Reborn Tech Maniac

Chapter 813 The richest man in Tang said it was White Wednesday
At this stage, British Prime Minister John Major has a temporary official residence in the Admiralty Building in addition to 10 Downing Street.

It's not that he was extravagant, but because on February 2 last year, No. 7 Downing Street suffered the most serious attack in history - the Irish Republican Army parked a van equipped with mortars at the British Government House. ~ Whitehall, the seat of the government center, resulted in an explosion in the backyard of No. 10 Downing Street. In addition to shattering all the windows of the Cabinet meeting room, it also left a large crater.

At the time of the incident, John Major was holding a cabinet meeting in the cabinet meeting room, and he was one step closer to death than his predecessor, Mrs Thatcher, who had a similar experience.

Therefore, the British Prime Minister, who had made a false alarm, was forced to move to the Admiralty Building to temporarily live in the Admiralty Building so that No. 10 Downing Street could start maintenance work.

Since John Major is not currently in 10 Downing Street, he should be in the Admiralty Building.

Thinking of this, Norman Lamont took a team of consultants and went straight to the Admiralty Building to convince the other party that there was no longer any delay and that exiting the European Exchange Rate Mechanism was the only way out.

After arriving at the Admiralty Building, Norman Lamont waited for another 15 minutes before seeing John Major—the Prime Minister is indeed very personable, and he is still calm and calm at this time, and he has not put Britain in the capital at all. Heavy losses in the market are taken seriously.

Not surprisingly, the starting point for John Major's considerations was politics.He first asked - whether there is currently room for further financial diplomacy between the UK and Germany.

"It is impossible for the Germans to consider our situation, and there is no time to negotiate." Norman Lamont smiled wryly and shook his head, "To ensure that the exchange rate of the pound is not lower than the lower limit of 2.7780 Deutsche marks, we have put the taxpayer's upper limit Tens of billions of dollars were handed over to speculators on the opposite side of the capital market. According to this trend, the UK’s foreign exchange reserves will be exhausted before negotiations with the Germans are concluded.”

After hearing this analysis, John Major couldn't sit still. "The other ministers will be here soon. We can discuss our views on unilaterally withdrawing from the European Exchange Rate Mechanism from different perspectives."

Norman Lamont understood that his boss was afraid of taking responsibility, so he brought in other cabinet members to share the political risk.

The subsequent meeting was indeed tortuous, with ministers discussing whether the UK could withdraw from the European Exchange Rate Mechanism without offending other European partners.If we really withdraw from the European Exchange Rate Mechanism, do all of you here need to take the blame and resign?
Time passed like this, and it was not until one of the ministers said, "We must stand as one, advance and retreat together", that John Major was refreshed-this is what he wanted.

With this consensus, the meeting at the Admiralty Building quickly made a decision.

John Major was still lucky and insisted on raising interest rates for the second time before announcing his unilateral withdrawal from the European Exchange Rate Mechanism—an increase of 12 percentage points on the basis of 3%, which was regarded as the last effort to save the pound.

However, capital markets were indifferent to the news - and that's not true as the sell-off in sterling was even more frantic.

Seeing this situation, Norman Lamont was sure that John Major's thoughts were too naive.The more Britain struggles like this, the more it shows that it is at its wit's end, which drives speculators crazy.

Now that the tide is over, Norman Lamont begins to brief the impending unilateral exit from the European Exchange Rate Mechanism, that is, to inform the finance ministers of other European countries about the current difficulties facing the pound.

We are all veterans of the political arena, so of course we understand the meaning behind these complaints.

Italian Finance Minister Piero Barusi, who has already experienced the collapse of the Italian lira, suggested that Norman Lamont temporarily suspend trading to buy himself time for negotiations instead of unilaterally withdrawing from the European Exchange Rate Mechanism.

Norman Lamont patiently pointed out some unreliable Italians-the modern finance minister has no right to suspend the continuous, globally traded foreign exchange market.

In the midst of the inaction of the politicians, the desperate pound finally collapsed!

……

Tang Huan didn't seem to know the swords and swords outside the office at all, and quietly checked the manuscript he had just written.

There was a gentle knock on the door, and then Zhuang Menghua walked in and said in a calm tone: "Just now, the pound collapsed, falling below the lower limit of the European Exchange Rate Mechanism's floating range of 1 pound to 2.7780 German marks, reaching 2.7100 Deutsche Mark."

"Of course." Tang Huan said casually without raising his head, "I think everyone is really concerned about how much the Bank of England lost on this decisive day."

Zhuang Menghua smiled and said: "It is estimated that this data will be classified as a British state secret for a period of time. Anyway, the planned position of 10 billion US dollars has already been operated with only the hard work and strategy on the surface."

"The greed of capital is endless-after the British pound has been sieved, the international speculators will definitely not stop there. It is estimated that the next target will be the French franc. Including ground and strategy, we will not participate, and focus on Go back to stocks and bonds." Tang Huan raised his head and explained.

"It's better to get out of trouble as soon as possible." Zhuang Menghua nodded, "The situation in France is indeed very different from that in the UK. In terms of real estate loan interest rates, they are not as volatile as the UK. Furthermore, the French are not as sensitive to interest rate increases. The degree is not as good as that of the British. In particular, the French government has far more intervention methods than the British government.”

"The power of hedge funds was clearly demonstrated in the process of defeating the pound. It is estimated that many investors have a crazy idea in their minds right now. As long as everyone joins forces, they can completely defeat any company~ The central bank, even if its currency is stable." Tang Huan smiled playfully, "How can it be so absolute! By the way, don't remind Jin Chang and Jin Ge, let them figure it out on their own."

Zhuang Menghua immediately rolled his eyes, "What kind of mentality do you have as a father? Don't you think you can't see your son succeeding and making money."

"Sometimes, the setbacks you experience personally are also a rare treasure." Tang Huan laughed indifferently, picked up the manuscript in front of him, and handed it to Zhuang Menghua, "You are a talented student at Harvard Business School, help me I checked this article from a professional point of view, lest people find mistakes and make jokes."

Zhuang Menghua glanced at it, and was immediately amused by the rhetoric of "White Wednesday", "Today, when the pound sterling collapses, it will definitely be rendered as 'Black Wednesday' by the British who admit defeat, but your point of view is the opposite. Anyway, don't you think that slapping No. 10 Downing Street in the face is not cruel enough?"

"It's not entirely because of this reason." The richest man shook his head and said: "The British pro-European faction is so superstitious about Germany's economic development achievements and the prospects of the European Community that they are so superstitious in the negotiation process of joining the European Exchange Rate Mechanism. , overestimated the value of the pound, and has since been put under a spell, and this is a mistake based on political interests."

"The UK must now exit the ERM, otherwise the remaining two trading days of this week will not just cause the pound to collapse."

"When the UK gets rid of the shackles of the European Exchange Rate Mechanism, it can freely seek the policies it needs to prevent economic recession. The will of the market will be truly reflected, and the UK's economic situation will actually improve."

Zhuang Menghua still couldn't help laughing, "But in the final analysis, it is the current Prime Minister of the United Kingdom, John Major, who has blinded the British people, and he needs to take the overall responsibility."

Tang Huan stretched his waist, and said sarcastically, "We don't need to worry about this. Naturally, the British media will accuse John Major of his incompetence."

……

At 1992:9 on Wednesday, September 16, 17, British Prime Minister John Major urgently convened the cabinet to pass the decision of the UK to unilaterally withdraw from the European Exchange Rate Mechanism.

Two and a half hours later, at 19:30, British Chancellor of the Exchequer Norman Lamont appeared in front of the television cameras.Exhausted and haggard, he unconsciously put his hands behind his back, looking like a prisoner with his hands bound.

Norman Lamont said seriously: "Today is an extremely difficult and extremely turbulent day. Huge capital flows continue to disrupt the operation of the European Exchange Rate Mechanism... The government has decided that the only way to end our role in the European Exchange Rate Mechanism is to Membership will protect the UK’s best interests.”

……

This official announcement means that the UK's central bank no longer needs to rely on "buy all" in the open market to defend its currency.

But before it can be remedied, Britain has already suffered huge economic losses-entering September, the Bank of England spent 9 billion U.S. dollars trying to defend the pound, a large part of which was spent on September 270, and the pound After the baffle of the European Exchange Rate Mechanism was removed, the value of the Deutsche Mark suddenly depreciated by about 9%.

Of course, the British government will not take the initiative to reveal how much taxpayers’ hard-earned money has been handed over to speculators by the incompetent, but the British media can use these public data to roughly estimate a result-38 billion US dollars.

Without any new ideas, the British media called September 9, the day when the pound was humiliated, "Black Wednesday" and launched an overwhelming denunciation of the current government.

Rumors began to appear in the market, saying that John Major had a nervous breakdown because he couldn't bear the pressure, and there was even a sharp picture of him spending a lot of time hiding in the closet and crying every day.

However, Norman Lamont, the British chancellor of the exchequer, has repeatedly clarified that his boss led the entire cabinet very calmly and dealt with the financial crisis in an orderly manner.

It is clear that these politicians are huddling together to keep warm, and in return, especially to prove that they are not incompetent, John Major has no accountability for any official of the British Treasury.

At this time, the richest man, who had always been at odds with No. 10 Downing Street, suddenly jumped out to "clear the ground" for John Major.

When attending an industry event as a director of Jaguar Motors, Tang Huan pointed out in his speech that the media portrayed September 9 as the "Black Wednesday" in the UK, which is too pessimistic; in the long run, it should be "White Wednesday" is more appropriate.

After every financial crisis, the first reaction of many people is always to belittle the market, rather than learn embarrassing lessons from the market,

Take the interest rate as an example. On September 9, in order to fulfill the obligations of the members of the European Exchange Rate Mechanism, the United Kingdom raised interest rates twice in a row, from 16% to 10%. But now that the United Kingdom has withdrawn from the European Exchange Rate Mechanism, the interest rate Naturally, more flexible policies can be implemented, which will drive the export of British goods to overseas markets and revive the local economy.

……

As if to confirm what the richest man said was true, the London stock market rose accordingly. In just a few days, the FTSE 100 index of the London Stock Exchange increased by 20.00%.

But No. 10 Downing Street is very annoyed by the richest man’s offer of an olive branch - will you "wash the ground" in such a way to beautify the development opportunities after the UK withdraws from the European Exchange Rate Mechanism? However, joining the European Exchange Rate Mechanism in 1990 was also John ·A political achievement promoted by Major.Doesn’t the contradiction so close to each other make the current cabinet more incompetent?
There are also traditional black Tang media forces such as "The Sun" clamoring-don't be sanctimonious as a cover for shorting the British pound, but honestly explain how much British taxpayers' sweat and blood have been plundered by Qinhe strategy in this pound crisis money.

Tang Huan didn't care about this. Qinhe's strategy was well-known. What's more, the entire European currency crisis was the result of Wall Street's troubles. Hedge funds and banks with large amounts of foreign exchange played the main role.

To put it bluntly, this is after the end of the Cold War. The United States cannot stand the alliance between Europe as a whole, and especially does not want the United Kingdom to get too close to the European continent. If it sees an opportunity and stumbles, it will rob you. What do you dare to do?
On the day of "Black Wednesday", the United Kingdom announced its unilateral withdrawal from the European Exchange Rate Mechanism, and Italy immediately made it clear that it would follow suit.

As a result, pressure on the French franc has never been greater in the coming week.

This made French Finance Minister Michel Sapin angrily shout out that troublesome investors should be sent to the guillotine.

But what about the reality?Who dares to do this?

This is where the British elites know how to be interesting. They admit defeat and start a discussion about Mr. Richest Man's "White Wednesday" analysis - the future is what matters.

As for the responsibility, of course it must be pursued, but that is the incompetence of John Major's cabinet.

Those who greatly appreciated the idea of ​​"White Wednesday" were not only the British, but also their opponents on the day of "Black Wednesday".

When George Soros reported the investment income to Tang Huan, the financial backer, he said in a convincing manner: "Don, do you know how much income the 'White Wednesday' view has brought to the London stock market?"

(End of this chapter)