(A brief aside: my brother-in-law's broth has never passed the review.)
…
City A,
In a luxurious office in Financial Street, the lights are bright, but they cannot cover up the tense atmosphere in the air.
Outside the window, tall buildings stand in rows and traffic is bustling, while inside the room, a gamble concerning fate is quietly unfolding.
"YAO, are you crazy? You actually proposed that we mortgage our entire fortune to borrow Thai baht from the Siam Bank?"
SAM's voice echoed in the office, his eyes full of disbelief and shock.
He looked at this oriental woman whom he once admired so much, but now he felt strange and puzzled by her.
Xu Mengyao sat at her desk, her eyes firm as she said, "Yes, I know what I'm talking about. Do you agree to take a gamble with me?"
SAM scoffed silently, then added emphatically, "May I remind you that the Sodas family used their entire fortune as collateral in February, and their first attempt ended in failure. Siam has tens of billions of dollars in foreign exchange reserves. We have absolutely no chance of winning."
Xu Mengyao smiled confidently and said firmly, "No, I think we have a very good chance of winning. Sodas has mortgaged $15 billion in assets. His last move was enough for him to find out the details of the Siamese government.
Now, he must be organizing more funds in the squid circle, and we must quickly enter the Siam Bank for mortgage before other capitals come."
(Give you some popular science:)
In 1985, Japan and the United States signed the Plaza Accord, and the Japanese yen and the Korean won were forced to appreciate, resulting in the outflow of labor-intensive industries in the region. Thailand, the Philippines, Indonesia and Malaysia, four countries with more people than money, became the best recipients. Because of the industrial transfer from Japan and South Korea, Southeast Asia created the economic miracle in the 1980s. The above four countries are also known as the Four Asian Tigers.
In order to attract international capital, Thailand pegged the Thai baht to the US dollar, with 25 Thai baht being exchanged for one US dollar.
Starting in 1995, a new round of dollar trend cycle officially began. The Federal Reserve raised interest rates, and the appreciation of the US dollar was accompanied by the appreciation of the Thai baht. Because they were tied to each other, it made it increasingly difficult for Thailand's manufacturing industry to export.
Foreign capital in Thailand, especially US dollars, began to flow back to the United States, and the phenomenon of drying up domestic investment in Thailand began to become more and more serious.
In order to cope with the crisis, Thailand's banks first printed money crazily and gave money to many cash-strapped manufacturing industries. At the same time, banks raised the Thai baht's bank interest rate in order to curb the uncontrolled entry of over-issued currency into the market and ensure that inflation does not occur.
However, because the Thai baht and the US dollar have a fixed exchange rate, now that the US dollar has appreciated, the Thai baht has also appreciated. However, Thailand has also over-issued currency. In fact, the Thai baht will definitely depreciate against the US dollar because their banks have printed money. This also means that the exchange rate between the US dollar and the Thai baht in the market outside Thailand is different from the official price in Thailand.
The same piece of paper is worth different amounts of US dollars in Thailand and outside of Thailand.
So at this time, if a person is very sensitive to the international situation and has a lot of US dollars on hand, then choosing to resell Thai baht will make a very considerable profit.
Xu Mengyao considered the current international situation and knew that Thailand would implement a floating exchange rate system in the future, where the exchange rate would not be pegged to the US dollar.
Moreover, she had heard about the Asian financial crisis, and coupled with the strong move made by the American financial giant Squid Capital, she knew that this opportunity must not be missed!
Seeing her tough attitude, SAM couldn't help but get angry at Lin Xiaohe.
"Evan, are you just going to watch her act like this?"
His tone was full of dissatisfaction and disappointment, as if he was the only rational person.
Lin Xiaohe sat nearby, sipping a cup of coffee slowly, maintaining his usual calm and composure, as if this gambling had nothing to do with him.
Xu Mengyao also turned her gaze to him, mentally prepared to be rejected.
After all, everything she was certain of was based on her understanding of future generations.
However, Lin Xiaohe only looked at her briefly for a few seconds before saying, "I agree with YAO's proposal."
His voice was calm and firm, and his eyes revealed his trust and support for Xu Mengyao, which made SAM feel even more angry and puzzled.
"Fuck, have you been fooled by women? You think a few of us small players can pull off something that even big organizations can't do?" SAM roared. His face was ashen, and his eyes were filled with anger and disappointment.
"SAM, calm down and take a look at this latest report." Lin Xiaohe responded calmly. As he spoke, he turned the computer screen around and let SAM read the content.
Reports indicate that in March 1998, the Bank of Siam announced that the asset quality of nine financial companies and one housing loan company was too poor and their liquidity was insufficient.
SAM frowned as he read the report and shook his head, saying, "That doesn't mean anything. These kinds of reports often appear in Southeast Asian countries."
Lin Xiaohe did not refute immediately, but continued to analyze: "You are right. Several Southeast Asian countries have experienced rapid economic growth since the 1980s. Last year, the World Bank even listed Siam as a middle-income country.
But why are there so many reports like this in Southeast Asia recently? Because the US dollar's interest rate hike has led to a strengthening of the Thai baht, while the renminbi has begun to depreciate. After the US lifted sanctions on mainland China, international capital has begun flowing into the mainland, where the per capita GDP is only a little over $700.
The appreciation of the Thai baht and rising labor costs have led to a slowdown in Siam's exports and economic growth. The country has already accumulated hundreds of billions of dollars in foreign debt, leaving it with only a little over $30 billion in foreign exchange reserves. Southeast Asia is now experiencing a serious economic bubble.
Lin Xiaohe's profound understanding and analysis of the international economic situation softened SAM's tone slightly. "Do you really think we can defeat the entire Siamese government? They have tens of billions of dollars in foreign exchange reserves, and there's also other international capital waiting to see what happens."
"That's precisely why we need to act quickly," Xu Mengyao continued. "Squid Capital is definitely mobilizing more funds. If we can act before other institutions, we'll have a greater advantage in this game. Don't worry, we'll definitely have allies in this financial war."
The air in the office seemed to be frozen, and the only sound could be heard of SAM pacing back and forth. After a struggle between himself and himself, SAM finally chose to trust his partner with whom he had worked for many years.
He took a deep breath and said, "Okay, I'm willing to take a gamble with you. But we have to be very careful. Any negligence may cause us to lose everything."
Xu Mengyao showed a relieved smile, and her eyes were full of admiration when she looked at Lin Xiaohe: He is worthy of being the man she chose, he is so handsome and capable!
With SAM on board, the three quickly took action. They pooled all available assets and, using the fund company's name as collateral, borrowed $400 million, or approximately 10 billion Thai baht, from Siam Bank. The baht was to be fully repaid to Siam Bank within a few months.
(I didn't expect this chapter to be banned from posting. I spent several days researching and compiling the information. I changed the country and character names.)