Chen Dong kept them in suspense, giving them time to think.
Lu Dachui asked, "Boss, does the increase in the interest rate on American government bonds mean that someone is selling off a large amount of government bonds? Could it be to raise funds to attack the Thai baht?"
“That’s right!” Chen Dong nodded in affirmation and further explained, “To put it another way, the yield on one-year US Treasury bonds has recently risen by 11 basis points, while yields on other years’ bonds have also risen to varying degrees, just not as dramatically as the former.”
"Here's the key point: there are no rumors in the market that the US is going to raise interest rates. In fact, the Federal Reserve is gradually entering a period of interest rate cuts."
"As Lu Dachui said, let's look beyond the surface and examine the essence. Since it's not because of interest rate hikes, but because the yield on government bonds has soared, there's only one possibility: someone in the market is selling off a large amount of government bonds, in such a large quantity that it's even affecting the market's expectations for yields."
"Now a new problem has arisen, Wangcai, why don't you explain it to everyone?"
"Okay, boss!" Wangcai glanced gratefully at Chen Dong. He knew this was Chen Dong giving him an opportunity to establish his authority. If he couldn't continue after the discussion had gone this far, he might as well just give up and kill himself.
"Cough cough!"
Wangcai cleared his throat and then said loudly, "Such a huge amount of national debt is absolutely beyond the reach of ordinary people, and even ordinary institutions don't have it. So, what are these top institutions going to do with the funds raised by selling national debt?"
"Brothers, the answer is obvious! First, we need to have a clear understanding that international hedge funds are planning a second attack on Thailand. Although I don't know what gives them their confidence or what their logic is, one thing is certain: the world's financial attention is now focused on the Thai baht."
"If their target isn't the Thai baht, frankly, I can't think of a second market that needs so much money."
When the topic of analysis came up, Wangcai's expression gradually became serious, and he spoke clearly and logically, uttering complete sentences without any pause. Clearly, these things were already in his mind.
"Brother Wang, is it possible that some of these funds might end up in Russia's bond market?"
No sooner had Wangcai finished speaking than a trader chimed in.
Believe it or not, it's not entirely impossible. Since the collapse of Russia, Great Russia inherited the vast majority of its assets, but Great Russia's economic situation has also reached a dangerous point.
Especially after 1992, under the guidance of a group of Western experts, Russia privatized its state-owned assets, ultimately leading to widespread suffering among its people.
In order to revitalize its economy, Mauritius has made a series of reforms, such as the Mauritian bond market, in order to attract new funds and boost the local economy.
Moreover, the yield offered by the Mauritian government bond market is very high. If you calculate carefully, even if the Thai baht depreciates, the gains will not be as high as the yield of Mauritian government bonds.
“No, it’s definitely not the Russian government bond market!” Wangcai shook his head and said with certainty, “The Russian government bond yield is indeed quite high, but considering the market system, it simply cannot accommodate so much money being circulated in it.”
"Another factor is that the continued depreciation of the ruble is also indirectly lowering the yield on Russian government bonds, and this risk is simply uncontrollable."
"It's true that capital seeks profit, but if you can't even get your principal back, I believe that not only you, but also international hedge funds, wouldn't invest their money in something that's just a pie in the sky. The risk is too great!"
These words were spoken.
Most of the traders lowered their heads, seriously considering Wangcai's words. Then, Wangcai added, "Precisely because of this, what we need to do now is to seize this vacuum period. We need to deplete Thailand's current foreign exchange reserves with lightning speed, and wait for other hedge funds to enter the market. At that time, we can sit back and watch the tigers fight, instead of waiting for them to decide the winner and then exposing ourselves to the public."
"Wrong!" Chen Dong interrupted Wangcai in time, saying in an unquestionable tone, "We are not sitting on the sidelines watching the tigers fight; we are the ones who will ultimately bring down the Bank of Thailand."
"How is this possible?"
Almost everyone, including Wangcai, was stunned.
Most of them reacted that this was impossible, after all, Thailand had just announced that it still had $40 billion in foreign exchange reserves, which was almost twice the amount of funds Chen Dong had invested so far.
Regardless of whether Thailand has any other tricks up its sleeve or other administrative measures, it would be difficult for this size of entity to impact Thailand's foreign exchange reserve system without leveraging.
Chen Dong glanced around, taking in everyone's expressions. He didn't bother to explain, wanting to see if any smart person could figure out the key point.
He commanded every major battle, which fostered a dependence on him among these people. For now, things are alright; the historical deviation hasn't been too significant.
However, as he became more deeply involved and his influence on history grew, the future outcome was difficult to predict. This is why Chen Dong was willing to spend time cultivating his team.
Half a day later, Xiang Huasheng whispered, "Boss, if we increase the leverage, there is still room for maneuver. However, if we do that, the corresponding risks will also increase exponentially."
Aside from the very beginning, when Chen Dong used the highest leverage ratio to accumulate sufficient initial capital, the proportion of leverage used gradually decreased as the capital grew larger.
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