Chapter 1350: Sooner or later, they will be worn out

After intense and heated discussions, the Reserve Bank of Australia discussed and worked out a preliminary response plan.

The first is to empty all currencies other than the US dollar and Australian dollar, and temporarily settle foreign trade transactions in US dollars. At the same time, sell the national debt of the United Kingdom, the United States and other countries to withdraw US dollars and increase US dollar foreign exchange reserves.

The second is to raise the short-term loan interest rate to increase the cost of shorting the currency.

Third, persuade New Zealand, the United Kingdom and other countries to assist in repelling the short sellers.

Fourth, borrow money from other countries, international financial institutions and organisations such as the World Bank to increase the foreign exchange reserves in US dollars.

After the discussion, Jack Staff immediately went to the Australian Treasury to report the situation to the Minister of Finance, Paul John.

Most of these measures require approval and implementation at the national level.

There is no doubt that Paul John agreed to implement all these measures after consulting with Prime Minister Bob Lake.

Soon afterwards, the Reserve Bank of Australia announced a new short-term lending rate, which was raised from 14.745% to 22.117%.

Some speculative capital, seeing the Australian government's fierce response, immediately backed off.

The Reserve Bank of Australia also mobilised funds to buy Australian dollars, and the Australian dollar's exchange rate against the US dollar immediately stopped declining.

The Reserve Bank of Australia and the many institutions that had been mobilised in Australia took in as much as the short sellers threw out, at the cost of a steady drain on the US dollar reserves.

However, the exchange rate of the Australian dollar against the US dollar finally stabilised at around 0.9135.

Although it had fallen compared to its peak, the Australian central bank was satisfied.

At this time, on Wall Street in the United States, something was happening that could decide the fate of Australia.

Bridgewater Associates and Tiger Management jointly hosted a meeting, inviting Wall Street financial tycoons who were very keen on the Australian foreign exchange market to meet and hold a symposium.

Of course, the main purpose of the participants was to find out the true attitude of Ray Dalio and Julian Robertson, so as to decide whether or not to place a bet and how big the bet should be.

'Ray, the reaction of the Australian central bank was very fierce, and it seems that they were scared by the result in Canada,'

Warren Perv, vice president of Merrill Lynch, said with a smile, his eyes fixed on Rey Dario's face.

Rey Dario kept smiling and said without haste, 'Their reaction has strengthened my confidence even more. We only tested the water a little and the RBA has thrown in such a big chip.'

'Compared to future benefits, what is this interest cost? Frightened hot money is destined to always eat rubbish from the back.'

Belarusian Vice President Douglas Dwight narrowed his eyes and smiled, adding, 'Benefits and risks go hand in hand. Without the determination to win, you are indeed not qualified to enjoy the delicious big cake.'

At this point, James Simons, the president of Renaissance Technologies, pushed his glasses up and looked at Julian Robertson, who had not spoken since he sat down next to Ray Dalio. He asked, 'Julian, we're here today to help you, and we'd like to earn some fees in the process. As friends, shouldn't you give us some insight?'

Everyone else also focused their attention on Julian Robertson, the other protagonist.

Julian Robertson smiled: 'In fact, when we are all sitting together, I can no longer predict how far we can actually go.'

'But I do know one thing: Australia can definitely not stop our alliance.'

'When I was previously working out with Ray, regarding a collaboration between our two funds, we had a success rate of over 60%.'

'Now here, with Merrill Lynch, Bear Stearns, Lehman Brothers, GNA, Renaissance, Goldman Sachs... I can't think of a reason to fail.'

'Even if we attack the pound or the franc, we are likely to succeed.'

'How low the Australian dollar will fall depends entirely on you. You want to make as much profit as possible, don't you?'

'Popping...'

'Julian, you are right. If we all work together, we can drive most of Wall Street's capital to follow. Previously, Canada could not be stopped, and now Australia will be even more unstoppable.'

...

During this meeting, no details were discussed, because although everyone was a partner, they were also competitors.

The Australian pie is right there, and how much you can eat depends entirely on your respective strengths.

Now everyone is unsure of how much capital will be used to enter the market later, and they don't want to reveal the details.

Anyway, the general framework has been set, and everyone is confident enough, which is enough.

After everyone left, Ray Dalio and Julian Robertson smiled at each other and decided to start the second phase of the attack.

The first stage of probing attacks has roughly revealed the Australian central bank's true colours, and through this meeting, they have also won over enough helpers. Now they must quickly take advantage of the fact that the Australian central bank still has money and the exchange rate has not plummeted, and cash out at a high price to get the dollars back.

It's time to share the burden of crashing the market.

If it's too late, and other capital enters the market, it will drive down the Australian dollar exchange rate, and every point that it falls will be a loss!

In the first stage, 3 billion Australian dollars were sold, and at this time, the two funds still had a cumulative total of 15.27 billion Australian dollars in their hands.

Without further ado, the word is 'sell'!

The two funds once again began to sell Australian dollars continuously.

In this second stage, it was not as large-scale as in the first stage, but the focus was on shipping out at high prices, consuming Australia's US dollar foreign exchange, and naturally controlling the intensity.

Millions of Australian dollars and tens of millions of Australian dollars were sold on this scale, and the proceeds were constantly recovered in US dollars.

Once they noticed that the bulls were trying to launch a fierce attack to regain lost ground, Bridgewater and Tiger Funds simply fought back without saying a word, absolutely not letting the bulls get a foothold, and just obediently getting their wool sheared.

After a week, although the Australian dollar-US dollar exchange rate did not collapse significantly, it was driven below 0.91, and the bulls gradually showed signs of fatigue.

In just one week, Bridgewater and Tiger Funds alone sold as much as 9.2 billion Australian dollars, and withdrew 8.22 billion US dollars.

This amount of US dollars far exceeds the previous foreign exchange reserves of the Australian central bank. Although a large part of the Australian dollars sold by the two funds was eaten up by long institutions in Australia and abroad, the foreign exchange reserves of the Australian central bank were also depleted.

Fortunately, the governments of New Zealand and the United Kingdom combined to borrow 6 billion US dollars, and then sold other foreign currencies to raise 4.2 billion US dollars, which allowed the Australian central bank to still have some reserves.

However, only 5.38 billion US dollars of foreign exchange reserves in US dollars remained.

From the 1st to the 8th, the Australian central bank's US dollar foreign exchange reserves had been depleted by a total of US$11.69 billion!

The Australian government was nervous.

The Australian Treasurer, Paul John, urgently summoned the central bank president, Jack Staff, and at the same time convened a think tank to discuss the situation. It was decided to launch a fierce attack to reverse the downward trend and attract international hot money to help strengthen the Australian dollar exchange rate.

If they relied on themselves to defend the exchange rate, they would be worn down sooner or later!