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1 On March 3, 1997, the Central Bank of Thailand announced that nine domestic finance companies and1housing loan companies had problems of low asset quality and insufficient liquidity. Soros and his men thought it was a hint that there might be deeper problems in Thailand's financial system, so they preemptively ordered the sale of shares in Thai banks and financial companies, and depositors withdrew a lot from all financial and securities companies in Thailand. At this time, the western impact fund headed by Soros is waiting for a large number of Southeast Asian currencies to jointly sell the Thai baht on a large scale. Under the siege of many western "heroes", the Thai baht was irresistible for a while and kept falling. In May, the lowest jumped to 1 USD against 26.70 baht. The Central Bank of Thailand devoted all its efforts to the whole country, and launched an anti-encirclement campaign against Soros in the middle and late May, aiming at disintegrating Soros's will, making him retreat from difficulties and stopping leading the people to attack the Thai baht.
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As the first step, the Bank of Thailand formed an alliance with Singapore and used a huge sum of about 654.38+0.2 billion US dollars to absorb Thai milling. The second step is to imitate Mahathir's strategy and tactics in 1994 and prohibit local banks from lending Thai wood to Soros's army by administrative order; Step 3: Raise the interest rate substantially, and raise the overnight rate from about 10% to 1500%. With a three-pronged approach, sophisticated weapons and a strong counterattack, on May 20, Taimo rose to a new high of 2,520.
Due to the sudden tightening of monetary policy and the sharp increase in interest costs, Soros's army was caught off guard and lost $300 million, which was a blow.
However, Soros is still Soros. According to his intuition, Soros thinks that the Bank of Thailand can do nothing more than that. After hard work, the Thais did not put themselves in a desperate situation and suffered relatively little losses. In a way, Soros thinks he has won. For southeast Asian countries, the initial victory was only a flash in the pan before the disaster, which could not hurt his vitality at all, nor could it save the fate of the southeast Asian financial crisis.
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Soros has worked hard for this opportunity for several years, and this time he is prepared and determined to win. The first defeat of the vanguard troops did not stop there, and Soros had to fight three wars in Southeast Asia.
1June, 997, Soros sent troops again. He ordered the three armed forces to regroup, ordered hedge funds to start selling US Treasury bonds to raise funds, expanded Soros's army, and later launched another fierce attack on the Thai baht. In a flash, the inclusive market in Southeast Asia was filled with smoke, and the two sides started hand-to-hand combat. Thailand is in chaos and the war situation is complicated. The major exchanges are like boiling hot soup, and people are running and screaming wildly.
After a short battle, the Central Bank of Thailand, with a foreign exchange reserve of only $30 billion, announced that it had "run out of ammunition and food". Faced with the overwhelming Soros army, they could not keep the Thai baht at a fixed exchange rate. Thais have to come up with a last resort, dig up the meat to mend the sore and implement a floating exchange rate. Unexpectedly, this is what Soros expected, and he also made various preparations for it. Various countermeasures have been implemented, and the fate of the Thai baht has been set on the cross of shame by Soros. The Thai baht continued to fall. On July 24th, the Thai baht fell to 32.5: 1 against the US dollar, a record low. Soros's slaughter of the Thai baht really made the world miserable, and the Thai people were even more frightened, dumbfounded and complaining.
Soros adopted a three-dimensional speculative strategy, not just foreign exchange operations. The so-called three-dimensional speculation refers to financial speculation by using the correlation between three or more financial instruments.
During the first half of 1997, some large funds, represented by Quantum Fund, used "leverage" to continuously squeeze the financial market in Thailand, which triggered the financial crisis in Thailand. In the subsequent evolution of the Southeast Asian financial crisis, these funds used "leverage" on a large scale, which aggravated the degree of the crisis. How did they do it? As Soros himself described, "We use our own money to buy stocks, pay 5% in cash and borrow the remaining 95%;" If bonds are used as collateral, we can borrow more money, and we can buy long-term bonds worth at least $50,000 with 1000. (Soros and others "Soros")
Under normal circumstances, due to the existence of non-arbitrage equilibrium relationship between financial markets, with the birth and development of various financial derivatives and their markets, the spot market, forward market, money market, capital market and derivative market of foreign exchange are interlocking, locking one after another, which will affect the whole body. Typical examples, such as June 1997, June 10, and several subsequent attacks by international speculators on Hong Kong's financial market, first of all, international speculators borrowed a lot of Hong Kong dollars in the money market and sold Hong Kong dollars, forcing the Hong Kong government to substantially raise the interbank interest rate in the money market; The sharp rise in interbank interest rates in the money market led to a decline in the stock market; At the same time, the Hang Seng stock index futures in the derivative market fell sharply. The plunge of HSI futures accelerated the decline of the stock market; The decline in stock prices has sharply reduced the confidence of foreign investors in the Hong Kong economy and the Hong Kong dollar, and they have sold Hong Kong stocks in exchange for US dollars, putting the Hong Kong dollar under a new round of depreciation pressure. The chain reaction of various markets finally expanded the victory of speculators in an all-round way.