Chapter 284 Preliminary Deployment
More than half a year has passed since the merger of Germany and Germany. After experiencing the reunification of the motherland, the East Germans gradually lost the excitement before the merger, and life returned to plain. In the face of the powerful commodity impact of Western consumerism, East Germans began to look a little at a loss.
East Germans got credit cards for the first time, and they quickly replaced all their furniture with West German styles. The garbage pile under the residential building is full of replaced furniture. Everyone made a small fortune on the 1:1 exchange between East and West Deutsche marks. And the money has not yet been warmed up in the hands of the East Germans. Then it was sent to the capitalists in West Germany.
Based on the average saving level of DM 7,000 per family, this money is actually not spent at all. But compared to these money matters. The change in work made the East Germans feel deeply helpless.
A large number of East German teachers lost their jobs, and many East German-era soldiers also left the army. A large number of original factories and enterprises in East Germany began to close down. Almost all the doctors in the hospital went to West Germany to set up clinics. Under various social shocks, unemployment and brain drain began to appear in East Germany.
Those respected teachers, intellectuals, and model workers in the East German era have lost their glory, and many of them have lived a miserable life in order to support their families. The academic qualifications and skills they acquired during the East German era could not continue to be used in Germany after reunification, and many people were abandoned by the times and society in this way. became a useless person.
Chancellor Kohl optimistically estimates that it only takes five years for the former East Germany to be as developed as West Germany. However, although the 1:1 exchange of Mark seems generous, it actually caused a serious problem of declining purchasing power in East Germany.
The Deutsche Mark is the most important currency in Europe, as the country with the most dynamic economy in Europe. The Deutsche Mark enjoys a pivotal position in Europe. Within the European Community, everyone has developed a complex pegged exchange rate mechanism based on the Deutsche mark. According to this mechanism, the currencies of all countries will be exchanged with the Deutsche Mark as an intermediary, and the fluctuation of the exchange rate cannot exceed 5%. The Bundesbank actually plays the role of the European Central Bank. But this is actually artificially putting a shackle on the exchange rates between countries. Since the up and down fluctuations cannot exceed 5%, once the currencies of these countries are attacked in the foreign exchange market, the governments of these countries have to take out marks to keep their exchange rates. And this is exactly the attack flaw that Seryozha valued.
The German economy is still digesting the mess left by East Germany, but the excess currency has flowed into the hands of the East German people. At this moment, the German economy is at its weakest. Now the Bundesbank is actually the central bank of Europe. There is a problem with the central bank, can the remaining countries continue to pay for inflation in Germany?
Not long after the last Gorky meeting ended, Seryozha carried out a series of splits of Colombian Bank. Soon, Columbian Bank’s business in Poland began to be listed in the UK under the name of Polish Bank. After the listing, Polish Bank was subject to After winning the favor of European investors, Seryozha successively spun off Czech Bank and Slovak Bank. When the shares of these banks are sold in the European private market, many established financial companies in Europe and the United States are very interested in this. Seryozha firmly controlled the banks through a series of loaded shareholdings. At the same time, he also got a lot of cash in his hands. The cash will be the ammunition for Seryozha's next attack.
With Seryozha diluting the Gorky Financial Group's stake in Columbia Bank's European operations to 40 percent, Seryozha has $2 trillion in cash reserves. But the money is just the beginning.
Seryozha used these funds as collateral, and began to make a large number of local currency loans in the European Community countries. In the UK, Seryozha borrowed £40 billion from the Bank of England,
In France, Sergios borrowed about 50 billion francs from the Central Bank of Paris. These are short-term loans with high interest rates, but they need to be repaid in local currency after maturity, so as long as Sergey shorts the currencies of these countries, when the time comes to repay the loan, the exchange rate difference will be Sergey’s Gained.
All this is done silently. With the further deepening of the separation of Colombian banks in Europe, almost every single market member country has established related banks. The Irish banking industry began to receive loan applications from Bulgarian banks, and Irish pounds were lent out at high interest rates. Romania, on the other hand, has borrowed heavily in lira from the Central Bank of Italy. The Hungarian bank is targeting the Danish krone. Polish banks received a large amount of pounds after listing in the UK, and at the same time lent more pounds from the UK. The Czech and Slovak banks targeted the remaining countries. The Luxembourg franc, the Belgian franc, the Danish kroner, the Greek drachma, the Dutch guilder, the Spanish peseta, and the Portuguese escudo have all become Sergei's borrowers.
At this moment, Seryozha only spared the Deutsche Mark. Because although Mark has a weakness now, it is still the most difficult to break through. The major currencies of the 12 European Union countries now look a lot like a chain ship in Romance of the Three Kingdoms. If Seryozha took the lead in attacking the currencies of small countries like the Belgian franc and the Luxembourg franc. Then other countries will come to the rescue. Seryozha is about to face the central banks of the 12 EC countries that are united. But what if every country is set on fire? Seryozha is betting that central banks will never provide any support to their neighbors until they have sorted out their own troubles. Although Seryozha still has to deal with 11 of these countries. But he is betting that Germany will likely choose to stay out of it. Because the central banks of 11 countries were rescued at the same time to maintain the exchange rate, the real money that the German central bank will spend will be astronomical.
Because Seryozha's banks have been split into several small vests, and most of these banks come from the capital-poor Eastern European region, the lending behavior of these banks has not received enough attention from central banks. In order to win over these countries to join the European Community, many countries even offered very favorable policies in terms of loans. However, although the interest on the loan is not low, the reserve for the mortgage loan has dropped a lot. Sergey is very grateful to these European central banks who do not know the heights of the sky and the earth. Really sold them and helped count the money!
After all, there is fierce competition between the European Community and the single market, and whoever wins depends on who can win over more countries. Seryozha's unified market can help Eastern European countries stabilize their economies, but what if Eastern European countries lose their wings and go to the European Community? In fact, Seryozha hopes to bring more countries closer to the unified market. But before the illusion of the European Community was disillusioned, Sergei's unified market was always facing a greater threat.
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