SFS Chapter 800: Funds Trapped
Chapter 800: Funds Trapped
After the Chinese New Year, Xia Ran left the stocks she had bought before to Chen Jin and asked him to help her assistant sell them.
Just wait for Xia Ran’s call to notify you of the specific date of sale.
Then he took people to Xiaorizi and South Korea without stopping.
Using the same method, a huge loan was lent out, and people were left to slowly convert it into US dollars.
The others stayed on standby and waited for further notification, while she went to Country T by herself.
Because Wang Jun said that Quantum Fund and Tiger Fund are already building positions.
Xia Ran immediately ordered to establish short positions in these countries at the same time.
At the same time, short the foreign exchange, stock, and futures markets, and increase leverage to sell them when they fall.
She bought as much money as she had, and she even had someone allocate another sum of money as a reserve fund.
At this time, Quantum Fund, Tiger Gene and a large number of hot money that followed them began to sell off their Thai baht.
Suddenly, so many Thai baht flooded into the market, causing the Thai baht to become worthless and causing the Thai baht exchange rate to plummet.
Not only did they sell off their own stocks, they also led public opinion to say that the market in Country T was about to collapse and that if they didn't leave, they would be trapped.
This led to a large number of people following suit and selling, which further exacerbated the decline in the exchange rate.
These things are all about confidence and optimism about the future prospects.
When retail investors saw that the market was about to end, they ran away faster than ever.
In mid-May, it looked like the market was going to fall badly.
The T government had to take measures to maintain the stability of the fixed exchange rate.
(Since 1983, they have had a fixed exchange rate of USD:Thai Baht = 25:1, directly linked to the US dollar).
The central bank began to intervene.
They took out $120 billion of foreign exchange reserves and threw them into the market to absorb the overheated Thai baht.
I want to bring the falling exchange rate back up.
At the same time, local banks were prohibited from providing lending services to these foreign speculators.
The purpose is to cut off the capital transfusion pipeline of these speculators.
On the one hand, the bank loan exchange rate was increased, thereby increasing the cost of borrowing money.
This resulted in the overnight lending rate increasing from 10% to 1000% to 1500%.
Both methods aim to achieve the same goal, which is to force these hedge funds to stop taking action against them.
This idea is not wrong and it works.
It took the whole country's efforts to bring the Thai baht's exchange rate back up.
Xia Ran lost a total of more than 9 million US dollars, but she herself didn't feel anything.
This scared Wang Jun a lot. He was so anxious and angry that he was worried that all the money he had worked hard to earn would be wasted.
Xia Ran said: "Why rush? The official war hasn't started yet, just wait patiently.
We have plenty of reserve funds, so we don’t have to worry about forced liquidation. What is there to be afraid of?
Besides, what we buy is for the long term, so there is no need to rush.
Besides, it doesn’t matter even if I lose everything, I can just consider it as a lesson learned.
Wherever there is high return, there is risk.
Opportunity and risk have been twins that exist simultaneously since ancient times. This is normal.”
He understood what his boss said, but the problem was that this was more than 9 million US dollars.
If converted into RMB, it would be 80 billion. How much can it accomplish? This is not a small number.
Wang Jun's heart still ached, and he was anxious and unable to sleep at night. He warned himself that he would never do this privately in the future.
Although the profits are high, my heart can’t bear it, I really can’t bear it.
The ups and downs are too crazy.
We watched it rise high, and then watched it collapse. There were too many uncertainties and uncontrollable factors.
It's like a roller coaster.
Although she was temporarily trapped, Xia Ran was not panicked at all. There was nothing to panic about.
Not to mention whether these big capitals can do it, she alone can short this place.
The answer is that she has enough assets, more than the total foreign exchange reserves of Country T, so she can play with them as she pleases.
She has prepared a large amount of capital but has not yet entered the market.
What's more, there are these foreign funds blocking the way ahead.
If these foreign funds lack the stamina to continue, she wouldn't mind giving them a push.
For the common people of this country, this is indeed a bit unethical, but so what?
Which capitalist doesn't have blood on his body? Which capitalist has clean hands?
Besides, Xia Ran has no burden at all about taking action against these countries.
She remembers clearly how these people bullied our people.
Who made her so vindictive and petty?
What's more, these countries are more unstable than each other, and there are always troubles.
If someone instigates or incites them a little, they will lose their identities and start making trouble.
When the economy is in recession, everything is in turmoil. But once it starts to develop well, it will be unstoppable.
Therefore, it is better to suppress them. Maybe they will calm down a little due to economic pressure.
To gain some room for development for our country.
Under the appearance of temporary stability, the two major funds and the consortium behind them were not idle either, trying their best to raise funds to prepare for another general offensive.
Anyone with a discerning eye can see that Country T is already empty-handed and at the end of its rope. It can't hold on for much longer and now only needs one final push.
In the process of raising money, somehow he was able to borrow it from Xia Ran through connections.
At first, Xia Ran planned to ignore it, but later he was moved by the high interest rate of the loan.
It directly lent $15 billion to Quantum Fund, almost at the highest lending rate, and of course it was a secured short-term loan.
In late June, several major fund consortiums launched a general attack on Country T with the funds they had raised.
Xia Ran asked his people to increase their positions and continue buying on the decline, investing another $18 billion.
The T government used $300 billion in foreign exchange reserves and $150 billion in international loans to try to turn the tide.
Unfortunately, this little bit of money thrown in here is still a drop in the bucket and will do nothing, without even a sound being heard.
It’s because the foreign exchange reserves are too small and the foreign debt is too high, which cannot prevent the market from continuing to decline.
Their current foreign debt is as high as US$930 billion, accounting for 49% of their GDP.
They were already on the verge of collapse at any time, and with the addition of these external pushers, this fragile bubble burst in an instant.
During this period, a large amount of other foreign hot money began to run away with the money, which was equivalent to giving the authorities of Country T another blow.
On June 30, President T reassured the public on television:
"The Thai baht will not be devalued, and we will make sure those speculators lose everything they have."
As a result, only two days passed, which was the second day after Hong Kong's return, July 2nd.
Country T could no longer hold on.