In Hong Kong, we build a global business empire

Over the next two days, Lin Haoran spoke with Ma Shimin, Huo Jianning, Chen Shoulin, Wei Li, and others about their plans for dealing with the Hong Kong real estate crisis.

In order not to make the Governor's Office and other conglomerates feel too overbearing, the scale of each of Lin Haoran's groups is not too large, at most a few billion Hong Kong dollars.

However, the total amount of money invested by these groups is also a huge sum.

After dealing with these matters, Lin Haoran returned to his daily routine of spending time with his child.

Occasionally, I would visit Guan Jiahui to spend time with her three-month-old eldest daughter, Lin Leyi.

Most of the time, he stayed at the villa on Shi Xun Road, spending time with Guo Xiaohan and their eldest son Lin Yaoguang, who had just turned one month old.

Occasionally, he would also talk to Liu Xiaoli about his life ideals and study the differences in male and female physical structures.

They were living a very comfortable life.

Originally, Lin Haoran thought that before the day Margaret Thatcher fell, he should be fine and could spend time with his wife, mistress and children.

However, on the morning of September 20th, Lin Haoran had just gotten up from his bedroom on the third floor of Shi Xundao Villa when an unexpected phone call shattered the tranquility.

"Boss, something's happened in the US and Brazil." Su Zhixue's voice was grave on the other end of the phone.

Lin Haoran frowned: "What is it?"

Su Zhixue quickly said, "The Federal Reserve just announced another 50 basis point rate hike, bringing the federal funds rate to 11.5%, a record high."

Lin Haoran was stunned for a moment, then realized what was happening.

In his previous life, he did know that the Federal Reserve had raised interest rates significantly in 1982, but he didn't know the exact time.

Now it seems that now is the time.

"What was Wall Street's reaction?" Lin Haoran asked.

Su Zhixue replied, "The stock market crashed; the Dow Jones Industrial Average opened down 3% today. The bond market also collapsed, with long-term Treasury yields soaring to over 13%. The US dollar index surged, and gold prices plummeted..."

Lin Haoran listened, quickly calculating in his mind.

When the Federal Reserve raises interest rates, the dollar appreciates, and capital flows back to the United States from all over the world.

This is undoubtedly adding insult to injury for Latin American countries already mired in a debt crisis.

Their foreign debt is mostly denominated in US dollars, and an appreciation of the dollar means a heavier debt burden.

However, the Federal Reserve's interest rate hikes will significantly increase their financing costs.

Latin American economies, already teetering on the brink of collapse, are now truly on the verge of total collapse.

"So it seems that Brazil is about to give up?" Lin Haoran guessed.

"Just as you said, Brazil really couldn't hold on any longer," Su Zhixue said admiringly.

"Oh? Could it be that they, like Mexico, have announced a debt default?" Lin Haoran asked with some curiosity.

In his previous life, he only knew that the Mexican debt crisis had plunged the entire Latin American region into a decade-long economic recession, but he couldn't quite remember which country had defaulted and when.

Anyway, all he knew was that Brazil, Argentina, Peru, Venezuela, Chile, and other countries all experienced difficulties in repaying their debts shortly after the outbreak of the Mexican debt crisis, and announced the termination or postponement of foreign debt repayment.

Su Zhixue quickly replied: "The Brazilian government has not officially announced the default yet. However, Brazil's current situation is similar to that before the Mexican debt crisis broke out, with high foreign debt and depleted foreign exchange reserves."

This rate hike by the Federal Reserve is like the last straw that broke the camel's back.

According to news from Brazil today, the Brazilian government has formally proposed debt restructuring to international creditors, suspending some debt payments and initiating negotiations. This means that Brazil, following Mexico's lead, has officially fallen into the quagmire of debt default.

Upon hearing this, Lin Haoran smiled slightly.

It seems that Huanyu Investment Company will soon be able to reap another wave of profits.

After reaping the benefits in Mexico, he continued to invest $60 billion in shorting the three major Latin American countries of Brazil, Argentina, and Venezuela.

As the largest country in Latin America, Brazil naturally became a key focus of the plan, with a total investment of $40 billion.

During this period, Huanyu Investment Company's layout also went very smoothly. Under the covert operation of Su Zhixue and his team, the $60 billion was quietly laid out!

Lin Haoran originally thought that these Latin American countries would not be able to hold on until at least the end of the year, that is, after November or December, but he did not expect that Brazil would be unable to hold on so quickly.

He underestimated the impact of the Federal Reserve's interest rate hikes on Latin American countries.

In his previous life, he had only read about this period of history in books. He knew that the Latin American debt crisis had broken out and that the Federal Reserve’s interest rate hikes were the trigger, but he had not personally experienced the specific timeline or the specific transmission mechanism.

Now, living in this era and witnessing firsthand the news of the Federal Reserve's interest rate hike and Brazil's subsequent collapse, he truly understands what "the last straw that broke the camel's back" means.

"Are you all ready?" Lin Haoran asked with a light laugh.

The Mexican debt crisis made him realize how easy it was to make money.

The money came in so fast, it was like picking up money off the ground compared to his previous investments.

"Don't worry, boss. We've been prepared since the Brazilian government proposed debt restructuring to international creditors. I've even sent a team to São Paulo, Brazil. Once the Brazilian financial system collapses, it will be our time to liquidate our positions and recoup our funds!"

Su Zhixue's voice was filled with barely suppressed excitement as he continued, "Boss, you're absolutely amazing! Nobody expected the Mexican debt crisis to have such a huge impact. When you first mentioned planning to expand into the three Latin American countries, I had my doubts, but now it seems I was short-sighted."

Lin Haoran smiled but didn't say anything more.

Some things are hard to explain, and there's no need to explain them.

He only needed to let his men know that following him would be the right thing to do.

"Alright, stop flattering me," Lin Haoran said with a smile. "Keep an eye on the situation in Brazil, as well as Argentina and Venezuela. Report to me immediately if there are any new developments."

He had nothing more to instruct Latin American countries on their next course of action.

After all, he didn't actually know much about the details of the Latin American debt crisis.

From now on, Huanyu Investment Company will handle everything.

And he only needs to wait for the end, and wait for the next harvest season.

Moreover, it seems that the time in Brazil shouldn't be too long.

After all, Mexico has already set a precedent for Brazil.

Although Brazil is still denying any formal debt default, investors will be making comparisons.

They foresaw Mexico's fate, and the panic was destined to spread to Brazil.

Most importantly, Brazil, as the largest country in Latin America, has a higher total debt than Mexico.

As resource-rich countries, if Mexico couldn't withstand the pressure, Brazil certainly couldn't either.

This is probably what many investors are thinking now.

Previously, before the US announced an interest rate hike, Brazil might have been able to withstand the pressure.

Now that the US has announced an interest rate hike, the dollar is appreciating, and capital is flowing out. Brazil's foreign exchange reserves were already running low, and this is making matters worse.

Therefore, it was only a matter of time before the Brazilian government proposed debt restructuring to international creditors and suspended some debt payments.

It could even be said that this is the best option the Brazilian government could make.

If they don't proactively propose debt restructuring, the real disaster will come when their foreign exchange reserves are completely depleted and they don't even have money to import food.

Su Zhixue replied, "Understood, boss!"

After hanging up the phone, Lin Haoran walked out of the study and into the living room, then turned on the television.

This time, he didn't watch TVB or RTV.

It is worth mentioning that two months earlier, in July 1982, Mr. Chiu Te-ken, chairman of the Far Eastern Group, invested in and purchased 50% of the shares of RTV, becoming the new owner of the television station.

It is said that RTV is preparing to change its name. If nothing unexpected happens, RTV will be officially renamed Asia Television on the day Margaret Thatcher fell, thus ending the more than 20-year history of the name RTV in the Hong Kong television industry.

However, these matters are temporarily irrelevant to Lin Haoran.

He turned on the TV and tuned to international channels, hoping to see if the BBC or CNN had reported on the Brazilian debt crisis.

Sure enough, CNN was broadcasting footage of the Federal Reserve Chairman being interviewed. In the footage, the Chairman was speaking to reporters: "The Fed's goal is to control inflation and maintain the credibility of the dollar. Raising interest rates is a necessary measure. Although it may have a short-term impact on the global economy, in the long run, it is a responsible decision..."

Lin Haoran looked at the TV screen and couldn't help but purse his lips.

Taking responsibility?
The Federal Reserve's interest rate hikes have indeed controlled inflation in the United States, but at what cost?
Latin American countries collapsed one after another, tens of millions of people fell into poverty, and the hopes of an entire generation were destroyed.

But those sitting in the Federal Reserve offices don't care about any of this.

This is American hegemony, and it always has been.

Even decades later, in the 2020s, this remains true.

When the US national debt becomes too heavy, they will turn on the printing press and make the whole world pay for their debt.

When the economy overheats, they raise interest rates to bring global capital back to the United States and shift the crisis to other countries.

This is the logic behind the dollar's hegemony.

Cruel, but true.

Lin Haoran changed the channel again; it was now playing ABC News.

The footage shows chaos on the streets of Brasilia, the capital of Brazil, with protesters holding signs and confronting riot police.

The host reported the latest news in a serious tone: "After the Federal Reserve announced another 50 basis point interest rate hike, bringing the federal funds rate to 11.5%, the Brazilian government formally proposed debt restructuring to international creditors this afternoon, suspending some debt payments."

This is the second major Latin American country to default on its debt, after Mexico. The news caused severe turmoil in international financial markets, with the Dow Jones Industrial Average opening sharply lower…

Lin Haoran watched the television screen, but his heart was unusually calm.

All of this was within his expectations.

He had already foreseen this when he was making his plans for the three Latin American countries.

These Latin American countries are indeed pitiful, but it has nothing to do with him. Their debt crisis is entirely their own doing, stemming from reckless borrowing, extravagant spending, and a single-sector economic structure...

The elites of these countries are like spoiled children in the face of international capital, only knowing how to ask for money, but never thinking about how to repay it.

Now, when creditors come to their door, they can do nothing but cry and scream.

Sometimes, Lin Haoran actually admired his father, Lin Wan'an.

Back when the Hong Kong real estate market was overheated, major real estate companies were willing to take on huge debts in order to develop faster and make more money.

If the real estate industry continues to be hot, then there is indeed no problem.

However, once the market turns bad and the housing market declines, those real estate companies burdened with huge debts will immediately fall into difficulties, their capital chains will break down, and they may even go bankrupt.

This is why many real estate companies in Hong Kong couldn't hold on and even went bankrupt after Forbes made those comments last time.

Because Forbes directly exposed the truth behind the cover-up.

Lin Wan'an, a veteran who has been in the Hong Kong real estate industry for decades, has always maintained a clear head.

He never expands blindly, and never takes on debts beyond his capacity.

Therefore, when the Hong Kong real estate crisis came, those once-glorious real estate tycoons fell one after another.

It is undeniable that the Wan An Group at that time could not be compared with Chinese real estate giants such as Cheung Kong Holdings, Sun Hung Kai Properties, Caring Group, Henderson Land Development, New World Development, and Chinese Estates Holdings.

Many real estate giants have been established for less time than Wan An Group, yet their assets are worth billions of Hong Kong dollars.

As for Wan An Group, its market value is only one or two hundred million Hong Kong dollars.

The reason is that Lin Wan'an is too cautious.

He dared not borrow money, dared not expand, and only dared to guard his small plot of land and slowly manage it.

In that crazy era, such conservatism was ridiculed as "cowardly" and "lacking in courage".

However, Lin Haoran believed that if Wan'an Group had not been interfered with by Lin Haoran and had continued to be managed by his father Lin Wan'an, then even the impending Hong Kong real estate crisis would not have much of an impact on Wan'an Group.

Because Lin Wan'an wouldn't take out excessive loans and leverage for expansion; he would only do business with the amount of capital he had on hand.

This kind of business model, while it may never get you into the top tier of wealthy families, will never lose money.

In this crazy era, such conservatism is ridiculed.

But when the storm comes, those who once mocked him fall one by one, while Lin Wan'an remains firmly standing there.

This is wisdom.

Not everyone can see through the crisis behind the prosperity, nor can everyone remain clear-headed in the face of temptation.

If Lin Haoran hadn't been a time traveler, hadn't possessed any cheat codes, and hadn't had the knowledge from his previous life, perhaps even if he had inherited the Wan'an Group, the best way to manage it would have been to continue maintaining the status quo and slowly building it up, just like Lin Wan'an did.

Instead of expanding aggressively and attacking everywhere to reap wealth across the world, as it is now.

Lin Haoran turned off the TV, and Guo Xiaohan just came out of the bedroom carrying her son, obviously having just finished breastfeeding.

"Brother Haoran, what happened? I've never seen you turn on the TV so early in the morning before." Guo Xiaohan, holding the baby in her arms, sat down next to Lin Haoran and asked curiously.

Lin Haoran took his son from Guo Xiaohan and, while teasing him, replied with a smile, "It's nothing serious. The Federal Reserve raised interest rates by 50 basis points, and the federal funds rate has been raised to 11.5%. Brazil is also experiencing some problems, and it looks like it's going to follow in Mexico's footsteps."

Guo Xiaohan graduated from the Bendheim Financial Center at Princeton University, making her an elite in the industry. In addition, she studied business management with her uncle Guo Henian for several years, so she naturally understands what it means for the Federal Reserve to raise interest rates by 50 basis points, bringing the federal funds rate to 11.5%.

"Raising interest rates so much?" Guo Xiaohan frowned. "Is the US trying to push Latin American countries to their doom?"

Lin Haoran laughed and said, "You seem to understand things quite well."

Guo Xiaohan rolled her eyes at him: "I'm not completely ignorant. The Fed is raising interest rates, the dollar is appreciating, and Latin American countries' foreign debt is denominated in dollars, so their debt burden has suddenly become heavier."

Coupled with capital outflows, their already scarce foreign exchange reserves are now even more difficult to meet.

Lin Haoran nodded: "That's right, so Brazil couldn't hold on any longer and formally proposed debt restructuring to international creditors, suspending some debt payments. Next, it's estimated that Latin American countries like Argentina, Chile, and Venezuela will follow suit soon."

Guo Xiaohan sighed: "These countries are also pitiful. International capital begged them to lend them money back then, and now they are forcing them to repay it. In the end, they are just a group of lambs fattened up by Wall Street, fattened up and then slaughtered."

Lin Haoran laughed: "Your analogy is quite apt."

Guo Xiaohan leaned on his shoulder and whispered, "Brother Haoran, do you think we might end up like that? I've heard that more and more local rich people and capital have left Hong Kong in recent years. They're worried that the negotiations will be detrimental to Britain, so they're running away in advance."

Although Guo Xiaohan married into the Lin family, it's actually unclear how much leverage Lin Haoran has.

After all, she knew that as Mrs. Lin, she couldn't interfere too much in her husband's family business; this was her upbringing.

Therefore, she didn't know how much money Lin Haoran had made in Latin America, nor how much cash he held.

All she knew was that Lin Haoran was very rich, but she had no idea exactly how much.

Lin Haoran knew what she was worried about, so he held her hand and said softly, "No, your brother Haoran has real businesses, cash flow, and investments all over the world."

Even if Hong Kong's real estate market collapses, or even if an economic crisis occurs, it will only be temporary for us. I, Haoran, am confident in that!

Looking at Lin Haoran's confident smile, Guo Xiaohan's worries dissipated considerably.

She knew that Lin Haoran never boasted.

He said he had the confidence, and he definitely did.

As for the Guo family, Guo Xiaohan is not worried.

Although the Guo family has been investing more and more in Hong Kong in recent years, their core wealth is still in Southeast Asia.

Moreover, real estate is not the Kwok family's largest investment in Hong Kong. The Kwok family's core assets in Hong Kong are hotels and trade.

Hotels are a necessity, and trade is the lifeblood of the economy; neither of these will be significantly impacted by the real estate crisis.

Moreover, with Lin Haoran as his son-in-law, even if the Guo family really encounters difficulties, he will not stand idly by.

With this in mind, Guo Xiaohan felt completely relieved. (End of Chapter)