Chapter 1367 Shocking Financial War!

When Yang Ming was just rising in Hong Kong, in March 1979, under the leadership of the two big brothers, West Germany and Country F, the eight member states of the European Economic Community established the European Monetary System.

Because there are 8 countries with different currencies and different economic strengths, if they directly join the euro, it will inevitably cause economic turmoil for each economy, so we first establish an initial exchange rate link between the currencies of various countries.

Therefore, the first step is to fix the exchange rates of each country's currency with each other and float them together against the US dollar.

As a result, the following regulations came into being. Each currency is only allowed to float within a certain exchange rate range. Once it exceeds the prescribed exchange rate floating range, the central bank of each member country must intervene in the market by buying and selling its own currency within the prescribed exchange rate floating range. The currencies of member states can float relative to the currencies of other member states. Because West Germany was the strongest economy at the time, the exchange rate between the currencies of each member state was anchored with the West German Mark, which stabilized the country's currency exchange rate within a specified range. within.

On October 5, 1990, Country Y announced that it would join the European Monetary System.

It was announced that the upper limit of the pound-to-mark exchange rate is 3.1320 marks, the lower limit is 2.7780 marks, the central exchange rate is 2.95 marks, and the floating rate is about 6%.

That night, the European Community issued a statement welcoming that it was finally together with the whole of Europe, but this in itself was a false start.

All because the pound was already overvalued at this time.

At the economic level, country Y was on the verge of recession at this time, and inflation was soaring. From the beginning of 1989 to 1S, the CPI rose from 5% to 8%. High interest rates seemed to be ineffective against high inflation, but instead increased the risk of economic recession. So we are caught in a dilemma. If we keep interest rates high, the Great Depression is inevitable, but if we cut interest rates, we can't stand inflation.

Country Y urgently needs to cut interest rates and release funds to stimulate the economy, but it is worried that this will lead to depreciation of the pound and capital outflows, thereby triggering a financial and economic crisis.

Therefore, they placed their hope on using external forces and chose to join the exchange rate mechanism of the European Monetary System to stabilize the pound exchange rate and control inflation. After joining the EMS, Country Y immediately announced an interest rate cut of 1%.

Facts have proved that the people of country Y are still very cunning. After joining EMS, the cpi of country Y dropped significantly.

On February 7, 1992, twelve countries of the European Community signed the Treaty of Maastricht, marking the euro's renewed push forward and its determination to unify the European continent with the euro.

In fact, the establishment of the euro was indeed a bumpy road. It was established to challenge the US dollar, and the people of China would definitely not agree to it.

The economic weakness at this time made it impossible for the pound to maintain its overvalued exchange rate.

However, because it joined the European Monetary System, the pound must be pegged to the mark. There is a lower limit, so it can only float within the limits of the exchange rate mechanism, and its hands are tied.

We are in a dilemma. If the pound depreciates, it is very likely to exceed the lower limit of the exchange rate, and it will leave the European monetary system, declaring the failure of country Y's foreign exchange policy, and losing public support.

If the pound does not depreciate, the exchange rate will be overvalued, and capital will vote with its feet, foreign exchange reserves will continue to bleed, and the consequences will be serious.

Country Y chose to carry it to death.

All this was seen by Soros, the financial giant in history. According to Soros's Quantum Fund's research on Country Y, it was believed that Country Y's economic downturn required interest rate cuts and stimulus measures.

As an important institution that ensures market stability, the Bank of England is the backbone of Country Y's financial system and has extremely rich market experience and strong strength.

Before this, no one had dared to challenge Optimus Prime of Country Y, or even thought about it. However, Soros decided to do something that no one had ever done before, shake the so-called strong pillar of Country Y to test how stable it is.

After the merger of East and West Germany in 1990, country D needed a large amount of capital to support the construction of East Germany. And because the infrastructure project was in full swing and inflation was gaining momentum, people in country D urgently needed to raise interest rates to keep funds at home and suppress inflation.

The linked exchange rates of European countries are the pound against the mark of country D. There are upper and lower limits. People in country Y need to cut interest rates to stimulate the economy, and people in country D need to raise interest rates. This creates a huge contradiction. If the pound does not depreciate, funds will continue to flow into country D. , which has brought extremely adverse effects to the market of country Y, which is itself in recession.

As time went by, people in country Y began to be unable to stand it anymore and asked the federal bank of country D to lower interest rates. However, countries always put their own interests first. People in country D were worried that cutting interest rates would lead to domestic inflation and may trigger an economic collapse. , directly rejected Country Y's request. Country D not only rejected the Seven-nation Summit's request for an interest rate cut, but instead raised the discount rate to 8.75% in July 1992.

In the opinion of domestic experts and business elites, Country Y's stubborn spirit of maintaining a high exchange rate cannot be sustained. However, in the summer of 1992, Country Y repeatedly reiterated that it insisted on maintaining its current policy unchanged and that Country Y had the ability to keep the pound within the European exchange rate system. .

Although Soros is convinced that country Y cannot maintain its position in the European exchange rate system, the people of country Y are just bluffing.

At this moment, on the other side of the Atlantic, Soros and other speculators have been increasing the size of their positions in the past few months in preparation for a sniper attack on the pound.

Their specific operation methods are as follows: using mutual funds and multinational companies that have been engaged in arbitrage operations for a long time, they first buy a large number of weak currencies such as the British pound and the Italian lira in the market, and then wait for the fluctuations in market sentiment, amplify the bearish sentiment on the British pound, and add fuel to the flames. When the market sentiment reaches its peak, they sell a large number of weak European currencies quickly and make profits by smashing the market!

After Country D raised the discount rate to 8.75% in July 1992, market sentiment changed, causing a trend of selling pounds and liras and buying marks in the foreign exchange market. The exchange rate of pounds against marks fell from 2.95 to 2.85, and then from 2.85 to 2.7964. The Bank of England urgently ordered to purchase 3.3 billion pounds to stabilize the exchange rate. The Bank of England successfully played the role of Great Britain's stabilizing force.

Although the British pound and the lira are continuously not optimistic, they are both big countries. If Soros directly fights against Country Y, he may not be able to win easily.

The blitzkrieg began. In Finland, an inconspicuous small Nordic country, after D raised interest rates, Finns exchanged Finnish marks for D marks. By September, the exchange rate of Finnish marks against D marks continued to fall. According to the linked exchange rate rules of European countries, in order to maintain a rigid exchange rate, the Finnish central bank sold a large number of D marks and bought Finnish marks.

However, cannon fodder is destined to be cannon fodder.

Finland could not hold on any longer. On September 8, the Finnish mark plummeted and decoupled from the D mark. In this way, it seems that it is necessary to read more news and be cunning. The Finnish people who changed marks first successfully saved themselves.

At that time, Britain and France felt something was wrong, so they suggested to Germany to lower interest rates, but the brains of D people were as inflexible as their highways. They believed that the decoupling of the Finnish mark was insignificant. D even publicly announced on September 11 that D would not lower interest rates. It was D's connivance that made the market begin to believe that the linked exchange rate system was in big trouble, and the powerful D country did not seem to be interested in interfering.

Soros, the great shark, seemed to smell blood, and speculators from all walks of life swarmed in with red eyes!

On September 12, Soros attacked the Italian lira.

Not only are Italians not good at fighting, but their exchange rate is also very weak. Within one day, it plummeted by 7 points, approaching the lower limit of the linked exchange rate of European countries. Italy is different from Finland and is a famous economic power in southern Europe. The plunge of the Italian lira shocked the world.

At this point, if Country D did not take action, the European monetary system would collapse. On September 14, the central bank of Country D officially announced a half percentage point reduction in the discount rate, from 8.75% to 8.25%. This move by Country D was welcomed by Britain and France.

But it was too late!

The interest rate hike by Country D in July was like a butterfly flapping its wings, and the storm caused by the butterfly was about to blow in the financial market of Country Y.

On September 15, the day after D announced the interest rate cut, the pound sterling exchange rate fell all the way, and the pound sterling to the mark exchange rate broke through three lines of defense to reach 1 pound to 2.78 marks.

The sharp drop of the pound sterling made Y country confused. The people of Y country asked D country for help again, but D country ignored him.

Y country seemed to be unable to hold on at this time.

The most important battle in the history of Soros seemed to be about to begin.

However, Soros ignored one person.

Yang Ming.

Sir Yang, chairman of the Empire Group.

Many years ago, Yang Ming began to plan and plot the Soros battle caused by the pound crisis.

Yang Ming has been preparing, waiting for Soros and others to enter the cage.

The weather in London in September now is still 20 degrees Celsius during the day and 10 degrees Celsius at night.

It is still very comfortable during the day.

At this time, in a private estate in a small town on the outskirts of London.

In addition to Yang Ming, Li Jiaxin, Zhou Huimin, Li Zi, and Ah Zhu, people like Lin Xiuzhi and He Chaoxun are now very busy.

Now Yang Ming is basking in the sun with a little girl about ten years old.

This little girl is none other than Yang Ming and Teresa Teng’s eldest daughter, Yang Baozhu.

Yang Baozhu looks a bit like Teresa Teng, but she is completely alike and taller.

Yang Baozhu is now in primary school.

However, people like Li Jiaxin, Zhou Huimin, Li Zi and others are very surprised. It is the first time they have seen Yang Ming’s daughter. They didn’t expect that she is already so big.

Thinking about it, it is normal. Now Yang Ming is in his thirties. How could he not have children?

Li Jiaxin may have guessed that Sir Yang has more than one child, but the outside world doesn’t know it. In fact, Sir Yang didn’t leave his children in Hong Kong.

“Daddy, I have to go back to class later.”

Yang Baozhu is in a private primary school for the nobility. In addition to her yellow appearance, other people don’t know her identity. Except for the principal, even the teachers don’t know her identity.

This is also a protection for her and to prevent her from being disturbed by the outside world.

It is impossible that Yang Baozhu likes art. This may be influenced by Deng Liyun's genes.

"Baozhu, then prepare to go to school."

After Yang Ming came from Moscow, Germany, and Berlin, D, he stayed in London. In addition to meeting Yang Baozhu, he also met Yang Tuoye and other children.

Of course, the eldest daughter Yang Baozhu is the favorite.

Yang Baozhu followed the maid to prepare to change school uniforms, and then took a car back to the aristocratic private primary school.

Zhou Huimin, Li Zi, and Li Jiaxin watched the eldest daughter of the Yang family leave.

At this time, the three girls didn't know whether they were envious or something else.

In the afternoon.

Yang Ming left the private manor where Yang Baozhu lived and returned to his private manor.

Just returned there.

At this time, Lin Xiuzhi, He Chaoxuan and others were busy.

Now many people are watching the final battle between Soros and other international financial speculators and the British pound of Country Y.

Yang Ming is ready to wait for the net to close.

He has been preparing for many years.

For financial giants like Soros, he is ready to hit them hard, making the other party afraid and afraid, even out of fear of him.

In fact, this is very similar to the Asian financial crisis in 1997.

However, this is now a test for Soros.

Unexpectedly, in history, it was because of this great victory that Soros has been preparing for the later Asian financial crisis in history.

As long as it is an opponent, there will be weaknesses.

What's more, this time, Yang Ming has been preparing for so many years.

This time, he doesn't need to contact others. With the strong reserve funds of the Empire Group, he can deal with Soros and those international financial speculators.

"Sir."

He Chaoxuan knew that Yang Ming had just visited his eldest daughter Yang Baozhu again.

In fact, some time ago, He Chaoxun also followed.

A little girl who looked very cute.

"Baozhu went back to class."

"Sir, Soros and his people seem to be well prepared." He Chaoxun said on the side.

In fact, this is a war of financial means.

Maybe He Chaoxun and others didn't understand at the beginning. Soros dared to challenge the entire European financial system with his own quantum fund?

However, from the understanding of the past six months, He Chaoxun found more and more horror in it.

In fact, this is also the power of the Jews.

Of course, Yang Ming now has many powerful financial experts around him, in addition to white people, Chinese, Orientals, and even Jews like Alina.

In other words, Yang Ming gathered these talents together to discuss how to deal with Soros and others, and then he could not only seek the greatest benefits from it, but also teach Soros and others a lesson.

This is what Yang Ming wants to prepare.

"I will make him come but never come back."

. . .

Before dinner.

Kayla and Barlow came to see Yang Ming.

Now Yang Ming is very low-key, so low-key that the outside world doesn't know about him, maybe they just think Yang Ming is just on vacation in Country Y.

After all, in addition to watching football games in Country Y, such as Manchester United's games, Yang Ming also watches some sports games sponsored by Red Bull.

In addition, he occasionally inspects the companies acquired by Empire Group in Country Y.

Apart from that, Yang Ming rarely appears in the news.

In fact, Yang Ming doesn't want those reporters to follow him, which will attract the attention of others.

And everything he does is to deal with Soros and others now.

At this time, countries including Country Y and Country D have laid a net, just waiting for Soros to jump in at the end.

In fact, Soros's money was originally the money of fund shareholders.

However, in history, the size of Soros's Quantum Fund jumped from US$15 billion to US$19 billion, and a few months later, it grew to US$22 billion, making a crazy profit of US$7 billion. After this battle, Soros turned into a world-class super rich man.

The success of a general is the result of the sacrifice of thousands of men. The Wall Street market has always been a zero-sum game. If someone makes a lot of money, someone else will lose a lot. Soros and others made a lot of money, but it was Country Y that paid the bill. (End of this chapter)