Raising US dollars, this is the fundamental reason, others have strong funds.
1. Exchange Thai Baht. Various ways to buy Thai baht in large quantities. For example: swaps. For example, I have US dollars and you have Thai baht. I come over and say to you: Brother, let’s exchange the two. I will give you 1 US dollar in exchange for 2 Thai baht. After 3 months, I will give you 2.5 Thai baht in exchange for 1 US dollar. Of course what do you do? Do it, what a good thing. Don’t worry about not having Thai baht to buy it, because there are not enough Thai baht in the foreign exchange market so the Thai government can open a money printing press. After the exchange was completed, rumors of an appreciation of the Thai baht were spread in the market.
2. Buy futures and options. The above large-scale purchases of Thai baht and the influence of rumors will inevitably cause the Thai baht to appreciate and the US dollar to depreciate in the foreign exchange market. At this time, if you buy a put option on the Thai baht (the agreement is to exchange one dollar for three baht), the price must be very cheap, because the baht is rising, and no one thinks that it will fall below 1:3 (put option: the buyer wants to sell Currency. A Thai baht put option actually means that both parties agree on a higher price for the Thai baht, and the buyer pays the option premium. If the Thai baht depreciates in the future, the buyer has the right to sell the Thai baht at the agreed high price). Sign futures. For example, the Thai baht has increased from 1 US dollar to 2 baht to 1.5 baht per US dollar, and it is still rising. Let me come and tell you: Brother, let's sign futures. In three months, I will exchange 3 baht for you. U.S. dollars, of course you do whatever you want. After three months, 1 baht will be worth 1 U.S. dollar. He actually gave me three bahts to exchange for one U.S. dollar. How stupid.
3. After signing a large number of futures options, he estimated that the Thai baht was about to rise to its peak. Soros began to sell the Thai baht and spread rumors about the devaluation of the Thai baht. He predicted that the Thai government did not have enough U.S. dollar reserves to purchase excess Thai baht. And if the Thai government cannot buy the baht sold by Soros and a series of financial giants, there will be only one result: the devaluation of the baht. Once the Thai baht depreciates, it will definitely plummet, because it is not Soros who is selling the Thai baht in the later period, but people are rushing to sell the depreciated currency in order to preserve its value. Just like before, people would rush to buy the Thai baht in order to increase its value and promote its appreciation.
4. Make a lot of dollars: First, the price of the Thai baht rose, Soros sold the baht, and the price of the baht fell. But after all, he sold when the price was high and made a small profit. Second, swap. After three months, the Thai baht depreciated to 1 US dollar for 5 baht. I only used 2.5 baht to exchange for one US dollar, making a small profit. Third, a very large number of options. The standard we agreed on was one dollar for three baht, but now it has dropped to one dollar for five baht. Soros has the right to sell at one to three. He will exchange it for one dollar in the market. Buy Thai baht for five baht, and then continue to exercise the option contract at three baht for one dollar, making a huge profit. Fourth, futures, the method is the same as options contracts, and you can make a lot of money.
At this point, Soros has returned with a lot of money, but in Thailand, those who signed swaps with him and gave him loans originally released 1 baht and got back 1 point and several baht, but it was not as good as before. The Thai baht is valuable, and it is a loss; those who signed futures and options with him originally had 1 US dollar, but only got 3 baht back, and could only buy back 0.6 US dollars in the market, which was a loss; Thai people: they could have bought a head of cabbage. You can only buy half a cabbage with money, which is a loss; Thai government: You Soros came in with a bunch of people, I printed a lot of Thai baht, and when you left, you took away all my foreign exchange reserves and threw away all the Thai baht. Back then, domestic inflation and the baht weakened, leaving a lot of problems and huge losses. Look, Soros didn't bring any benefits when he came, but he even wiped out the land when he left. That's cruel.
(The above data are all fabricated, just for the convenience of presentation)
As mentioned before, the most fundamental reason is that Soros has strong funds and can influence the direction of the small Thai currency market, and the Thai baht is weak. There are some problems in the currency itself. The economy cannot keep up with the development but it wants to maintain the linked exchange rate. There is a tendency of depreciation in itself. This gave Soros an opportunity.
Similar strategies often appear in the hands of Chinese stock market makers. In the past few years, international oil prices soared to more than 100, and then plummeted to more than 30. If you look carefully, many Chinese companies lost money in the middle. Big money is actually the trick played by international speculators. When playing economics, the most important thing is to look far and deeply. Don't be blinded by immediate interests. Think more about why he is like this.