The Rebirth of the Financial Hegemon

The intelligence personnel were arrested and the intelligence system suffered a fatal blow.

This directly led to the direct interruption of the connection between Quantum Fund and Thailand.

Those intelligence officers are all important pawns arranged by the Quantum Fund to promote the Thai baht trend.

Now that it has been uprooted by the Thai authorities, it means that it is difficult for Quantum Fund to make any further moves in Thailand.

That wasn't what angered Druckenmiller the most.

What really surprised Drucken was that the Bank of Thailand actually raised the offshore short-term lending rate to 1,200 percent.

Up to twelve times the lending rate.

Offshore lending rate is a concept derived from lending rate.

Because a country's financial market is open, there will inevitably be the entry of foreign multinational banks.

A market that does not use its own currency within its own country is called an offshore financial market, and this market is dominated by overseas investors.

The offshore lending rate, simply put, is the interest rate for foreign investors.

This is a combo killer move.

Use forward foreign exchange customer information provided by banks to put pressure on position holders, then use drastic measures to eliminate the shadow of international capital in Thailand to weaken the influence of public opinion, and increase the cost of borrowing Thai baht by raising offshore lending rates.

Coupled with this is the use of mandatory administrative orders to cut off the possibility of foreign investors borrowing baht from local banks.

Such a combination is bound to kill. Even if international speculators previously borrowed Thai baht from local banks, they will no longer be able to borrow short-term loans through local banks.

The only thing that can be used is to borrow Thai baht from foreign banks with Thai baht business at high interest rates.

When used together, the two moves of Sunflower Chain and Eight Childish Girl are really super sure-kills.

First of all, most of the Thai baht lending business is carried out among local banks, which fundamentally cuts off the possibility of speculators continuing to expand short selling.

Secondly, for those foreign banks that want to lend short-term interest rates, they must borrow Thai baht from local banks at a very high lending rate, and then lend funds to speculators at a higher interest rate.

This will undoubtedly increase the interest rate burden on speculators.

An interest rate of more than ten times is no joke.

"Damn it, you dare to cheat openly!"

In New York, Stanley Druckenmiller slapped the desk in front of him fiercely and said angrily.

Now, Quantum Fund faces not only losses from the futures market, but also high offshore lending rates.

This abnormally high short-term lending rate made Druckenmiller, who had always regarded himself as an apostle of God, unable to help but curse.

In Europe's highly mature and liberalized financial markets, the interest rate market cannot be determined by a single official document from the central bank or the government.

Take the UK and France as examples.

Changes in interest rates are based on overnight interest rates quoted by a consortium of banks.

It is somewhat similar to a liberalized bidding model. The level of interest rates is mainly determined by the relationship between currency supply and demand.

Therefore, when the pound and mark were under attack in 1991, the British and French governments could only attract the inflow of foreign capital by raising the benchmark deposit and lending rates, thereby easing the pressure to sell pounds in the spot market.

However, after the currency crisis spread across Europe, some countries used mandatory administrative orders to deal with the selling impact of hedge funds.

Among them, the Swedish government once used outrageously high overnight lending rates to cope with the attacks of hedge funds.

Obviously, the Bank of Thailand has learned this trick, which is almost cheating.

What's even more outrageous is that the Thai authorities actually used coercion and inducement to obtain information on foreign exchange forward customers from major banks, and even used judicial means to forcibly arrest people.

This is blatantly undermining the rules of the game in financial markets.

In the history of finance, no country has ever dared to cheat so blatantly.

Because the market bidding system is the basic game rule of the financial market.

Simple scores are like casinos.

There are casinos that only lure customers to gamble, but there are never casinos that force people to gamble at gunpoint.

If you do this, no one will dare to come to your house to play in the future.

But now, although the Thai authorities are not actually holding a gun to force people to play according to their rules, they are almost blatantly breaking the rules of the game.

Druckenmiller's face looked uncertain.

He knew that this time the Quantum Fund's attack could only end in failure.

The Thai government's series of sure-fire moves combined together can have a lethality of 100,000 points on the short side.

According to the current form, as long as the Bank of Thailand mobilizes funds to sweep the baht in the market next week, it can easily kill the short side to collapse.

Even, many funds will rebel and actively participate in this encirclement and suppression of short sellers.

“Damn Boulder Capital!”

Druckenmiller's hatred for Boulder Capital is like the endless river.

In Druckenmiller's plan, Quantum Fund originally planned to make a three-dimensional attack on the Thai baht.

This solid is like a three-dimensional space.

By launching a simultaneous attack on a currency in the currency, foreign exchange, stock and financial derivatives markets, causing the fixed exchange rate system to collapse, Quantum Funds can profit from financial turmoil.

The sources of local currency mainly include the currency market of the target country, the offshore market and the selling of the country's stocks or bonds.

Quantum Fund intends to adopt an asymptotic approach to gradually absorb Thai baht to prevent the cost of holding Thai baht from rising due to short-term borrowing of large amounts of Thai baht.

Until they have enough Thai baht in their hands, they will sell the Thai baht intensively, suppressing the Thai baht exchange rate.

When enough Thai baht is absorbed, the Thai baht will be sold when negative news about Thailand's economy and finance comes out; or simply use the chess pieces placed by Thailand in advance to spread rumors of negative news and encourage other investors to follow suit.

Second, sell a forward contract for the exchange of US dollars for Thai baht in the forward foreign exchange market.

If the Thai baht depreciates on the expiration date of the forward contract, the Quantum Fund can make a profit by delivering the contract.

The forward selling attack on the Thai baht will cause the Thai baht's forward exchange rate to fall, and at the same time, it will also suppress its spot exchange rate.

On the one hand, if banks expect to buy a large amount of Thai baht in the future, they will sell Thai baht in exchange for US dollars in the spot foreign exchange market to close their positions so that they can fulfill their contracts at that time.

On the other hand, when market investors observe the depreciation of the forward Thai baht, they will also borrow Thai baht in the spot foreign exchange market, and then sell the Thai baht in exchange for U.S. dollars, so that they can exchange less U.S. dollars for performance on the expiration date of the forward contract. Arbitrage target in Thai Baht required.

However, all these plans were ruined by Jushi Capital.

To mobilize large-scale funds without attracting the attention of the Bank of Thailand, it is necessary to operate secretly and gradually.

This requires Quantum Fund to first mortgage part of the bonds and stocks to the Bank of Thailand, and then establish positions in Thai securities, futures and other financial derivatives markets.

When the position shows profits, Quantum Fund can earn enough baht at the minimum cost to break the fixed exchange rate of the baht.

However, the Quantum Fund's position had just begun to be established, and Jushi Capital suddenly penetrated the Thai baht's defense line with US$3 billion like a shit stick.

In this case, Druckenmiller had to respond hastily.

Even if the Quantum Fund is not fully prepared.

But Druckenmiller has been bearish on the Thai baht for two years. Now that the baht's elastic range has been broken, it means that his judgment is correct.

The situation is difficult, and everyone pushes against the wall.

It doesn't matter if you can't grab the first prize. Since the Thai baht has collapsed, you can still make money by taking the opportunity to add insult to injury. You can also avenge the sniper attack by the Bank of Thailand.

But who knew that breaking the Thai baht's elastic range would be a trap.

What’s even more detestable is that Jushi Capital, which launched the first attack on the Thai baht, suddenly turned against the tide.

One wrong step and one wrong step after another.

Now, the Thai authorities are cheating and playing such a series of combinations. The Bank of Thailand and other markets will definitely take the opportunity to kill the short sellers of the Thai baht after the market opens.

If the cost of quantum funds can be as low as the early plan, it may be able to withstand this round of strangulation.

But now, the only thing Quantum Fund can do is to stop losses and exit.

"Damn shit stirrer..."