As a result, turmoil is about to begin in many foreign countries, especially in Latin America.
In July 1994, within a month, many Latin American countries, including Mexico, Argentina, and Brazil, experienced currency devaluation and rising interest rates...
Among them, the Mexican peso depreciated abnormally by 40% in 20 days!
The Mexican financial crisis erupted under the influence of international and domestic economic and political events at the time.
The increase in interest rates has put significant pressure on Mexico's financial markets, as short-term capital is likely to flee in pursuit of higher rates.
Because Mexico operates under a pegged exchange rate system to the US dollar, the exchange rate of the new peso to the dollar has long been confined to a narrow range of 3-3.5 pesos to 1 US dollar. The exchange rate fluctuation range consists of a fixed lower limit and a floating upper limit, with the upper limit allowing for a daily increase of 0.0004 pesos. Due to the tense international and domestic situation in Mexico, the pressure for peso depreciation has been increasing. Entering July, the new peso's exchange rate against the dollar has been hovering near the government's intervention limit, and the pressure for peso depreciation has gradually exceeded the government's ability to intervene.
The root cause of this financial crisis lies in the social, economic, and political deficiencies of Latin American countries such as Mexico.
For a long time, Mexico has been plagued by deepening political contradictions, unresolved poverty, widening wealth gap, increasing unemployment, and growing economic imbalances between sectors and regions. As a result, Mexico, with a population of 90 million, has 40 million people living in poverty.
This weakness has been exploited by international speculative capital, such as Soros, who has stirred up trouble in the Mexican financial market.
These entities controlled the inflow of large amounts of capital into the Mexican stock market, leading to an increase in the stock market bubble. The bubble exacerbated the fragility of the Mexican economy and finance; the slightest disturbance could cause the bubble to burst and trigger a financial crisis.
The reason why international speculative capital is so rampant is that the high degree of privatization of Mexico's financial sector has led to a decline in the financial system's ability to cope with risks.
In short, the financial crisis in Latin American countries was a foreign exchange speculation "rehearsal" launched by international speculative capital such as Soros.
Subsequently, in just a few years, they expanded their operations throughout Southeast Asia and then the whole of Asia, triggering a massive financial storm...
Chen Dong plans to disguise himself as an international speculative investor to participate in the upcoming Latin American financial events, accumulate strength, and train his team in preparation for the Asian financial crisis a few years later.
With less than a month to go before the financial war triggered by Soros and others, Chen Dong decided to personally return to Hong Kong to oversee the operation. His first task was to review the preparations made recently and make further arrangements.
Just then, Hua Zi called.
......
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