Hedge funds led by Soros in the United States have long been greedy for the fat Southeast Asian little dragons and tigers, and regard them as on-the-trade food. They had conducted tentative attacks as early as 1994, but later gave up because they felt that the time was not ripe.
1997's time comes, so naturally I will not let it go. First, I took the four little tigers with relatively weak strength. In February 1997, Soros and others shorted the spot of the Thai baht, and at the same time bought forward Thai baht contracts and conducted forward foreign exchange swap transactions. The depreciation of the Thai baht part is its profit. Thailand suffered a little resistance. In June, the Thai Finance Minister resigned under political pressure. The panicked domestic company bought the US dollar to hedge its foreign exchange risk exposure. The intervention of the foreign exchange leveling fund led to heavy losses in foreign exchange reserves.
The crisis of confidence among domestic residents has not eased and has exceeded the control of banks. In July 1997, Thailand was forced to abandon the fixed exchange rate system, and the exchange rate began to float freely. In the following six months, the price ratio of the Thai baht against the US dollar dropped from 26 to 55.
And the Asian crisis is showing signs of spreading to other countries. International financial institutions such as hedge funds led by Soros quickly swept Southeast Asia and defeated the so-called four Asian tigers such as Malaysia, the Philippines and Indonesia in succession. Next, the four Asian dragons are in danger.
For the sake of easy understanding, here we will give a simple explanation of the exchange rate system. The exchange rate system is divided into floating exchange rate system, managed floating exchange rate system, fixed exchange rate system, and linked exchange rate system. From the history of financial crises, especially currency crises, countries that have currency crises generally have fixed exchange rate systems or implement managed floating exchange rate systems. Due to space limitations, we will not explain the reasons in depth here.
Contact exchange rate system, also known as the currency bureau system, is an extreme situation of the fixed exchange rate system. The currency bureau system reserves currency inventory and assets priced in a country or region (usually government bonds of reserve countries, such as U.S. Treasury bonds). Hong Kong uses the US dollar as the reserve currency. When the reserve currency stock is large enough to include the entire base currency, which is what we often call M2, the currency bureau system can be implemented.
Take Hong Kong as an example to determine the exchange rate between the Hong Kong dollar and the US dollar. Like the gold standard, the issuing bank must pay the equivalent US dollar as collateral to issue Hong Kong dollars. Hong Kong abandons control over monetary policy and follows the Federal Reserve's monetary policy in a synchronous manner. The Hong Kong dollar and the US dollar fluctuate within a very small range around 7.8.
If you understand the contact exchange rate system, you will know that as long as Hong Kong has sufficient foreign exchange reserves and does not issue Hong Kong dollars secretly, the Hong Kong dollar is almost equivalent to the US dollar. The further part of the currency bureau system is US dollarization. In 1997, Hong Kong had US$96 billion in foreign exchange reserves and its fiscal situation is good. There is no basis for attacking its contact exchange rate system.
Hedge funds led by Soros swept Southeast Asia with the support of international financial capital. Hong Kong, one of the four little dragons, is like a frightened bird, always be alert. It is worth noting that in July when the financial crisis occurred in Thailand, the Hang Seng Index in Hong Kong not only did not fall, but rose instead.
Unfortunately, the Hong Kong authorities did not notice this signal. Through the understanding of the Hong Kong-connected exchange rate system, we know that there is no basis for attacking the Hong Kong dollar. Don’t you know that Soros, who has swept through many countries by launching a currency war?
Even the UK has lost to him. Of course, Soros is clear that it is impossible to make profits through forward foreign exchange swap transactions in Hong Kong dollar. So what is his purpose in attacking the Hong Kong dollar?
openly repaired the plank road and secretly crossed the Chen warehouse. Soros' initial profit target was locked on shorting the Hang Seng Index futures. Therefore, in July 1997, the strange Hong Kong Hang Seng Index rose instead of falling. This is exactly the period when international hedge funds shorted the Hang Seng Index.
From October 1997, the situation took a sharp turn for the worse, and the Hong Kong crisis began to break out. The fuse originated from the fact that on October 20, the central bank of Taiwan gave up its support for the New Taiwan dollar, and the New Taiwan dollar depreciated by 9%.
Taiwan is not closely linked to Hong Kong, but Taiwan’s foreign exchange reserves are huge, which is equivalent to the total foreign exchange reserves of Southeast Asian countries in the summer of 1997. If Taiwan can collapse, why can’t Hong Kong lose?
Under this logic, it is also possible that the international hedge funds short the Hang Seng Index position has been completed.There is a joke that late at night on October 21, the night was dark and windy. Hong Kong Financial Secretary Tsang and the Secretary for the HKMA Ren Zhigang received a mysterious call, and a low voice said that Soros was going to attack the Hong Kong dollar. On the 22nd of the 21st, the 6 billion Hong Kong dollars were sold in the London foreign exchange market, pushing the Hong Kong dollar exchange rate below the warning line of 7.75. At the same time, the market rumored that the Hong Kong-related exchange rate system was not guaranteed.
At this time, the Hong Kong financial authorities, who were particularly frightened, saw that Thailand, the Philippines, Indonesia and Malaysia were in the currency crisis, and Taiwan had also been defeated. With the continuous strengthening of this mentality, they may have forgotten that Hong Kong is implementing a monetary bureau system pegged to the US dollar. The Hong Kong dollar is almost equivalent to the US dollar. Who has the courage and ability to attack the US dollar?
Who can use US dollars to attack US dollars? Tsang Yinquan and Ren Zhigang were facing a great enemy. Soros attacked Hong Kong dollars. This trick has been used many times in Southeast Asia. Tsang Yinquan and Ren Zhigang secretly said, "I knew the solution to it, where is your Hong Kong dollars?"
was not borrowed from my bank. At noon on October 23, the interbank lending rate rose sharply to 280%. At the same time, I called the bank to say hello window to guide me, strictly control the short-term lending amount, so that you can't afford to borrow or borrow. If you want to attack Hong Kong dollars, there is no door.
Hong Kong residents and foreign investors who were worried about the lack of exchange rate protection have already begun to sell Hong Kong dollar assets, especially Hong Kong stocks. The sudden tightening of monetary policy and the sharp increase in short-term interest rates have made the stock market worse. The Hang Seng Index plummeted 10.4% on the same day. On October 28, 1997, the Hong Kong Hang Seng Index plummeted 13.4% again, and the Hong Kong stock market market value decreased by 2.1 trillion Hong Kong dollars.
Some people question why the Hong Kong financial management authorities did not adhere to the monetary bureau system under this situation and provided liquidity for the market urgently. However, they did not know that this was the Hong Kong financial management authorities' measures to deal with attacks on the Hong Kong dollar. Under the command of international hedge funds such as Soros, the Hong Kong Hang Seng Index was defeated.
The following two attacks on the Hong Kong dollar also made Hong Kong repel them with the same method. Some people say that the Hong Kong financial management authorities won the victory of this first confrontation. In my opinion, the so-called attack on the Hong Kong dollar is not valid at all. The Hong Kong financial authorities are dancing with Soros' baton. They don't know if they are fooled. How can they win?
From the later description by Ren Zhigang, Chairman of the Hong Kong Monetary Authority, the Hong Kong financial authorities only realized it in August 1998 and were deceived. He wrote: In August 1998, the situation we faced was even more complicated.
Speculators launched a joint orchestrated attack on our financial markets. Speculators have found that by concentrating selling of the Hong Kong dollar in the short term, it can temporarily raise interest rates under the monetary office system, which will put downward pressure on stock prices.
may gain a gain from the stock index futures contract by putting pressure on this currency in the short term and selling stocks, even if they cannot break through the set exchange rate.
In fact, the Hong Kong government understood too late. On August 13, 1998, the Hong Kong Hang Seng Index fell below 6,600 points, falling nearly 10,000 points from the high of more than 16,000 points in August 1997. At this time, the Hang Seng Index delivery period on August 28 was close, and it can be said that the victory or defeat has been decided.
In the four attacks on the Hong Kong dollar before August 1998, Ren Zhigang responded by raising interest rates. At that time, public opinion asked him to do any move, but this one move, and it was a wrong move. After Ren Zhigang understood it, he changed his trick and took Hong Kong dollars from the foreign exchange market at a low price. On August 5, speculators sold more than 20 billion Hong Kong dollars. On August 6, speculators sold more than 20 billion Hong Kong dollars. Hong Kong used fiscal funds to eat as much as possible, stabilized the exchange rate at 7.75, and at the same time transferred it to the bank, stabilizing the interest rate. This was the correct response that should be adopted from the beginning, so speculators had no chance to take advantage of it and had to pay the interest on loans.
htmlOn August 14th, the Hong Kong authorities, whose foreign exchange market is just a smoke bomb, are the main battlefields, resolutely decided to intervene with huge foreign exchange funds and land funds in the market, and fight to the death with international speculators led by Soros.Before deciding to enter the market, Tsang Yin-Quan had cried quietly two or three times at night, feeling very stressed. If he failed, he could not recover the losses even if he jumped off the building. After discussing with Ren Zhigang, he immediately made a suggestion to Chief Executive Tung Chee-hwa. The boss Tung Chee-hwa made a decision in less than half an hour and fought with them.
There are many articles about the grand occasion of Hong Kong's financial defense war. We will not describe too much here, but only talk about some key things. On August 24, the Hang Seng Index rose from 6610 points before the Hong Kong government entered the market to 7820 points. In the following days, the battle between international speculators and the Hong Kong government entered a white-hot spot.
Since August 28 is the delivery period for stock index futures, the first decisive battle was ushered in. Just 5 minutes after the market opened at 10 a.m., the stock market turnover exceeded HK$3.9 billion. Half an hour later, the transaction amount exceeded HK$10 billion. By the close of the morning, the transaction volume had reached a huge amount of HK$40 billion, close to the historical record of the daily transaction volume of HK$46 billion set on August 29, 1997. After the opening of
in the afternoon, the selling has increased and the trading volume has been rising, but the Hang Seng Index and Futures Index have always remained above 7,800 points. As the bell rang at 4 pm, the transaction amounts of the Hang Seng Index, Futures Index and Futures Index that were constantly jumping on the display were finally locked at 7829 points, 7851 points and 79 billion Hong Kong dollars respectively.
The general view is that international speculators shorted the Hang Seng Index August contract at 7500 points, while the settlement point closed at 7851 points. International speculators lost huge losses in shorting the Hang Seng Index August contract. On September 7, 1998, the Hong Kong Monetary Authority issued new regulations on foreign exchange, securities trading and settlement, which greatly restricted speculation among speculators.
The Hang Seng Index soared by 588 points on the same day, closing at 8076 points. Coupled with a series of factors such as the appreciation of the yen and the stabilization of Southeast Asian financial markets, the funds and exchange costs of speculators have increased significantly, and they have to retreat: on September 8, the September contract price rose to 8,220 points.
htmlThe futures futures contracts that were transferred to the position at the end of August will be closed and exited, and each contract will have another loss of HK$40,000. At this point, international speculators saw that the situation was hopeless and threw away their armor and fled in panic.The Hong Kong government invested 118 billion Hong Kong dollars in the entire Hong Kong financial defense battle. Some people expect Soros to lose 800 million US dollars in the Hong Kong blocking battle and flee in panic.
The actual situation is really as revealed by the Hong Kong financial defense war, is the Hong Kong authorities winning a great victory? Let's recall that the attack on Hong Kong began in October 2007, and Soros was carefully preparing for the attack on Southeast Asia in 1994.
It can be said that all preparations were done before launching an attack on Hong Kong in October 1997. With Soros' profound understanding of the money market, he certainly knew that it was impossible to make a profit from attacking the Hong Kong dollar. Attacking the Hong Kong dollar was originally a plank road, and Soros' main battlefield was stock index futures.
In August 1997, Hong Kong Hang Seng Index was above 16,000 points, which undoubtedly provided it with a good opportunity to short the Hang Seng Index to build positions. It is reasonable to believe that Soros has enough time to complete the shorting of the Hang Seng Index futures at a high level.
started to attack the so-called Hong Kong dollar in late October 1997. When the Hang Seng Index plummeted in just a few days, with a market value of 2.1 trillion Hong Kong dollars. At this time, Soros did not need to build a position in the stock market. Even if there were, there was a small amount of chips used to suppress it, which could be ignored. At this stage, his profit in shorting stock index futures was almost net profit.
Similar attacks occurred four times before August 1998. Each time the Hong Kong Monetary Authority uses the same method to raise short-term interest rates to make Soros short-sell the Hang Seng Index profit.
Friends who have common sense about stock index futures know that the main force in shorting stock index futures must master a sufficient number of heavy-weight stock chips, otherwise it will be like the meat on the felt board being slaughtered.
analyzes the trend of the Hang Seng Index. Soros and others may start building positions in the Hong Kong stock market below 10,000 points. They may build positions on large-scale around May 1998 to hedge the risk of shorting the futures index. In June and July, the Hang Seng Index climbed to around 8,000 points. At this time, hedge funds once again shorted the Hang Seng Index significantly, and by August 14, the Hang Seng Index hit 6,610 points. In the previous 19 trading days, the Hang Seng Index fell sharply by more than 2,000 points. Each contract could make more than 100,000 Hong Kong dollars. The high profit was unimaginable.
short the Hang Seng Index futures. For every 1 point of the Hang Seng Index fall, each contract will make a profit of HK$50. From the more than 16,000 points that Soros initially built a position, each contract can earn more than HK$500,000. Even if he holds 10,000 contracts, he will earn more than HK$5 billion. Even the most greedy person should be the harvest season at this time. Moreover, a master like Soros should be the time for Soros to close his positions in large quantities in early August 1998. Since it is impossible to find out the specific positions of his short-selling Hang Seng Index, it is impossible to calculate how much money he made.
According to some statements, Soros lost 1.2 billion Hong Kong dollars in the short-selling Hang Seng Index contract delivered in August 1998, and each contract delivered in August was more than 30,000 Hong Kong dollars. That is to say, Soros' newly opened open contracts should be more than 30,000, and his entire Hang Seng Index short-selling contract should be hundreds of thousands, and his profits are uncountable.
For the main players who short stock index futures, the weighted stock chips they hold in the stock market are mainly to ensure the safety of their futures contracts. They must be able to suppress the market when the market rises. When the downward pressure is generally to timely cover the chips at low levels. Sometimes we will see that it is difficult to understand when buying high and selling low. For the main players, after buying high and selling low, as long as they can be taken back at a lower price, the loss of their stock market value will be very small, and if it rises, there will be profits.
For the main force shorting stock index futures, it is basically in a balanced range above and below the index, and the amount of shorting futures index is roughly equivalent to its weight stock chips to hedge risks. When the short-selling stock index contract closes its position, its weighted stock chips that hedge against the risk need to be cleared. Generally speaking, it is a means of downward suppression and does not aim for profit.
analyzed here, I think you have roughly understood that between the Hang Seng Index 6600 points and 8000 points, most of the main contracts of hedge funds short futures have been closed with profits.
The most important task at this time is that it is the most critical to ship the large number of stocks held to hedge risks. Ren Zhigang and other Hong Kong financial authorities have attacked the Hong Kong dollar four times before October 1997 to August 1998, but they did not understand the main battlefield for hedge funds to make profits. At the last critical moment, I suddenly understood it, and I suspected that this was what Soros told them.
Soros actually built a position at the Hang Seng Index at 7,500 points. The short-selling Hang Seng Index contracts delivered in August 1998 were completely bait to cover 100 billion heavyweight stock chips to complete a victory escape.
Tang Yinquan and Ren Zhigang finally knew the secret of the hedge fund, so after crying for a few games, they made up their minds to fight to the death with Soros, which was quite a bit of a tragic battle.
Faced with Soros' crazy selling, the Hong Kong government used abundant foreign exchange funds and land funds, and placed orders at all costs to take over all the selling orders of hedge funds. He also took advantage of the victory to raise the stock price, so that Soros could sell a good price. In fact, the Hong Kong government might have been dizzy at that time and did not check how many short futures contracts were there? Actually, it should be found.
Soros, who was known afterwards, lost 1.2 billion Hong Kong dollars in the short-selling stock index futures contracts delivered on August 28, less than 40,000 yuan, each with a total market value of less than 300,000 Hong Kong dollars, and a total market value of less than 15 billion Hong Kong dollars. However, the Hong Kong government took out 118 billion Hong Kong dollars and raised the stock price. In just ten trading days, it took over the chips of the hedge fund headed by Soros, helping him achieve his goal of a victory escape.
Some friends may not understand that from the intensity of the Hong Kong defense war, the Hong Kong government's 118 billion Hong Kong dollars chips should be basically sold by international speculators. Although there are inevitably other retail investors' chips, the chips of international speculators such as Soros should be above HK$100 billion. According to statistics, Soros lost US$800 million in the defense war in Hong Kong, which is almost HK$6 billion, which includes short-term interest on borrowing Hong Kong dollars, losses from blue-chip chips suppression, transaction fees, and the final short-term futures index contract loss in August.
Speaking of this, you should understand that Soros completed the unfinished task of shipping 100 billion Hong Kong dollars in just 10 trading days at the cost of 6 billion Hong Kong dollars, and also achieved a rise of 6,600 points to 7,829 points. The astronomical chips were shipped, and basically came at the highest point in the last few days, but the stock index rose by nearly 20%, and the gains from the stock price increased by more than 6 billion Hong Kong dollars. How clever is this? Do you think the Hong Kong government has won the battle to defend Hong Kong?
The Hong Kong government did win the Hang Seng Index futures contract in August and September 1998, and the 118 billion Hong Kong dollar Yingfu Fund invested also achieved good returns a few years later.
Let’s take a look at how much money the international speculators led by Soros have made? As analyzed above, in the final shipment process, Hong Kong's financial defense war was used to achieve high-level shipment. We assume that this process has compensated for its losses and costs, and its profit in short-selling stock index futures in the early stage was net profit.
According to the previous analysis, in the balance range, the positions of short futures of hedge funds in short futures are basically the same as their weighted stock chips to hedge risks. Now we know that the market value of its stock is above HK$100 billion, and the corresponding short size of futures index is above HK$100 billion, and the Hang Seng Futures Index corresponds to HK$50 per point, and each contract of 8,000 points is 400,000, which means that the Hang Seng Futures Index short contract held by international speculators led by Soros is above 250,000.
If all positions are built above 16,000 points, the profit margin of each contract is 8,000 points, even if not all positions are built at high levels, as we analyzed earlier, most of its positions should be built at high levels. If the average profit margin is 6,000 points, then the profit per contract is HK$300,000, and the profit of more than 250,000 contracts is at least HK$75 billion, which is nearly US$10 billion.
Because it is impossible to know the short size of the futures index of international speculators led by Soros, the previous analysis was an estimate, but compared with the market value loss of trillions of Hong Kong dollars in the Hong Kong stock market, this is nothing.
Through analysis, I wonder if you already understand that the so-called Hong Kong financial defense war in 1998, hedge funds mainly operated by leverage, and their main money was borrowed from financing. According to the current financing situation of Goldman Sachs and Morgan Stanley, it is generally an annual interest rate of 10%. Waiting for four or five years to slowly ship, it is tantamount to suicide. Soros' exquisite shipment is regarded as a hasty escape. The so-called victory is not calculated, which is a one-slash space that cuts the Hang Seng Index from 16,000 points to 8,000 points. Calculated by the delivery of the last two months in August and September 1998, it is completely self-deception of the Ah Q victory method.
Soros' financial attack on four Asian tigers, including Thailand, the Philippines, Indonesia and Malaysia, cannot be called a scam. It is a completely unscrupulous and naked robbery of open fire sticks. The attack on Hong Kong can be called an extremely exquisite and carefully planned scam of the century.
Hong Kong was a sudden rescue of the market back then, thankless. The international community has always criticized Hong Kong for violating the principle of free market economy. Looking at the actions of the leaders and defenders of the principle of free market economy in the United States today, it is simply a joke to truly defeat Soros in the Hong Kong financial defense war:
receives as much as the sell-off of Hong Kong dollars, and then deposits it into the bank to provide unlimited liquidity support to all Hong Kong banks. In this way, no matter how much Hong Kong dollars Soros borrows, it will be rewarded with interest for free, and then resells. And if you want to do so, you are afraid that Soros will not borrow as much as the Hong Kong dollar. In this way, you will not have the door to suppress the stock market.
issued a short order, prohibiting short selling of Hang Seng Index futures. Previously, shorting of Hang Seng Index futures was an improper profit and was confiscated; as for the stocks bought by Soros, there is no need to worry about it. There is no other way except selling at a loss, otherwise it will only contribute to the long-term stability and prosperity of Hong Kong.
You say it’s smart or not. Only by not playing according to the rules can you kill these guys. Despicable is the pass for despicable people.
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