Reborn Financial Overlord

Glancing at Lucy Baden-Powell who was at least 30 years younger than Robert, Shen Jiannan opened his mouth several times, wanting to say something, but for a while he didn't know what to say.

Finally, the fire of gossip in his heart destroyed his long-standing principle of not interfering in other people's private affairs.

"Old carrot, you said that because you loved your ex-wife deeply, you fucked her daughter? Are you sure it's love, not revenge? Revenge for the harm she caused you."

Robert John was taken aback, very dissatisfied with his boss's slander, he also replied in Chinese.

"Boss, in your heart, am I that kind of villain? I really love her, how could I take revenge on her. "

"OK. Let's put it another way, what do you love about her?"

Robert John rolled his big eyes, as if to say, I just love her, does this need any reason.

This time, Shen Jiannan and William understood.

But the more you understand, the more your three views will be ruined.

The old carrot is really not revenge, this guy loves both Susanna and Lucy, it can also be said that he loves that face and figure.

Is there a difference?

There is no difference.

Shen Jiannan was defeated by the old carrot head's logic, and felt powerless to vomit. Who can do anything about such a superb product.

"Okay. Carrot head, you are such a carrot head, you can bury wherever there is a hole. Now, settle down with your little girlfriend, we need to talk about business."

"..."

Interest rate and exchange rate are two important parameters in the modern financial system.

In terms of internal factors, the currency is reflected in the transformation of labor force. Appropriately gapping interest rates, shrinking and injecting currency can regulate the economy.

But currency, after all, has a word. Under the credit currency system, the value of currency itself is far lower than its issuance cost, and it is a material medium of exchange.

Therefore, the exchange rate of the currency represents the comprehensive economic level of the currency-issuing country or allies. When a country’s overall strength declines, the exchange rate of the local currency will inevitably fall. When the overall strength of the currency-issuing country increases, the price of the local currency will naturally rise.

Of course, this is under the condition that the money in circulation does not change.

If a country's comprehensive strength is strengthened, but the total circulation of its own currency is released in large quantities, and the supply expands, it may offset the demand growth brought about by the strengthening of the economy.

----

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Chapter 85 Selling Great Britain

OneCanadaSquare 36th floor, Capital One (London) investment company.

The comprehensive conference room of more than 100 square feet has a spotless marble floor and a white suspended ceiling. It is the most expensive Daikin central air conditioner in the world.

On the wall in the central area of ​​the office, a LitePro series projector is hung, and rows of writing are clearly displayed on the fluorescent screen.

ERM, European Community Exchange Rate Mechanism.

According to the European Monetary System, the currencies of Western European countries are no longer pegged to gold or the U.S. dollar, but to each other; each currency is only allowed to float within a certain range of exchange rates. The central bank has the responsibility to intervene in the market by buying and selling its own currency to stabilize the currency exchange rate of the country within the specified range;

Within the specified floating range of exchange rates, the currencies of member countries can float relative to the currencies of other member countries, and the exchange rate between the currencies of member countries is centered on the Deutsche mark.

Beside the ten-meter-long oval conference table, Shen Jiannan, Robert, John, and the core members of Capital One London, William, Andy Smith, and Yu Zheng sat quietly on chairs, facing the projector panel.

William's secretary, Mary Snow Hunter, wore a well-fitting suit and held a pointer to explain the basic concepts supplementing the EC's exchange rate mechanism.

"The exchange rates of member countries' currencies set a fixed central exchange rate, allowing the exchange rate to fluctuate within a certain range above and below the central exchange rate.

The aim is to mitigate currency fluctuations in Europe so that companies can invest and trade without fear that wild exchange rate swings could jeopardize their business models.

For more than a decade, this mechanism has worked well, stabilizing the currency without unifying it to the extreme.

All participating currencies allow small fluctuations in their exchange rates against each other, and if there is not enough flexibility, a country can negotiate devaluations with its European partners.These rules provide some governments with the possibility of using interest rates to manage the business cycle. This system balances the goals of exchange rate stability and interest rate flexibility. "

"..."

Of course William’s secretary is not ugly. Marie, who was just 22 years old, was young and beautiful. Her delicate facial features, graceful curves and crisp voice make people feel very good both visually and audibly. comfortable.

Her basic skills are also very solid. As a top student at the School of Economics of Cambridge University, it is not a piece of cake to describe an exchange rate mechanism.

Soon after Mary Snow Hunter finished explaining the basic concepts, she glanced at the current big boss.

Shen Jiannan nodded his head in approval, then turned around and asked the people sitting there.

"For ERM, what do you think?"

Several people present looked at each other in blank dismay, except for William, who probably knew it, and didn't understand what his boss meant for a while.

Shen Jiannan raised his eyebrows, took out a cigarette and lit it without restraint.

The smoke flowed into the lungs along with the breath, eroding the body time and time again, and when it had been wandering in the body for a week, this guy was very unscrupulous and sprayed second-hand smoke to everyone present.

"In this way, let me put it another way. In the ERM exchange rate system, what do you think is flawed in it?"

The guys present are all human beings.

Savoring Shen Jiannan's words carefully, he guessed his purpose of calling everyone to a meeting in the middle of the night.

Soon, someone spoke.

Andy Smith, a Swedish currency expert, has been affiliated with the Riediant hedge fund for the past ten years.

Now, he is the investment manager of Capital One.

"From the perspective of the exchange rate mechanism, the biggest problem is the communication between the member states, and there is a certain gap in economic strength among the countries. The linkage mechanism will cause some deviations in exchange rate coordination."

"However, this problem is not very big. The central banks of various countries have the responsibility to maintain this coordination of exchange rates."

"......"

"......"

Shen Jiannan was quite satisfied with Andy Smith's reaction. If he couldn't even see such a basic problem, the annual salary of 30 US dollars would be better than raising a pig.

Taking another puff of the cigarette, Shen Jiannan pressed the end of the cigarette and said with a half-smile.

“And what if central banks are powerless to intervene in this currency coordination?”

"..."

Pairs of eyes, big eyes stared into small eyes, apart from Robert John who was a little confused, William and Andy Smith couldn't help swallowing.

Shen Jiannan laughed terribly.

Both of them are smart people. William, as the head of London, probably already has a guess, and Andy Smith, as a currency expert, also has a keen sense of something.

"OK. I think you already know my purpose. At present, the merger of Germany has created a huge loophole in the system. With the current strength of the Mark, both the pound and the lira are facing great pressure to depreciate. Now, let's analyze how we can exploit this vulnerability to make a lot of money."

Gudong!

Gudong!

People are most afraid of Lenovo.

Reminiscent of the operations that Shen Jiannan had asked himself to perform, William and Andy Smith swallowed together.

"Boss. Are you trying to sell England?"

Snapped!

Shen Jiannan snapped his fingers and gave Andy Smith an approving look without hesitation. To be able to guess his purpose so quickly, the title of currency expert is not considered a white belt.

In the late 70s, affected by the oil crisis, the British economy fell from the world's factory into a peat swamp. With Mrs. Thatcher in power to promote privatization, the British economy temporarily got rid of the downturn.

However, just after the recession came, due to the privatization reform process, a large number of state-owned assets were sold to the capital of other countries at a low price, and the market was transferred from the British mainland to the European market and the North American market. However, the financial crisis broke out in the United States and the economy Once in a downturn, with the decline of the North American market, the British export industry was severely restricted, causing a large number of ordinary people to lose their jobs.

According to the latest statistical report of the National Bureau of Statistics of the United Kingdom, the GDP growth rate in the third quarter of 1991 in the United Kingdom was even worse than the zero growth in the second quarter, which was negative 0.5%, the largest drop since 1990.The report shows that the annual GDP growth rate in the third quarter of last year was 0.3%, a 16-year low.

Data show that in the first three quarters of this year, British industrial production fell by 0.72% month-on-month, of which the weakness in the manufacturing industry was the most obvious, with a quarter-on-quarter drop of 1.0%. At the same time, industrial investment also fell by 5.41%, the largest in 23 years decline.Not only that, the output of the service sector, which accounts for two-thirds of the UK's GDP, fell by 2% in the third quarter.

The European Exchange Rate Mechanism was formulated by the European Economic Community in 1979, which limits the exchange rate fluctuation range of eleven European currencies.However, this exchange rate mechanism has a fatal weakness: countries must coordinate economic policies with each other to keep fundamentals close to each other.

If the British inflation rate is higher than that of Germany, it will put pressure on the exchange rate mechanism, and the interest rate difference between the two countries will also impact the exchange rate mechanism.

So here comes the problem. With the development of the Internet, the scale of transactions in the foreign exchange market has reached astronomical literacy. In the past, the ability of the central bank to intervene in the national currency with tens of billions of dollars in foreign exchange reserves has been greatly weakened.

Looking at Andy Smith with interest, Shen Jiannan said.

"Congratulations, you got it."

"But boss, that's the Bank of England."

Bank of England?

So what?

Chapter 87 Head Start (Two in One)

Snapped!

Shen Jiannan snapped his fingers, making everyone in the audience pay attention to himself.

"Mary. Tell me about the recent capital liquidity in the UK market."

"Yes, boss."

"..."

"..."

From 1982 to 1989, the British market was in a typical state of excess capital, represented by the liquidity represented by M3 and the prices of real estate and stock prices as assets. The rising speed was much higher than the rising speed of GDP and CPI. The stock market has risen by [-]%, and the stock market has risen by [-]% in a row.

Among them, in 1986, the excess currency index EM was as high as 1985% in 1987, and in 80.00, the EM index reached a historic high of [-]%.

In terms of interest rates, in 1985, the privatization reform process drove the short-term growth of the British economy, and the CPI index also reached 12.00%. The Bank of England raised the overnight lending rate to 5.00%. After [-]%, the short-term lending rate dropped from [-]% to [-]%.

In 1988, the Bank of England raised the interest rate again, perhaps because it was aware of the crisis caused by excessive market speculation and currency flooding. In 1989, the overnight lending rate was raised to 13.00% point five, and in 1990, the interest rate was even raised to 14.00%. seven.

Those present were all experienced elites in the market. Even William, who had acquired relevant knowledge, could not understand the meaning of Shen Jiannan and Mary's question and answer.

Sterling has been severely overissued, and it is precisely because of the massive overissue of currencies that the stock market and real estate market have continued to rise.

The relationship between supply and demand determines the price factor. The huge excess circulation of the British pound corresponds to the pressure of depreciation. If you want to maintain the price of the British pound, you need to raise interest rates to shrink the market circulation of the British pound.

However, after the privatization reform, the British economy is mostly affected by the European Community and the North American market. With the economic crisis in Northern Europe such as Finland and Iceland, the British export industry has been greatly affected, and the unemployment rate remains high. It is very necessary to cut interest rates to stimulate inflation. .

Soon, Mary's narration came to an end, and the huge conference room became silent.

Obviously, the purpose of my boss is to short the pound.

The idea is horrific.

The empire on which the sun never sets is so powerful that it once ruled almost half of the earth. Although the United Kingdom is now in a state of decline, the emaciated camels are bigger than horses, and the rotten broken ships still have a few catties of nails.

With the strength of Capital One, if you want to short the British pound, this is not an egg hitting a rock, but a mouse trying to kill an elephant, which is courting death.

Gollum!

Andy Smith swallowed, but it was difficult to say something.

Shorting a country's currency is tantamount to challenging the authority of a country, and the UK is one of the member states of the European Community. If it wants to short the pound, it is challenging the behemoth of the European Community.

MI[-] and MI[-] are not just for nothing. God knows what kind of trouble they will cause.

If you succeed, you will have no good fruit, and if you fail, you will lose your own money.

"Smith. If you have any ideas, don't be restrained."

Andy Smith couldn't help straightening his back, and spoke seriously.

"Boss. With all due respect, shorting the British pound is a very stupid idea. Although there is a loophole in the exchange rate mechanism of the European Community, and Britain is no longer as glorious as it used to be, the Bank of England's foreign exchange reserves are as high as 240 billion U.S. dollars. There is no People can shake such Britain.

Even if we find a weakness in Britain, there is nothing we can do about it.

A skinny camel is bigger than a horse. Regardless of success or failure, this is a country with complete sovereignty. If we provoke it, we simply cannot bear the consequences. "

as a result of?

Shen Jiannan raised his eyebrows, stood up, walked behind Andy Smith, and slapped him heavily on the shoulder.

"Andy, don't worry about the consequences. You're right. A skinny camel is bigger than a horse, so don't worry about it. Now, we're talking about the market. Capital determines the price. How much money do you think we need to prepare? earned money."