Rebirth in 1985

Chapter 450 Prelude

As far as I remember, the actual outbreak of the Mexican financial crisis took place on December 1994, 12. Late in the night of that day, the Mexican government suddenly announced that its currency, the peso, would depreciate by 19%. This news was a fuse that ignited a powder keg that was about to explode, causing great panic in the market.

Mexico was too dependent on foreign investment before this. The depreciation of its own currency, the peso, caused the funds of foreign investors in the peso to shrink rapidly. They sold their pesos frantically and began to buy dollars, which also caused the peso exchange rate to fall sharply.

到了12月20日，只不过一天的时间，汇率从最初的3．47比索兑换l美元跌至3.925比索兑换l美元，狂跌13％。

The crisis did not end there. Investors continued to sell their pesos and rush to buy dollars, and the dollar fell another 12% on December 21.

In just two days, just two days, with the depreciation of the peso and a large amount of capital withdrawal by foreign investors, Mexico's foreign exchange reserves dropped by nearly US$20 billion in just two days from the 21th to the 40st.

On the third day, December 12, the peso continued to plummet, and the entire financial market in Mexico was in chaos. In just three days, the exchange rate of the Mexican peso against the US dollar plummeted by 22%. Such a large drop is extremely rare in modern financial history.

But Mexico appeared, which meant that the financial crisis officially began.

The sharp fall in exchange rates produced a butterfly effect, and the stock market also plummeted. In Mexico, about 70% of the foreign investment absorbed was speculative short-term securities investment. The capital outflow was like a drain on the Mexican stock market, and the Mexican stock market fell. On December 12, the Mexican IPC index fell 30%.

On January 1995, 1, it plummeted by 10%.

到3月3 日，墨西哥股市ipc指数已跌至1500点，比1994年金融危机前最高点2881.17点已累计跌去了47.94％，股市下跌幅度超过了比索贬值的幅度。

In order to stabilize the Mexican financial market, the Mexican government, after consultations with many parties, launched an emergency economic rescue plan to reduce the current account deficit to a level that can be paid normally as soon as possible, quickly restore normal economic activities and employment, reduce inflation to the smallest possible level, and apply for emergency loan assistance from international financial institutions.

In order to help the Mexican government tide over the difficulties and reduce the losses of foreign investors, the US government and international financial institutions such as the International Monetary Fund decided to provide huge loans to support Mexico's economic rescue plan in order to stabilize the exchange rate, stock market and investor confidence.

It was not until the gradual arrival of $500 billion in international capital aid, mainly from the United States, that Mexico's financial turmoil began to subside in the first half of 1995.

The situation of the entire financial crisis was clearly imprinted in Lu Shaohua's mind, including a lot of detailed data, which Lu Shaohua knew clearly.

Not only that, in addition to the situation in Mexico, Lu Shaohua also clearly remembers the situation in several other countries.

Affected by the Mexican financial crisis, other Latin American countries such as Argentina, Brazil and Chile have economic structures similar to that of Mexico. They all have economic problems such as heavy debt, trade deficit and overvalued currency to varying degrees. These countries were the first to be affected by the outbreak of the Mexican financial crisis.

Because foreign investors feared that the Mexican financial crisis would spread to all Latin American countries, they sold stocks in these countries, triggering a sharp drop in Latin American stock markets. On the day when the Mexican currency crisis occurred, the stock indexes of Latin American countries fell along with the Mexican stock index.

其中巴西股票指数下降11.8%，阿根廷下降5.0%，智利下降3.4%。 1995年1月10日股价指数与1月初相比，巴西圣保罗和里约热内卢的证券交易所分别下跌9.8%和9.1%，阿根廷布宜诺斯艾利斯证券交易所下跌 15%，秘鲁利马证券交易所下跌8.42%，智利证券交易所下跌3.8%。

At the same time, the prices of various bonds issued by Latin American countries also plummeted. During the stock market crash, investors withdrew $16 billion from Argentina and $12.26 billion from Brazil, equivalent to 10% of the total foreign investment in Brazil. The entire Latin American securities market lost $89 billion.

Several other countries have experienced financial crises to varying degrees, but these are not what Lu Shaohua needs to worry about. After all, his energy is limited, and it is impossible for him to visit every country. Well, even if he had that energy, he would not have enough manpower to deal with so many countries.

Therefore, Lu Shaohua could only concentrate his manpower and take action against the country that could make the most money for him, which was the leader, Mexico.

Lu Shaohua had already decided to take action against Mexico, but how to do it and from where to start were issues that Lu Shaohua should consider, and were also the main reasons why he came to Mexico in advance.

Layout, yes, layout. Before the Mexican government announced the devaluation of the peso, Lu Shaohua could make full preparations and speculate on the exchange rate, like the 92 British pounds, to make a fortune first, and then take action on the stock market.

The exchange rate and the stock market are Lu Shaohua's two major goals this time. All arrangements must be carried out around these two goals. As for what to do before that, Lu Shaohua does not need to worry about it. He has two generals, Liu Mingzhang and Li Zongen, by his side. As long as he explains the situation, they will know what to do.

……

In the study on the third floor of the villa.

Lu Shaohua, Liu Mingzhang, Li Zongen and the old man surnamed Feng, all four of them were sitting inside. The hall was silent and no one spoke.

This small meeting was convened by Lu Shaohua. Needless to say, the purpose was to deal with the financial crisis.

"It seems like we have been in Mexico for some time?" Lu Shaohua did not get to the point in his first sentence, but asked an irrelevant question.

"It's been almost a week." Liu Mingzhang said lightly, with a hint of impatience in his tone.

Come to think of it, we have been in Mexico for nearly a week, but Lu Shaohua has not issued any orders yet. He just asked everyone to go around Mexico City, have some fun and relax when they have nothing to do.

In response to Liu Mingzhang's impatience, Lu Shaohua just smiled faintly and ignored him, then he muttered to himself, "Yes, it's been almost a week, I've played and relaxed enough, it's time to do something."

"Doing things?" What does it mean to do things? It simply means to start taking action.

When Liu Mingzhang heard this, his impatience disappeared and he said excitedly, "I have recovered enough energy and can start anytime."

Lu Shaohua rolled his eyes at Liu Mingzhang, then asked him, "Any news about Soros?"

The Mexican financial crisis is getting closer and closer, with only about a month left. As the leader of the Quantum Fund, which is involved in blocking Mexico, it is time for Soros to come to Mexico and make preparations.

"Without any news about him, it seems like he has disappeared." Liu Mingzhang shook his head and said, then added, "But recently, he seems to have retired and we can't find him."

"Yeah." Lu Shaohua was not surprised at all. The financial crisis was about to break out. How could Soros have the time to do other "businesses"? He must have focused all his energy on Mexico. It was normal to lose sight of him. "Pay attention to his news. If you know he has come to Mexico, tell me. Well, you don't have to tell me. Just keep an eye on him."

Lu Shaohua knew very well who Soros was. However, later on, Lu Shaohua seemed to realize that he was paying too much attention to Soros. Although he was an international financial hunter, he seemed to have nothing to do with Lu Shaohua. Lu Shaohua only needed to pay attention to his movements and did not need his personal attention.

Liu Mingzhang was different. He didn't know what Lu Shaohua meant, so he asked, "Should I keep an eye on him or tell you his whereabouts?"

"Just pay attention to him, no need to tell me." Lu Shaohua waved his hand and said.

"Okay," Liu Mingzhang nodded to show that he understood.

"Yeah." Lu Shaohua responded, and then his eyes swept across the faces of the three people one by one. His expression also became serious. He pondered for a long time before continuing. "The situation in Mexico is still very stable, but it does not mean that it has no problems. Other financial crises have already formed, and all they need is a fuse. Once the fuse is lit, that is when the financial crisis breaks out."

Lu Shaohua said some nonsense, but there was no other way. If he wanted to get to the point, he needed an introduction. Only with an introduction could he really get to the point, and this nonsense was exactly Lu Shaohua's introduction.

After a pause, before anyone could speak, Lu Shaohua continued, "Based on the current situation, this crisis will break out in about a month, and when it does, the Mexican peso will depreciate, and the exchange rate with the U.S. dollar will plummet."

Lu Shaohua is a person with memories, but at this time, he can only make estimates, because Lu Shaohua can't say that I am sure that the financial crisis will break out in a month, or that I am a reborn person, and my memory tells me that it will break out in a month.

The matter of rebirth has always been Lu Shaohua's biggest secret. He has not even told his parents and closest people, let alone Liu Mingzhang and others. It is even more impossible for Lu Shaohua to tell them, so it is most ideal to use estimates to explain the matter.

"One month later, hehe! The layout is just right now." Liu Mingzhang said with a laugh.

I still remember that when the Japanese stock market crashed, Lu Shaohua went there several months in advance to make arrangements. However, Mexico cannot be compared with Japan back then. It did not take several months, only one month was enough.

"One month won't be a big problem." Li Zongen assured.

Lu Shaohua is a legend. From the establishment of Phoenix Financial to the present, his "estimates" have never been wrong. Therefore, neither Liu Mingzhang nor Li Zongen even needed to consider it. They believed that the one-month period mentioned by Lu Shaohua would explode.

But the old man surnamed Feng was different. His knowledge of Lu Shaohua was limited to the fact that he was the chairman of the Phoenix Group and had the rank of major general. Since he only knew this little, how could he be sure of the one-month period that Lu Shaohua mentioned?

After looking at Lu Shaohua, the old man surnamed Feng moved his lips as if he wanted to say something, but in the end he did not say it. Instead, he fell into deep thought, organized his words, and then opened his mouth to ask.