Reborn Financial Overlord

The Man Who Broke the Bank of England - The Untold Story Behind It

On September 9, Anatoly Kellys, a well-known economic editor and contributor to the "Taiwan Shibao", published an exclusive interview article. Because Kellys enjoys a high reputation in the media industry and the shocking title makes this article The first newspaper was sold out not long after it was published, and the "Taiwan Shibao" had to add millions of copies to ensure the supply of the market.

"This month, the Bank of England failed to intervene in the foreign exchange market, and the pound depreciated by more than 30.00%. With the depreciation of the pound, Shen Jiannan, an international investor, earned $47 billion on the pound."

"I am very honored to be qualified to interview Shen Jiannan by chance."

"He is very young, young makes me feel unbelievable. The first time I saw him, I still couldn't believe it. It was this young man who defeated the most powerful central bank in the world - the Bank of England."

"In the interview, I asked him why he chose to attack the pound. He told me that it was not an attack, he just wanted some big people to hear his voice and use the results to tell them that the value of the pound was too high. , is a very serious mistake."

"As a traditional Englishman, I was outraged to hear him say that."

"A foreigner, he was blaming our government, but after I heard all Shen Jiannan said, I fell into deep thought."

"Flies don't bite seamless eggs. The total circulation of British pounds is in the trillions, while Shen Jiannan's company only has a position of selling British pounds of 400 billion pounds."

"But as a result, the Bank of England failed, and the pound depreciated by 30.00%, causing every taxpayer to lose at least fifty pounds of wealth."

"Obviously, this is an unequal contest. But why, the pound, which has always been strong, has been hit hard?"

"I asked Shen Jiannan this question. He told me that, in fact, the Bank of England does not need to bear this loss. If the UK had not joined the European Community, it would not have to be kidnapped by Germany's high interest rates and could easily cope with this crisis. Take a step back , even a week ago, the Bank of England had more options, they could leave the ERM at any time, and that would save a lot of money."

"But it's clear that the Bank of England didn't do that, and they chose to die stupidly to the end."

"I can't understand why the government would do this, but there is no doubt that this is a very stupid act. In the end, we have not stayed in the European Community, but we have to suffer huge losses."

"Shen Jiannan told me that he had already closed his position on the British pound."

"I am deeply surprised by this answer. The Bank of England has lost its foreign exchange and can no longer support the price of the pound. Knowing the selling position of the pound at this time is tantamount to giving up the wealth it has acquired."

"He told me he didn't want to see more of that happen, he was a foreign exchange trader, he was a speculator, he was shorting the pound, it was his job, it was like a butcher in a slaughterhouse, from work There's nothing wrong with that, in a sense. But that doesn't mean he likes the job."

"The devaluation of the UK also means that the Bank of England has also realized its mistake, so there is no need to continue to short for the sake of short."

"..."

After writing hundreds of words eloquently, Anatoly Keris wrote the article at the end.

"Shen Jiannan is a very knowledgeable person and a philanthropist. If I hadn't seen it with my own eyes, it would be unimaginable. He spent a lot of time in Eastern Europe engaged in political and educational philanthropy. Jiuding Bank, a subsidiary of Capital One, The amount of aid to Ukraine even exceeded $3000 million."

"It's just incredible."

"But he is also the world's largest currency dealer. In the week that eventually led to Black Wednesday, Shen Jiannan dealt the most brutal blow to the cabinet government in history."

Kerris wrote.

"Shen Jiannan knew that he had profited as much as $47 billion from the slump in sterling. When describing the operation before Black Wednesday, he told me: "We did a lot of short selling of sterling, so we made a lot of money.Before the exchange rate mechanism collapsed, we became the most important dealers in the market.Before Black Wednesday, we had a £400 billion business in the market.We plan to sell most of them.In fact, we were delighted when Lemon said before the currency devaluation that he would borrow $150 billion to defend the pound because that's what we planned to sell.

And the amount he said was not even a third of the size of our position. "

"But the development of things exceeded our expectations. Before we had time to occupy a large enough market share, the British pound withdrew from the currency mechanism. The US$47 billion was also our earlier estimated gain. Although it was US dollars rather than British pounds."

“While we have found that earnings in the British pound market are approaching $20 billion, our earnings are still growing due to our operations in other currency markets. Long-term shares in the UK, French and German interest rate markets, and operating short-term Italian lira operations will enable Our profit was $47 billion."

"I asked him why he invested his money in a policy that the UK was so stubbornly implementing and ultimately fell short of. If the UK changed its policy, such a high position size would be enough to bankrupt him."

Shen Jiannan said, "I believe that the Bundesbank wants the lira and the pound to depreciate, not the franc. I feel that it is safer to bet on the Bundesbank. The Bundesbank has made it clear that it wants the lira and the pound to devalue, and it is ready to protect the franc. The banks scored 3:0, the speculators 2:1, and I did better than the other traders by being firmly on the side of the Bundesbank."

When I asked about the possibility that it would be better if Major raised interest rates before Wednesday, Shen Jiannankou replied: "This is absolute nonsense. If interest rates are raised, it will encourage us to sell more in the stock market, because the market operates due to Interest rates rise and accelerate, which will allow us to get more profits to short the pound.

In fact, we didn't want the currency to depreciate until the end of the week, but when interest rates were raised on Wednesday, we realized we couldn't wait any longer and we had to sell quickly to take our market share. "

“In our conversation, Shen Jiannan, like a financial analyst, believes that speculation is harmful, especially in the currency market.”

"But he believes that the measure to stop this kind of speculation is not not to speculate, just like a rapist, if he wants to make him truly realize his mistakes and correct them, the best way is to punish them according to the law, not ignore them. His criminal behavior is even selectively ignored.

The error itself is the error itself, even if I give up the attack on the pound, it will still go wrong.

And all I did with sterling was to get the error corrected earlier.

But apparently the Bank of England didn't realize this until the end, they've been wanting to restrict monetary liquidity until then, and it turns out that's usually more harmful.Restricting liquidity will make capital feel panic and uneasiness, and will shake investment. The simultaneous decline in the stock market and interest rate market is the best proof. "

"When it comes to exchange rates, I have to ask whether a fixed exchange rate is more suitable for the current currency market."

Shen Jiannan told me: “Fixed exchange rate systems are also flawed because they eventually fall apart.”

He used a theory that I can't quite understand-the great way is fifty, and its use is forty-nine.

Fortunately, although I didn't understand what it meant, he still explained it to me.

"In fact, any exchange rate mechanism is flawed, and the longer they exist, the more flawed. Avoiding speculation is not not having an exchange rate mechanism, but having only one currency in Europe, as in the United States. This will make A speculator like me can’t do it, but I’m willing to sacrifice for it.”

During our conversation, Shen Jiannan seemed composed.

"He told me that he had no interest in money, that money was just a symbol in his eyes. I believed he was serious because he seemed absolutely calm and rational, and I didn't even feel his obvious Mood swings."

"..."

"In his view, making money is just a means...but the purpose of making money is not necessarily because of the need for money."

"I asked him why he was willing to accept my exclusive interview."

He said he was proud of what he had achieved, which is why he decided to talk to me about it. …he delights in his intelligence in recognizing what will happen, challenging authority and winning.But he also wants to use publicity, because it will make his philanthropy in Eastern Europe known, and at the same time, give governments enough experience from this crisis to avoid making such mistakes .

postscript:

Before leaving, Shen Jiannan looked very happy, much happier than when he mentioned making money. His approach to challenging the pound was confirmed by his business theory.

This result proves that blind self-confidence and a sense of being everything and wrong can lead to corresponding trading behavior in the market. Sterling will be supported in any case.

But apparently, the Bundesbank has made it clear that it will not follow the Bank of England's proposal to cut its rates.

His theories also lead him to believe that speculators always try to make consistently the same trades in the market.

He said: "In a relatively free-floating exchange rate mechanism, the volume of speculative transactions gradually increases, and speculation has the characteristics of long-term continuity. As the scale of the electronic Zerg grows, this will lead to an increase in the exchange rate, and eventually trigger the mechanism The rupture. Because Internet information can report transactions to the market in milliseconds, the central bank’s tens of billions of foreign exchange reserves are completely out of date.”

"Obviously, this is ignorance and serious backward thinking."

Chapter 137 The Uncrowned King

With a history of more than 200 years in the UK, "Taiwan Shi Bao" is the largest mainstream newspaper in the UK. As a top student who graduated from the Department of Economics of the University of London, Anatoly Kelly also enjoys a very high reputation in the UK.

During the privatization process of the state-owned enterprise reform, Mrs. Thatcher once rejected a buyout of up to [-] pounds by the president of a state-owned enterprise, and strongly criticized the embezzlement of state-owned assets by capital during the privatization process.

One hundred thousand pounds, this is a very large sum.

At least, it was money that Anatoly Kelly would not be able to earn in five years under normal circumstances.It is precisely because of many similar reasons that Anatoly Kelly is known as the last clear stream in the British media industry, and he is the spokesperson of objectivity and justice.

Everyone has a hero in their hearts, and whether this hero is a god or a demon is not that important.

For most Britons, Shen Jiannan became a hero.

Everyone knows who the person who launched an attack on the pound was. As soon as the "Taiwan Shibao" sold an interview with Anatoly Kelis, Shen Jiannan became the "man who brought down the Bank of England". Heroes in people's hearts.

Although, in fact, the Bank of England was not destroyed, he did consume the wealth accumulated by the Bank of England.

This is a ridiculous thing.

But the truth is so absurd.

Just like when the Eight-Power Allied Forces entered the imperial capital, countless people took the initiative to lead the way.

The privatization process promoted by Mrs. Thatcher has completely reduced many working classes in the UK to the stepping stones of capital. Some families can even buy state-owned enterprises with assets worth billions of pounds at the price of one pound. Major’s slogan when he took office was to To change this status quo, the facts have proved that the cabinet government is extremely shameless.

Even at the last moment of the devaluation of the pound, Norman Lamont, the chancellor of the exchequer, and the Bank of England were still telling the public that the pound would never depreciate.

"In our conversation, Shen Jiannan, like a financial analyst, believes that speculation is harmful, especially in the currency market."

"But he believes that the measure to stop this kind of speculation is not not to speculate, just like a rapist, if he wants to make him truly realize his mistakes and correct them, the best way is to punish them according to the law, not ignore them. His criminal behavior was even selectively ignored."

If you are sick, you need to see a doctor.

Under Anatoly Kelly's objective economic explanation, everyone understands that the root cause of the depreciation of the pound is the economic deviation between Germany and the United Kingdom.

But in this matter, the cabinet government’s selective blindness ignored the problems of the pound, and used the means of concealing the disease to tell the public that they were not sick, and the final result would only lead to minor illnesses becoming serious illnesses.

The error itself is the error itself, even if I give up the attack on the pound, it will still go wrong.

And all I did with sterling was to get the error corrected earlier.

But apparently the Bank of England didn't realize this until the end, they've been wanting to restrict monetary liquidity until then, and it turns out that's usually more harmful.Restricting liquidity will make capital feel panic and uneasiness, and will shake investment. The simultaneous decline in the stock market and interest rate market is the best proof. "

It's like a sharp knife that has been inserted into the hearts of too many British people.

In order to intervene in the exchange rate of the pound, the Bank of England raised interest rates several times, causing a large-scale sell-off of national debt and stock markets.

What's more irritating than falling Treasury bonds and stocks?

No.

What's more, in the end, the Bank of England dared to fail the pound, but it caused a comprehensive plunge in the stock and bond markets.

The process doesn't matter.

All the results point to one point, the cabinet government is utterly stupid.

A British TV reporter declared: "The government's obligation to the exchange rate mechanism should keep the Bank of England safe, but it doesn't realize it.

The losses were huge as the bank used up its foreign exchange reserves to protect the pound's exchange rate.

The government won't say how much we have lost, but it could be in the billions, and far more has been spent protecting the pound this autumn than we have spent on the Gulf War. "

In this way, Shen Jiannan became a hero.

He became a hero in the hearts of the British.

The stupidity of the cabinet government Most people can only roar and curse, but they are powerless, but at the critical moment, Shen Jiannan gave this stupid cabinet government an iron fist and made them deeply aware of their mistakes.

Of course, those who regard Shen Jiannan as a hero will never admit that the stock market rebounded because of the continuous plunge.

In the conference room of the Admiralty Building, an urgent meeting was forced to be held temporarily.

Prime Minister John Major sat on a chair with an ugly expression on his face.Norman Lamont, the chancellor of the exchequer, also had a dark cloud on his face, and a feeling of humiliation and incompetence enveloped the two of them.

From an objective point of view, what they did at the time was not wrong.

The price of the currency market is related to the future of this country. If you do not try your best to prevent the depreciation of the pound, more people will join the ranks of selling pounds. In this way, no matter how much foreign exchange reserves the Bank of England has, it is impossible to resist all the people. Sell ​​British Pounds.

Confidence is something more important than gold.

As Chancellor of the Exchequer, Lamont is deeply aware of this, which is why he has stated countless times in front of the camera that no matter what the circumstances, the pound cannot depreciate.

But the world of adults never pays attention to process, especially politics.

Norman Lamont has a feeling of being bullied. He knows that in the face of constant accusations from the media and the public, he is afraid that it is time to resign.

The atmosphere in the venue was a little awkward.

None of the people present were fools. In fact, they knew very well that if they were replaced by Sister Mei, they would probably not do better. If they really wanted to investigate, neither the Iron Lady nor the royal family could escape the responsibility.

All the problems stem from the privatization reform. It is precisely because of the privatization reform that the property of state-owned enterprises has been annexed on a large scale, which has led to the loss of huge state-owned assets.

Germany?

It can only be regarded as an inducement.

But these things must not be said, and the members of parliament looked at each other, sympathizing with the newly appointed prime minister.

“I don’t think we’re at fault for this. If Schlesinger had promised us to cut rates, we wouldn’t be here today.”

"Damn Germans, if it weren't for their unreasonableness, it would never be so bad."

"..."

When one speaks, another begins.

Members of Congress accused the Bundesbank of fueling the flames in this matter, and it seemed that all the faults were on the Germans.

Naturally, no one objected to this.

If the Germans are the scapegoat, then at least they will be under a lot less pressure.

Listening to his colleagues scolding Cole and Schlesinger out of righteous indignation, Norman Lamont's heart sank to the bottom.If it was in the past, these guys would definitely let him continue to take the blame, but now it seems...he has nothing to do.

This is a very bad phenomenon.

The meeting was over, and Norman Lamont followed Major out of the building dejectedly. He felt very tired in his heart. In this political pursuit, he became a complete loser.

But he still had the last ray of hope in his heart. The Prime Minister of the Cabinet had the right to decide his own ministers. If Major himself did not want to fire him, he could continue to serve as the Chancellor of the Exchequer.