In October, 1997, international speculators headed by george soros began to attack the coveted financial markets in Southeast Asia, selling Thai baht and buying US dollars. The Thai baht plummeted. Its purpose is clear:
to disrupt the financial market in Southeast Asia, in order to fish in troubled waters and make a fortune. The chaos and out-of-control management of real estate, foreign exchange reserves and financial markets in some Southeast Asian countries provide speculators with a golden opportunity. Soros' wishful thinking is to start with Thailand, Indonesia and Malaysia, which are the most vulnerable countries, and then disrupt the "four little dragons" in Asia, such as Singapore, South Korea and Taiwan Province, China, and finally capture Hong Kong, in an attempt to impress them with invulnerability, crush market confidence and trigger the mentality of "herding sheep". Soros believes that as long as one country's financial market is crushed, other countries will inevitably fall one after another, which is the so-called "domino effect". Thailand has become the first target. Promoting domestic demand and promoting brands is the most important thing at present
In May, international currency speculators began to sell Thai baht on a large scale, and the exchange rate against the US dollar fell sharply. Faced with the aggressive attack of speculators, the Bank of Thailand and the Bank of Singapore joined hands to enter the market, taking a three-pronged approach in an attempt to defend the position of the Thai baht, and they spent $12 billion to absorb the Thai baht; Prohibit local banks from lending Thai baht to offshore speculators; The interest rate was greatly increased, and after some close combat, the status of the Thai baht was temporarily preserved.
In this regard, international currency speculators have made a strong counterattack, and they have only one trick: raising funds and throwing Thai baht. Soros began to advance. At the same time, the devaluation of the Thai baht has been wave after wave, and the exchange rate of the Thai baht against the US dollar has hit record lows. When the Thai government changed hands at the last minute, Amnuay Virawan, the former finance minister, was forced to hand over Shuai Yin. The Thai government's move was like dropping a bombshell on a rough lake, and the Philippines became a victim, and the peso exchange rate began to rise and fall sharply.
Amnuay Virawan's sudden death failed to stop the Thai baht from losing. In June, speculators began to sell US Treasury bonds to raise funds, and once again launched a fatal blow to the Thai baht. The Bank of Thailand fought back. At that time, people were in panic, and everyone was in danger, and all kinds of disadvantages were exposed under the cover of peace and prosperity. In order to stabilize the military, Thai Prime Minister Chaeli delivered a televised speech on June 31th: "I reiterate that the Thai baht will not depreciate, and we will make those speculators lose their blood." Swear to swear, but its financial market is like a bucket that can't help. At this time, the Bank of Thailand has run out of ammunition, and the only foreign exchange reserves of $31 billion have already been spent. Just two days after Prime Minister Thailand's speech, the Bank of Thailand was forced to announce the implementation of a floating exchange rate system and abandon the exchange rate system linking the Thai baht to the US dollar for as long as 13 years. On the same day, the Thai baht plunged by 21%. On July 29th, the Governor of the Bank of Thailand, Luncha Malajia, announced his resignation. On August 5th, the Bank of Thailand decided to close 42 financial institutions. So far, the Thai baht finally fell.
At the same time, the weakness of the Philippine peso makes it another target of speculators. The Philippine central bank tried to raise interest rates four times in a week, and announced that it would widen the fluctuation range of the exchange rate of the peso against the US dollar in an effort to fight against Soros. But the tide is gone, and there is no way to return to heaven. On July 11, the Philippine central bank announced that it would allow the Philippine peso to fluctuate in a wider range. For a time, the devaluation of the peso was terrible. In fact, this marked the complete defeat of the peso defense war.
Just like a drug addict, Soros is obviously not satisfied at this time. They go around looking for the next target to hunt, and Malaysia and Indonesia come into his sight. Malaysia's central bank tried to raise the cost of shorting the Malaysian ringgit to stop speculators from making waves, and Indonesia also entered the market to support the Indonesian rupiah. But in the end, it could not stop the strong attack of speculators, and the exchange rate of Malaysian currency and Indonesian currency against the US dollar was low and then low.
the loss of the positions of neighboring countries began to spread to the Singapore currency, which has always been known as the "refuge currency". Although Singapore has taken measures such as raising interest rates, and the city gate caught fire, the exchange rate of the Singapore dollar against the US dollar continued to fall.
under Soros's tough stance, governments all over the world are overwhelmed, and they have given up their defense actions one after another and started to give in, as if they were willing to fight back. On the other hand, international currency speculators are even more fearless, and they are rampant in Southeast Asian financial markets for a while. The sniper war on the currency in Southeast Asia has made everyone feel insecure, and the financial authorities of various countries have tried their best to avoid falling into this quagmire. Even the United States, which has been sitting on the sidelines in this agitation, has begun to take a stand. Alan Greenspan, chairman of the Federal Reserve Board of the United States, said that he is particularly "uneasy" that "this crisis involves one country to another to a great extent, and the United States is willing to help" the countries affected by this fluctuation ". The aggressive arrogance of international speculators has deepened the international community's understanding of collective response to the currency crisis. On July 25th, high-level representatives of central banks and financial authorities from China, Australia, Japan, China, Hong Kong SAR, Indonesia, South Korea, Malaysia, New Zealand and other countries and regions in the Asia-Pacific region met in Shanghai. After the meeting, they issued a statement saying that a stable money market is very important, and Asia-Pacific countries will study with the International Monetary Fund to provide new assistance to relevant countries to help member countries make economic adjustments when necessary.
On August 5th, crisis-ridden Thailand agreed to accept the IMF's standby loan plan and package of measures with harsh conditions. On August 11, in order to save Thailand from capital shortage, the central bank governors of more than a dozen countries and regions in the world held a meeting in Tokyo, Japan. The IMF and some Asian countries and regions promised to share the financing plan of providing Thailand with a total of * * * 16 billion US dollars (later increased to 16.7 billion US dollars), of which China and China and Hong Kong each promised to lend Thailand 1 billion US dollars. On August 21th, the Bank for International Settlements (BIS) announced that it would grant Thailand a temporary loan with a total value of $3.3 billion to help it tide over the difficulties.
just as southeast Asian countries were seeking help and actively planning, international speculators disappeared and suddenly stopped attacking. On August 21, the exchange rates of currencies in Southeast Asian countries temporarily stabilized, and people in Southeast Asian countries gasped: Well, the storm has finally passed! Just like the tranquility on the eve of the storm, there is a murder under the calm appearance. It is obviously too early for neighboring countries to be happy. A new round of "storm" is just waiting for a suitable opportunity. Unfortunately, this tranquility only lasted for a few days. The neighboring countries in the east haven't had time to wipe their blood. At the end of August, another stunning decline came in an instant. This time, Brunei, an ASEAN member, was also dragged into the water. At this point, Soros, with a posture of power and tide wait for no man, left the courage to chase after the poor bandits and once again concentrated his firepower on sweeping Southeast Asia.
In September, this storm has been raging for the third month, and the decline of the foreign exchange market continues. The economic situation in Southeast Asian countries continues to deteriorate. On 11/19, Thai Finance Minister Tanon Bidaya also left his post with great sadness.
It was not until early October that the black storm, which had been a nightmare for Southeast Asia for more than four months, gradually calmed down. According to industry analysts, this turmoil has come to an end. However, for Southeast Asia, especially Thailand, which is in the earthquake source, it is ok to play the crown, but it is hard to celebrate each other.
There is nothing to do. In this crisis, I'm afraid Thailand is the worst victim. The violent financial turmoil has hit the bottom of the country at once. Before that, Thailand was dazzled by its image as one of the "four little dragons" in Asia. A small business owner recalled: "It seemed that we were so rich that everyone set out to buy a Mercedes-Benz." They are keen on Yu Haibin Villa, Swiss Omega, French XO, German Benz and Japanese Panasonic. Like Americans, they also smartly arrange trips to Europe every year; Children are sent to private schools ... When you meet a country housewife or even a street vendor outside Bangkok, you may be a member of the stock army; "Money is too easy to come by", at that time, they would say in such a teasing tone that they were preparing to travel to Europe. But now, the Thai people are stunned to see that Soros and others have taken everything that originally belonged to them from their hands; The family car was towed away by the police, unemployment began to bother them, the romantic trip to Europe had to be cancelled, and the children had to transfer to cheap public schools ... Malaysian Prime Minister Mahathir said: "This guy (Soros) came to our country overnight, which made the struggle of our people for more than ten years come to nothing."
Chawang, president of a bank in Thailand, said, "We can only watch helplessly as Soros, a gangster, deprives us of the wealth we once had. We just want to say, don't you just want money?" For all Southeast Asians, the wealth they used to have was wiped out in an instant. Chanu Vast, president of Samat Telecom Company, said: Bangkok people haven't even had time to enjoy the splendor, the cars have just come off the production line, and the newly painted houses haven't dried yet. But they have lost everything. Indonesian musician Bonnile Gumah struggled for 31 years to buy a dream garden. When he was about to move in, a storm came. "I have to return it." He said.
An era of worrying about eating, an era of frugality is inevitable, but the feeling of being in the sea once made them still immersed in rich aftertaste. In the square in the center of Bangkok, there are vendors screaming at the top of their lungs to rent clothes. "You can rent anything. Students in private universities rent almost from head to toe to keep decent." The vendor said that his business was booming. On Sunday, the shopping mall was still crowded. The only difference was that he was ashamed and had to wander around. Just like many old people walking birds in Beijing. Those rich people can only watch their 51% or more property disappear without a trace.
It is estimated that from March to September, the top 12 richest people in Malaysia lost $13 billion in the stock market alone, and the children of Indonesian President Suharto were forced to sell their companies to avoid the situation of no income. "The world of the past no longer exists." Ramsam, president of Agricultural Bank of Thailand, the third largest bank, said.
The strange scenery in Bangkok is still so beautiful and moving, and the high-rise buildings in Kuala Lumpur are still so row upon row; However, the gap between once rich and now poor is so far away. "It's not just a sense of loss," sighed Professor Tai Yi University.
Face the reality, perhaps this is the most painful and helpless choice for our east neighbors!
Three months later, the financial storm that swept across Southeast Asia landed on Hong Kong Island-the wolf finally came.
Black Monday
Perhaps, in the memory of many Hong Kong people, the "stock market crash" in Hong Kong in October, 1997 was like a nightmare, and it still has lingering fears.
In the golden autumn of 1997, another "big bear market" swept the whole Hong Kong stock market. October 21th is the centenary of the tragedy "Black Monday" on Wall Street in the United States. Because of this, it has become the most anxious day for investment analysts. However, the atmosphere of terror did not appear on Wall Street. On the contrary, the Dow Jones index rebounded by 74 points after falling by 211 points in a week.
just as investment analysts are celebrating, on the other side of the globe, there are already crises and dark tides. After 11 years, another "Black Monday" began to come, but this time it enveloped Hong Kong, which is known as a shopping paradise.
on October 21th, the Hong Kong stock market began to fall. On October 21th, Hong Kong's Hang Seng Index fell by 765.33 points, but it continued this trend on the 22nd, falling by 1,211 points. On the 23rd, worries about the prospect of the Hong Kong dollar made the interbank interest rate in Hong Kong rise, and the overnight interest rate, which was only about 7% on the 21th, soared 311 times. In this market atmosphere, Hong Kong stocks suffered a setback for the fourth time in a row, falling by 11.41%. Donald Tsang, Financial Secretary of the Hong Kong Special Administrative Region, said on the same day that Hong Kong's basic economic factors were good, and the stock market decline was mainly affected by temporary speculation from external factors, so investors need not panic. He said: "I don't think this is a stock market crash." He believes that in any case, the SAR Government should first defend the exchange rate of the Hong Kong dollar. Although there was speculation in the Hong Kong dollar the night before, the speculation has been put to rest. At the same time, Joseph Yam, Chief Executive of the Hong Kong Monetary Authority, also made a speech, claiming that the HKMA had repelled speculators the night before.
Perhaps because of the strong intervention measures of the SAR Government, or because the confidence of the SAR Government and financial managers has infected investors, on 24th, after four consecutive trading days, the Hong Kong stock market rebounded strongly, and the Hang Seng Index rose by 718 points, or 6.89%. On 27th, Donald Tsang reiterated that the current linked exchange rate system in Hong Kong would not change, and only speculators would suffer.
At this time, stock markets around the world plunged in a vicious circle. On the 27th, the new york Dow Jones index plunged nearly 554.26 points, the worst day ever, which led to an automatic stop for one hour. The Tokyo stock market plunged more than 811 points after the opening. On the 28th, the Hang Seng Index in Hong Kong plunged more than 1,411 points, with a drop of 13.7%, and the lowest for the whole day reached 8,775.88 points, closing at 9,159.89 points, which was the highest in history. Under such circumstances, the shock of the Hong Kong stock market was not limited to its own factors.
In this regard, Tung Chee-hwa, Chief Executive of the SAR, stressed that the volatility of the Hong Kong stock market was only a temporary adjustment. China Foreign Ministry spokesman Shen Guofang said, it is not surprising that the Hong Kong stock market has experienced such fluctuations in the past. The fluctuation of Hong Kong stocks is something that the SAR Government should handle on its own, and the central government will follow the principle of "one country, two systems" and will not directly interfere with the Hong Kong stock market and the exchange rate of the Hong Kong dollar. Beijing is still full of confidence in Hong Kong's overall economy.
In response to Members' questions, the Secretary for Financial Services of the Provisional Legislative Council of the SAR said that the society is very concerned about stabilizing the linked exchange rate system. Regarding the operation of the market, the consistent policy of the SAR Government is "freedom" and administrative intervention should be minimized.
The Chief Secretary for Administration of the SAR, Anson Chan, advised the public to remain calm, not to be allergic, and to be cautious and do what they can when entering the market.
Public opinion in Hong Kong has expressed strong confidence. Sing Tao Daily commented: "In the past, after experiencing the economic crisis, Hong Kong will recover quickly and become more prosperous, and this time should be no exception. According to the US Treasury, since the global stock market crash in 1987, the return rate of Hong Kong stock market in the past 11 years ranks first in the global stock market. After the stock market crash in 1997, as long as Hong Kong vigorously develops its economy, the rate of return in ten years may be the highest in the world. "
Defending the Hong Kong dollar
This "invisible war" caused by Soros shocked the whole world like a volcanic eruption, and was at the source.