Dry!

This is the next day Soros and Stanley?? Druckenmiller's final conclusion after the meeting.

There are three reasons for this.

First, the hegemony of the US dollar, which is the world's reserve currency.

More than 90 percent of the world's international trade is settled in US dollars.

Since the beginning of the year, the US dollar exchange rate in the international market has continued to strengthen, and the implementation of a fixed exchange rate of the Thai baht means that it has continued to appreciate passively.

This is very bad for Thailand's economy.

In the Asian market, Japan is the main competitor in Southeast Asia due to its high level of development.

Whether it is agriculture or industry, Japan is extremely competitive in Asia and even in the world.

But while the dollar strengthened, the yen showed a downward trend.

The strengthening of the US dollar and the decline of the yen have led to a decline in exports of countries pegged to the US dollar, which has exacerbated the current account deficit.

The statistics of the data collected by the Quantum Fund team show that:

From 1995 to 1996.

Overall export growth in Thailand, Malaysia, Indonesia, the Philippines and other countries fell by nearly 70% from 22.8% to 5.6%.

As a result of the massive export decline, GDP growth in East and South-East Asia fell by almost one percentage point.

The second point.

The exchange rate of Southeast Asian countries is mainly determined by the US dollar as the dominant currency.

However, its monetary system pegged to the US dollar has led to a small range of free fluctuations and an inflexible exchange rate system.

This is particularly the case in Thailand.

Looking at the actual fluctuations in the Thai baht exchange rate in 1993 and 1994, the monthly rate of change was only 0.15 to 0.16 percent.

Although this inflexible pegging system can encourage direct investment to a certain extent, it severely limits the room for the Bank of Thailand to use monetary policy to regulate the economy.

Since 1988, a large amount of capital has begun to flow into Thailand, which has put the Thai baht under greater pressure to appreciate.

The Bank of Thailand had to limit the appreciation of the baht and intervene neutrally by the end of 1993.

As a result of the intervention, the gap between domestic and international interest rates has widened, further attracting capital inflows.

After the Bank of Thailand abandoned its neutralization intervention, the massive inflow of capital contributed to the expansion of the domestic money supply.

This, in turn, has further stimulated domestic demand and increased investment in non-critical sectors, making it difficult for the Bank of Thailand to implement effective monetary policy.

The currencies of other Southeast Asian countries are allowed to fluctuate sharply, but because the government has strongly intervened in the currency market and exchange rate.

It attempts to maintain a certain level of psychological price for a long time, so its exchange rate policy is also inflexible.

This kind of psychology is somewhat similar to the psychology of living in a small family.

It's like a farmer who raises a pig.

The price of pigs was sold for five yuan a pound in the previous year, and the next year it will be sold for at least five yuan a pound anyway.

If the price of pigs falls, psychologically that hurdle will not be able to pass.

To put it simply, it is wishful thinking that the currency will be maintained at the price you want regardless of the changes in the market.

The third point.

Southeast Asian countries have not reformed their exchange rate regimes when they have deregulated their capital accounts.

Economically, it is believed that free capital transactions cannot coexist with artificially fixed exchange rates for a long time.

This law is unbreakable.

This is because exchange controls are imposed to maintain an exchange rate that appears to be overvalued in the market.

In the absence of a strong balance of payments position and a flexible and effective exchange rate system, South-East Asian countries have liberalized their capitalization, which has prevented exchange rates from self-adjusting.

In this situation where capital is allowed to move freely in and out, the intelligence agency of the Quantum Fund believes that speculators can speculate in the market with only a small amount of risk.

The Quantum Fund's intelligence system also found that Southeast Asian countries, particularly Thailand, lack effective regulation of the financial sector.

Thailand opened its capital account prematurely, while the central bank did not adequately regulate the offshore operations and financial transactions of foreign banks.

Due to the high openness of Thailand's capital account, non-residents are more free to participate in trading activities in the local market, while the central bank is not supervised in a timely manner.

On the basis of these three irreversible points, the collapse of the Southeast Asian economic system is a foregone conclusion.

There is no change in the foregone conclusion.

It's like a building with a hollowed-out foundation, and it's only a matter of time before it collapses.

No one can change the fate of these emerging market countries.

An early collapse may end early, and the longer it drags on, the worse the disaster will be.

After determining this result, Soros muttered to himself.

"What we are doing is not wrong, not to be precise, not to exacerbate the gap between rich and poor in this country.

On the contrary, we are helping this country to go down the right path, not further down the wrong path......."

A week has passed.

During the week, Stanley?? Druckenmiller has focused all his attention on Southeast Asia.

Soros, on the other hand, has been quietly waiting, waiting for the opportunity to arise.

That opportunity is the ASEAN political landscape.

Soros has considered a number of options for this issue nearly a month ago.

Now Soros has come up with a plan of action, which is basically the same as the last pound incident, that is, to use political factors to attack!

And Stanley?? After Druckenmiller had studied it, Soros sat down in the sofa chair heavily, and he stretched out for a long time.

He shouted at Druckenmiller, "Let the world turn its attention to Southeast Asia!"

A silent battle has begun, and the specter of the world roams over the countries of Southeast Asia.

…….

In North America in November, heavy snow is covered.

The whole city of Manhattan is often covered in white.

The snowflakes that reflected the crystal light made Zhao Jiangchuan lose his mind.

The arrival of winter means that the year is about to pass.

In a few months, it will be the annual Spring Festival in China.

Set off firecrackers, eat dumplings, and string relatives.

You can also get New Year's money.

Most importantly.

There, there were parents who gave birth to him and raised him.

No matter how tired you are, there will be a safe haven for your heart.

Zhao Jiangchuan was a little homesick.

"We currently hold 180 billion baht assets in the Thai market, and from a risk perspective, I think we should build a certain position size in the interest rate market to deal with the risk of possible depreciation of the baht......

"At present, the call for the depreciation of the Thai baht is getting louder and louder, and from the analysis of the current situation in Thailand, the depreciation of the Thai baht is already a matter of time, so I am also in favor of opening a short position in the baht...."

"Last month, international capital carried out several tentative attacks on the Thai baht, and judging from the reaction of the Bank of Thailand, the psychological price of the Thai baht by the Bank of Thailand is between 24 and 25 ......"

"Judging from the data we have collected, BOT is the only buyer of Thai baht in the temptation of international capital for the Thai baht......."

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