"Take Thailand as an example. Their manufacturing industry is developing rapidly. So what supports their sudden surge in manufacturing? It's foreign investment! Foreign debt! They borrowed a lot of money from international financial institutions, and many foreign companies moved their factories to the local area for production, which boosted employment and economic prosperity."
"Do these foreign investments and foreign debts come for free? Of course not. The Thai baht is pegged to the US dollar, and foreign financial markets are fully open. International financial capital can go to the stock and futures markets there as if they were their own home. When the financial system loses its sovereignty and currency fluctuations are compensated by subsidies, then trouble is imminent."
"Does Thailand have any pillar industries? No, it's a vassal state, producing cheap products for the US and Europeans. It imports raw materials and then exports the finished products. A country like this can collapse instantly at the slightest sign of trouble, such as rising raw material prices, exporting finished products, or the other side raising tariffs. Such a fragile country's economy is like paper. The key question is, how many countries and regions in Asia are like paper?"
The others didn't react much to Lu Feng's words because most of them didn't understand them. However, John looked at Lu Feng with disbelief in his eyes. Schroders Group makes predictions about the financial markets of various countries around the world, and John had recently attended several internal financial meetings.
Several financial tycoons shared similar predictions about the Asian financial situation with Lu Feng. Many developing countries lack financial sovereignty, and the Asian economy is experiencing an "overheating" situation. Even if this economic model is fragile, it can withstand the pressure. The key issue is the instability in the international community, which will soon cause someone to tear this fragile structure to shreds.
In simple terms, monetary finance is like this: your family is very poor, so you print money and spend it yourself. But behind that money is industrial output. For example, if your family prints 100 yuan and you only have one jin (500g) of pork, then that 100 yuan is worth one jin of pork. Even if you print another 1,000 yuan later, then it's 1,000 yuan worth of pork, commonly known as inflation.
The wealthy families in the village were very rich, and they had a lot of food, drink, and other necessities. The main currency circulating in the village came from their households, so everyone's money needed to be exchanged with the wealthy families' money at a certain ratio. This is the exchange rate system.
They were a poor family to begin with, with only one pound of pork for the whole family. How could they possibly get rich? The best way was to work for a big company. But even working requires a foundation: tools (factories), knowledge (intellectual property), and buyers (major exporting countries). These things don't come out of thin air.
In order to find work, the poor man went to a wealthy family to plead for a loan, hoping to borrow some money so that the man could move his factory there and sell his products to him. Upon hearing the request, the wealthy family said, "Even landlords don't have surplus grain. Since you are so sincere in wanting to be a worker, it's not impossible."
If you want to make money, you have to kneel. Kneeling isn't shameful. In the future, if anything happens in the village, or if the village committee holds a meeting, you have to be the vanguard. If other big households in the village cause trouble for me, you have to go to their doorsteps and make a scene. You can go into their yards whenever you want, or into my family's accountant Wang and accountant Li's yards.
So the poor guy transformed into a working man. The problem was that the exchange between the poor guy's money and the rich guy's money was unstable. There were always a few decimal places that fluctuated a lot. Accountant Wang and Accountant Li would come every now and then and take away these 'fluctuations'.
The poor man made money, but he didn't learn any skills or go to school for further education. He just ate, drank, and had fun, spending all his money. Those small fluctuations gradually accumulated into a big hole. Originally, this was easy to solve. A wealthy person would lend him some money to plug the hole, and he could be happy for several more years.
The key issue is that something happened around the poor guy's neighborhood. The area where the poor guy's family lives was once the village's most powerful family. Although the former powerful family had fallen on hard times, they had been doing quite well these past few years, working and studying at the same time. They wanted to take back their former front and back yards.
This is really bad. The rich man thinks that you all work for him and don't know your own worth. In order to scare the former rich man, he decides to kill the poor guy!
That's roughly the idea, everyone should get it!
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