Riding the wind of rebirth

Chapter 539
"The key point is that the dilapidated big ship is also at risk of sinking, and if it sinks, several sunken ships will also drag down the only newly built big ship."

"When disaster strikes, breaking the cable to survive is the best choice for big ships, isn't it?"

"But the ECU did play a role in stabilizing the European currency and reducing the monopoly of the US dollar, didn't it?" Jack asked back: "When the US dollar encounters risks, the European currency basket allows everyone to have a hedging option, so the allocation of European currencies Baskets will be the choice of financial institutions all over the world, and based on this one, the first to grab the eggs will definitely enjoy the bonus of hatching chicks."

"Yes, what you said is indeed correct." Zhou Zhi did not deny this point: "However, chickens are the most vulnerable, and they will definitely attract the eyes of poisonous snakes."

At this time, the fax machine next to the phone began to spit out paper with data, and Douglas began to transmit monetary and financial data on Hong Kong Island.

"The world's reserve currency structure was dominated by the U.S. dollar before. The Germans and French tossed out such a European currency system with a very clear purpose, so clear that everyone in the world understands it."

"Americans are very clear in their hearts."

"Britain is a very interesting country. After World War I and World War II, it has been regarded as the most staunch ally of the United States in Europe."

"But even the staunchest political allies, as long as their strength allows, cannot tolerate their allies having a tube that can suck blood at any time."

"With a share of the global reserve currency cake and sitting at the big table that determines the pricing of the international financial market, there is an opportunity to cut off the blood sucker. The UK joined the EMS in 1990 and joined the Maastricht Treaty in February this year. ", the attitude has been very clear."

"Yes, this is the basic reason why financial institutions all over the world are optimistic about the British pound and continue to sell, driving the British pound and related currency products higher." Jack said.

"We can imagine that, assuming that the British pound officially begins to fulfill its obligations in the EMS, then half of the pricing power of international commodities will be converted from British pound pricing to ECU pricing. There will be many trade stages, international settlements and foreign exchange reserves in the next stage. In the field, we will launch a full-scale battle for positions against Mi Yuan."

"If all this really happens, the pound will withdraw from the stage of history, and European monetary policy will no longer be dominated by the pound. Can the United States maintain a strong influence on British foreign policy? Can it still influence Europe's domestic and foreign affairs through the 'British wedge' ?”

"If there is no chance, the United States will hold back for a while, but the security strategy of EMS is itself fragile."

"Zhou Sheng, is there any sign of the fragility you mentioned?"

"It's a very simple example. At present, in the whole of Western Europe, including the UK, only Germany has maintained economic growth, and the momentum is still very strong, and it has even begun to overheat."

"To cool down the already overheated domestic economy, Germany must adopt a policy of raising interest rates and tightening monetary policy."

"In contrast, the non-German Eurobasket countries are experiencing economic recession."

"A large number of other European countries, such as the United Kingdom, Italy, Belgium, and Finland, have experienced high inflation, low growth, and increased unemployment."

"Cutting interest rates to stimulate the economy is an inevitable choice for these countries. This kind of contradiction is almost irreconcilable in that basket."

"If Germany can assume the responsibility of the leaders of the ten countries and give up individual interest for the overall benefit, the chained fleet of EMS may still be saved."

"But how did Germany do it? Look at this data. Just in July this year, the German central bank ignored the request of the G[-] summit to cut interest rates and brazenly announced an interest rate hike, raising the discount rate from [-] percentage points to Eight seven five!"

"For Germany itself, this is a very wise choice, but its choice will definitely lead to an imbalance in the currency interest rate differentials between the Deutsche Mark and other countries, giving people opportunities to take advantage of."

"Mr. Li, based on what you have learned, where is the main source of funds used by the financial institutions that previously opened positions in European currencies?"

"With the temperament of the Americans, they used dollar-linked crude oil to attack SPDR before, which shows that they will not let it go."

"The flags and drums are now quiet, but they are actually just building positions secretly, and then preparing for short selling!"

"Shorting... the currencies of ten countries?" Jack was stunned by Zhou Zhi's words: "How big is that?"

"The scale of tens of billions of dollars, but don't forget, there is such a thing as financial leverage." Zhou Zhi said with a smile: "And there is no need to short-sell the currencies of the ten countries, just pick the persimmons and squeeze them. Wait for me take a look……"

"For example..." Zhou Zhi shook the list in his hand, and quickly found a currency: "The Finnish mark, the Finnish mark is linked to the German mark, but Finland's economic recession is severe, and it has become the most closely related to the German mark. Currency with the biggest spread!"

"Shorting the Finnish mark by building a position in the Deutsche mark is a very simple matter, and it can be done without much money. After that..." With the reminder that the big event that happened in later generations will definitely happen, Zhou Zhi soon found out Two very dangerous currencies: "The Italian lira, or the Belgian franc."

"The method is very simple. When you are selling French francs and German marks, you can short those two currencies."

"At this stage, EMS will slide into an irretrievable abyss, and international hot money will inevitably join in the eating of ECU like bloodthirsty sharks."

"And the power of the short sellers has risen sharply, and they can attack the currencies of big countries."

"The Deutsche mark cannot be beaten because of its strong economic foundation; the French franc can be played, but the profit is not huge enough."

"To maximize the benefits, it is a matter of course to short sell the currency with the longest time to build a position, the largest scale, and has reached an absolutely dangerous high level - the British pound!"

"This is the only possibility!"

"Hmm..." The other end is probably studying the data while on the phone: "Zhou Sheng, we have to study your prediction before we can draw a conclusion..."

"It doesn't matter, you can do your research." Zhou Zhi said, "But I hope that the part of the entrusted fund between me and Jin'an Company can be implemented according to my pre-judged plan."

"You speak."

"The first step is to short-sell the pound when the pound breaks two, and increase the position in short-term products."

"In the second step, if the pound starts to turn down, we can refer to the German government's response. If the Bundesbank insists on maintaining the Deutsche Mark interest rate, we can take it as a signal to hold positions."

"The third step is to pay close attention to the trend of the Finnish mark, the Italian lira, and the British pound, as well as the actions of the central banks of the three countries. If the Finnish mark is not broken, then even if I lose, I will throw away the short-term products to stop the loss. I will decide how much I lost. "

"But if the Finnish mark is broken, it means that my prediction is initially successful, and then I will hold positions until the situation of the Italian lira or the Belgian franc becomes clear, and continue to observe the trend of the pound."

"Zhou Sheng, have you considered the possibility that the central banks of various countries will join forces to rescue the market?" Jack asked.

(End of this chapter)