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Chapter 225 Crisis and Opportunity

21days ago Urban Novels 5
After Christmas, the following festival is the Meat Festival, which is the well-known Carnival

In Brazil, where there are many Catholics, Carnival can be said to be the largest festival among the people. Its day is chosen on the third day after the Catholic Fai Festival. At this time of year, Sao Paulo becomes extremely noisy

However, compared with previous years, the carnival in recent years seems destined to be unveiled in a deserted atmosphere.

Since Christmas, in just half a month, inflation problems have emerged fiercely throughout Brazil again. The Cruzero currency has once again depreciated sharply. Government regulation has been in full force. People have lost the last bit of confidence in Brazil's currency. People who exchange US dollar hard currency have filled banks every day.

This depreciation trend originated from the lending information in Brasilia. According to the report of the São Paulo Le, Congress has just passed a new foreign debt project of up to $36 billion.

At the same time, in the just-arrived year, Brazil's foreign debt and interest that it needs to pay back was as high as US$38 billion.

In other words, the Brasilian government has completely fallen into a foreign debt crisis. The dead cycle of raising new debts to repay old debts indicates the bankruptcy of the country's finances. Cruzero, a national currency pledged by national credit, naturally lost its value.

How fast is Cruzero depreciating?

To give an interesting example, it was opened in the Walmart shopping mall on Paulista Street. In order to cope with the depreciation of Cruzero, it specially hired more than a dozen workers to post price tags. Within a day, the price tags of the same product may change more than a dozen times, or even more.

There is an ironic joke among the citizens of St. Paul: The cost of taking a bus is more expensive than taking a taxi, because taking a bus is paid when getting on the bus, while taking a taxi is paid when getting off.

As we go to the destination, the taxi price has depreciated to a lower price than the bus price

The astonishing depreciation of the currency, the continuous surge in unemployment, and the deterioration of the security environment have made every Brazilian's tolerance reach its peak.

Anger and dissatisfaction spread among the public, brewing, and the entire Brazilian society has reached the brink of breaking and collapse

At the same time, the military is frequently showing its existence, and the threat of the military government's comeback is overwhelming the entire Brasilia

Perhaps most Brazilians cannot understand that Brazil, once known as the most powerful country in South America, has indeed reached the edge of the cliff this year.

The rapid depreciation of the currency also caused huge economic losses to Li Zaian and his Morio organization.

Those who sell drugs in the street corners cannot charge their guests US dollars, which is equivalent to keeping guests out.

The consequences of collecting Cruzero mean that the organization has to bear the losses of currency depreciation.

The most troublesome thing is that as the US dollar becomes popular throughout Brazil, a large number of counterfeit US dollar bills have begun to enter the market.

Just over half a month after Christmas, the Morio organization executed thirteen people. The reason for these people was killed was that they used counterfeit US dollars to buy drugs sold by Morio.

Of course, such economic losses are not a big deal for Li Zaian personally. After all, in addition to the Morio organization, he also has a Pi Fund.

Cruzero's huge depreciation also means that Pie funds can choose speculative projects more easily and obtain more amazing speculative profits.

The second week after Christmas is the end of the year for Sao Paulo Bank to review several business-related funds.

Before this, Pie Fund sold all the Vietnamese bank bonds they held. This speculative operation caused Pie Fund to receive nearly 8 million US dollars in dividends, with a profit margin of more than 160%.

Although it is only a hedge fund that has been established for more than a year, in this year's bank evaluation, Pi Fund still obtained a 3A rating from São Paulo Bank with its only few high-profit investments, becoming the most potential and investment value hedge fund in São Paulo State.

After the evaluation, Sao Paulo Bank adjusted the credit limit of the Pie Fund and ruled that the fund's guaranteed fund holdings were US$30 million. This ruling means that the Pie Fund can be based on US$30 million. During speculative operations, the funds for leverage operations will exceed US$100 million.

High input and high output, this principle also applies in the financial industry

The increase in credit limit, especially the increase in leverage limit, means that in future operations, the amount of funds that Pii funds can use will be larger, and the profit will naturally be more abundant.

Faced with the good development momentum of Pie Fund, Li Zai'an made his next investment plan, and his eyes were aimed at the seemingly calm international gold market.

Just a few months ago, a currency crisis that swept almost the entire Europe and disrupted the stable operation of the entire international currency market. It was a well-deserved disaster.

After this crisis, Europe, especially Western Europe, Southern Europe and Northern Europe, the currency exchange rate market continues to turbulent, and central banks of various countries have also strengthened supervision in this area. Therefore, the trend of international hot money withdrawing from this field is very obvious.

There is no opportunity for speculation in the international currency market in the short term, which does not mean that a large amount of international hot money will calm down. Bloodthirst is the nature of this monster, and it can hardly be idle for a moment.

A common sense in the investment field is: When the money market is in a depression, it often means that the gold market will have a prosperous future.

This is not difficult to understand. Most people think this way. When money cannot maintain value, the first thing they consider is to buy gold that can maintain value. This way of thinking creates opportunities for the continuity of international hot money.

Li Zaian carefully observed the price changes in the international gold spot market since October last year and found that the gold spot trading volume has steadily increased since November, but the international gold price has always hovered around US$330 per ounce.

In January 1992, the highest peak of international gold prices was 329 per ounce per ounce

$45, the lowest trough is 327

$55, the price fluctuates and is cold and cold

Li Zaian believes that this is the last cold before the market appears. If nothing unexpected happens, the huge amount of international hot money should have moved to the periphery of the international gold market, and perhaps a large part of it has entered the market.

When hedge funds speculate on a certain field, they all have their own stages.

Take the speculation in the international gold market as an example. Generally speaking, they will choose a so-called expected market that will inevitably cause sharp fluctuations in gold prices. This market may be a country rich in gold that announces suspension of production or increase production, or a large-scale financial crisis breaks out, etc.

Before this market emerged, hedge funds that manipulated a large number of hot money were the first to enter the gold market, suppressing gold prices on the market, pushing gold prices down to obtain cheap chips

When the gold price reaches their psychological expectations, they will continue to suppress the gold price on the market on the one hand, and buy on the dip off the market on the other hand

This process usually lasts for one to two weeks, but under normal circumstances, it will not exceed two weeks

Why two weeks?

Because gold has a psychological lowest price in the market. With the continuous suppression of hot money on the gold price on the market and the continuous absorption of off-market, the gold price will be lower than this psychological lowest price.

What followed was the rising bull market after a continuous decline

As experts in this kind of operation, hedge funds will not go against the trend, not to mention that in the previous operation, their funds have been consumed almost the same. Therefore, they will buy from off-market to inside the market at this time, and use the rise of the bull market to push up the gold price and earn the first round of profits.

The operation of hedge funds will not last only for one round. There is a saying in the international gold market that the five waves are the main rise, which means that such speculative operations will often lead to five rounds of rise in gold prices. According to Li Zaian's estimate, once this operation is achieved, after the fifth round of main wave, the international gold price will be expected to break through the high price of US$430 per ounce.

After this high price, the price plummeted in the international gold market. Those who do not leave the market at the right time will lose all their belongings.

Li Zai'an's ambitions in the Pie Fund are not very big. He never thought of entering the market and taking over the banker. He just wanted to imitate vultures and hide aside to swallow some corpse and carrion. Therefore, the risk of this operation is also not very big.

In addition to the affairs of Pii Fund, Li Zai'an is still concerned about the establishment of offshore companies during this period. The two companies established in the Virgin Islands have become the capital turnover bridge between Pii Fund and Antong Kexin Company.

Funds transferred from the Pie Fund will be transferred between two companies established in the Virgin Islands, and finally enter the Antong Kexin Company, which directly operates online gambling business, and then enters the ATOC.com, which directly operates online gambling business.

Since the Virgin Islands and Panama do not accept international bank supervision, it is difficult for people who do not understand the inside story to find out the connection between Pi Fund and Antong Kexin Company.

At the same time, Antong Kexin Company's business has also achieved preliminary results. A software technology company called Bird accepted the company's orders. They will develop a client software system dedicated to online gambling for Antong Kexin Company within six months.

As for the network architecture and server rental, ATOKIC also seeks cooperation with international communication companies. Stimulated by the annual rent of $7 million, the International Communications Company accepted ATOKIC's services including server rental, maintenance and network architecture.

As of now, there is still a problem of payment method for Antong Kexin to be officially put into operation. Without an Internet payment platform, Li Zaian must find a bank of a certain size to take over this business, and this matter is difficult to operate.