Chapter 2192 Let the enemy make weapons for me (page 12)
During periods of economic prosperity, people will feel optimistic about future expectations, banks will be more willing to take risks, and lending will become easier.
In this matter, people always prefer to borrow money to spend money, but they hate saving money and repaying money. Moreover, people are used to judging the future based on past experience. They will be inertial and artificial income will continue to rise and housing prices will continue to skyrocket, so they will borrow a lot of money without hesitation. Invest in real estate.
This often leads to inflation.
Managers will also relax credit because they need more liquidity to maintain economic prosperity. Therefore, during the debt repayment cycle, when spending declines and the economy stalls, policymakers will usually release stimulus measures, causing the debt to break through the critical point of equilibrium, thus Towards the bubble.
The combination of these factors will definitely turn liabilities from benign to bubbles.
This is a rule, an inevitable result, and what Chen Mo calls the "Tao" that cannot be violated.
When a debt bubble reaches its peak, it will turn around and enter a downward self-reinforcing cycle.
In the down cycle, due to reduced consumption, falling income, and increased defaults, banks have doubts about the borrower's ability to repay the loan. Not only will they not continue to borrow money, but they will ask you to repay in advance, corporate cash flow will be in crisis, and defaults will further increase...
When economic growth slows down and people become pessimistic about the future, investments tend to be conservative and assets are sold, housing prices will plummet.
In the capital market, human psychology is dominated by two emotions: greed and fear.
The prosperous first half was controlled by greed;
The second half of the recession was dominated by panic.
When the debt cycle reaches the explosion stage, panic will completely dominate people's psychology, and a debt crisis will occur.
Therefore, the real estate bubble in the dominant country will definitely burst, and the subprime mortgage crisis is inevitable.
Unless it is in a boom cycle, you can control the hand of the person who released the water.
But everyone knows that this is not in line with human nature and the needs of hegemonic politicians.
From 2004 to 2006, during the two years when housing prices in Hegemony skyrocketed, Hegemony's economy was also in a honeymoon period of low inflation and high growth. Under such favorable conditions, Hegemony officials adopted a laissez-faire attitude toward bubbles.
In 2007, the hegemonic economy was experiencing a round of moderate inflation. Monetary policy was torn between controlling inflation and maintaining housing prices, but ultimately policymakers chose to prioritize controlling inflation.
This is because the politicians of the hegemonic country are very selfish. They are essentially the spokespersons of capital. Who is willing to take the responsibility of exacerbating inflation?
However, after experiencing rebirth, Chen Mo knew that in order to maintain the economy, the financial experts and senior officials of Hegemony were drinking poison to quench their thirst, and they were crazy about making up all kinds of lies to trick the people of Hegemony into continuing to buy houses and related bonds, while they themselves were going crazy. Sell, go ashore.
In the real estate industry, once there is no liquidity, life and death are basically instantaneous. A house without liquidity is like a blood-sucking tumor, sucking up cash flow.
Chen Mo himself is engaged in real estate. He knows that the high returns of real estate companies are achieved through high leverage, high liquidity, and high cycle operations. Without liquidity, how can the dominant real estate companies operate in high cycles?
Therefore, Chen Mo is confident that he can amplify the thunder of the subprime mortgage crisis before the elites of the hegemonic country, including the foundation, come ashore, and then detonate it directly, which can directly blow up the entire real estate of the hegemonic country! ! !
Once the industry accounting for 173% of GDP is completely disrupted, the entire industrial chain of Naha country will be involved, and no one will be spared!
Jiang Pengyue was silent for a long time, then spoke again: "It's not that I don't believe you, it's just that the biggest reason why a hegemonic country is strong is not its combat power, but because it controls the international currency!"
"In fact, the international currency status of the hegemonic currency cannot be shaken. It can be said that the hegemonic country has kidnapped the whole world with its hegemonic currency and made the world pay for its economy."
"As long as it suffers any losses, it only needs to print money like crazy and let the hegemonic currency depreciate slightly to make up for the losses, transfer the risk to the whole world, and let the whole world pay for its losses."
"Under such circumstances, it will be difficult for the hegemony to be destroyed even if it wants to!"
Chen Mo nodded: "That's the truth, but if the risk reaches a point where the whole world can't bear it, who would dare to pay for the hegemon's losses?
Countries around the world will take the initiative to decouple from the hegemonic currency to avoid financial risks.
At this time, our Daxia Coin has the opportunity to replace it! "
Jiang Pengyue licked her lips and still shook her head: "This is the theory. But there are still many flaws and problems."
“First, if you want to short the behemoth Hegemonic Real Estate, it is equivalent to going against the foundation, Hegemony and all the top powerful and wealthy people in the world.
The short-selling funds you need are so huge that it will be unimaginable!
If you use all your own wealth, I'm afraid it's just a drop in the bucket. Where do you plan to raise such a huge amount of short-selling funds? "
"Second, let's put aside all the talk of what is and what is not. Even if you want to short Baguo real estate, there are no financial products on the market to short Baguo real estate!
Your short selling will be carried out against certain real estate companies or banks that hold real estate shares. The best result is that a certain real estate company or a certain bank will be destroyed.
I'm afraid this won't have much impact on the entire Baguo real estate, right?
How do you deal with this? "
Chen Mofeng said calmly: "I can raise funds for short selling with the members of the Hongmeng Club."
"As for the financial product you mentioned... I can ask the central bank of Hegemony to make a financial instrument specifically for me! A financial tool for shorting Hegemony's real estate, and then I will buy it."
Jiang Pengyue: "???"
She couldn't believe her ears! ! !
Let the central bank of the overlord give you a financial product specifically designed to short the real estate of the overlord?
are you crazy?
Is there any country that dares to launch financial products that shake the very foundation of its own country?
"Just wait and see the good show!"
Chen Mo started his "coin throwing" action that day.
He flew directly to the central bank of the overlord country, found the manager and explained his purpose.
"I would like to ask our bank to customize a credit default swap product for me - CDS..."
Soon, Chen Mo explained the concept of CDS clearly to the stunned eyes of bank executives.
Before talking about CDS, we must first understand another term - MBS.
In order to quickly withdraw funds and earn interest, banks in overlord countries will package multiple mortgage IOUs into a bond (or you can understand it as a financial product) and sell them to investors, and this bond is MBS.
Generally speaking, those who buy this kind of bonds are the top investment banks in the hegemony, such as Gaosheng and Mogen.
The bank lends money to the lender, gets the lender's IOU, packages it into MBS, and sells it to the investment bank. The investment bank gives the bank cash to ensure that the bank can continue to lend money.
This business became a kind of funding cycle.
for example.
Chen Mo wanted to buy a house and found a bank for a loan of 100 million with an interest rate of 5%.
