"Yes, the trip principle!"

Seeing Qiao Tianyu's shocked face, Xu Jiahao mistakenly thought that Qiao Tianyu didn't know the principle that he looked like a god and a god, and his eyebrows fluttered to show off.

"Anyway, that trip principle is indeed a bit amazing, I really don't know how Lily could come up with such an ingenious principle!"

"Seriously, since Lily proposed the design idea of the trip principle, I really admire Lily, and I can't put it into words!"

......Seeing that Xu Jiahao was showing off endlessly, Qiao Tianyu hurriedly interrupted him, "Jiahao, time is pressing, you better continue." ”

In fact, the trip principle is very ingenious, Lily through a series of accurate calculations, came to the conclusion that an important node for the Bank of England to maintain the stability of the pound exchange rate is $30 billion. Xu Jiahao's excitement was still showing off.

"Because for the vast majority of international hedge funds and investment institutions, $30 billion is a very important filtering threshold. ”

"$30 billion can turn out the vast majority of small international hedge funds and investment institutions, and there are only a few international hedge funds and investment institutions in the world that can break through the $30 billion mark. ”

In other words, for those forces who want to attack the Bank of England by replicating Soros's short-selling strategy, $30 billion is enough to keep them out. ”

"And once there are forces that can break through the $30 billion threshold, it means that they are not making a small fuss, but have made up their minds to fight the Bank of England to the end, and they will never give up. ”

"Then they would immediately trigger a money swap agreement between the Bank of England and the Federal Reserve. ”

"The funds swap agreement clearly states that if the agreement is triggered, the Bank of England and the Federal Reserve will enter into an unlimited GBPUSD swap. ”

That is, the Fed will accept the Bank of England's pounds at the normal exchange rate and continue to provide the Bank of England with a corresponding amount of dollar support. ”

In other words, as long as there are forces that can break through $300 when shorting the pound, they will not withdraw easily due to the huge shorting costs. ”

"Little did they know that they had triggered the swap agreement, and that what they were going to do was no longer the Bank of England, but the most powerful US Federal Reserve in the world. ”

"As the issuing bank of the US dollar, the Fed can start the money printing press and print a steady stream of dollars to support the Bank of England as long as the Fed wants to, so no matter how well prepared the offensive forces are, they cannot be the opponent of the Fed!"

"Therefore, as long as there are international hedge funds and investment institutions that dare to attack the new version of the pound exchange rate prevention and control system, within the range of 30 billion US dollars, the Bank of England can clean up the opponent, and beyond 30 billion US dollars, the Federal Reserve will clean up the opponent!"

"Therefore, $30 billion is like the relay protector of the electric switch, once it is triggered, it will cause the circuit to trip, and the Bank of England will automatically jump to the Federal Reserve, so this principle is also called the trip principle!"

"Well, that's the truth!" Qiao Tianyu nodded vigorously after hearing this, this tripped principle is indeed the same as the principle of the world investment risk prevention and control system proposed by Qiao Tianyu and others many years later!

In fact, this trip principle does not sound like a profound theory, but the most subtle part of this principle is that it captures human nature very well and sets an extremely reasonable protection current, that is, the threshold of 30 billion US dollars!

Because there are countless investment institutions in the world's financial circles, all of which vary in size and power, and these investment institutions frequently harass the central banks of various countries for various purposes.

Therefore, every year in the international foreign exchange market, the central banks of various countries around the world will encounter countless attacks.

If the central banks of all countries are as nervous as if they were facing a great enemy in the face of every attack, they will only end up with losses and annoyance, and the gains outweigh the losses.

And if central banks ignore all attacks, they will end up with loopholes, as the UK did before the 1992 pound crisis, and will eventually be able to exploit loopholes and break the exchange rate control system in one fell swoop, causing heavy losses.

Therefore, the "trip principle" of the new version of the pound exchange rate prevention and control system sets a reasonable limit of 30 billion US dollars, which is enough to easily repel those attackers who fight small.

For financial predators like Soros, $30 billion is nothing to them, and in their opinion, the new version of the pound exchange rate prevention and control system is completely useless.

But once someone dares to break through the $30 billion mark rashly, limited by the high cost of shorting, they must take the new version of the pound exchange rate prevention and control system, otherwise they will be crushed by the high cost of shorting.

However, they did not know that the $30 billion mark had triggered the fund swap agreement, and they were no longer facing the Bank of England, but the most powerful Federal Reserve in the world.

Therefore, the "trip principle" firmly grasps the psychology of investors who want to win and are afraid of losing, and tightly traps the attacker in the belief that he must win!

A digression.

Unlike the objective law that natural science research is not based on human will, economics and finance are also a discipline that studies the laws of economic development and financial investment.

However, the main body engaged in economic development and financial investment is people, so the laws of economics and finance are greatly influenced by people's subjective consciousness to a large extent.

Therefore, a true economist and financial investment guru does not believe in a certain cold economic principle or financial investment dogma.

They tend to use the commonalities and weaknesses of human nature to their advantage, and win the battle by influencing the opponent's mental state.

For example, the well-known financial predator Soros, who summed up his lifelong investment experience and put forward the "reflexive theory", which has also become the core theory of Soros's investment philosophy.

Simply put, reflexive theory refers to an interactive effect between investors and the market. Soros believes that the relationship between financial markets and investors is:

Investors anticipate market movements based on the information they have and their knowledge of the market, and act accordingly. In fact, actions in turn affect and change the direction of the market, and the two are constantly influencing each other.

Therefore, Soros's reflexive theory describes the relationship between the market and the psychology of investors.