When Lu Feng received the news, he was completely stunned. He was being made to take the blame?
According to their estimates, the second wave of short selling power is at least five billion US dollars. Where is Lu Feng going to find five billion? Moreover, even if he had five billion, he wouldn't throw it into Thailand. The depreciation of the Thai baht in the next few years is inevitable. Investing in it would only result in losses.
The problem now is that Lu Feng is in a difficult position. This is not just a matter of civilian exchange. Lu Feng has had close relations with Thailand over the years, and many things he has done have official intentions behind them. Because these things are involved, we will leave it at that.
Lu Feng wanted to call Maha to explain, but after thinking about it, he decided to report it first. According to Lu Feng's memory, there was no support from above for this matter; it was only when something happened in Hong Kong that there was a large amount of foreign exchange support.
I made a few calls and asked around, but everyone on the other end said they didn't deal with that kind of thing. They said if it were three or five hundred million, maybe they could lend money or something, but with that much money, even people in China are struggling financially.
Not only did they refuse to pay, they also told Lu Feng to try to maintain good relations with the relevant parties.
After hanging up the phone, Lu Feng sat on the sofa, lit a cigarette, and scratched his head. He wasn't going to pay him, but he was being asked to do things properly. This was really asking too much of him.
Two days passed in a flash, and Lu Feng still had no clue what to do. The company was in turmoil, and Maha kept calling him. He was really at his wit's end, so Lu Feng came up with a desperate plan.
Lu Feng picked up the phone and called Maha. The call was answered by his assistant, and it took more than ten minutes before Maha's voice came through.
"Mr. Lu, how are your funding preparations going?" came the translator's voice from the other end of the line.
“Prince Maha, we don’t have five billion dollars, but I have a way to fight Wall Street. If you follow my method, we will definitely make them lose a lot of money.” Lu Feng’s tone was very confident. At this moment, it seemed that economists were ignorant in front of him. He continued, “At the same time, our country is very dissatisfied with this kind of international bullying and is very willing to help you. The problem is that the domestic situation is not good, and we are really powerless to do anything.”
Maha knew that they couldn't offer him much help, but he was quite curious about Lu Feng's method and asked, "What method?"
"Finance and economics are underpinned by currency, and the greatest backing for the value of currency is real assets. The current international pessimism about the Thai baht is simply a revaluation of all assets in Thailand. Since it is a valuation, there will be highs and lows. Rather than clinging to a fixed exchange rate now, it would be better to liberalize it."
“I know that after liberalization, the Thai baht will lack international currency competitiveness, which will lead to increased import costs. However, as long as we lower the valuation enough, someone will support the Thai baht. As long as we separate the currency from the physical commodity for a period of time and give the currency enough depth, there will be room for maneuver,” Lu Feng analyzed seriously.
"Wait a minute, what do you mean?" The person on the other end of the phone seemed a little confused.
"What I mean is, if they want to short the Thai baht, let them short it. Lock up a series of valuable assets in your country, such as companies, real estate, and intellectual property, and make them untradeable for a short period of time. Then let them in. Wall Street says that 25 baht to one dollar is too low, so let's make it more realistic. If in the eyes of short sellers, 50 baht to one dollar is reasonable, then we'll help them suppress it."
“By driving the price of the Thai baht to 75 baht to one US dollar, the baht, which was originally overvalued, will instantly become incredibly valuable. International currency speculators will see an opportunity to go long. This way, the international funds will fight each other, which is far better than simply letting others short the market. Perhaps the original loss of 50% will now be reduced to a maximum loss of 20% or 30%,” Lu Feng explained.
“I remember you said something about this being called asphyxiation therapy?” Maha recalled.
"More or less, but there's one thing: they'll assess your domestic production value and use that to measure the value of the Thai baht. To get capital going, you need to offer a different kind of hype. They say Thailand's industries are hollowing out, so you can leak information to them privately, like workers demanding higher wages, banks having a lot of bad debts, and foreign exchange reserves being severely depleted."
"We need to create the appearance of national bankruptcy so that smart people will reassess the value of the Thai baht. They won't think that the baht has depreciated by half and that this is the bottom. They will increase their short selling efforts until the real bottom appears, at which point the government will step in to buy at the bottom."
"In this way, we can recover some losses and attract a large number of international speculators to enter the market and go long. At this time, we need to announce that the bad debts are fake, the workers are satisfied with their income, and there is no problem with foreign exchange reserves. This will stimulate national speculators to go long frantically. What is the most effective thing in the world? Of course, it is the retail investors. This is the only way at present."
There was silence on the other end of the phone. After a long while, Maha spoke up: "Mr. Lu, do you think you could come and serve as our Minister of Finance?"
"You're too kind. However, there's a prerequisite for implementing this: it must be kept secret, but also widely publicized. To keep it secret, we can't let certain people on Wall Street know about it. To publicize it, we must let the vast majority of retail investors know about it when we go long later. Another point is that I suggest freezing the important assets in the stock market and not trading them, so as to prevent the stock market from crashing and being bought up by the cheap money that rushes in."
"Those Wall Street guys rushed in, all they wanted to do was rob. As long as they took all the valuables from the house, and then told the other thugs that they had stolen something good, they would naturally start fighting each other."
"Mr. Lu, your idea is brilliant! I'm so grateful to you!" Maha kept thanking him and even asked the person next to him if he had written it down.
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