Bow and thank you for the monthly pass support of "Little Dolphin 429", "MDXGG", and "Chinese Herbal Medicine 0318"! "zjun971210" is great, "God's Fart" is greatly rewarding support! There's something going on this month.,The update is a little weak.,I hope you're a big guy.,Next month will be more!

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After ten o'clock, the capital was much quieter, and the car slid quickly a**, and then went forward for a while, turning into a door.

Lu Zhengdong looked at the place and the guards at the door, his heart jumped violently, this was obviously going to Ouchi, and his heart was becoming more and more confused.

Walking into a conference room, Lu Zhengdong glanced at it, there are many people who are familiar faces who often appear in the media, there are many senior government officials in the economy, as well as officials from the Hong Kong and Macao Affairs Office, and another major feature is everyone in the economy and finance, it can be said that there are a gathering of stars, Lu Zhengdong glanced at the venue for a while, and found that there was also an acquaintance of his - his mentor Professor Wu, Professor Wu had obviously been staring at the door, saw him come in, beckoned him to sit next to him.

"From the perspective of economic fundamentals alone, Hong Kong should not become a victim of the financial crisis. This is because compared to several other crisis-stricken economies, Hong Kong's economic fundamentals are unassailable. From a macro point of view, Hong Kong's economic growth has maintained more than 5 percent, its fiscal surplus accounts for more than 4 percent of GDP, its external debt is almost none, and its foreign exchange reserves exceed US$100 billion, ranking third in the world. At a micro level, the company has the lowest gearing ratio in Asia, while its banking system is the most robust in Asia. In the wake of the crisis in Southeast Asia, Hong Kong's financial market has generally remained positive, with the Hang Seng Index reaching an unprecedented 16,000 points on August 7 and the real estate market booming...... To sum up, I don't think Hong Kong will have much of a problem even if it is attacked......"

A scholar was speaking, and while listening to the speech at the venue, Lu Zhengdong hurriedly asked Professor Wu:

"Teacher, I was dragged here in a daze, I don't know what happened to call me here?"

"There are indications that hedge funds. The next target of international speculators such as Tiger Fund and JPMorgan Chase is Hong Kong, which is seeking the advice of the central government. Listen to what other people have to say, and think about it. You were the first to foresee the financial crisis. There is a study in this area, and you will have to speak later, and the central leaders would like to hear your views. ”

In the summer of 1997, a group of international speculators, including Soros, an American financial speculator known as a "financial robber," continued to attack. Since Thailand, the foreign exchange and stock markets of Southeast Asian countries such as the Philippines, Malaysia, and Indonesia have plummeted all the way. After winning in Southeast Asia, Soros decided to move to Hong Kong.

"Teacher, just spare me. All of you here are well-known people, and I am a small person. ”

"Zhengdong, the humble man does not dare to forget the country, this is related to the future and destiny of Hong Kong, not the time to be polite."

Lu Zhengdong heard Professor Wu's words, his expression was awe-inspiring, in Professor Wu, the professionalism of economists and the civilian feelings of public scholars have been highly unified, and there are different expressions at different stages, but the spiritual core is the same, and Lu Zhengdong can only respect.

Lu Zhengdong listened carefully to the speeches of the other people present. There are no more than two points of view, which have not been greatly affected by the severe impact, but the unanimous view is that these financial predators are eyeing Hong Kong, but there is no very effective way to deal with it.

As the statement progressed. It was also Professor Wu's turn:

"I don't have much in-depth research on Hong Kong's economy, so I can't make a valuable comment, but my student Lu Zhengdong has a deep study of this and predicted the financial crisis as early as last year. I think his opinion is more important than mine. ”

Lu Zhengdong didn't have any politeness, nodded and said:

"Then I, a junior in the next generation, will get an axe in the door. The right is to throw bricks and lead jade.

Since this crisis started in Thailand, I will start with the situation in Thailand.

The results of Thailand are already there, and I don't need to say more, but I would like to say that the lesson of Thailand is that just as individuals must manage their individual risks, the State must also manage its overall risks, otherwise the globalized flow of capital will severely punish such mistakes. Some attribute volatile capital flows to an uncontrollable external environment, but the responsibility for risk management rests with a country itself. Globalization can test a country's governance from the corporate level to the public administration level, and the crisis in Thailand may be a case to show that a free economy is not the same as laissez-faire, and that it must intervene when it is time to intervene, otherwise it will be doomed.

Some people may say that Hong Kong is completely different from Thailand, that Hong Kong has abundant foreign exchange reserves, a perfect market and a free economic system, and so on, but Hong Kong is not invulnerable, and Hong Kong's financial market is not without loopholes. First, as an international financial center, Hong Kong benefits from a huge inflow of foreign capital, but it also brings about an asset bubble in the financial and real estate markets, and also brings huge risks, such a risk may not be revealed in normal times, but once the conditions are met, this becomes an opportunity for the attack of international funds, and the linked exchange rate system itself is not invulnerable, this system in fact sets up an automatic adjustment mechanism: as long as there is a large outflow of capital, Hong Kong will sell US dollars to maintain the exchange rate of the Hong Kong dollar against the US dollar. But the problem is that selling dollars means recovering Hong Kong dollars, and Hong Kong's local monetary policy is quickly tightened and interest rates start to rise, which will deal a heavy blow to Hong Kong's asset market.

That's why these financial predators are targeting Hong Kong.

According to my judgment, these international speculators will not directly attack Hong Kong, but will attack the east and west, and the Hong Kong dollar implements a linked exchange rate system, which has an automatic adjustment mechanism and is not easy to break. However, Hong Kong dollar interest rates are prone to sharp rises, and a sharp rise in interest rates will affect the stock market to fall sharply. In this way, as long as you sell short in the stock market and futures market in advance, and then borrow a large amount of Hong Kong dollars from banks, the interest rate of Hong Kong dollars will rise sharply, causing the Hang Seng Index to plummet, and you will be able to make speculative profits just like in other markets.

When speculators hit Hong Kong's financial market, from my observations, they did not engage in spot lending activities, but instead hoarded a large amount of Hong Kong dollars in advance. These Hong Kong dollars come from a variety of sources, but a very important source is the one-year to two-year Hong Kong dollar bonds issued in Hong Kong by some international financial institutions, which swap these Hong Kong dollars into US dollars, and the Hong Kong dollars are mainly borrowed by hedge funds. These Hong Kong dollars have become low-cost bargaining chips for hedge funds to attack Hong Kong's financial market, giving speculators favorable conditions to carry out arbitrage in the foreign exchange market. Hedge funds, in turn, buy a large number of forward US dollars in the foreign exchange market to balance the risk. It's obvious. Their attack on the Hong Kong dollar is only superficial, and the stock market and futures market are the real main targets. Attacking the West has been a consistent means of speculation by Soros and other international speculators, and has been successful many times.

Because they expect the Hang Seng Index to fall sharply after the shock to Hong Kong stocks. The price of the HSI futures contract is HK$50 per point, which means that if you open a short position. Every point drop in the Hang Seng Index. It can bring a profit of HK$50 to the short seller.

As everyone knows, Hong Kong has returned to the motherland. This is a major event in the history of the Chinese nation and has ushered in a new era for Hong Kong. However, for international speculators. This provides them with an opportunity to make waves. A series of issues, such as where Hong Kong's future will go and what will happen to Hong Kong's economy and society, have not only made outsiders wonder, but Hong Kong people are also confused. The Hang Seng Index represents the outlook for Hong Kong's financial market, as well as Hong Kong's economy and politics as a whole. It is the "barometer" of Hong Kong's economy. As long as the Hang Seng Index can be shaken, it can undermine people's confidence in Hong Kong's economy. In this case, the Hang Seng Index fell sharply, which is likely to cause the majority of investors to panic blindly, so as to achieve the purpose of reaping the benefits of the fisherman.

There is also the new Taiwan dollar, they will also attack the new Taiwan dollar, causing a sharp depreciation of the new Taiwan dollar, causing great pressure on the Hong Kong dollar, and then attacking Hong Kong after a series of preparations.

Combining the above. First, borrowing a large amount of Hong Kong dollars in the currency market and using forward contracts to short the Hong Kong dollar in the foreign exchange market, I think these financial predators will take a multi-pronged approach to attacking Hong Kong. Secondly, on the stock market. borrowing the constituent stocks of the Hang Seng Index while continuously shorting the Hang Seng Index contract in the stock index futures market; Finally, rumours spread that Hong Kong's economy is fragile and shake investors' confidence in the Hong Kong dollar. ”

"This big gamble by financial predators, led by hedge funds, is aimed directly at Hong Kong's linked exchange rate system. International speculators clearly saw this opportunity in the asset bubble. They will sell short local equities and Hong Kong dollar forwards at the same time, essentially making a profit on both ends - if the monetary authorities maintain the linked exchange rate system. Then the collapse of the local stock market will make speculators make a lot of money in the stock market; If the monetary authorities allow the linked exchange rate to collapse, the depreciation of the Hong Kong dollar and the consequent collapse of the local stock market will make speculators profit both in the foreign exchange market and the stock market. ”

Such consequences are unbearable for Hong Kong, if allowed to develop, Hong Kong will eventually "return to the economic abyss of decades ago" overnight, and to fight back, that is to violate the principle of free economy, which is contrary to the positioning of Hong Kong's free port, will be widely criticized by the world and even Hong Kong public opinion, but the government to intervene in the market, we have to see whether the advantages outweigh the disadvantages or the advantages outweigh the disadvantages, obviously the advantages of the intervention in the market far outweigh the disadvantages, since these international speculators take advantage of the loopholes in the rules, this can be a moral move? If this is despicable, then why should we stick to the rules, and why can't we intervene in the market in a non-traditional way? It's like a wounded person who is bleeding and can't get a blood transfusion, but the abuser doesn't allow him to heal himself, isn't it a joke, if the victim lets himself bleed to death, isn't it too dogmatic The victim has the right to put on a tourniquet to stop the bleeding on his own, and the victim has the right to do whatever it thinks is right, this is a matter of course, and there is nothing wrong with even launching a counterattack.

Such measures, one might argue, do not conform to the 'Washington Consensus', which is based on neoclassical assumptions about perfect markets: governments do not intervene in markets, and sound markets require trade liberalization, sound macroeconomic policies, accurate pricing, privatization of state-owned enterprises, and the spread of democracy. This consensus has also increased transparency in the financial sector and promoted better public and private governance. Global institutions such as the OECD, WTO, IMF, and the World Bank have extended this neoliberal theory to the world.

The most economically successful countries in East Asia have not followed this development strategy: governments have played an active role in promoting education, promoting science and technology, stimulating increased savings, and redistributing incomes.

And let's not forget that the Washington Consensus is basically a set of institutional combinations based on the Western market economy, in which the property rights infrastructure such as a functioning judicial system, a good corporate governance structure, mature financial regulatory capabilities, and a strong level of risk management are taken for granted, so economists mistakenly believe that as long as a country or region has the political will to reform, coupled with their good construction, then the country's or region's monetary and fiscal policies, Even the goal of financial reform is simply easy to achieve.

However, it is important not to forget about jì. That is, all institutions, including the market itself, are path-dependent, and must be built on the existing historical, cultural and social structures of a country or region; The change in the structure of the social system is much slower and more difficult than the theory assumes. Once the theoretical assumptions are wrong, the conclusions derived and the policy recommendations formed will lose their foundation.

Nowhere is this more evident than in Russia, where naïve Soviet economists have implemented institutional reforms based on this theory. This is despite the fact that there is a lot of economic and technical assistance from the West. This practice continues to fail. Among those who blindly follow market orthodoxy, there are some of the top theorists, all of whom fail to understand that the precondition for the proper functioning of the market is the existence of sound judicial and regulatory institutions, and as a result, Russia is also set back decades.

Unfortunately. This set of erroneous prescriptions was once all the rage in emerging markets in Asia, and it has an unshirkable responsibility for the formation and intensification of the Asian financial crisis. These emerging-market countries have had to swallow the bitter pills, while the PhDs in economics who prescribe medicine are still living a decent and honorable life.

The 'Washington Consensus' also ignores the inextricable links between countries and looks at each country in isolation. Meantime. The Washington Consensus also underestimates the dangers posed by liquidity and ignores the inherent fragility of Asian economies' balance sheets, which are characterized by large inflows and outflows of capital. Of course, some Asian economies themselves underestimate the vagaries of international capital flows; The 'Washington Consensus' even mistakenly believes in the economic efficiency of rapid capital flows, ignoring the deadly danger it brings, thus giving international speculators an easy opportunity. And when these international speculators open their mouths, these countries seem to be at a loss. Therefore, for such things, thinking without superstition is objective. Contrary to the 'Washington Consensus', I think the "network theory" is that every economy is a "network node", and there are "links" between economies. In such an economic network, it is necessary to achieve the security and stability of the network. We should not only focus on certain nodes, but also pay attention to those links that are most fragile and easy to break, theory is needed, but not superstition. It is necessary to abandon theoretical dogma and pay attention to practical results. In times of crisis. Intervention is necessary, just as a patient needs a doctor for a serious illness, and it is impossible to rely solely on the patient's own immune system, which can leave time for structural reform to respond to the crisis......

This crisis has made us think that although global integration is a major trend of economic development, developing countries should actively move closer to the international community. However, when a series of crises erupted, people had to reconsider the issue of liberalization, especially when a country's economic and financial security was threatened and undermined, and the large-scale sweep of international funds had seriously threatened the economic security of some countries. Should liberalization continue to be pursued?

I think it is self-evident that after this crisis, intervening in the market when necessary will be an inevitable choice for both a full and limited free market. ”

Lu Zhengdong knew that the Hong Kong government's biggest concern was that he was afraid that intervention would shake the foundation of the free port, and he had to talk more about it. Don't ask for a move, but ask for thinking. After a lot of attention in this regard, Lu Zhengdong has turned the topic to the favorable factors in Hong Kong:

"Hong Kong's financial sector is well-regulated and well-capitalized, and Hong Kong's strong banking system is well-functioning, with a capital adequacy ratio of 18 percent and a bad debt ratio of only about 3 percent, which is an important protective levee for Hong Kong's economy from collapse. Hong Kong's abundant foreign exchange reserves have allowed the Hong Kong banking system to maintain good liquidity even though foreign banks have quickly withdrawn large amounts of funds from Hong Kong.

Moreover, before the asset bubble, banks had reduced the leverage ratio of real estate mortgage loans from 70% to 50%, and the establishment of the Hong Kong Mortgage Securities Corporation also increased bank liquidity. These are the foundations, coupled with Hong Kong's abundant foreign exchange reserves, there are quite a few Chinese-funded enterprises, and there is no problem in the capital of the counterattack.

Moreover, the Hong Kong government has no shortage of financial elites to fight back...... In fact, no matter how those speculators use the trick, we completely simplify the complicated counterattack very simply, that is: when the market is unstable, the central bank should act as a lender of last resort, continuously injecting liquidity to restore market confidence. Usually, the central bank regulates liquidity through the bond market, which is not very suitable for this operation, and the other party has to adopt an unexpected strategy: buying large quantities of blue chips. On the one hand, the release of the Exchange Fund quickly quelled the panic sell-off of the Hong Kong dollar. There is also the need to carry out counterattacks according to the actual situation, and you can't always be led by their noses, and you should be taken by surprise......

On the other hand, the injection of liquidity has led to a significant reduction in market interest rates. Even on the expiration date of many futures contracts, despite the best efforts of the other party, the stock index remains high, the Hong Kong dollar does not move, and the fundamentals of Hong Kong's economy are good, and the real reason for the economic volatility and the shaking of the linked exchange rate system is the market's confidence in Hong Kong. As a result, its counterattack strategy was very clear from the outset – to maintain market confidence. Such an extraordinary strategy is used to achieve the effect of killing many birds with one stone. ”

Lu Zhengdong talked eloquently:

"Of course, it's hard to judge what's right and who's wrong in a crisis. But Kissinger has said that in a crisis, the most dangerous measures are often the safest. Contrary to orthodox policies, in fact, are good ways out of the predicament, and even the opinions of the best think tanks of the "Washington Consensus" are not necessarily correct. Because they are discussing these things, this thing has not happened, and now this thing has happened, then we must deal with the actual situation now, this is the biggest good policy, of course, the counterattack is not without difficulty, that is, to grasp the rhythm, to grasp the node of the counterattack, counterattack, not only to maintain the fundamentals of Hong Kong's economy, but also to let those greedy people steal chickens and rice, let them pay a heavy price, let them remember for a long time! ”

"This is a difficult time, because the foreign exchange reserves are the result of the sweat of the Hong Kong people, and there are many people's economic beliefs, and the government of a free economy should not intervene or interfere in the market field, and the Hong Kong government has always believed in a free economy, and a free economy is the cornerstone of Hong Kong. But is a manipulated economy not a free economy? Will it shake the foundation of Hong Kong, and I want to say, is there no limit to freedom? When the market is completely destroyed, we can't help but wonder if this belief needs to be slightly corrected. Because of the catastrophic consequences, it is not only one person who suffers, but also other citizens of Hong Kong. It's a painful choice, but no matter how painful it is, you have to make a decision......"

"I'm going to stop here, and my expression may be a little messy without the slightest preparation, but it doesn't affect the expression of my main idea."

Lu Zhengdong's speech lasted for a long time, and no one interrupted, and even the venue was surprisingly quiet.

Obviously, his tirade caused the participants to think deeply, and of course, he was able to achieve such an effect, not only because he was a disciple of Professor Wu, but also because he was the prophet of the financial crisis, which would give an extremely strong psychological hint to those present. He said what he wanted to say and what he could say, and then it was up to the SAR government and the central government to make decisions.

Lu Zhengdong felt that he had violated the principle of being an official and doing more today, but if he could get a better structure, he would not regret it at all.

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