"We'd better wait, it's not suitable to enter the market for the time being." Fu Rongqi made a decision.
"Why?" Fu Guangzheng looked puzzled.
"Because the Thai government hasn't intervened yet. When the Thai government takes action, there will definitely be another fight. A government cannot be helpless." Fu Rongqi began to teach Fu Guangzheng his experience.
"Then we wait now?"
"That's right, wait."
More than a month has passed since then. During this period, the Thai government really intervened and pulled back the exchange rate, which had fallen a bit. It was already early May, and Feng Yu had returned to Xiangjiang. Naturally, Kirilenko followed.
"Feng, how long do you have to wait?" Kirilenko's patience is limited. It has been more than a month. They have lost hundreds of millions of dollars, and the exchange ratio of Thai baht is only 25:1. The money they have earned is not enough. The compensation is much. Fortunately, Thailand's stocks are still slowly falling. If their stock index futures are delivered, most of the 22 losses can be filled.
"When Soros and the others can't help it anymore, he will take the initiative to contact us. Only by selling the Thai baht on a large scale at the same time can we suppress the Thai baht with a thunderous force." Feng Yu was very calm. If it was really as Kirilenko thought, Simple, there are more than just funds for foreign exchange speculation.
"But why did you start short-selling Malaysia's ringgit again?" Kirilenko couldn't figure it out. If a country's currency has not been suppressed, why are you starting to dabble in the markets of other countries? In this way, funds can be used
"You must not know that the country with the most frequent trade contacts with Thailand is Malaysia. The debts between the two countries are very large and complex. When serious problems occur in Thailand's economy, Malaysia's economy will inevitably be affected."
Why history calls this time the Asian Financial Crisis is because the economic models of East Asian countries at that time were similar and trade between them was frequent, forming a complete chain.
When a certain link is broken, the entire chain is broken. These interconnected countries will be damaged to a certain extent, and then it will be much easier to suppress them.
Kirilenko nodded as if he understood. Anyway, he saw that he was losing money every day. If it weren't for the futures contract to cover the bottom, he would have asked to withdraw his capital long ago. Without Feng Yu, Kirilenko would not have attacked Thailand even if Soros invited him. This country's economy seems to be very good.
How rich is Thailand now? The per capita GDP exceeds 3,000 US dollars, many times that of China. It seems that we have the prototype of a developed country, right
But strangely, Thailand’s per capita debt exceeds US$1,500, which means that Thailand’s overall debt ratio exceeds 50%.
Thailand's economic development is inseparable from foreign investment and the export of domestic manufacturing. The export of domestic manufacturing accounts for more than 42% of GDP. This is a considerable proportion and an absolute pillar industry.
This ratio is reflected in many countries in Southeast Asia that are close to the sea. After all, shipping is the most mainstream mode of international transportation.
The second point is that Thailand’s real estate industry is very prosperous and is also their second pillar industry. Among them, foreign investment accounts for a large proportion. Luxury hotels and office buildings are rising from the ground. Vacation villas and golf courses are constantly being built.
In Bangkok alone, there are two international conference centers and four under construction. The number of hospital beds is more than three times the actual need. Real estate speculation has become a quick insurance shortcut to make a fortune.
But there is a huge hidden danger, that is, the vacancy rate of houses is extremely high, exceeding 20%. In other words, so many houses are built not for living or because of need, but for speculation.
This model is very similar to the economy of the United States and island countries in the late 1980s. With real estate and exports as the pillar industries, a false prosperity and a real estate bubble will quickly form.
It is worth mentioning that island countries account for a huge proportion of foreign investment in real estate speculation in Thailand. In other words, investment from island countries accounts for a huge proportion in the entire Asia.
When the U.S. real estate crashed, the disaster was transferred to island countries. Then the U.S. developed rapidly again through high-tech, and real estate has also recovered. However, the real estate in the island country has not yet recovered, but smart businessmen in the island country have also found a good way, that is, to replicate the illusion of former real estate glory in other countries in Southeast Asia, and then they can make money from it.
This time they learned the lesson. As long as they retreated when real estate was at its peak, they could make a lot of money and then leave the mess to the governments of those countries. In this way, they not only make money, but also hit the economies of other countries, ensuring the island country's status as the economic leader in Asia. It kills multiple birds with one stone.
Another interesting point is that Thailand's financial liberalization, in order to promote the development of the capital market, has abolished the securities transaction tax, reduced the corporate dividend tax, and even provided financial support to securities companies.
Interest rate restrictions were removed, interest rates were market-oriented, and the short-term lending market developed rapidly. Foreign exchange is open to the outside world, and the upper limit for foreign investors to remit foreign exchange is US$500,000, which makes Thailand's foreign exchange reserves seriously insufficient.
Perhaps seeing the benefits of the development of the financial industry in other countries, Thailand has opened up offshore financial services. Thailand's fifty commercial banks, including thirty-five foreign banks, have obtained the ability to absorb deposits and borrow money from abroad, and then in Eligibility for Thai and foreign loans in foreign currencies.
This also makes it easy for Soros and Feng Yu to borrow Thai baht.
Of course, another important point is that Thailand allows non-residents to open Thai baht accounts in commercial banks in Thailand, make deposits and borrow money, and convert them freely. Thailand’s capital projects have been basically liberalized.
In this way, a large amount of foreign investment can be obtained in the short term, which will allow the country's economy to develop rapidly. But this financial crisis has also laid the foundation for major hidden dangers.
For example, they do not control the scale of foreign debt of financial institutions, and their supervision of financial institutions is simply ineffective. Domestic stocks and bonds are completely open to the outside world, giving international speculators great opportunities.
Then there is no restriction on foreign investment, and they even welcome it very much, thinking that it will bring prosperity to their own economy.
Enterprises can borrow externally, and the scale of external debt is huge. Their national debt ratio exceeds 50% of GDP, which speaks volumes. It seems that the company is developing well and the assets are growing gratifyingly, but they fail to consider that after excluding the money owed to others, they are actually still losing money!
The country that owes the most foreign debt to Thailand is the island country. The island country is also the country that has opened the most banks in Thailand and even in the entire East Asia. It borrows money from abroad desperately because the island country has a serious excess of funds. The island country’s investment in Thailand has already exceeded 10 billion US dollars.
In fact, even if Soros and others do not attack Thailand, Thailand's economy will not survive the millennium. When the island country withdraws from its real estate and financial industries, it will bring economic collapse to Thailand.
(End of chapter)