No one has done statistics. Even if there are statistics, we ordinary people will never know, which involves national security, but I have a set of information formed by the financial storm.
Due to the acceleration of global economic integration, the close economic ties among countries and the acceleration of economic cycle, the financial crisis triggered by one country will soon spread to another country and form a large-scale financial storm.
in p>1997, an unprecedented financial storm swept through many countries and regions in Asia. In this storm, countless enterprises in the affected countries went bankrupt. Take South Korea as an example. In just one year in 1997, 14 of the top 5 chaebol in China went bankrupt in the storm, 5 of the 775 listed companies went bankrupt, and the number of small and medium-sized enterprises went bankrupt as high as 15,.
On the whole, in Thailand, Malaysia, Indonesia and other countries, the national wage income has generally dropped by 1% to 2%, while inflation has generally increased domestic prices by 2% to 5%, which has caused the actual living standards of people in these countries to drop by more than 3% on average. With the emergence of serious economic instability, many countries have experienced political instability and social instability.
this financial storm originated in Thailand. At that time, some international speculators had already seen the weakness of Thai economy. The Thai government borrowed a lot of foreign debts, and a lot of short-term hot money stayed in Thailand to chase the rapidly expanding wealth in the Thai real estate market, especially more people invested their money in the stock market. International speculators have already spotted a major hidden danger in Thailand's economy, and it is difficult to resist large-scale sustained financial attacks. Therefore, they first attacked the foreign exchange market, because the stability of an open country's currency directly affects the confidence of its people in its economy. International speculators used financial leverage tools that were multiplied. They borrowed a lot of Thai baht from Thai banks and sold a lot of Thai baht in foreign exchange transactions, forcing the Thai government to use its US dollar reserves to undertake the selling of Thai baht in order to maintain the stability of the Thai baht exchange rate. As a result, the Thai government's limited US dollar foreign exchange reserves soon became insufficient, and the government's short-term foreign debt was under increasing pressure to repay the principal and interest at maturity, and finally it had to abandon the fixed exchange rate of the Thai baht.
in this process, once the international hot money attack begins, a large number of highly liquid funds will withdraw from the stock market rapidly. At this time, the stock price of the stock market will fall sharply round after round. In order to avoid risks, banks began to be forced to tighten monetary policy, and even many poorly managed banks were quickly pushed to the brink of bankruptcy. In this way, both the foreign exchange market and the stock market plummeted, and people's confidence in the national economy dropped sharply. They kept withdrawing funds from the stock market and went to the bank to withdraw their deposits, and then changed their Thai baht into dollars as soon as possible. As a result, the whole national economy has fallen into a vicious circle and is on the verge of total collapse.
in the open financial trading market, there are a large number of financial derivative trading instruments, and the leverage effect of these instruments makes the financial market magnified by multiple times or even dozens of times when risks appear. This is also an important reason why many people don't quite understand why the financial storm came so quickly. The same principle and similar methods soon spread the financial disaster to other countries in Southeast Asia.
In the thrilling Asian financial turmoil in 1997, one of the famous national speculators, Soros, used only $9 million in his quantum fund at that time. A few months later, there were $2 billion in the account of the quantum fund. Terrible is that the total amount of international hot money mobilized by this financial storm is as much as $1 billion. Such a large-scale hot money is mobilized to attack a country's financial market. Which country has so many foreign exchange reserves, how can they resist the attack of international hot money?
The characteristic of modern financial market is that money is moving at the speed of light. With a phone call and a computer, you can place an order on the internet and complete a big financial transaction in an instant, and no matter where the investor or international speculator is in the world, he can do it. The situation of financial market makes it difficult for any country with an open financial market to resist such a large-scale and high-speed financial attack. Once a country's financial system is breached, a lot of wealth will be swept away by international speculators, and its economy will immediately fall into a vicious circle and then face a total collapse. The most terrible thing is that once people's confidence breaks, the financial crisis will spread like a plague among neighboring countries and regions.
as an ordinary investor, entrepreneur and government official, it is important to learn to find opportunities in this market, learn to see major problems that may arise in economic and financial problems, and successfully avoid risks when financial crisis and financial storm really come.