CHAPTER 1836: CHAPTER 1661: DEFENDING THE ASIA DOLLAR

Myanmar.

Xin’an City.

A quiet Tea House.

Everyone sat in a circle, drinking tea. Tang Kai wasn’t unreasonably generous; he took out the tea leaves given by Tang Qing to avoid these people coming back to ask for more and making it awkward for Tang Qing to refuse.

"Do you think this time there will be an inflation outbreak, with money losing its value?"

Sipping from a cup.

A local family head voiced his concern.

Just at the meeting.

Didn’t dare bring it up.

But it didn’t mean they weren’t worried. A large issuance of currency leading to inflation is basic financial knowledge. If there’s too much money and it’s worthless, it’d be troublesome.

"Why didn’t you ask earlier?"

"Would you dare?"

"Nope."

"So there you have it."

"Actually, you guys should look at it from another angle. In any country, as long as it’s in a period of rapid development, inflation is unavoidable. But as long as the exchange rate doesn’t fluctuate much, there’s nothing to fear."

"Inflation mainly refers to the decline in currency purchasing power, domestic goods, and asset prices rising. But do you think it will happen when raw material prices aren’t fully marketized?"

"It won’t. In the Myanmar Economic Zone, food, vegetables, meat, and industrial raw materials are price-regulated by the Myanmar Bank Group to stabilize terminal consumer market prices."

"As long as this hole isn’t plugged, people’s currency purchasing power won’t change much. The price of rice per jin last year to its increase in the first half of this year is less than three percent."

"The average person barely notices."

"Salaries still feel sufficient."

"However, the stability of commodity prices is due to policies and price controls. Asset prices are rising, so inflation isn’t our concern; it’s a matter for the general public."

"The exchange rate."

"That is the standard that determines the absolute value of our wealth."

Miao Yin analyzed.

Sipped his tea.

Continued.

"Currently, the exchange rate is determined by a fixed exchange rate system, controlled directly by the Myanmar Central Bank. Coupled with foreign exchange regulation, short-term changes won’t be significant unless someone shorts the Asia Dollar."

"However, this route is temporarily not feasible. The Myanmar Central Bank has not relaxed borrowing of the Asia Dollar by foreign capital, similar to Soros shorting the Thai Baht—that’s just wishful thinking."

"In the future, as the circulation of the Asia Dollar increases, a floating exchange rate will undoubtedly be implemented, but this doesn’t mean our wealth will significantly depreciate."

"How to avoid depreciation?"

"Firstly, of course, is the exchange rate system."

"Secondly, are the Myanmar Group’s products, which can earn a lot of wealth from other countries."

"Lastly, it’s us."

"Why are we encouraged to invest in foreign trade enterprises and expand the circulation of the Asia Dollar? It’s to earn more and form an internal loop to protect the Asia Dollar’s value."

Upon hearing this.

Some tilted their heads.

Feeling like they were about to lose the explanation!

Internal loop?

What kind of loop?

Shook their heads.

Miao Yin felt that these old friends focused too much on making money, rarely considering higher intentions. Fortunately, having a son in charge of economic policy design broadened his own vision significantly.

"What’s an internal loop?" someone asked.

Miao Yin chuckled.

"Let’s give an example: previously, if we imported wood and others didn’t accept the Asia Dollar, we had to give them foreign currency. As a result, foreign exchange reserves decreased, and so did our ability to withstand exchange rate shocks."

"Now, even if they accept the Asia Dollar, they might turn around to exchange it for dollars or euros with our central bank, leading to a similar reduction in foreign exchange reserves."

"However, if we acquire this company and settle in Asia Dollar, do we need to exchange it for dollars? No, we can hold it long-term."

"If someone wants to short the Asia Dollar."

"Like Soros shorting the Thai Baht, there has to be followers selling off too, those holding Baht—businesses, individuals, finance capital, and foreign exchange management organizations around the world."

"A gust and one-sidedness."

"Very dangerous."

"But if we form an internal loop, the Asia Dollar earned by our overseas investment companies wouldn’t join the sell-off crowd, reducing speculators’ brewing storm."

"Even, the foreign exchange we earn can, conversely, bankrupt the short-sellers."

Speaking to this point.

Miao Yin couldn’t help but admire the brilliance of this move.

Through the Chamber of Commerce.

Binding everyone together.

Through expansion.

Enhancing the Asia Dollar’s ’self-protective capability.’

If these foreign trade companies, controlled by them, continue to expand, even if only a third of Myanmar’s foreign trade demand is controlled by the Myanmar Group, it will have a significant impact.

Anyone trying to short.

Has to consider.

Whether following capital has the capability to topple the Asia Dollar structure. As long as this third is stable, it could influence the other third of conservative capital, leaving the remainder unable to cause a large ripple.

...

Qingyan City.

Manor.

After listening to Miao Yin’s words.

Tang Qing just smiled; there are indeed many smart people in the world to foresee these benefits at a deeper level. Indeed, having them acquire foreign trade enterprises is also due to this reason.

Foreigners making money.

A lot exchange to foreign currency and leave, becoming uncontrollable capital.

In the future.

As Myanmar Group companies gradually control Myanmar’s major imports, the Asia Dollars earned become stable capital, not affected by short-selling capital, significantly maintaining the stability of the Asia Dollar exchange rate.

...

Tea House.

With this explanation, everyone nodded in agreement.

Impressive.

They didn’t expect such deep meaning; as long as they don’t betray the Asia Dollar, it won’t be easy for outsiders to shake it. And would they betray? Silly, why dig one’s own grave?

The exchange rate.

Determines their absolute value of wealth.

Protecting the Asia Dollar.

Is protecting their core interests.

"But will other holders not be affected."

Besides companies and individuals.

There are international financial institutions and foreign exchange management agencies.

"As long as the main commodity trade is secured, the issue isn’t too big. Individuals don’t hold much generally, and financial institutions wanting to bank loan the Asia Dollar here is not that simple."

"Regarding foreign exchange management agencies, it’s a risk, so we must strive hard. As long as we’re strong enough, we can give them enough reservations to prevent quickly siding one way."

In discussing kicking someone when they’re down.

Miao Yin feels the last party is also a significant risk.

Quite simply.

You give someone a project loan, they owe you, good, debts must be repaid. If they borrow in Asia Dollar and repay in Asia Dollar, they’d surely welcome depreciation of the Asia Dollar to reduce the repayment amount later.

A 20% depreciation.

Equates to 20% less to repay.

World.

Is indeed ’cruel’ like this.

Morality doesn’t matter, it’s merely a form of capital’s profit-making behavior, and therefore, their existence is necessary.