Chapter 1301: Canada's financial time bomb

The Toronto 300 Index in Canada was compiled in January 1977 and consists of the 300 stocks with the highest trading volume.

As of the latest statistics, these 300 stocks include 27 financial services companies, 52 metals, mining and gold companies, 60 oil and gas companies, 15 utility companies, 39 industrial products companies, 21 consumer goods manufacturing companies, 13 transportation and pipeline transportation companies, 13 mixed joint companies, 26 commodity trading companies, and 34 other types of companies.

Since the Toronto 300 Index was compiled in 1977, the Canadian stock market has been on a long bull run. It started at around 1,000 points, and although it fell for a while in 1980 due to the oil crisis, by March 1984 it had surged to around 2,300 points.

In seven years, it more than doubled!

And from 1980 to the present day, it has been rising almost straight up.

The persistently high unemployment rate did not have an impact on the Canadian stock market. More people firmly believed that the Canadian stock market would become even more prosperous, and they invested capital in the Canadian stock market, fuelling its prosperity.

In addition, from 1982 onwards, the Canadian government suspended the control of monetary supply indicators and allowed domestic interest rates to fluctuate in tandem with or higher than US interest rates, which accelerated the inflow of foreign capital into Canada and further stimulated the prosperity of the Canadian stock market.

In terms of exchange rates, the Canadian dollar was weak from 1980 to 1982, but from the second half of 1982 onwards, with the adjustment of Canada's policy interest rate, it attracted large-scale foreign capital inflows into Canada, which continuously pushed up the exchange rate of the Canadian dollar.

Entering 1984, benefiting from Canada's strong stock market and artificial manipulation, the exchange rate of the Canadian dollar rose again, reaching a high of 0.8285 points as of March.

The rise in the Canadian dollar exchange rate naturally boosted the strength of the bulls and their willingness to increase their capital.

As for the Canadian bond market, due to the 'see-saw effect', the stock market has been rising for a long time, while the bond market has been on a long-term downward trend.

Under these circumstances, Xia Yu's funds have been pouring into Canada, especially the Canadian bond market and bond futures, which have been continuously buying.

Of course, more funds are still sitting idle, hovering at the doorstep of Canada.

This is not to say that Xia Yu has not moved in the stock and foreign exchange markets.

In response to the stock and foreign exchange markets, Xia Yu is the short side.

However, Xia Yu is not just shorting for profits, he also plans to buy the bottom later, so naturally some of his funds will have to enter Canada, which in turn will further push up the Canadian dollar exchange rate.

Compared to letting large amounts of capital enter Canada later and pushing up the exchange rate, Xia Yu of course chose to enter earlier. Although there would be losses after the Canadian dollar exchange rate was hit later, he was completely confident that he could hedge against the losses.

Whether it was simply to blow up the Canadian dollar exchange rate to make a quick buck, or to reap the assets of Canadian companies, Xia Yu of course knew what was important.

However, as time entered April, the atmosphere in the Canadian financial market gradually became strange.

The capital power of short selling in the Canadian foreign exchange market and stock market gradually increased, and the two casinos became bigger and bigger.

Although the risk also increased sharply, capital is not afraid of risk. Both long and short positions continued to increase their bets, and each side firmly believed that they would win!

Major Canadian banks and securities companies were the main long positions.

The short sellers are mainly financial companies from the Chicago Consortium, such as the Bank of Illinois, CNA Financial, First National Bank of Chicago, Northern Trust, Harris Trust and Savings Bank, etc.

It can be said that the financial companies of the Chicago Consortium are the biggest flag among the short sellers.

The big gambling table, which is hiding a storm, has attracted the influx of hot money from all over the world, such as Europe, the island countries, the Middle East and Australia, which have then taken sides.

No one knows when this time bomb will go off, and everyone waits with bated breath, raising the stakes...

At this time, Xia Yu is not at all anxious. He has other things on his mind.

First, he completes the establishment of the Yanhuang Society and the Blue Star Society, and then studies the financial markets of various European countries.

When George Berkeley reported to him that the UK had introduced the Telecommunications Act, which would privatise British Telecom and sell 50.2% of the shares to the public and company employees, Xia Yu told George Berkeley to join the battle for the shares, and then gave him instructions for action on the West German and Austrian stock markets.

The Guangming Fund had already entered West Germany, and in 1981, when the West German stock index was fluctuating around 500 points, it went to the bottom to buy.

Sure enough, between 1982 and the first half of 1983, the West German stock market experienced a surge, reaching a high of 800 points, and then stabilised for most of the year.

This time, Xia Yu judged that the West German stock market would soar again, and the West German stock index was expected to double, with the prospect of reaching 1,600 points, so he told Guangming Fund to place another big bet before the bull market came.

The West German branch was in charge, while George Berkeley had to personally take care of the Austrian branch.

...

The Austrian stock exchange is currently a quiet market that is only open a few hours a week. There are less than 30 stocks and fewer than 20 members, but it has an extremely glorious history.

Before the First World War, the Austro-Hungarian Empire had not yet disintegrated. As the stock exchange of the Austro-Hungarian Empire, the Vienna Stock Exchange was the largest exchange in Central Europe at the time, with the largest market share, and its status was like that of New York and Tokyo today.

Unfortunately, all flowers do not bloom for a hundred days. With the disintegration of the Austro-Hungarian Empire, Austria is now just a small country in Central Europe, with a land area of just over 80,000 square kilometres and a population of 7.56 million.

In terms of GDP, it was 72.121 billion US dollars in 1983, 1.57 times that of Hong Kong.

Of course, with Austria's population and GDP, the financial market should not have developed into such a state.

In particular, in February 1984, the Austrian stock market, with less than 30 stocks, was even worse, and the stock market fell to half of its 1961 level.

The hearts of the few investors who were still interested in stocks were cold.

The Austrian government was helpless despite its anxiety.

It was under these circumstances that George Berkeley, a European financial magnate, came to Austria and held a normal social gathering, inviting only local Austrian tycoons.

With the end of the party, the news of George Berkeley's arrival naturally spread throughout the Austrian upper class.

Troy Wopel, the current chairman of the Vienna Stock Exchange, had a brainstorm and went straight to visit his boss, Ulysses Myron, the Austrian deputy finance minister and director of the Financial Market Authority.