Jemin Disraeli once said: There are no eternal friends, only eternal interests.

During World War II, Britain and the Soviet Union reconciled, and Prime Minister Winston Churchill extended this sentence to say: There are no eternal friends, and there are no eternal enemies, only eternal interests.

"Mr. Brooke. The bearish view of the market on the pound is based on the weak economic foundation of the UK. Even Germany believes that the pound needs to be devalued, and now you are trying to persuade us to give up the profits we have. ”

"Mr. John. From an objective point of view, our proposal is not entirely in the interests of the pound. It's a balance.

In my opinion, the pound does not have more room to fall, although the Bank of England's foreign exchange reserves have fallen compared to before. But it also means that central banks have more monetary policy to adjust the economy. ”

"But it will take time. ”

"Yes, time is what we need, but it's what you need, isn't it? ”

“.....”

There are no surprises.

Over the weekend, Norman Lamont held a closed meeting with a special economic advisory group headed by Pound Brooke and a Capital One Financial Research Group headed by Robert John in a reception room on the top floor of the Navy Building.

Pound Brooke asked Capital One to gradually close its short positions on the pound, and he chose the sharpest point of attack as a bargaining chip for the negotiation. For good reason, when the British government announced its withdrawal from the European exchange rate system, the Bank of England was not obliged to maintain the value of the pound against the mark, and the attack on the pound by international investors came to an end.

This should have been the logic of the bears on the pound, but it was used by Brooke as the most advantageous breakthrough.

Some people will ask how the Bank of England is not obliged to buy the pound, which means that the market lacks more funds to buy, which is more bearish for the pound and will further depreciate the pound, how can it become a bargaining chip between the Bank of England and the bears.

The reason is simple.

The price of a currency is based on the sovereign credibility of a country, and the decisive factor is the purchase of capital, which depends on different judgments of market prices.

From a larger perspective, it is like the relationship between two connected reservoirs, and the currency exchange between countries is like two different pools, where water flows between the two pools, and the two maintain a relative equilibrium, and the price at this equilibrium is the normal exchange rate level.

However, in order to keep the pound in the European exchange rate system, the pound was forced to set up a dam between the two pools to prevent the inflow of water from the pools.

The logic of the market's bearish pound is based on this relationship, using funds to continuously push up the price of the US dollar and the German mark, so that the balance continues to tilt, so that the pressure on the Bank of England is increasing, and when this pit reaches a certain limit, the water level in the UK is equal to rising, the balance is broken, and the pool water in the UK will involuntarily flow into Germany, which has dug a big hole, until the dam boundary formed by England's foreign exchange bursts to achieve the effect of flood discharge.

Now that the UK has been forced to withdraw from the European Exchange Rate Mechanism, this also means that the water between the UK and Germany and the pegged currency can flow freely again, and although there will be a short-term plummeting water level during the initial flood release, a lower exchange rate will inevitably stimulate the UK economy to strengthen, and the water level will return to an equilibrium level.

In other words, after the Bank of England announces that the pound will no longer be pegged to the mark, the pound will depreciate sharply for a short period of time, and then reach a market recognized equilibrium price, and as the market price tends to stabilize, the market will be at a relatively balanced level for foreign exchange buyers and sellers.

Man was born from nature, and it is destined that all derived social structures cannot escape from nature.

After all, the United Kingdom is one of the most powerful countries in the world, and the size of the pound's single-day turnover is also in the hundreds of billions of dollars.

Now, with the Bank of England's withdrawal from the European Exchange Rate Regime, this trend has shifted dramatically.

It means that, over time, the market will no longer be bought and sold by the Bank of England, but by a myriad of foreign exchange dealers, and the transaction amount will not be comparable to that of an investment company.

In other words, even if you hold more pounds and continue to short, there will be no random followers in the market, but there may be more multinational trading companies or foreign exchange exchanges to arbitrage in the opposite direction.

Of course, this is only a bargaining chip used by the UK's Special Economic Advisory Group.

In fact, the market has been killed.

That's right, just killed.

As the pound fell completely beyond market expectations, all the bulls who participated in the buying of the pound market were killed and discarded, and they were fatally strangled again and again.

A slight fluctuation in the market, there will be a bull who buys the pound at the bottom and immediately chooses to stop the loss, so that the price of the pound is like a dwarf falling into the abyss, and there is no sign of a rebound at all.

In another room from the reception room, Shen Jiannan took Qina Kanovski and Yulia Sidorov to talk with John Major and several chancellors of the exchequer.

"Mr. Brooke has a point, but the UK needs lower interest rates to stimulate the economy at the moment, and the UK needs more time than time, at least, more than it takes us to close our positions. ”

"I don't think it's in our interest to close our positions right now. Unless, you can make more concessions. ”

Bummer.

Downright scoundrels and hooligans.

Shen Jiannan's face did not have the humility that he should have when meeting with a big man like the prime minister, except for the polite greeting at the beginning, it was completely a hooligan posture of a dead pig who was not afraid of boiling water.

John Major's muscles trembled involuntarily at the corners of his eyes, and the Minister of Commerce and Exchequer, both Chancellor of the Exchequer and Cabinet Advisers were all glared at each other.

When did the British Empire suffer such humiliation.

Finally, John Hancock, the Interior Minister and Privy Councillor, could not stand the arrogance and scoundrel attitude of this guy.

"Shen. This is Great Britain. You haven't even thought about how this is going to end?"

Threat.

Naked threats.

Shen Jiannan's momentum suddenly withered, revealing a frightened look. But Kina Kanovski didn't think it was a big deal at all, and slapped her palm on the table.

"Lord Hancock, are you threatening us?"

“.......”