Chapter 30 Chapter Thirty Sweeps Southeast Asia

"Free-floating currencies have a certain flaw in that the market will always be overly skewed." Chapter 1 Unfortunate Prophecy About a year ago, Maurice Goltz, an economist at the International Monetary Fund, predicted in the British "Economist" magazine: Measured by the red flags in the Mexican financial crisis in December 1994, in Southeast Asian countries, Currencies are being buffeted from all directions, threatening a Mexican-style economic catastrophe.Then, he said frankly that Thailand has more symptoms of Mexico than other Asian countries. In other words, if a crisis such as financial turmoil occurs in Southeast Asia, then Thailand will bear the brunt.

Goltz and the International Monetary Fund he represents are not so popular in Southeast Asian countries, because the former is regarded as the spokesperson and decoration of Western developed countries by rising stars in Asia.In the eyes of the leaders of these former colonial countries, believing them (them) is tantamount to betraying their own national interests. This is a gap woven by history, and mankind has since lost the possibility of mutual trust and mutual assistance.Prejudice makes people narrow-minded, and ignorance makes it difficult for people to face reality. Mr. Golzdan has not received the attention of Southeast Asian countries, especially in Thailand, where the government and the opposition are intoxicated by a blueprint for the future, how can they accept the prophecy of an uncertain future.

Just like that, Goltz was driven away.However, the disaster he first predicted came as scheduled. On July 2, 1997, in a panic, the Thai government and financial authorities announced that they would abandon the 13-year-old exchange rate system pegged to the US dollar and implement a floating exchange rate system.The Thai baht suddenly plummeted, and it was in a tragic situation where no one rescued, and no one dared to rescue, and set a black record at the lowest point in history. The currency storm finally broke out overnight.Immediately afterwards, the financial markets of the Philippines, Malaysia, Indonesia, Singapore and other countries also began to be violently turbulent. The Philippine peso, Malaysian ringgit, Indonesian rupiah, Singapore dollar, and even the currency of Myanmar, which is economically closed, also weakened and declined.People can't help worrying, will Southeast Asian countries repeat a financial crisis similar to Mexico's that was planned by Soros as the director?

It was only at this moment that the Thai people and even the entire Southeast Asian countries realized how accurate Mr. Golzdan’s prediction was. Of course, for Golzdan himself, the crisis in Southeast Asia was just misfortune. Six-color light in the second section of the bubble Entering 1997, the Southeast Asian financial market, which had been calm and peaceful, was turbulent. Since May, the foreign exchange market has become even more turbulent and turbulent.Thailand, the Philippine peso, and the Malaysian ringgit continued to depreciate sharply. The currencies of countries such as the Indonesian rupiah and the Singapore dollar also failed to escape this catastrophe, and they were all besieged and precarious.Although the central banks of the relevant countries have adopted various emergency measures to crack down on the currency speculation that stirs up troubles in the market, and have tried every means to maintain the stability of the country's market value, they have backfired. On July 2, Thailand was forced to implement a floating exchange rate system, and the Thai baht plummeted by 20% within a day.At the same time, the government of the Kingdom of Thailand, which was about to go bankrupt, issued an application for emergency financial assistance to the International Monetary Fund, Japan, the United States and other large financial institutions, which finally brought the long-simmering Mexican-style financial crisis in Thailand to the surface. The world saw its face.

In the early 1990s, when the developed countries in the West were suffering from recession and the fall of Western civilization seemed to be in sight, the economic growth in Southeast Asia was unstoppable and invincible, which amazed the world. The boss is also ashamed of himself, full of jealousy and hatred. In the mid-1990s, Southeast Asian countries started a great leap forward to accelerate the pace of financial liberalization in order to drive a new round of rapid economic growth. They took it for granted that the 21st century is the century of Asia, and the century of Asia is the This is the century of Southeast Asia, and the center of gravity of world power will shift to this emerging region, and so on.However, the top-heavy Southeast Asians, who have been overwhelmed by imported wine, have overlooked the most basic fact: the main driving force behind Southeast Asia’s economic development in the past few decades has been the increase in external inputs, rather than the increase in output per unit of input. Therefore, on the basis of such a limited growth model, they are trying to loosen financial controls, and compete with the world's top financial powerhouses to eat the "cake" of the big financial market. This is undoubtedly building a skyscraper on the beach, which has many hidden dangers and is easily broken by external forces. .

This point has long been seen and kept in mind by the wily and calculating George Soros.Soros is a person who is used to digging into horns and nitpicking. Such a huge financial loophole in Southeast Asia naturally cannot escape his palm.He's been waiting for the last chance to cash in and pull off another England-style miracle. In fact, as early as 1995, Singaporean Crosby Securities Company made a research report on the economic conditions of seven Asian countries, pointing out that the quality of labor in Southeast Asian countries was low.The trade balance is deteriorating, inflation is rising, and the economy is facing the danger of overheating; on the other hand, these countries will encounter "growth recession" (Growth Recession) due to excess production capacity, high corporate debt, and lack of higher education and skilled labor. ), risking a dire economic crisis.Crosby believes that due to rapid economic growth, Southeast Asian companies generally overestimate the supply of real estate, manufacturing capacity and the size of the company's workforce, thus causing an "optimistic error".Relevant authorities accelerate the pace of financial market liberalization, which often adds fuel to the "optimistic error".At that time, the economic performance of the whole country will be highlighted by the upsurge of speculation, the bubble economy will expand everywhere, and the whole market will be covered in a colorful halo of false prosperity, thus creating an excellent opportunity for "financial flies" such as George Soros. offensive opportunity.

However, the Southeast Asian countries, immersed in the joy and dream of the "East Asian Miracle", turned a deaf ear to the above-mentioned advice, and their attitudes were similar to those of Golzdan.All this, Soros has been secretly happy in his heart. As early as 1992, people in the economic circles of Thailand, especially those in the financial circles, came up with a strange idea out of nowhere, thinking that Bangkok should replace Hong Kong, which was about to return to China, and become the financial center of Southeast Asia and become the second largest financial center in Southeast Asia. Hong Kong.Driven and stimulated by this kind of unrealistic idea that is equivalent to the Great Leap Forward, the Thai government wishfully opened the door to the financial market to foreign capital.Sure enough, foreign banks brought a large amount of low-interest dollar loans, and Thailand's financial industry has tasted the sweetness of this. It is full of money and is very happy, and it has begun to have a strong interest in basic industries such as real estate. As a result, many banks swarmed nearly 30%. The loans were invested in the real estate industry, which caused the real estate industry to develop blindly like the little fat man in Beijing, China, and the supply and demand were seriously unbalanced.The ensuing downturn in the real estate market led to a surge in bank bad debts and bad debts. Many loans were difficult to recover and the quality of assets deteriorated severely.According to Japan's Daiwa Research Institute citing relevant information from Thailand, as of the end of June 1997, the amount of risky creditor's rights owned by Thai financial institutions was 486 billion baht, accounting for 31.5% of the total loan amount.Some people even estimate that the bad debts of Thailand's financial industry are as high as 800 billion to 900 billion Thai strains (about 31 billion to 35 billion U.S. dollars).The wanton squandering of low-interest capital and the huge deficit of necessary projects can easily lead to a financial crisis. In 1996, Thailand's project deficit was equivalent to 8.2% of its GDP, and in 1994, when Mexico's financial debt crisis broke out, it was only 7.8%.In this way, it is normal for a crisis to break out in Thailand.

Thailand is playing with fire, and Soros has a message for his men.From the beginning of 1997, Thailand's real estate bubble began to lose its luster, and soon tended to burst. Foreign investors sold Thai baht one after another.As soon as Soros saw that the time had come, he fished in troubled waters, personally led the international financial speculators, and concentrated on attacking the baht fortress built on the beach.For a time, Thailand's financial position was in danger, and the smoke filled the air, and the shock spread to the entire financial market in Southeast Asia. Attack in the third quarter!attack!Re-attack

In the 1990s, the international financial market was full of storms and crises.Economists all believe that there is an invisible, intangible but clearly felt "giant hand" wandering around the international financial market, a terrible devil-like giant palm.For this giant hand, economists have given it a more popular term: hot money. According to the rough statistics of the International Monetary Fund, there are at least 7.2 trillion US dollars of short-term bank deposits and other short-term securities flowing in the international financial market, and there is an increasing trend.The development of world economic integration has made possible the rapid global flow of huge amounts of hot money.To mobilize a huge amount of money, you only need to make a phone call or answer a keyboard. The huge transaction can be completed within a second in the market. On the contrary, it is to avoid risks.The rapid withdrawal of funds is also a breeze.Since Soros led the crowd to defeat the British pound in 1992, and in 1994, Soros and other big players made a big fuss in Mexico, bringing the largest country in Central America to the point where it almost sold out. The international community has really learned this. All countries seem to be in awe of Soros, who disappeared and went to Yuanying.Under the leadership of Soros, the hot money in the international financial market is like a wild horse running wild, elusive.When the rate of return on capital in a certain area is considerable, hot money will flock to it, and when there is a turmoil, especially after the goal is achieved, it will disappear without a trace like a whirlwind.

On July 25, 1997, the roaring Malaysian Prime Minister Mahathir cursed the world-famous speculator George Soros as the "black hand" behind the sharp depreciation of Southeast Asian currencies by speculators.There are various indications that this "legendary figure" in the western financial market, commander of the hedging fund organization, has set his "hunting" target on the Asian emerging markets since his wild sale of the British pound in 1992, waiting for an opportunity to start. In 1993, the group of managers who were in charge of the hedging trading fund organization "tested their knives" in Malaysia and made their debut.At that time, investors generally believed that the market value of the Malaysian currency, the ringgit, was undervalued, and it seemed that it would undoubtedly rise. So under the call of Soros, international hot money began to encircle the ringgit, but Mahathir refused to buy Soros. In order to resolutely defend the low market value of the ringgit, Mahathir and Soros each commanded a side, and launched a fierce fight against each other in the financial market. In January 1994, Mahathir ordered to strengthen the control of the capital market. Seeing that there were not many opportunities, Soros had no choice but to lead all the big speculators to retreat across the board and rest their troops to prepare for another battle.

In the blink of an eye, another two years have passed, and the economies of Southeast Asian countries have exploded, and the prosperity has become increasingly obvious.Due to rising inflation and the increasing threat of overheating, the interest rates of Southeast Asian countries have been rising and rising under the guidance of the central banks of various countries. Although this move can slow down the rising speed of inflation, it also attracts a large number of hot money to arbitrage. Soros and others sent troops to fight again.Created new opportunities.A senior executive of Citibank Bangkok Branch pointed out that the amount of overseas arbitrage hot money handled by Thai banks is as high as 2 billion to 3 billion US dollars every day.also.Because of the profits, the bankers themselves wantonly borrowed from overseas the US dollars, Japanese yen and marks whose interest rate is 3-5 percentage points lower than that of Thai baht, ringgit and other currencies, and then sold these currencies to earn the interest rate difference.According to statistics, the total overseas borrowings of commercial banks in Thailand have exceeded US$1 trillion, of which 95% are short-term loans of less than one year.According to news from the foreign exchange market in Singapore, in the foreign exchange markets in Southeast Asia, the total daily transaction value of the Asian currency forward foreign exchange market is about 6 billion US dollars, of which the transaction volume in Thailand has the fastest growth. In February 1997, Boorman of the International Monetary Fund issued a warning that just two years after the Mexican financial crisis, a large amount of hot money was being poured into Asia and other emerging markets at a record pace, and "irrational enthusiasm" was spreading in these markets Widespread, this phenomenon can lead to excruciatingly wide swings. However, Boorman's voice was still not heard, which made Soros finally make up his mind to fight against the power of national groups in Southeast Asia with his own power. Faced with the prevalence of speculation in the currency markets of various countries, the central banks of Southeast Asian countries have been hesitant about the rate of change of market value, especially worried that hot money will flow out as quickly as it flows into the country, which will cause sharp fluctuations in exchange rates.But at this moment, it is very difficult to turn on the reopened funding spigot.Central banks in Southeast Asia have reached their final hurdle. Seeing the timing, Soros dispatched. However, this time Soros and his subordinates not only appeared cautious and prudent, but also chose the Thai baht, which has not become a regional currency since the 1980s.Because although the interest rates in Indonesia and the Philippines are higher than those in Thailand, the Indonesian exchange rate is often manipulated by the Indonesian government, making it less likely to be speculative. The Philippines also has more controls on the foreign exchange market, and it is also inconvenient to let go of a war to determine the outcome.In contrast, Thailand has the most open financial market among Southeast Asian countries, with free capital entry and exit; in addition to high interest rates, the Thai baht has been pegged to the US dollar for a long time, the exchange rate is quite stable, and the risk is minimal; on the other hand, Thailand's economy is "fake" prosperity The boom is the most prosperous, and the sluggish real estate market is dragging down the financial industry, which was originally rich in pockets. Therefore, the market value of the Thai baht is actually the most unstable and the easiest to break. The reason why Soros took Taimo as a knife is that he took a fancy to the above-mentioned favorable conditions. This is called "capture the thief first and capture the king". After breaking the Thai fortress, he will be able to completely sweep Southeast Asia.In this way, Soros ordered his subordinates to secretly transfer the funds to Southeast Asia, so that when the final opportunity is ripe, they can land in Southeast Asia in a large scale and catch these people who are still in their dreams by surprise. Soros finally quietly declared war on the Southeast Asian countries. March 3, 1997.The Central Bank of Thailand announced that nine domestic finance companies and one housing loan company had problems with low asset quality and insufficient liquidity.Soros and his staff believed that this was a hint of possible deeper problems in Thailand's financial system, so they preemptively ordered the selling of stocks in Thai banks and financial companies, and depositors withdrew a large number of funds in all financial and securities companies in Thailand.At this time, the Western shock funds headed by Soros, who were holding a large number of Southeast Asian currencies, sold the Thai baht in a large scale. 26.70 baht.The Central Bank of Thailand devoted all its efforts to launching an anti-encirclement and suppression campaign against Soros in mid-to-late May, with the intention of overcoming Soros' will and making him retreat from difficulties and no longer lead the crowd to attack the Thai baht. The Central Bank of Thailand formed a coalition with Singapore in the first step, spending about 12 billion U.S. dollars to absorb Thai money; the second step followed Mahathir’s strategy and tactics in 1994, and strictly prohibited local banks from lending Thai money to Singapore through administrative orders. Ross army; the third step is to substantially increase the interest rate, the overnight interest rate from about 10% to 1000 to 1500%.A three-pronged approach, cutting-edge weapons, and a strong counterattack caused Tamo to rise to a new high of 2520 on May 20. Due to the sudden tightening of money and the sharp increase in interest costs, the Soros army was caught off guard and lost 300 million US dollars, which was a blow to the head. However, Soros is still Soros after all.Based on his intuition, Soros believed that the central bank of Thailand could do nothing more than this. After the Thais tried their best, they did not put themselves in a desperate situation, and the losses they suffered were relatively small. relatively minor.In a way, Soros thought he had won.For the Southeast Asian countries, the initial victory is just a flashback before the imminent disaster, which cannot hurt their vitality at all, nor can they save the fate of the financial crisis in Southeast Asia. Soros has been trying his best for this opportunity for several years, and this time he came prepared and determined to win.A setback for the vanguard will not let it go, and Soros will have three battles in Southeast Asia. In June 1997, Soros sent troops again. He ordered the armed forces to reinvigorate and ordered hedging funds to start selling US treasury bonds to raise funds, expanding the size of Soros' army, and launched a fierce attack on the Thai baht again in the second half of the year.In an instant, the flames of war in Southeast Asia's financial market resurfaced, and the smoke filled the air. The opposing sides launched a hand-to-hand combat. Thailand was in chaos, and the war situation was complicated. The major exchanges were like boiling hot soup, and people went crazy. Running and howling. This is a personal war against the state, which seems inconceivable in form; however, it is even more puzzling in terms of results. The Central Bank of Thailand, which has only a measly US$30 billion in foreign exchange reserves, declared after a short battle that it was "out of ammunition and food." Facing the overwhelming Soros army, they were unable to keep the Thai baht at a fixed exchange rate.The Thais had to come up with a last resort, to dig meat to mend the sores, and implement a floating exchange rate.Unexpectedly, this was already expected by Soros, and he also made various preparations for it.Various countermeasures were implemented one after another, and the fate of the Thai baht was set on a shameful cross by Soros.The Thai baht continued to decline. On July 24, the Thai baht fell to 32.5:1 against the U.S. dollar, hitting a record low. It was slaughtered by Soros. . However, after breaking the Thai baht city, Soros was not satisfied with it. He concluded that the Thai baht would depreciate and other currencies would also collapse, so he ordered to continue to expand the results and sweep the entire Southeast Asia.Soros vowed secretly that this time he would sweep up all the countries in Southeast Asia, and extinguish the dream of these ignorant people who tried to replace the West with the West. Hearing that the Soros army was stirring up trouble and could not come through the clouds, other Southeast Asian countries put all their strength into a desperate resistance.The Philippines sold 2.5 billion U.S. dollars, and Malaysia sold 1 billion U.S. dollars to stabilize their currencies, but it was difficult to prevent the depreciation of the peso and ringgit in the face of Soros' powerful offensive.At the same time, the Indonesian rupiah and the Singapore dollar also fluctuated violently. For a while, the money market in Southeast Asia was full of wind and fire.Is this a harbinger of a financial crisis, or the tail end of a financial turmoil?I am afraid that no one dares to jump to conclusions. Perhaps only one person knows the secret, and he is Soros. Fourth Quarter Hurricane Soros Most people who have fought against Soros, whenever they talk about him, they don't feel the color change when they talk about "Suoros".Some called him the devil, others called him an angel.However, Soros is undoubtedly a very energetic figure. In the world, I am afraid that only North American hurricanes can be compared with him: before the wind blows, no one can predict it; The ruins, the charcoal of the living beings, a scene of cruelty.Immediately after the incident, there was no trace again, and the wind and sun were beautiful, illuminating all things. At that time, the British Empire emptied all its treasury and exhausted tens of billions of dollars, trying to stop the attack of Soros, a North American hurricane. However, the power of the once invincible British Dynasty has long since faded away. After all, it failed to defeat Soros. , was forced to depreciate the pound by 15%, and at the same time withdrew from the unified exchange rate mechanism of the European currency blue one by one.Soros alone caused the most serious trauma to the process of European unified currency.So far, the British and Europeans who have not yet recovered their vitality still hate Soros. When they mentioned Soros, they repeatedly cursed him as "Sherlock" (the Jewish businessman in Shakespeare, a money addict).Through this campaign, Soros added another billion dollars to his bank account.Afterwards, Hurricane Soros swept south again. During the financial crisis in Mexico, this big Latin American country was almost destroyed and its family was ruined, making a lot of money. This time, Hurricane Soros traveled across the oceans, traveled thousands of miles, and took great pains to attack many small tigers in Southeast Asia. Although he attacked three times and was unwilling to give up, he won a complete victory in the end, making these hundreds of millions of small rich people feel panic All day long, all day long, I was busy praying for the mercy of the Savior. Soros' massive crusade against the vassal states in Southeast Asia really taught them a lesson. With the frenzy of selling Thai baht and snapping up dollars, a large number of factories began to close down, companies reduced their staff one after another, prices rose sharply, and the living standards of urban residents dropped sharply.In the silent attack launched by Soros, July 29, 1997.The governor of the Central Bank of Thailand voluntarily announced his resignation, and before that, Thailand's deputy prime minister and finance minister in charge of the economy had returned home with hatred. The furious Malaysian Prime Minister Mahathir sternly named and scolded Soros, while the frustrated Thais vowed to bring Soros to justice and bring him back to Thailand for sentencing. Silence, silence, Soros didn't say a word, and later he simply said that his subordinates did it. He Iceman didn't know anything at all, and so on.As for Stanley Druckenmiller, the general manager of the Soros Fund, after the depreciation of the Thai Bowl, he was overjoyed and couldn't restrain his inner joy.Announce loudly: "we won!" Following the Thai campaign, Hurricane Soros soon swept through Indonesia, the largest country in Southeast Asia.In an instant, "Black Monday" appeared in Indonesia, the Indonesian rupiah slumped sharply, and the people panicked to buy US dollars. Since July 21, the exchange rate of the Indonesian rupiah has fallen sharply, and its decline has broken the historical record. From the beginning of the year As of August 20, the Indonesian rupiah has depreciated by about 23% against the U.S. dollar, far exceeding the annual target of 5%-6% set by the government’s wishful thinking. The depreciation rate is so large that it is second only to Thailand in Southeast Asia. Affected by the exchange rate, the stock composite index of the Jakarta stock market also fell again and again. In the first three months of August alone, it fell by more than 20%, and fell by 150.55 points within one month. Indonesian banking circles, economic circles and the general public cried ground, beating his chest and stamping his feet. After the depreciation of the Indonesian rupiah, the most obvious impact on the Indonesian economy is the sharp increase in the cost of the manufacturing industry, which mainly imports raw materials, resulting in a sharp rise in the prices of products including automobiles and computers, price increases of construction materials, and prices of major daily necessities. It was also up 5% to 13%.Economists in the industry believe that rising prices will push this year's inflation rate from below the expected 6% to above 8%.Due to the depreciation of the dong market, due to the regional system of currency interest rates, the debts of various companies have increased by 100% overnight, which will lead to a further increase in Indonesia's external debt, which currently exceeds US$110 billion. The power of Hurricane Soros can be seen from this. Soros's prostitution in Southeast Asia has shocked the planet we live in: people in the political and economic circles of various countries in the world have responded in various ways. As the lingering power of the Soros shock wave was still in force, it quickly spread to the Brazilian stock market and the Polish currency zloty, and then attacked Singapore, Taiwan and Greece, prompting the U.S. Treasury Department and the International Monetary Fund to be in a position due to financial turmoil in Southeast Asia. A state of high alert and a fall in the value of currencies and securities from Asia to Latin America and Eastern Europe. On July 17, the scrambled Greek government admitted that they had to back up the drachma (Greek currency) with $800 million from the treasury as speculators piled on bets that the drachma would fall. The instability has rattled the International Monetary Fund and U.S. government officials.They still remember the crisis caused by Soros' trouble in Luxigo in 1994 and 1995.It was that crisis that threw luxico into a deep recession and shook financial markets, a senior clinton administration official said: "we are of course in close touch with the iMF, and they are of course in touch with the affected countries close contact." "We do take this very seriously," said Jack Boorman, head of the IMF's policy and research department. "We have concerns about individual countries and that there may be some kind of contagion from one market to another that might start to occur feeling anxious. On July 19, the Thai currency experienced a sharp depreciation. Just before that, the "darling" of Central Europe, the Czech Republic, announced that it would abandon the fixed exchange rate and replace it with a floating exchange rate.On the far side of the Pacific Ocean—one hemisphere also had immediate repercussions: Brazil and Argentina in Latin America felt the earthquake, their stock markets generally fell, and there were rumors that the Brazilian currency, the real, would depreciate.In this way, the index of the São Paulo Stock Exchange, the largest stock exchange in Latin America, fell by 15%, which is equivalent to a 1200-point drop in the Dow Jones Industrial Average. Hurricane Soros has the potential to have a boomerang effect that threatens the US economy itself, especially if it continues to spread. "If there's more unrest like this, it's going to bring more uncertainty around the world, and that's not good for any country," said Anthony Chen, chief economist at Bank One Investments, a Columbus bank in Ohio. ." Soros's manipulation of the financial markets caused the government and trade deficits of many developing countries to surge.This will ultimately hold back their until recently rapidly growing economies, which in turn may affect U.S. exports of goods and services to these countries.Currency devaluation may help these countries sell more products abroad, but at the same time make American products much more expensive, especially as the dollar strengthens."This is the main danger facing the U.S. economy," said Thea Ratayuan, senior economist at McGraw-Hill Research Finance in Lexington, Mass. Soros, it seems, has not always brought back philanthropic money to America.Perhaps one day, he too will be some type of persona non grata in America.Appendix 1 French "Libération" published an article: Currency Typhoon Sweeps Asia After getting drunk on tequila shochu, now you're getting drunk on sake?Will the sudden financial crisis affect all emerging countries in Southeast Asia?Since Thailand's devaluation (by 20% on July 2), countries in the region, from Kuala Lumpur to Jakarta, Yangon to Manila, have experienced currency crises."This is just the beginning. What we see now is just a small firecracker before the fireworks are set off," said Deutsche Bank's chief economist for Asia Pacific. He believes that the shock wave caused by the depreciation of the Thai baht may affect To more than a dozen emerging countries in Asia, Eastern Europe and Latin America. So far, the domino effect of the devaluation of the Thai baht has had a huge impact on the currencies of the Philippines, Indonesia, Myanmar and Malaysia.On Friday (11th), under the pressure of speculators, the Philippines had to allow its currency, the peso, to fluctuate and depreciate by nearly 7% in a few hours.On the same day, Myanmar’s kyat also hit an all-time low on the free market: 240 kyat to the U.S. dollar (the ratio has remained around 160:1 for months before falling a few weeks ago) the trend of). The shift in relative prices has had an impact on merchandise trade: the prices of some imported items rose by nearly 30% in a few days.Speculation in the ringgit (Malaysian currency) was rampant, and Malaysia became a victim.For this reason, the Central Bank of Jijiangpo had to decide on Friday (11th) to raise the interest rate from 9% to 50% the previous day.In this way, the cost of speculative activities (from bank loans to sales in the market) increases at once. The most powerful country in the region, Japan, is trying to put out the fire.The Japanese authorities decided to provide US$1 billion in funding to maintain the stability of the Thai baht.The purpose of this move is to prevent another catastrophe like the 1994 Mexican financial crisis.Tokyo is also trying to get the Asian Development Bank to do the same.Hong Kong and Singapore are also involved in the rescue operation.According to relevant sources, Bangkok is seeking US$20 billion in aid.A delegation from the International Monetary Fund has arrived in Thailand to find out the current situation of the financial crisis here and take corresponding measures as soon as possible. So far, the take-off of Asian countries has been a model for people to learn from.How, then, should these "surprises" be explained?"Most of the countries in the region are facing industrial overinvestment, a real estate crisis, rising imports, slowing economic growth and structural inadequacies," said Fadile Rakoua, economist at Savings & Trust in charge of emerging countries. question. The cause of Thailand's financial collapse was real estate speculation. In mid-May, those domestic and foreign investors who have invested a lot of money in financial institutions investing in real estate found that the profits of these financial institutions have not been as good as before.These financial institutions have invested a total of 230 billion francs in the real estate sector and are unable to repay loans totaling 70 billion francs.Of the 100,000 square meters of office buildings that have been completed, more than half cannot find buyers.This is only an estimated figure.All in all, most financial institutions are unable to repay funds borrowed from international markets.Skepticism begins, which turns into fear of disaster.With economic growth slowing (Thailand's growth rate is likely to be 3.5 percent this year, compared with 7 percent in 1996 and 8 percent in 1995), there is less and less hope for Thai banks and foreign investors to recoup their investments.Money was lost just like that. After the speculative bubble burst, various vulnerabilities in Thailand's system began to show.The first is the fragility of the exchange rate regime.The Thai baht is primarily pegged to the U.S. dollar.For more than a year, the dollar has been rising against other major currencies.For Thailand, an increase in the dollar exchange rate means a decline in exports.Next is competition from China, India and Vietnam: Thailand's exports also face low-wage competition, which has forced some entrepreneurs to move to lower-wage regions. As a result, Thailand's relevant economic indicators have become very dangerous in the eyes of many experts. Whether it is the Philippines, Indonesia (Myanmar or Malaysia), these countries have more or less in common with Thailand. In order to help domestic disease-ridden banks, to make up for trade deficits, and to expand industrial investment, these countries must draw from international markets. Borrowing money. However, as these countries realize today, foreign investment (which has long been the engine of these economies) can actually be both good and bad. Those once confident investors and speculators are always on the lookout In order to ensure the stability of the domestic currency, the countries concerned have little choice but to raise interest rates sharply, which in turn will stifle economic activity. (French "Liberation", July 14, 1997) Appendix II "Nihon Keizai Shimbun" contains: Asian economies are increasingly uncertain Currency turmoil, which began with a plunge in the Thai baht, has again cast doubt on the outlook for the Asian economy, which has begun to recover.On the 14th, Thailand significantly lowered its growth rate estimate. In addition, the export speed of Hong Kong and Singapore slowed down significantly.The degree of dependence on intra-regional trade is large, so changes in the economic situation of some countries and regions have begun to cause people to worry that it will affect the recovery of the entire Asian economy. The Central Bank of Thailand lowered its estimate of the GDP growth rate in 1997 from 7.1% to 5.9% in late June, and then lowered it to 4.6% on the 14th.The loss of the exchange difference caused by the actual devaluation of the currency will make Saam Cement Company, the largest manufacturer in the country, also face losses, and in short, it will greatly affect the profitability of the enterprise.After the real estate bubble economy that existed in the past burst, domestic demand slumped, and car sales from January to May fell by 12.5% ​​from the same period of the previous year. Exports in the Philippines are in good shape, with a record 5% growth rate in January-March, but, like Thailand, there is a disturbing situation in the real estate market, coupled with the need to raise interest rates to protect the national currency, the peso , which will directly hit the domestic economy.A person from a local securities company said: "If the high interest rate policy persists for a long time, it will definitely have an impact on equipment investment and corporate financing. Following Thailand and the Philippines, Malaysia and Indonesia, whose currencies are turbulent, are expected to grow by around 8% this year, but if their currencies continue to fluctuate.The government's plan to develop the economy is bound to be disrupted.38% of exports and 37% of direct investment of East Asian countries excluding Japan were directed within the region."Intra-regional dependence is increasing. Currency turmoil has a huge impact on the economies of other parts of Southeast Asia," said a securities analyst in Thailand. in addition.The currencies of Hong Kong and Singapore have not been volatile, but there are concerns that it will affect exports.Electrical machinery and electronic instruments account for 70% of Singapore's exports. Since the demand is not strong, since 1997, except for April, exports have decreased compared with the same period of the previous year.The same is true for Hong Kong, where exports faltered in January-May.由于中国的劳务费提高等原因，把生产据点迁往中国的香港企业的竞争力也受到了影响。 台湾1一3月的经济增长率是6．8％，但是，由于发生猪传染病而给有关产业罩上了一层阴影：另外，经济增长率也由6．28％下调到6．24％。中国经济虽然很坚挺，上半年的增长率可望超过10％，但是，问题仍然很多，例如国有企业的开工率下降等等。 亚洲货币的动荡对口本经济也将产生影响，东亚在日本的出口中占的比罩由1900年的30％增加到了1995年的42％。日本同亚洲经济的关系比以往任何时候都密切。 日本在海外建立的企业多数是从日本购买机器和部件，当地的货币贬值使劳务费增加，迸而影响当地法人的盈利。另外，高利率引起市场冷清也是令人担心的因素。现在已经有人担心他说： "如果当地法人的分红减少，就会影响总公司的收入，甚至有的企业没有利润。" （日本《日本经济新闻》，1997年7月15日）