deposit and loan interest rates.
Reaching unprecedented 12% and 13.5%!
Not only is it the highest in Eastern Asia, it is also more than twice the international average.
In this regard, Robert just wanted to laugh. Siamese officials would only be trapping themselves by doing this.
People deposit their money in banks, which will further curb consumption.
Moreover, people only save but do not lend, and banks need to bear high costs and lose their source of income.
This will further expand the deficit of domestic commercial banks.
At the same time, Robert's people began to sell 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, Siam officials began to invest huge amounts of US dollars to rescue the market.
A battle for foreign exchange reserves has begun!
One side is the big short seller who has been planning for many years, and the other side is one of the Four Little Tigers with large foreign exchange reserves.
Laosuo and Tiger Fund watched the two parties fall into a fierce battle and chose to sit back and watch.
Facing Big Brother’s call inviting him to join the game, Lao Suo said bluntly:
"Boss, it's not my help. You are really a little impatient. We estimate that next year will be the best time to take action. This time you can only ask for your own blessings."
How could Robert not know Lao Suo's plan? He wanted Cayman Capital and Siamese officials to have a bloody blow and then reap the benefits.
Without other spoilers, Robert simply turned his currency attack to public talk.
In the interview, it was claimed that the Thai baht exchange rate was much higher than it actually was.
Faced with the open declaration of war by the Big Shorts, the central banks of various Eastern Asian countries have unanimously agreed to jointly carry out multilateral or bilateral intervention when encountering currency crises!
They realized that their country’s capabilities simply could not resist Cayman Capital’s short selling.
As soon as the news was announced, the stock and real estate markets immediately began to see slight increases, and the price of the baht on the black market also increased accordingly.
This is not the most terrible thing. Siam has raised interest rates again and announced that the Thai baht will never depreciate!
Faced with this set of official Siamese punches, Cayman Capital responded by selling off another 500 billion baht!
Correspondingly, Siam spent US$30 billion to stabilize the national exchange rate.
At this time, Siamese officials were still confident because their foreign exchange reserves were still as high as 200 billion US dollars.
Their swelling created the illusion of superiority in me.
Time quickly came to 2 months later.
These two months are a bit too long for Thailand's banking industry, because the deposit interest rate as high as 2% has caused all liquidity to flow to them.
The borrowing interest rate, which is also as high as 13%, has caused some companies that were already heavily in debt to successfully go bankrupt.
These bankrupt companies have aggravated the bank's bad debts. Non-performing assets have reached 2.78 trillion baht, and the non-performing asset rate is as high as 45.8%!
Siamese officials, who originally thought that Cayman Capital would not be able to hold on for long, discovered that Cayman Capital had changed the target of its attack at this time.
A new report has been released, which omits the bad debts of several major banks in Siam.
And some gossip began to spread in the streets.
By the time Siamese officials wanted to intervene with force, it was already a bit late.
Even after the financial officer returned home, his lover asked tentatively:
"Dear, are our country's banks going bankrupt? I took out all the money I saved today. Now my house is full of cash. I have no place to put it but can only put it in the refrigerator."
Only then did he discover that the apartment sold to his young lover was filled with Thai baht everywhere.
"The big thing is bad."
His lover was assigned to work in a bank, which naturally gave him some privileges. Of course, he could withdraw cash first.
But ordinary people are not so lucky. If the rumors of bank bankruptcy become more and more intense...