novelraw Chapter 635 635: Revenge, Soros's Defeat in Hong Kong
Chapter 635 635: Revenge, Soros's Defeat in Hong Kong
[Chapter 635: Revenge, Soros's Defeat in Hong Kong]
While Linton was busy with Oscar PR every day, time unknowingly slipped into late February.
The Skycrest Hedge Fund, which had been closely monitoring the financial markets of Hong Kong, also received significant news.
Since early December of the previous year, the Skycrest Hedge Fund had followed the Jewish financial predators in stirring up trouble in Taiwan, looting 4.2 billion USD and acquiring a 10% stake in TSMC at a bargain price.
Following that, the financial looting in Asia ceased. Linton distributed 15% of the profits earned throughout the Asian financial crisis — totaling nearly 5 billion USD — to the operations team and gave them a full month's vacation, prompting everyone on the team to cheer 'Boss'.
However, Linton did not withdraw the remaining 28.5 billion USD in profit; instead, he kept it in the investment fund's account to continue searching for investment opportunities.
Afterward, Linton kept the two team leaders, Richard and Willix, behind to assign a new task: to closely monitor Soros's actions in the Hong Kong financial market.
"I have insider information that Soros's next target is Hong Kong. I want you to monitor it closely and gather all kinds of information."
During the profit distribution, Richard and Willix each received 1 billion USD. This instantly propelled them across numerous social strata, elevating them to the ranks of America's top elites. They were immensely grateful to Linton, following his every word while remaining filled with a strong sense of initiative and drive.
Upon hearing about the opportunity to make big money in the Hong Kong Island financial market, their eyes immediately lit up. Willix chimed in, "Boss, since there's action in the Hong Kong financial market, why are we still taking a vacation? Let's cancel it. Such an opportunity to make big money is too rare to pass up."
Linton doused their enthusiasm. "No, we won't be participating in Soros's looting of the Hong Kong financial market this time."
"Why?"
"Because I feel this time is different. The risks will be very high, and it's highly likely that Soros will meet his Waterloo."
"Boss, no way. We even crushed Japan and South Korea with ease. How can tiny Hong Kong possibly hold out?"
"Don't forget that Hong Kong was returned to the Chinese government last July. This means Hong Kong now has a powerful backer. If Soros attacks the Hong Kong capital market, the Chinese central government certainly won't stand idly by. Furthermore, Hong Kong's foreign exchange reserves exceed 90 billion USD, and mainland China's reserves are as high as 130 billion USD. Together, the two regions have over 220 billion USD in foreign exchange reserves. Their strength is far from ordinary."
Richard said doubtfully, "Boss, even with Hong Kong and China combined, it might not be enough. I remember Japan's foreign exchange reserves also exceeded 210 billion USD, yet they were still soundly defeated. You have to realize that the shorting capital Soros has gathered is as high as a trillion dollars."
Linton shook his head. "Compared to Japan and South Korea, there is another fundamental difference with Hong Kong."
"What difference?"
"Political independence."
"Political independence? What does that mean? I don't understand."
"Do you really think that when we attacked the financial markets of countries like Japan and South Korea, we relied solely on capital strength?"
Richard caught on. "Oh, I see. Actually, the most important factor was the support of the American government from behind."
Seeing that Willix still looked confused, he continued to explain, "Take Japan, for example. When their financial markets couldn't withstand the attack, they actually could have adjusted their financial policies, strengthened controls over the exchange rate and capital markets, and established financial control firewalls.
For instance, they could have significantly raised overnight lending rates, restricted financial institutions from lending stocks to foreign capital for shorting, or even limited the daily amount of foreign capital inflow and outflow.
However, all these methods that could effectively defend against attacks from external financial predators were prohibited by the American government in the name of the sacred and inviolable principles of market economics and financial freedom.
Precisely because their financial markets were fully open to us without any firewalls, we were able to attack them freely.
Otherwise, no matter how much shorting capital we had, it would have been useless, and we couldn't have achieved such great results."
Willix also understood. "Boss, are you saying that if Hong Kong is attacked by Soros, they might use administrative measures to intervene, adjust financial policies, and strengthen controls over the exchange rate and capital markets?"
Linton nodded. "That's inevitable. Who would willingly stand by and watch themselves be robbed by predators in broad daylight?"
"But aren't they afraid of threats from the American government?"
"If Hong Kong were still in the hands of the British, they would certainly not dare to offend America and would have to swallow the bitter pill of being robbed. But unfortunately, Hong Kong was returned last July. China isn't afraid of America; they have the strength to say no to them."
Richard and Willix gasped. "In that case, it seems Soros really does have a chance of suffering a crushing defeat in his attack on the Hong Kong Island financial market this time."
"That's why we won't be participating in their attack on the Hong Kong financial market this time."
Richard and Willix both nodded. "Understood."
"Do you want revenge?'
Richard immediately became indignant. "Of course. I'll always remember when we were precisely set up and cheated out of 500 million USD in the Thai foreign exchange market."
Willix also realized. "Boss, you mean since the risk of Soros failing is so high, we can turn the tables and screw them over instead?"
Linton nodded and continued, "Yes, I believe there will be many opportunities for revenge. Of course, we can't act rashly. We must strike at the most critical moment with absolute certainty to achieve an unexpected effect. If we're going to do it, we must ensure it's effective — both to avenge being cheated and to earn massive profits. Otherwise, it's better not to do it at all. Understand?"
Richard and Willix nodded simultaneously. "Boss, we understand."
"Good. From now on, all other financial operations are to cease. Closely monitor Soros's funds and information related to the Hong Kong financial market. Notify me immediately of any important news."
...
As Linton had expected, the Wall Street financial predators, led by Soros, turned their sights on Hong Kong in December.
However, Hong Kong was different from other places. Strictly speaking, the Hong Kong Dollar could not be considered an independent currency; its monetary policy was known as the "Linked Exchange Rate System."
This meant the Hong Kong Dollar was directly pegged to the US Dollar. For every Hong Kong Dollar a bank issued, it had to pay 0.128 USD (at a rate of 7.8:1) to the Hong Kong Monetary Authority. This was recorded in the Foreign Exchange Fund accounts, and banknotes could only be printed after receiving a Certificate of Indebtedness.
Due to this unique monetary policy, the US Dollars held by the Foreign Exchange Fund provided support for the stability of the Hong Kong Dollar. Consequently, the currency remained firm, making shorting in the foreign exchange market essentially unprofitable.
Therefore, this time, Soros set his sights on — Hong Kong stocks.
At this time, although Hong Kong had not yet been directly hit by international financial predatory capital, it had already suffered a significant impact under the influence of the Asian financial crisis.
The Hang Seng Index had plummeted from 16,673 points in early July to less than 9,000 points, nearly losing half its value.
Despite the massive decline, the total market capitalization of companies listed on the Hong Kong Stock Exchange still exceeded three trillion USD, ranking sixth among global exchanges.
Their specific approach began with shorting a large volume of Hang Seng Index futures contracts.
Since the Hang Seng Index had already dropped from 16,673 points in July to a low of 8,700 points, and with the financial storms in Japan, South Korea, and Taiwan ending, the economy across Asia was rapidly recovering.
Hong Kong stocks had also begun to recover slowly. The Hang Seng Index had risen from 8,700 points in early December to nearly 9,000 points. Citizens of Hong Kong were beginning to regain confidence, believing that the stock market had reached a turning point and was entering a new bull market.
In this context, the Hang Seng Index futures contracts shorted by the financial predatory capital led by Soros were largely absorbed. By the time the financial war was launched in early January, the transaction volume for Hang Seng Index futures short positions had reached as high as 40 billion USD, with an average transaction point of 8,950.
As 1998 began, financial predators led by Soros brazenly launched an attack on the Hong Kong market.
First, they heavily sold off borrowed Hong Kong Dollars to crash the exchange rate. Prepared in advance, the Hong Kong Monetary Authority (HKMA) absorbed all the Hong Kong Dollars to stabilize the rate. Simultaneously, the HKMA rapidly increased the interbank offered rate — simply put, raising borrowing interest rates to drive the speculators' costs to the maximum.
However, this was actually a feint by Soros. The HKMA's move had a severe negative impact: the high interest rates discouraged normal borrowing and drastically reduced liquidity in the market. This led citizens to sell their stocks for cash to deposit in banks for high interest, causing the stock market to immediately turn from red to green.
Under these circumstances, Hong Kong stocks continued to decline, and investors' confidence began to waver. Meanwhile, Western-controlled media outlets like Apple Daily began to fan the flames. A massive sense of panic spread through the stock market, and fence-sitting speculators fled the market in droves, causing Hong Kong stocks to plummet.
In less than a week, the Hang Seng Index fell by 1,000 points, dropping to 8,020.
Just when everyone thought the decline was nearing its end, Soros employed even more ferocious tactics. When the market opened on the second Monday, short orders worth over 100 billion HKD appeared, causing the Hang Seng Index to crash again.
Over five consecutive working days, Soros's side sold a total of over 600 billion HKD worth of stocks. The Hang Seng Index broke through 7,000 points, falling to 6,700.
If they could maintain this position until the Hang Seng Index settlement day on the 28th of the month, the financial predators led by Soros would profit over 100 billion USD from HSI futures short contracts alone. Not to mention the profits from shorting stocks, the total profit would be at least over 1.5 trillion USD.
Soros even began to openly boast in The Wall Street Journal: "The Hong Kong Government is bound to lose."
The situation reached its most critical juncture. Any slight misstep, and the wealth Hong Kong had accumulated over decades would be completely plundered by international financial predators.
With the support of China, on Monday, January 17th, the HKMA began its move to save the market.
The specific approach was for the Hong Kong Government to use foreign exchange reserves to enter the market, buy up all the sold stocks, and drive up the Hang Seng Index.
On that day alone, the capital injected into the stock market exceeded 20 billion USD.
Of course, Soros's side was not to be outdone. They used international media to heavily criticize the Hong Kong Government for severely undermining the free market economy, and even pressured the Hong Kong Government through American diplomatic notes, while continuing to sell off Hong Kong stocks in large volumes.
Regarding the pressure from America, with the support of the Central Government, the Hong Kong Government ignored it and continued to pour massive amounts of capital into the stock market.
After a week of intense tug-of-war, the Hang Seng Index rose to 7,100 points. However, the cost to the Hong Kong Government was also enormous, estimated at over 100 billion USD of foreign exchange reserves consumed in the stock market.
More importantly, if the settlement occurred at this index level, Hong Kong would still suffer heavy losses.
The date became January 24th, another Monday, and the Hong Kong Government released even stricter financial control policies.
First, they significantly increased the overnight interbank lending rates again to increase the financial costs for Soros's side.
Second, they issued financial control orders prohibiting financial institutions from lending stocks to foreign capital. This was a masterstroke to cut off Soros's source of ammunition entirely.
As soon as these two control policies were announced, they naturally met with severe protests from America. America immediately sent a strongly-worded diplomatic note to the Hong Kong Government, demanding they stop undermining the free market economy and immediately cancel the financial control measures, while also inciting Western-controlled media to launch a propaganda war.
However, the Hong Kong Government had the full support of China's central goverment. They withstood the pressure and paid no heed to America's protests.
At the same time, they held a press conference to explain to the public that Hong Kong was facing an attack from Western financial predators and had reached its most critical moment.
To protect the wealth accumulated over decades of development in Hong Kong, they had to strike back resolutely, and they specifically criticized several biased media outlets.
That day, Apple Daily and several other Western-controlled media outlets were besieged by a large number of citizens who threw eggs and rotten vegetables at them, completely silencing them.
...
Seeing this information, Richard and Willix both believed the time to enter the market had arrived and immediately made an emergency report to Linton.
Linton was overjoyed. "Good, the time for our revenge has come. I will give you a 20 billion USD limit to go all-in on longing Hong Kong stocks."
Having received approval, Richard and Willix, who had been eager for action, immediately led their operations team into the fray, slamming 20 billion USD into the Hong Kong stock market.
Soros's side, already weakened by the loss of their ammunition source, was caught in a pincer attack by the Hong Kong Government's foreign exchange reserves and Linton's new capital. Hong Kong stocks immediately began a comprehensive rise, and the Hang Seng Index surged accordingly.
That day, the Hang Seng Index rose by 620 points, reaching 7,735.
...
If things continued to develop this way, Soros's side would not only fail to make money but might also suffer a crushing defeat. Naturally, they would not sit idly by.
They were especially infuriated when they discovered that the massive new longing capital in the market actually came from Linton's Skycrest Hedge Fund.
The Five Major Wall Street Investment Banks immediately went to the White House. First, they demanded America put even more pressure on Hong Kong; second, they asked the White House to step in and stop Linton from supporting the Hong Kong stock market.
Unfortunately, with the support of the highest levels in China, the Hong Kong Government ignored all of America's protests and orders.
As for Linton's massive long-ing in the Hong Kong stock market, others did not dare to easily offend him. In the end, Clinton had to bite the bullet and call Linton to ask for his reasons.
Linton didn't hide anything and replied directly, "Since they dared to target me with a precision strike back in Thailand and cost me 500 million USD, they shouldn't blame me for taking my revenge today."
These words left Clinton speechless, and he himself lacked the courage to question or interfere with Linton's actions. After hanging up, he truthfully informed the representatives of the Five Major Wall Street Investment Banks of the situation.
Upon hearing this news, Soros was livid but helpless. He could only add another mark to his resentment toward Linton and decided to increase funding for The Wall Street Journal, as it was currently the only outlet in the United States that dared to continuously attack and smear Linton.
In this manner, the stocks in the hands of Soros and his associates were quickly exhausted. ...
Meanwhile, the large-scale long-ing capital from the Hong Kong Government and Skycrest Hedge Fund continued. More importantly, it boosted the confidence of Hong Kong citizens in the stock market. For a time, buying orders surged, and stock prices naturally continued to rise.
On Tuesday, the Hang Seng Index rose by 613 points.
On Wednesday, the Hang Seng Index rose by 715 points.
On Thursday, the Hang Seng Index rose by 776 points.
On Friday, January 28th, the settlement day for stock index futures, the Hang Seng Index rose another 915 points, reaching 10,754 at the close.
The predatory operation by the financial predators led by Soros in Hong Kong failed completely. Not only did they make no money, but they also suffered massive losses.
From stock index futures alone, they lost 80 billion USD.
The losses on stocks would only be determined after they bought back stocks to close their positions. However, based on current stock prices, the loss would not be less than 40 billion USD.
As for Linton's Skycrest Hedge Fund, it not only got its desired revenge for the past, more importantly, it earned massive profits again. In just five working days, the paper profit on the Hong Kong stocks they held had already exceeded 20%, which was 4 billion USD.
Of course, the final profit would only be truly determined after the stocks were sold. However, there was no need to worry about the stock price falling, because the stocks Soros and the others had borrowed for shorting had a term of only one month.
In other words, by next month at the latest, they would have to spend huge sums of money to buy stocks to return them. Under these circumstances, stock prices would only rise and could not fall, making it the perfect time for Skycrest Hedge Fund to close its positions.
*****
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