章節 794: Chapter 794: The Pit for the Rothschild Family
Xia Yu slowly said, 'Sir Carter, you should know that in the second half of the 1970s, due to changes in the world economy, international banking operations have seen new developments. Therefore, a few years ago, in order to seize opportunities, banks in various countries began to implement international strategies.'
Carter Howard Duke nodded slightly in recognition, this was the truth.
It was precisely because of this change that Lloyds Bank made a strategic adjustment, shifting its focus from the UK to the international market, hoping to use the money of the Middle Eastern local tyrants to quickly grow Lloyds Bank.
It can be said that four years ago, Lloyds Bank basically operated within the UK. UK business accounted for 90% of Lloyds Bank's business, and the remaining 10% was basically contributed by markets in Commonwealth member states such as Canada and Australia. There was almost no business in Asia, Latin America, Africa and other places.
Xia Yu continued, 'Lloyds Bank's entry into the international market was not wrong, because with the integration of the global economy, it would be difficult for Lloyds Bank to rank among the ranks of the world's major banks by relying solely on domestic business in the UK, and it would even be left far behind.
'But the problem is that Lloyds Bank, due to a strategic mistake, has recklessly expanded without understanding the situation. It has only competed for market share and relaxed its risk management. Now Lloyds Bank has planted a big bomb. According to the current international economic situation, at most in one and a half years, Lloyds Bank's bomb will explode.'
'And there are two bombs, one is loans to Latin American countries, and the other is loans in the commercial real estate sector.'
Duke Carter Howard's eyes narrowed, his brow furrowed, as he looked at Xia Yu intently and asked, 'Xia Yu, are you sure? Give me a reason!'
Xia Yu questioned the strategic mistake made by Lloyds Bank, and Duke Carter Howard did not immediately refute him, because he knew Xia Yu's strength in the financial field. Regardless of whether he was right or wrong, he was definitely qualified to say such things.
He also knew that Lloyds Bank had indeed made great strides in recent years, and that it had relied on the influence of the UK and various families in Latin American countries to take a lot of shortcuts and grab a lot of business, making Lloyds Bank's total loan business in Latin American countries second only to Barclays Bank.
As for commercial real estate loans, because they are secured by physical collateral, Lloyds Bank has a relatively large and loose lending margin. Commercial real estate loans are now an important business for Lloyds Bank.
It can be said that these two businesses, which have developed after strategic adjustments, have the most significant growth rates and are very important as the two pillar businesses of Lloyds Bank.
But precisely because they are so important, he had to pay more attention to Xia Yu's words.
Xia Yu nodded emphatically and said very affirmatively, 'Of course, this is the result of research conducted by me and my think tank. I judge that the Latin American countries are already on the brink of the abyss without knowing it, and are doomed to a sovereign debt crisis!'
'Sovereign debt crisis!'
After this word came out of Xia Yu's mouth, Duke Carter Howard's expression instantly became grave, and he asked in pursuit, 'How did you come to this judgement?'
A sovereign debt crisis is no laughing matter. If it does happen, every bank involved will suffer.
What is sovereign debt?
It refers to the debt that a country borrows from other countries and banks, whether from the International Monetary Fund, the World Bank or other countries, using its sovereignty as collateral.
The reason why Latin America's sovereign debt attracts so many financial institutions is that all of them believe that Latin America's sovereignty and reputation are strong enough that lending to them will not result in losses.
As Citibank Chairman John Reed once said: 'Countries never go bankrupt!'
This statement is regarded as the guiding principle of major banks and financial institutions.
This is somewhat similar to the purchase of US Treasury bonds in later generations, believing that the United States will never go bankrupt.
Another reason why major banks lend money to Latin American countries is that they have too much money in the bank and need to find a place to spend it, and Latin American sovereign debt seems to be the most stable.
Because of the oil price hike in 1973-1974, the income of oil-exporting countries soared. These countries deposited huge amounts of oil revenue in major European banks, which were in turn mired in economic quagmire. Money was not the solution, so major banks invested the money in developing countries to make money.
That said, if a sovereign debt crisis occurs, the country's credibility will be bankrupt, which will cause the collapse of the country's financial system and even affect the international financial system. Lloyd's Bank, which is part of the international financial system, naturally cannot escape.
Not to mention that Lloyd's Bank is particularly ruthless in lending.
Seeing that Sir Carter Howard attached importance to it, Xia Yutong paused and said slowly, 'Sir Carter, we have compiled some data on Latin American countries, let me tell you first.'
'In 1971, Mexico's debt was only 50 billion US dollars, but by this year, it had risen to 71 billion US dollars.'
'However, last year, Mexico's GDP was only 112 billion US dollars, which means that the debt balance accounted for 63.4% of Mexico's GDP!'
'And Mexico's economic growth rate last year was only 8.3%, far lower than the growth rate of debt.'
'According to this trend, the debt balance will account for an increasingly large proportion of Mexico's GDP, and the leverage will become higher and higher!'
'Mexico occupies an important position in the Latin American economic system. Even if this is the case in Mexico, the situation in countries such as Brazil, Peru and Argentina is similar, if not worse.
'However, due to last year's oil crisis, high domestic inflation in the United States, and the Federal Reserve's implementation of a tight monetary policy, a large amount of capital has been forced to flow out of Latin America, which has caused changes in the debt structure of Latin American countries. The proportion of short-term debt is rising, and the proportion of Mexico's short-term debt has increased by 10% in just half a year. Therefore, the pressure on Mexico to repay its short-term debt is increasing.
'The Fed's monetary tightening has also led to a stronger US dollar, which has forced the price of commodities to fall. Countries in Latin America and other regions are extremely dependent on exports of commodities, which means that their export income is getting lower and lower, and the balance of payments is becoming more and more unbalanced.'
'The reversal of international capital flows and the rapid increase in short-term debt have coincided with the fact that Latin American countries' balance of payments cannot make ends meet, making debt default inevitable. The reason why it hasn't exploded yet is because Latin American countries can still support it.'
'However, as long as the Fed's tight monetary policy is not lifted, the situation in Latin American countries will continue to worsen, until they are finally forced to default on their sovereign debt.'
...
'Sir Carter, do you think the Federal Reserve will give up? The United States is now suffering from severe inflation. Paul Volcker will never give up tight monetary policy for the sake of the United States' economic recovery, and no one can interfere! The United States needs the blood of the world to transport nutrients.'
'The major American consortia and American Jews need a strong America to ensure their safety!'
The last sentence made Duke Carter Howard's face grow even more severe.
He had already taken Xia Yu's words to heart, and the more he thought about it, the more he felt that they were reasonable. Moreover, he knew that Xia Yu was right.
The interests of the United States are the interests of the Jews. The Jews have a decisive influence at the top of the United States. Only when the United States is strong can the Jews in the United States use the strength of the United States to ensure the security of Israel and the safety of Jews around the world. Paul Volker, a German-born Jew, definitely puts the interests of the United States and the Jews first and will never care about the lives of other countries.
Xia Yu is also well aware of the influence of the Jews on the US financial system, especially the Federal Reserve.
From 1951 until his rebirth in a later life, with the exception of the year and a half from 1978 to 1979 when a non-Jew was the Chairman of the Federal Reserve, every other Chairman of the Federal Reserve has been Jewish!
'Sir Carter, at present, the major banks and financial institutions only know how to lend money, just like Lloyds Bank. They have been lulled by the days of making money lying down, and the sooner they run away, the better. If they wait another six months, some financial institutions will definitely come to their senses, and it will be difficult to get out then.'
Carter, the Duke of Howard, nodded with a grave face, and suddenly asked, 'What you said makes a lot of sense. I will secretly arrange for someone to conduct a targeted study and make a decision at that time.'
'By the way, didn't you say you had a proposal? What is it?'
Xia Yu's mouth curled up slightly, and he smiled faintly, 'Isn't Barclays still investing massively in Latin America? I heard that Barclays has taken a lot of business from Lloyds Bank in Latin America. As the UK's number one bank, Barclays definitely has the strength to take over all of Lloyds' business.'
'Judging from Barclays' current actions, they definitely haven't noticed the crisis. As long as Lloyds is willing to transfer its business, I believe Barclays will be happy to take it over.'
Upon hearing this, the Duke of Carter Howard's eyes became deep, and he looked at Xia Yu deeply. His impression of Xia Yu in his heart changed greatly again.
You can't tell, Xia Yu is gentle on the surface, but he is very ruthless when calculating people, and his methods are sophisticated. He has a strong sense of revenge, and whoever bothers him will be unlucky.
Even though the Rothschild family had plotted against him, they had not yet revealed their fangs. Xia Yu had directly dug a big pit for the Rothschild family, a pit that could bury Barclays Bank completely if one was not careful.
Barclays Bank was the British bank with the largest loan business in Latin America, and Lloyds Bank was second.
If these two banks belonged to Barclays Bank, then no bank in the UK or even Europe could rival Barclays Bank.
But if there really is a burst of thunder and a sovereign debt crisis, then Barclays will either die or be severely injured, and the Rothschild family will be devastated!
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