The Rebirth of the Financial Hegemon

When a cheater cannot explain that he is a cheater, the best explanation is naturally to pretend to be a cheater.

Zhao Jiangchuan was showing off, pretending to be sophisticated.

For him, it is not a piece of cake to explain after the fact.

Therefore, George King was confused.

George King is an Englishman, an authentic Englishman.

He could understand every word Zhao Jiangchuan said.

But after those words formed an idiom, George King was just confused.

This is more embarrassing.

Fortunately, there was Zhang Xiaolei next to him.

When things reach their extremes, they must reverse; when they reach their peak, they must decline.

The meaning of these two idioms can be understood by Chinese people as soon as they hear them.

Zhang Xiaolei thought of a lot.

Since ancient times, there has been no dynasty that lasts forever.

It's like there is some kind of pattern.

No matter how powerful a dynasty is, it cannot avoid the day it comes to an end.

Not to mention far away.

In modern times, it was as strong as the Soviet Union, but it suddenly fell apart.

The same goes for the economic cycle.

Even in the United States, the world's largest economic system, the unemployment rate has remained high in the past few years. Many real estate companies across the United States are facing bankruptcy due to the recession in the U.S. economy.

Well-known companies such as the Trump Group almost went bankrupt amid the sharp fall in housing prices.

Since 1980, real estate prices in Thailand have begun to grow slowly.

If we compare housing prices in 1980 with the previous highest price, it would have increased by a full forty times.

This is a terrifying increase.

Such a terrifying increase seems to be in line with the signs that things will turn around.

Zhang Xiaolei's thoughtfulness helped Zhao Jiangchuan cover up the embarrassing situation of failed pretense.

George King is even more miserable.

He could tell that Zhang Xiaolei seemed to understand something.

But he still didn't understand anything.

Apart from being confused, he had no idea what Zhao Jiangchuan was talking about.

Am I no longer as good as a recent graduate, or do Chinese people have a talent for understanding economics?

George King had some doubts about life.

After thinking hard to no avail, he could only speak again.

"Zhao, if I am stupid, can you explain it more clearly?"

George King's tone was unprecedentedly respectful.

For him, being hit again and again in the professional field made him see his shortcomings.

He desperately wants to know where he went wrong, more like making up for his shortcomings.

At this time, George King no longer had the arrogance of a nobleman, nor the cunning and cunning of a banker.

He was like the most eager student, asking Zhao Jiangchuan for the knowledge he most desired.

The reactions of Zhang Xiaolei and George Jin almost made Zhao Jiangchuan laugh out loud.

If you want to fool someone, how should you fool them?

The best way is to let the person who was deceived think for himself.

The more you think about it, the deeper you sink.

Zhao Jiangchuan knew this very well.

Just like on the stock market.

Many people will involuntarily think about the impact this news will have on the market based on the news that appears in the market.

During the Chinese New Year, if the sales volume of the mall increases significantly, the stocks of the mall will definitely rise sharply.

If oil prices fall, airline costs will decrease, and airline stocks will rise sharply.

Phenomenons similar to this can be found throughout human history.

When a person's thinking enters what he thinks is the right direction, he will always find countless reasons to convince himself.

George Jin fell silent, and Zhao Jiangchuan asked, suppressing a smile.

“George, where does Thailand’s economic growth come from?”

The opportunity for Thailand, and most countries in Southeast Asia, to take off economically lies in its low labor costs and cheap raw materials.

Against this background, a large amount of foreign investment began to enter these countries.

Among them, the Japanese consortium has the largest amount of capital entry.

Japan is a developed country.

This means that both labor and materials are extremely expensive in Japan.

In order to save costs, large-scale Japanese companies have relocated to these Southeast Asian countries.

On this basis, Thailand’s rapid economic leap has been promoted for more than ten years.

George Jin graduated from the economics class and has many years of research in the financial industry.

Of course he knows all this.

However, he still couldn't understand the logic behind Zhao Jiangchuan's ability to see through Thailand's real estate collapse.

George King wondered.

“Thailand’s economic growth mainly comes from foreign capital injection, but what does this have to do with the collapse of Thailand’s real estate industry.

With a large amount of capital injection, Thailand's economy has achieved sufficient development and per capita income has increased. Thailand's real estate should continue to rise.

It's obviously an upward trend. "

"George, you are right, but are there trends in this world that will never change?"

This time, George King understood.

Although the meaning of this sentence is not much different from that of "things must go to their extremes".

Under Zhao Jiangchuan's explanation, George Jin frowned.

"I understand what you mean, but according to the trend of Thailand's real estate industry at that time, there was no sign of turning downward at all. How did you predict that it would suddenly collapse?"

Of course I know.

Zhao Jiangchuan wanted to know how George King would react if he said this.

But unfortunately, no one can tell this kind of thing.

In order to satisfy George King's thirst for knowledge and to pay a valuable coolie, Zhao Jiangchuan had to use what he had at his disposal to continue to deceive.

"George, don't you understand yet? It's not me who predicts the collapse of Thailand's real estate industry, it's the Thai government who wants it to collapse."

"Buzz...".

George King's mind suddenly exploded.

He seemed to understand a little bit what Zhao Jiangchuan meant.

Zhao Jiangchuan did not stop, and continued to talk while George King was dumbfounded.

“George, haven’t you noticed that Thailand’s economy has overheated in recent years, and in order to cool it down, the Bank of Thailand raised the lending rate to more than 8%.

In terms of benchmark interest rates, the external interest rates of major commercial banks have reached 12%.

I think you understand the purpose, which is to curb excessive speculation of capital, hoping to use high costs to limit the flow of capital into the stock market and real estate.

But the Bank of Thailand has ignored one point. When interest rate spreads widen, it will attract a large amount of arbitrage funds.

Those funds borrow capital from overseas and lend money to Thailand to make a profit.

It will essentially exacerbate the total value of the baht in circulation.

I think you understand why I am bearish on Thailand's real estate. "

Of course George King understood.

If he didn't know it yet, Zhao Jiangchuan wouldn't promote him to Standard Chartered Global CEO, let alone waste his time talking so much nonsense.

The problem is currency.

The expansion of the total circulation value of the Thai baht means the over-issuance of the Thai baht.

During the gold standard, currency was issued based on gold reserves.

But under the credibility standard, the issuance of currency is entirely based on a country's economic, political, technological, foreign exchange reserves and other comprehensive factors.

Thailand's comprehensive level is not enough to support the current total circulation of Thai baht.

When Thailand’s ability to earn foreign exchange from exports cannot keep up with the issuance of the Thai baht, the contradiction will be infinitely magnified.

Thailand implements a fixed exchange rate system.

When capital flows out of Thailand, the Bank of Thailand is under tremendous pressure.

And the pressure will get bigger and bigger.

The circulation of Thai baht is expanding.

According to the relationship between supply and demand, the Thai baht should depreciate when the issuance of the baht expands.

But the fixed exchange rate has locked the possibility of depreciation of the Thai baht.

This will lead to the Bank of Thailand's foreign exchange reserves being unable to make ends meet.

To solve this problem.

The only way is to reduce the amount of money injected.