Chapter 539 Prejudgment

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

"When a disaster strikes, cutting off cables to survive is the best option for big ships, isn't it?"

"But the ECU did play a role in stabilizing European currencies and reducing the monopoly of the U.S. dollar, didn't it?" Jack asked back: "The European currency basket gives everyone a hedging option when the U.S. dollar encounters risks, so the allocation of European currencies

Baskets will be the choice of financial institutions around the world. Based on this, the first person to grab the eggs will definitely enjoy the dividends of hatching chicks."

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

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

"The world's reserve currency structure was dominated by the US dollar before. The Germans and the French created such a European monetary system with a very clear purpose that everyone in the world understands."

"Americans know it very well."

"The United Kingdom is an interesting country. After experiencing World War I and World War II, it has been regarded as the strongest ally of the United States in Europe."

"But even the staunchest political allies, if their strength permits, cannot tolerate their allies inserting a tube in their bodies that can suck blood at any time."

"Having a share of the global reserve currency cake and sitting at the big table that determines pricing in the international financial market will give us the opportunity to cut off the suckers. The UK joined EMS in 1990 and joined Maastricht in February this year.

"Special Treaty", the attitude has been very clear."

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

"We can imagine that if the pound officially begins to fulfill its obligations in the EMS, then half of the pricing power of international commodities will shift from sterling pricing to ECU pricing. In the next trade stage, international clearing and foreign exchange reserves, etc.

In the field, we will launch a comprehensive battle for positions in Miyuan."

"If this really happens, and the pound withdraws from the stage of history, European monetary policy will no longer be dominated by the pound. Can the United States maintain its 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 still hold back for a while, but the security strategy of EMS is inherently fragile."

"Zhou Sheng, are there any signs of the vulnerability you mentioned?"

"A very simple example: At present, in Western Europe, including the United Kingdom, only Germany is maintaining economic growth, and the momentum is still very strong, and it is even beginning to overheat."

"To cool down the already overheated domestic economy, Germany will inevitably adopt policies to raise interest rates and tighten monetary policy."

"On the contrary, the non-German European currency basket countries have experienced economic recession."

"For example, the economies of 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 contradiction in that basket is almost irreconcilable."

"If Germany can assume its responsibility as the leader of the ten countries and give up individual interests for the sake of the overall benefit, the chain-linked fleet of EMS may still be saved."

"But what did Germany do? Look at this data. Just in July this year, the Bundesbank ignored the request of the last seven-nation summit to cut interest rates and brazenly announced an interest rate increase, raising the discount rate from three 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 difference between the German mark and other countries, giving people opportunities to take advantage of it."

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

"Given the temperament of Americans, the previous use of U.S. dollar-linked crude oil to snipe the SPDR shows that they will not give up."

"The current silence is actually just building a position secretly and preparing for short selling!"

"Short selling... the currencies of ten countries?" Jack was stunned by Zhou Zhi's statement: "How big is that scale?"

"The scale is tens of billions of dollars, but don't forget, there is such a thing as financial leverage." Zhou Zhi smiled: "And there is no need to short-sell the currencies of ten countries, you only need to pick up the weak ones. Wait for me

take a look……"

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

The currency with the largest interest rate differential!”

"It is a very simple thing to open a position in the German mark and short the Finnish mark, and it does not cost much money to complete. After that..." Under the reminder that the big event that will happen in later generations will definitely happen, Zhou Zhi quickly found it again.

Two very dangerous currencies: "Italian lira, or Belgian franc."

"The method is very simple. When you sell the French franc and the German mark, just sell those two currencies short."

"When things reach this point, EMS will slip into an irreversible abyss, and international hot money will inevitably join in the eating of ECUs like bloodthirsty sharks."

"And the short sellers' power has increased greatly, and they can take action against the currencies of major countries."

"The German mark cannot be beaten because it has a strong economic foundation; the French franc can be beaten, but the profits are not huge enough."

"To maximize profits, of course, short sellers should hold the currency that has been in the market for the longest time, has the largest scale, and has reached an absolutely dangerous high - the pound!"

"This is the only possibility!"

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

"It doesn't matter, you guys have already studied it." Zhou Zhi said, "But I hope that the entrusted funds of Jinan Company and I can be implemented according to my pre-judged plan."

"You tell me."

"The first step is to short the pound when the pound breaks 2 and increase the position of short index products."

"The second step is that if the pound starts to turn downward, we can refer to the reaction of the German government. If the Bundesbank insists on maintaining the interest rate of the German mark, we can regard it as a position signal."

“The third step is to pay close attention to the trends of the Finnish mark, the Italian lira, and the 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 sell the short-term product and stop the loss. I will accept the loss.

"

"But if the Finnish mark is broken, it means that my prediction is initially successful. Then I will hold the position 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 central banks of various countries join forces to rescue the market?" Jack asked.
Chapter completed!