George Soros
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Can anyone explain to me what he did during Black Wednesday and also how did he contribute to the Asian Financial Crisis in 1997?
Is his strategy or business acumen so powerful that he can crippled many nation's currency value example England, Malaysia... etc...
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google is your friend...
but what Soros is doing is what the US is doing.. creating money out of nothing.. a house of cards and nothing else..
a long article here but it's worth a read.. clicky here => US$370 Trillion in Derivatives -
He is quite a guy ...One of my idols...But he made a lot of people jobless and bankrupt overnight...
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wah chim. read until blur.Originally posted by the Bear:google is your friend...
but what Soros is doing is what the US is doing.. creating money out of nothing.. a house of cards and nothing else..
a long article here but it's worth a read.. clicky here => US$370 Trillion in Derivatives -
what it says is simple..
too much manipulation of the finance market creating money out of nothing.. such that a guy making $12.50 an hour can get a home loan of $300,000 and using that debt, they can use it again and again leveraging until it becomes a $10.5 million bunch of securities... which are options, futures, forward and stuff like that... they are nothing other than paper and are not backed by real things...
something, from a $100 deposit in a bank, the bank can use that to "make a $1,000 loan" and still be within its rights if the authorities say it must be 10% capitalised.. but there is still capital..
the US is doing stuff like that.. and lending to people who have bad credit ratings because they can charge higher interest..
ultimately, something will give.. the bubble will burst..
it happened to Japan before..Originally posted by ChoCoChips:wah chim. read until blur. -
Yeap.. google indeed my friend... but all the articles abt his doings so long and chim.....Originally posted by the Bear:google is your friend...
but what Soros is doing is what the US is doing.. creating money out of nothing.. a house of cards and nothing else..
a long article here but it's worth a read.. clicky here => US$370 Trillion in Derivatives -
It's because of Thailand's adoption of the Fixed Exchange Rate, that is they will change 25 Baht : 1 USD, irrespective of whether that level is acceptable by the foreign exchange market. Soros knows that the rate is of 25 Baht : 1 USD is too high for the Thai Baht, so he anticipated that the Baht will drop to maybe say 33 Baht : 1 USD. So he short (speculative selling) the Thai Baht, the Thai central bank defended the Fixed Exchange Rate with their foreign reserves, as soon as the reserves ran out, the Fixed Exchange Rate is no longer supported, in the end the Thai Baht fell. So all Soros has to do is to buy back the contract that he sold short.
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To understand the Asian Economic Crisis you need to understand 3 technical concepts in Finance.
1. Currency peg - a system where the government fix currency exchange at a rate say 1USD = 35Baht. This is to say their currency would not fluctuate unlike Singapore where you have to check the exchange rates daily.
2. Current account deficit - The country is importing more goods than exporting
3.Short selling - e.g. Borrowing Thai currency for 30 days from another friend (pay him 30 day interest), then sell on the currency market today, buy Thai currency back (with USD) and return to friend 30 days later.The Seller is betting the Thai currency would drop in 30 days, hence making a profit from the decline.
In the case of Thailand, Indonesia and South Korea, they have chalked up huge current account deficits (Importing more than Exporting). The extra imports was financed primarily by borrowing - they have lots of debts especially in USD.
What the currency speculators did was they knew the Asian countries had so much US Debt, that if one day all the creditors decide to ask for money, their foreign reserves would collapse maintaining the artificially high currency peg.
They began their attack on the currency by short selling Thai currency. Many other vultures joined in the attack because they saw the Thai currency with so much US debt has little chance of appreciating but a high likelihood to depreciate.( Nothing to lose, much to gain)
When the Central Bank of Thailand's foreign reserves were depleted, it became pandemonium. For Foreign investors holding Thai Currency, they saw they Thai currency depreciating in seconds. Being fearful, the converted their Thai investments in US currency which caused a further decline in the currency. A further decline spark a greater panic causing more investors to withdraw their investments and convert to US currency spuring another cycle of further decline.
The Rupiah for example fell from 1USD to 2000 Rupiah to 1USD to 18,000 rupiah.
The value of the currency has depreciated 11% of its original value at one point.
If i did remember correctly, George Soros didnt really make much from that crisis. Even if he didnt short sell the currencies, they are plenty other hedge funds that would attack an unstable economic system.
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He got the Guts to leverage so much...
If I were Him... I dun tink I dare to do so... me learning how to take calculated risk now... -
He said at Raffles City that we are "not an open society", and ignited a near standing ovation.
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I just love the way the crazy bigot up north crack up with his ant-semitic rants ... -
We must keep our foreign reserves strong and confidential oso...
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or you could say that we might actually be doing what Soros does?Originally posted by sunny6110:We must keep our foreign reserves strong and confidential oso... -
let's bring down the thai baht and the rupiah ! ....Originally posted by LazerLordz:or you could say that we might actually be doing what Soros does? -
some other currency can... but i dunno whether we can live to see that day anot...Originally posted by Fatum:let's bring down the thai baht and the rupiah ! .... -
I don't think we need to do that..they're pretty low as they are..Originally posted by Fatum:let's bring down the thai baht and the rupiah ! .... -
did you merely repeat that from the PAP propaganda? Can you explain how keeping foreign reserves confidential can protect a managed-float system from currency speculators?Originally posted by sunny6110:We must keep our foreign reserves strong and confidential oso...
Hong Kong is transparent about its reserves
http://www.info.gov.hk/hkma/eng/exchange/index.htm
http://www.info.gov.hk/hkma/eng/reserves/trans_ex_fund.htm -
well ... if speculators don't know the size of the reserves, they wouldn't be able to know the extent to which a goverment can defend it's currency rates, eh ? ....Originally posted by kilua:did you merely repeat that from the PAP propaganda? Can you explain how keeping foreign reserves confidential can protect a managed-float system from currency speculators?
Hong Kong is transparent about its reserves
http://www.info.gov.hk/hkma/eng/exchange/index.htm
http://www.info.gov.hk/hkma/eng/reserves/trans_ex_fund.htm
of course hong kong can be open about their reserves ... they are not a country after all, but a city in China ... and who can fight against the chinese dragon, who can toss a TRILLION US around just to seed an investment fund ? ...
in any case, the yuan is not a free float, and it's also under-valued .... -
Chrtistians like to say that Jews are so smart and rich and powerful because they are "God's people".... actually the truth is that their religion Judaism has a Rabbinical tradition that says "God does not expect you to use half your brains... God gave you a full brain and so you are to use a whole brain" Unfortunately the religious descendants' of Judaism.. you know the two main branches... never got that part and indulge in many stupid beliefs...Originally posted by Fatum:I just love the way the crazy bigot up north crack up with his ant-semitic rants ... -
Keep it confidential until even Ong Teng Cheong the elected president cannot get an accurate account of it when he asked... hahaha Singaporeans believe it is still there? or will it be like the Philippines reserves that disappear with Marcos when he stepped down?Originally posted by kilua:did you merely repeat that from the PAP propaganda? Can you explain how keeping foreign reserves confidential can protect a managed-float system from currency speculators? -
My explanation is abt the same as Fatum... If u followed my posts... Some of things I agree wif the gov... Some I dun....Originally posted by kilua:did you merely repeat that from the PAP propaganda? Can you explain how keeping foreign reserves confidential can protect a managed-float system from currency speculators?
Hong Kong is transparent about its reserves
http://www.info.gov.hk/hkma/eng/exchange/index.htm
http://www.info.gov.hk/hkma/eng/reserves/trans_ex_fund.htm
The way I see... Sg may hv offended many pple/countries the way she wants Her to be 1st world/world-class, clean gov and strict laws....
I see the way Sg grows its economy is pissing many off by acquiring other banks, telcos, airlines and other impt infrastructures...
Who knows one day they might gang up and plan a silence attack(financial) against Us... All the more we must keep our foreign reserves confidential... -
well ... if speculators don't know the size of the reserves, they wouldn't be able to know the extent to which a goverment can defend it's currency rates, eh ? ....
Letting the speculators know the huge size of our reserves would deter them...
of course hong kong can be open about their reserves ... they are not a country after all, but a city in China ... and who can fight against the chinese dragon, who can toss a TRILLION US around just to seed an investment fund ? ...
in any case, the yuan is not a free float, and it's also under-valued ....
unless there is not enough money inside than what is really claimed
Besides can you explain why would they want to attack a floating system when the correct value of the currency would be accurately reflected by market forces?
Also during 97, China had not accumulated their reserves yet, and Hong Kong is already transparent on their reserves. -
The Shin Corp incident shows that we can bring down governments.Originally posted by Fatum:let's bring down the thai baht and the rupiah ! ....
Why bother with trivial things like currencies? -
U dun know wat other have and other might hv more advantage wif more information... to be on the safe side... I rather not want to be known...Originally posted by kilua:Letting the speculators know the huge size of our reserves would deter them...
unless there is not enough money inside than what is really claimed
our currency allow us to be "Appreciating", "Neutral" or "Depreciating"... It's set to allow our currency to be "gradually appreciating" now... Again ... it's better to be confidential so that no particular country will say that we are pinpointing their currency while we allow our dollar to be "gradually appreciating"Originally posted by kilua:Besides can you explain why would they want to attack a floating system when the correct value of the currency would be accurately reflected by market forces?
Also during 97, China had not accumulated their reserves yet, and Hong Kong is already transparent on their reserves. -
the yuan is not a free float my dear, as i have mentioned ... and do you think our foreign reserves of a measly hundred plus billion or so will make a dent in anything ? (the figure is up on the net, go look it up ... :lolOriginally posted by kilua:Letting the speculators know the huge size of our reserves would deter them...
unless there is not enough money inside than what is really claimed
Besides can you explain why would they want to attack a floating system when the correct value of the currency would be accurately reflected by market forces?
Also during 97, China had not accumulated their reserves yet, and Hong Kong is already transparent on their reserves.
... even if hong kong depletes their own holdings, one of the largest in the world btw ... China the master would still be behind them ... after executing the financial secretary perhaps ... sides, you don't wear a one dan karate belt around everywhere if you have one eh, cos the other chaps are just going to send a 3 dan fella against you, no ? ...
a floated currency is the only one you can attack through the financial system, my dear ... that's the only was you can make money speculating currencies, right ? ... ... otherwise, you'd have to wait for inflation to kick in and the country would have two different exchange rate, the official one, and the black market one ... 
... rule number one of economics ... there's no such thing as the "correct" value, the equilibrium, that's probably the word you were looking for ... is only the "perceived" value .. according to current market sentiments ... if you can shake that sentiment in any market, there is going to be market adjustment ... precisely what happened in china recently ... a "tulip" phenomenon ...
I understand where you're coming from ... the better question would be, how can we achieve accountability in our reserves, neh ? ....
in any case .... I better go google further around a bit ... there seems to be an awful lot of info on singapore's reserves around ... how ironic it would be if it's not really a secret after all eh ...