novelraw Chapter 614: Shorting Japan
Chapter 614: Shorting Japan
[Chapter 614: Shorting Japan]
On the afternoon of October 15th, Linton received a phone call from Richard; there might be major changes in the Japanese financial markets.
Linton rushed to Skycrest Hedge Fund.
Inside the meeting room, Richard and Willix reported to Linton together.
"Boss, the trading volume in the Japanese foreign exchange market surged today. From 9:00 AM until now, the volume has already Breakthrough 600 billion USD, which is more than three times the daily volume from the previous period."
"Therefore, we judge that the Wall Street investment banks led by Soros have likely entered the market in force. Next, the Japanese government certainly won't give in easily; there will surely be a fierce struggle."
"To avoid risks, we just closed all our short positions in the foreign exchange market. We plan to wait and see for a while, entering the market again after they have determined a winner."
"Not bad. Tell me about your gains from the previous period."
"Boss, ever since you told us at the end of August that Soros and the Wall Street investment banks had their eyes on Japan, South Korea, and Taiwan, we made arrangements in those three places."
"Actually, at that time, the Southeast Asia financial crisis also had a significant impact on these places. Take Japan for example; the Yen depreciated from 115 Yen per Dollar in early July to 125 Yen per Dollar, a depreciation of over 10%."
"The impact on the stock market was equally profound. The Nikkei Index fell from its peak of 20,910.79 at the end of June to 18,251. In just over a month, it dropped by more than 2,700 points, and the stock market value fell from 7.5 trillion USD to 6.7 trillion USD, with over 800 billion USD evaporating directly."
"It seems the Southeast Asia financial crisis had a massive impact on them as well."
"Yes, it really did. Starting in mid-August, the Southeast Asia financial crisis was brought under control, and the stock markets in these places began to rise slowly. The Yen's exchange rate against the Dollar also started to recover. Everyone thought the financial storm on Japan, South Korea, and Taiwan would end."
"But after receiving your information at the end of August, we took action in these three places. First, we spent 1.5 billion USD, 1 billion USD, and 500 million USD respectively to short the stock index futures of Japan, South Korea, and Taiwan expiring in December."
"You shorted their stock index futures at that time? Was there anyone to take the other side of the trade?"
"Well, it's because they all thought the financial crisis was over. At that time, the stock markets in those places were slowly rebounding, and the confidence of the local governments and the public was recovering. Otherwise, someone might not necessarily have taken our short orders. Even then, it took several days to complete the transactions."
"Good, well done. Now, how are their stock market indices?"
"They've all fallen by more than 4%. Japan's stock index fell from our average purchase point of 18,610 to 17,780. Our profit has already exceeded 40%."
"Good. You haven't closed the stock index futures positions, have you?"
"Of course not. Didn't you say Soros and the Wall Street investment banks would move against them? The current decline is far from the end; there will definitely be a massive drop later on."
"Good. What else?"
"Afterward, in mid-September, we invested 500 million USD, 300 million USD, and 200 million USD respectively in the foreign exchange markets of these places, using 10x leverage to short their currencies in waves."
"As of this morning, we noticed a huge increase in volume in the Japanese foreign exchange market. We judged that the five major Wall Street investment banks and Soros have entered the market. To avoid being liquidated by their market manipulation, we closed all our short positions in the foreign exchange market."
"However, the harvest was also good. Over twenty days of continuous short-term operations, our total profit in the foreign exchange markets of these three places exceeded 400 million USD."
"Good, you did the right thing. Learn from experience. Soros and his group have massive capital. In the current situation where the outlook is unclear, it is indeed a wise choice to avoid them."
"Boss, since Soros and the others have started a massive offensive, I reckon the Japanese government won't just sit and wait for death. They will definitely use their foreign exchange reserves. Japan is the largest holder of foreign exchange reserves, with over 200 billion USD. This battle might not be decided so quickly, right?"
"Willix, you're right, but that's under normal circumstances. Normally, with so much in foreign exchange reserves, the Japanese government should be able to handle various crises."
"But this time is different. Do you know how much capital Soros and the five major Wall Street investment banks have invested?"
"How much?"
"Over 1.5 trillion USD. More importantly, this shorting of Japan, South Korea, and Taiwan has the support of the America government. The State Department, the Department of the Treasury, The Pentagon, and the Federal Reserve are all involved."
"Boss, if that's the case, Little Japan is doomed this time."
"Let's put it this way: these places are primarily export-oriented economies. Previously, with the support of America, their economies grew extremely fast. But at the same time, at America's request, they completely opened up their financial markets before their local financial systems were fully developed."
"This essentially left a backdoor that America's financial speculators can attack at any time. Once America launches a financial attack on them, their financial markets become like a sieve full of holes."
"In fact, whether it's Japan, South Korea, or Taiwan, in the eyes of the America high-level, they are all like penned-up cattle and sheep that can be harvested at any time. Now that the livestock is fat, the master feels it's time to harvest. What can they use to resist? Being conquered is an inevitable result."
This was the first time Richard and Willix had heard such a cruel truth, and they were both somewhat stunned. "So that's how it is?"
"Actually, there's one more thing you shouldn't forget. Besides the main capital from Soros and the five major Wall Street investment banks, those who shorted Southeast Asia last time also included global speculative capital following the trend. This speculative capital is at least in the trillions of dollars."
"Once the Japanese government can no longer hold out, guess whether this speculative capital will swarm in to kick them while they're down."
After hearing this, Richard's confidence was restored. "Yes, yes, yes. Looking at it this way, we need to keep our eyes wide open during this period and constantly monitor the battle in the Japanese foreign exchange market. We need to find the right timing to enter the market promptly so we can feast on the succulent meat."
Willix also said, "Boss, I think we can monitor the depletion of the Japanese government's foreign exchange reserves to judge our entry timing. When their reserves are almost exhausted, we should enter the market decisively."
"Before that, I think we should mainly wait and see. At most, we can use small amounts of capital for short-term operations. This way, we can better observe the main capital flows of both sides without taking too much risk."
"Alright, let's proceed with that strategy. We still need to have a bit more patience at this time."
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