Fatal Strike: Paladins Mercenary Road

Chapter 380 Arbitrage
Shanying stayed with the group of people until after dinner, and only after watching these guys who had traveled a long distance sleep on the sofa and the floor in their own house did he have some free time.

He put a piece of beef on the grill, sprinkled salt and black pepper carefully, and then turned the beef diligently while drinking beer.

Mr. Poincare and Sophia appeared behind him without knowing when...

Seeing that the mountain eagle seemed to be a little uninterested, Mr. Poincare took a chair and sat upwind to avoid the heat radiating from the oven, then said with a smile: "You look a little unhappy..."

Shanying was stunned for a moment. He touched his face and said with a smile: "Is it so obvious?"

Shanying smiled and took a sip of beer, then said, “The most difficult thing in this world is to convince some ‘successful people’ to change their habits.

From the perspective of ordinary people, all the people in Arctic Fox are successful.

I'm not unhappy, nor do I feel there is anything wrong with their choice...

The world is inherently unfair, and this is especially true for some industries!
Arctic Fox is the longest-lived mercenary team in this industry that I know of. However, the people of Arctic Fox are not as rich as I thought...

Of course, it is unfair to measure a group of excellent soldiers by money. After all, there are many top masters trained by big countries who cannot afford to buy a house.

But I kind of feel for them because they could have gotten so much more!"

As he spoke, Shanying looked at Mr. Poincare and said seriously, "I have a feeling that they are not really stupid, but someone has set a ceiling..."

Mr. Poincare looked at the mountain eagle with admiration, nodded and said, "Your feeling is right, how could Chickpea and the others be stupid?
There is basically no threshold to become a mercenary, but the market is limited.

You can think of the mercenary industry as a service industry, and the scale of the service industry depends on external demand.

Mercenaries are just tools, and tools can never make big money because the people who assign them missions don't allow it!

Do you use the best motor oil for your rental car?
Would you fall in love with a prostitute and then give her half of your wealth?
Tools must have the consciousness of being tools, so they generally live a very intense life!
Arctic Fox is the leader in this industry, but in fact they are not fundamentally different.

The world's best tool is still a tool, nothing more than that! "

Mr. Poincare looked at the dazed Eagle and said with a smile, "Give them some time!
I've seen the mutual aid network plan you and Sophia set up, and it even includes some things I don't quite understand.

I think you will succeed, but it will take some time to change those guys and make them trust you wholeheartedly.

Now I have some questions..."

Shanying picked up the roasted beef with a pair of tongs and put it on a plate. He then cut the beef into long strips with a meat cleaver. He walked to the side and sat down with the plate. While eating, he said, "You want to ask why I am so sure that I can make money from the financial market in the long run..."

Mr. Poincare nodded and said, “Although they didn’t say it, everyone would have doubts in this regard.

You act so confident that it seems unreal to them!

I actually have the same idea...

I certainly trust your judgment, and I admire your ability to get the Fed's rate cut schedule through Maury...

But these cannot guarantee long-term profits!
High profits are always accompanied by high risks. You must have other ways to ensure profits, but you didn’t bring them up, right?”

Shanying nodded slightly and said, "In fact, you should know that there are businesses in this world that are guaranteed to make money.

It’s just that our size doesn’t meet the security standards we need, so I’ve been thinking about establishing another secure currency trading point outside of Thailand.”

Mr. Poincare, a financial veteran, immediately realized something and asked curiously, "Arbitrage trading?"

Shanying finished the beef in a few bites, took a sip of beer, and gave Mr. Poincare a thumbs up...

“Money is also a commodity!
Almost all large funds in the world that pursue stable returns are engaged in arbitrage business.

However, to make this kind of business happen, you need a stable free currency trading market.

There are not many free markets in the world that meet the requirements, and the profit margins are not particularly high, so this business is not very noticeable.

Now Thailand can barely meet my needs, but the profit from using Thailand for arbitrage trading is extremely low.

However, even so, by introducing the US dollar with a lowered interest rate or the euro with a zero interest rate into Thai banks, earning the interest rate difference while adding the depreciation of the Thai baht, at least an annual return of around 8% to 12% can be guaranteed.

And this income is 100% guaranteed and safe!
However, the Thai government is still quite powerful and they can adjust financial policies at any time. Therefore, if you want to make long-term profits, you need to find a valuable area and establish a safe trading channel...

Then you don’t have to think about it, just follow the sickle of the dollar and you can make enough money safely using carry trades.”

Mr. Poincare is a real expert. He understands what Shanying is talking about, but he also knows how difficult it is...

Arbitrage is the simplest profit model in the financial market. Almost anyone who can do math can figure out where to send the money most cost-effectively.

When the interest rate of the US dollar or euro is low, I will make large-scale loans, and then see which country's bank has the highest interest rate, and then I will lend the money to them.

Because when you deposit money in a bank, you are actually lending money to the bank!
It seems simple, but in fact only real big funds can guarantee profits.

Because there are currently few places that can accommodate large amounts of funds...

The island country is one of them, but in order to fight against the harvest of the dollar tide from their American father, they have implemented negative interest rates for many years.

Dongda is one of them, but they implement a strict fund management policy, and both the inflow and outflow of funds are strictly controlled.

Europe is one of them, but since 08, Europe has launched a battle to defend the euro. The euro has now entered an era of zero interest rates. At the same time, in order to protect the value of their assets, they will stick to the euro's exchange rate.

If you want to make money by arbitrage by inputting a large amount of funds in these three places, you need a huge amount of funds and the means to stir up the exchange rate of the other party. On the contrary, it is relatively easy for the capital in these three places to flee to the United States for arbitrage when the US dollar raises interest rates.

This is why capital is fleeing from all developing countries!

Because during the period of US dollar interest rate hikes, even if they do nothing and just keep their money in the United States, they can make huge profits through arbitrage when America raises interest rates.

Isn’t this much easier than running a business with great effort?

This is why developing countries are so vulnerable to dollar harvesting, because it is not just the foreign capital that entered the market at a low price that will run away, but also the comprador capital that has reaped enough dividends from the country's development.

Once they run away, the value of domestic assets will depreciate and shrink. At the same time, reduced liquidity will lead to reduced financial activity, which will instantly put a country's economy into a vicious cycle.

Once the people of this country stabilize the economy through hard work, they will once again become a source of value in the eyes of the big sharks.

Then after the Federal Reserve announces a rate cut, hot money will flow into these places, starting a new round of cycle.

It is unrealistic for Shanying to do this kind of arbitrage transaction and rely on companies like Goldman Sachs, because this is a low-risk transaction and his capital is very limited. After deducting management fees and handling fees, the profit cannot meet Shanying's needs.

Thinking about what Shanying has done in the past period of time, Mr. Poincare sighed and said: "If you want to make a profit in those so-called value depressions, you must first ensure that they can deliver on their promises.

Where is your destination? Malaysia? Indonesia? Brazil? Colombia?
Do you think the Arctic Fox is enough of a safety net for you?"

The mountain eagle gave Mr. Poincare a thumbs up...

Older gingers are more spicy!
The old man only listened to the beginning, but he deduced his thoughts and pointed out the key points!
With Shanying's identity and size, it is impossible for him to go to island countries or the University of Tokyo to achieve stable and long-term arbitrage. Only countries with unstable economies can become his target.

The problem with these unstable countries is that they have a lot of bad debts...

In order to complete the final transaction, you need strong debt collection capabilities, that is, to get the money out of the other party’s bank.

This is really no joke!
In this world, it is common for thieves to rob each other. You are after other people's interest, but they are after your principal.

Without strong means, without currying favor, and without creating social value, once financial funds reach nine digits, it is easy to attract attention and be robbed by cheaters.

A strong team like the Arctic Foxes is a very good safety factor!
It is no exaggeration to say that if all the Arctic foxes were gathered together, they could easily massacre the government buildings of some small countries in Central, North or South America, and could easily stage a coup.

This is what Shanying believes mercenaries should do!

Make money from policy!

Those giant security companies in America earn their money from America’s special military budget!

In his understanding, the top mercenaries should earn money from the relatively chaotic financial policies issued by local governments!
Loan sharks are not afraid of people defaulting on their debts, and they cannot default on their debts to mercenaries!

Seeing the old man's worried look, Shanying said with a smile: "Arctic foxes should be the chips that determine victory or defeat wherever they are in South America or Central and North America.

It’s just that they don’t know how to use their power correctly!

But I am not in a hurry. After all, the Fed’s policy dividends are enough for us to survive for a few more years, and my current capital is not enough…

It doesn’t matter if they don’t understand. Trust is something that shouldn’t be achieved overnight. Maybe it will take two years, maybe three years. I have the patience!”

Mr. Poincare frowned at the ambitious eagle and said, "Where is your goal?"

Shanying spread his hands and smiled and said: "The next step is to go to Cyprus to get a nail. After getting a reliable financial channel, I want to go to Central and North America or South America...

Cuba, Venezuela, Costa Rica, and Nicaragua are all possible destinations for me.

I come from a trading background, and I have discussed the establishment of a shadow fleet with Eddie's wife Amelia before...

If you want to earn the interest rate differential, you should not blindly invest money in a place with high interest rates. In my understanding, the best approach is to use trade as a means to open up the market first, and then try to add some financial elements after expanding transactions.

For example, using the registered identity of a third country to help Venezuela with oil trade, help Cuba with some export trade, and help them buy what they need...

As long as the import and export trade volume reaches a certain level and solid personal and political connections are established, some financial operations that earn interest rates can be carried out. "

Mr. Poincare was amazed and said, "Just like what you did in Thailand?"

Shanying shrugged his shoulders and said with a smile: "Thailand was just an accident, but the result was better than I expected.

And I'm just thinking about it, there's still some time before I can really do it..."

Mr. Poincare nodded slightly and said, "I think you have omitted some information about money, but this is enough for me...

You had better……"

While Mr. Poincare was speaking, Shanying's phone rang...

He looked at the number above, and just as he was about to speak after the call was connected, he heard an anxious voice from the other end...

"Anna has been kidnapped, and the other party is demanding the release of the imprisoned Philip Royce..."

The mountain eagle stood up suddenly...

"Are you trash?"

(End of this chapter)