In the past few days, a wave of speculative selling has raged in the European market, first the Finnish mark, after depleting its foreign exchange reserves, the Finnish government announced that it would abandon the policy of pegging to the European currency unit, thus allowing the Finnish mark to float freely in the market, and on this day the Finnish mark depreciated by nearly 15%, and foreign exchange traders made a profit almost in the blink of an eye.

The next day, the capital was targeted at the Swedish krona, and in the face of the urgency of the situation, the Swedish government announced overnight that it would raise interest rates to an unprecedented level of 75 percent, enough to allow capital to flow back into the domestic market. Seeing that the attack was fruitless, these capitals, which relied on the operation of advanced electronic communication systems, turned to attack the Italian lira.

Italy, unlike Finland, is not yet officially a member of the European Exchange Rate Mechanism, so it is unlikely to count on the help of other European central banks when speculators are eyeing it. But the situation is different in Italy, where a devaluation means that for the first time the members of the exchange rate mechanism are blown out by the market, and the Italian central bank is entitled to support from the powerful German central bank. In fact, in the past week, Italy has borrowed about $36 billion worth of marks from Germany, and although this intervention is unprecedented, it has failed.

On the British side, it's a different story.

When visiting officials from Italy and Germany discussed the depreciation of the lira, British Chancellor of the Exchequer Lamont still attended the event as he had already arranged, and even in the description of the British media, Lamont was even a little proud, because he knew that Germany's interest rates were going to fall.

As part of the Italian lira depreciation agreement, Deutsche Bank will announce a 0.25 percentage point cut in interest rates on Monday (14th), which is a disguised increase in the value of the pound.

In fact, in the eyes of most analysts and financiers, Italy is not at all comparable to the United Kingdom, the most chaotic and wealthy country in Europe, with its domestic political landscape and economic system simply not comparable to that of the United Kingdom, a country still led by the Conservative Party, which has changed the country's economic situation in the previous decade or so.

In addition, since August, the currency pressure caused by the market sell-off on the pound has also been successfully defused by the Bank of England, which announced in early September that it would borrow 10 billion European currency units (7.25 billion pounds, $14 billion) in early September to improve its ability to defend the pound. As a result, the Bank of England has more than $50 billion at its disposal.

What Lamont didn't expect was that the money they prepared was only equivalent to the amount that the Quantum Fund had prepared in pounds, and in addition to the Quantum Fund, there were countless other hedge funds and forex traders who were ready to sell the pound.

On Monday, September 14, 1992, when the London foreign exchange market began to operate, the news that Germany would cut interest rates was received, and the English market also bought the equivalent of 700 million US dollars in the market to maintain the value of the currency, so that the exchange rate of the British pound rose slightly on this day, and everything looked good.

But this gave the speculators more courage, because they saw a worst-case outcome. As a result, even with the help of the Bundesbank, the pound has risen only a little, which means that they can sell the pound as best they can, because at worst it will only rise a little.

As a result, the next day, a wave of sell-off of the pound came as promised, as a result of which more than a billion dollars were spent, which was able to leave the pound at the mark of 2.7850, which is only 70 basis points from 2.7780.

At the end of the day, Zhong Shi also sold half of the pound in his hand.

After showing HSBC a huge amount of cash reserves and related proof of assets, Zhong Shi easily borrowed four billion pounds sterling, which was hung in Zhongyi's name, but Zhong Shi had already obtained his authorization and consent, in fact, in order to prevent this cousin from embezzling property or something in the future, when he authorized the operation of funds in Zhongyi's name a few years ago, there was also a clause in the power of attorney to prevent embezzlement.

These pounds have been sold to forex traders at different prices in the past few days, and now all Bell Stone needs is to buy the same amount of pounds in the market at the right time to pay it back to the bank.

It is rare for an individual to participate in the foreign exchange market and also have such a large position. Therefore, HSBC has given great convenience in all aspects.

On the 15th, Schlesinger's conversation was published in an interview with the Wall Street Journal and the German Handelsblatt, in which Schlesinger declared that a broad adjustment of the European currency would be better than a separate adjustment of the lira.

The implication is very obvious, that is, not only the lira will be adjusted, but other currencies will also be adjusted, so whoever wants to adjust, the first must be the pound sterling, which is on the cusp of the storm.

Lamont was shocked. He immediately called the German side overnight with the governor of the Bank of England, Pemberton, hoping that the German side would issue a statement stating that the interview only represented Schlesinger himself or vetoed the news, but the German side refused.

Lamont understands very well that Basschlesinger's speech on interest rates has already caused a frenzied sell-off of the Italian lira by speculators, and now he says this that tomorrow when the market opens will cause a frenzied attack on the pound by speculators.

In fact, in the global foreign exchange market, this news has already caused an uproar, and everyone knows that Germany has abandoned the United Kingdom.

Zhong Shi was woken up by a phone call at seven o'clock in the evening, it was a call from the United States, and Zhong Yi in New Jersey called Zhong Shi as soon as he saw the news.

"What does such a statement by Germany say?" As soon as he connected the phone, Zhong Yi asked with a slashed face. During Bell Seok's trip to Europe, he kept in touch with the United States.

"What the hell did he say?" Zhong Shi, who had just woken up, was a little confused, he had been staying at HSBC's UK headquarters for the past few days, and basically didn't go anywhere, Rao was like this, and he felt very tired, so he went to bed early.

"What he meant by this was that there was going to be a large-scale adjustment of the European exchange rate system." Zhong Yi said anxiously. His mentor at Princeton was an expert in econometrics, a man named Christopher. Sims's economist.

It stands to reason that macroeconometrics and the exchange rate system of the international economy are not the same direction, but the European exchange rate system has been so hot lately that it has attracted the attention of almost all economists on Shijie, and professors and students at Princeton often discuss similar issues here.

"I guess it's forcing the pound to depreciate!" Zhong Shi said lazily. But in the next moment, he was awakened by his own words, yes, forcing the pound to depreciate, is this how the depreciation of the pound in the previous life came?

Thinking like this, Zhong Shi couldn't sleep anymore, and after a few perfunctory words, he quickly hung up the phone. He then called HSBC's trading department and instructed them to go all out in the global market at the floor limit of 2.7780.

As mentioned earlier, the foreign exchange market is a 24-hour market, and the pound is bought and sold everywhere except in London, and of course the largest buyer is the Bank of England.

HSBC's foreign exchange trading department received Zhongshi's instructions and did not dare to be careless, and hurriedly called them to inform them in the United States, Japan, Hong Kong and other departments to peddle Zhongshi's pounds.

At the same time, in the Quantum Fund's office on Seventh Avenue on Wall Street, Druckenmüller's first reaction was that Schlesinger would be happy to see Britain squeezed out of the European Exchange Rate Mechanism, and that Germany's central bank had no intention of helping its weaker neighbors, that is, the depreciation of the pound was inevitable.

Extremely excited, Druckenmiller walked into Soros's office and discussed his next move with his boss, who had just returned from England a few days ago.

"I will start gradually increasing my position until the pound is crushed." Druckenmiller walked up and down the huge office, his eyes shining with excitement.

"What?" Soros looked a little unresponsive, and his old face was full of puzzlement. He objected: "It doesn't make sense! ”

"What do you mean?" Druckenmiller felt like someone had poured cold water on his head, and his enthusiasm was immediately extinguished. He looked at his boss suspiciously, waiting for the next explanation.

"If the news report is not wrong, then we will be in a situation where we are almost sure to win, so what are we hesitating about, operating with all our might, betting all the positions up, and directly increasing all our own!" Soros said categorically. "Go all out!"

Hearing his boss say this, Druckenmiller laughed dumbly. HE STILL DOESN'T KNOW HIS BOSS VERY WELL, AND IN THIS CASE, ACCORDING TO HIS GAMBLER PERSONALITY, IT MUST BE SHOWHAND. (A gambling term that means to bet all in.) ）

Time is running out, and the market in the United States is not yet closed. This time Druckenmiller and Soros decided to go into battle in person and call the banks that were willing to do business with them. According to the rules of the European exchange rate system, the Bank of England must buy the pound at 2.7780 in order to keep the pound in the European monetary system, but this is only valid during the trading hours in London. By this time, the trading time in London had passed, and they had to find another buyer.

With the emergence of large sell orders from Bell Stone and Quantum Fund, banks with large sell orders began to alert their currency traders, and they followed suit and began to sell off the pound. In this way, the news of the imminent collapse of the pound quickly spread, forming a wave of selling the pound in the range of the whole shijie.

Soon, there were no buyers in the market.

As the sell-off was timely and at the lowest price, Bell Stone's pound quickly fell off. (Thank you for the book friends who are accustomed to waiting for more ~~ rewards!) I hope more book friends can support this book, everyone's support is my motivation, ask for Sanjiang tickets, ask for more recommended collections, thank you very much! ）