Chapter 222: British Pound Crisis

As the Barcelona Olympics approached, Arthur assigned Jim Colter to handle the short selling of the British pound, while he took Yu Feihong to the northeastern part of the Iberian Peninsula, to the second largest city in Spain, located on the Mediterranean coast.

Arthur wasn't an international speculator himself; he just followed the hedge giants like Quantum Fund, waving flags and cheering from behind. He was content to be part of the pack of wolves!

In the early morning, in a seaside resort hotel suite in Barcelona, Arthur rolled off Yu Feihong.

Through the floor-to-ceiling windows, the endless Mediterranean sea view could be admired.

"How do you like this city?" Arthur asked as he gently caressed the woman's softness. "A tourist city facing the sea, its fame will surely soar after the Olympics."

In fact, since the 1984 Los Angeles Olympics, the event had taken on a strong commercial aspect.

It had a tremendous effect in promoting urban culture and tourism.

Yu Feihong blushed, "Barcelona's city layout is quite interesting; everything is designed in square blocks!"

Barcelona is the capital of the autonomous community of Catalonia and the province of Barcelona (belonging to the Catalonia autonomous community).

As Spain's second-largest city, next to Madrid, it's quite impressive in all respects.

Yu Feihong was tempted. "What about you?"

"I have a lot of business; I won't stay until the end of the Olympics. Next month, we have a movie premiere and the start of a new film," Arthur was mainly interested in watching the U.S. Dream Team's basketball games.

At the opening ceremony of the 25th Barcelona Summer Olympics, the lighting of the Olympic flame was done by disabled archer Antonio Rebollo, using his archery skills; a rocket followed a perfect parabolic trajectory, flying 70 meters to light the 21-meter-high torch, igniting the Olympic flame on the main torch.

"This lighting ceremony in Barcelona is really fancy," Arthur commented, joining the audience in applause.

"Very creative and hard to top," Yu Feihong praised by his side.

Arthur smiled and nodded...

With August, A Few Good Men had been in theaters for a month, reaching a box office of $90 million.

Along with the earlier release of The Bodyguard, North America had grossed over $100 million and overseas $200 million.

However, the biggest winner of the summer was Warner Bros., with the release of Batman Returns and Lethal Weapon 3.

Leaving Spain, Arthur went directly to London to meet with Jim Colter.

Jim Colter had specially set up another hedge fund under Pacific Investment Management Company (PIMCO) to short the British pound!

In a London bar that evening, Arthur and Jim Colter were drinking together.

"I can't believe someone has the guts to attack the pound?" Jim Colter couldn't help but be surprised. The pound had been strong for 200 years and was still a key international currency, second only to the dollar.

Arthur dared to use $100 million as principal to leverage 500 million pounds!

"Arthur, the British government seems very confident in maintaining the pound's high-interest rate. The exchange rate has even risen!"

Arthur smiled, "Relax, the Bank of England has raised rates to 15%. They can't bear such high rates for long. Without Germany's Deutsche Mark cutting rates, they're doomed."

Jim Colter understood Arthur's point. As long as the pound kept appreciating, there was no need to short it; treat it as a forex investment instead.

"Now we just need a frontrunner," Arthur said, smiling. "Remember, as soon as someone starts hitting the pound in the spot, futures, or options markets... Immediately follow, strike swiftly, don't hesitate. The Bank of England might be the world's first central bank, but it can't withstand a pack of wolves. The frontrunner will be Wall Street's Quantum Fund and related investment companies!"

Jim Colter understood Arthur's meaning. When the highly-priced pound plummets, the Bank of England won't be able to maintain the European Exchange Rate Mechanism (ERM).

For now, the Bank of England was doing everything to stabilize the exchange rate, and the 15% interest rate did boost the pound, but everyone knew that the UK couldn't sustain it.

As long as the strongest economy in the European Community, Germany, didn't lower the Deutsche Mark's rate, the UK couldn't withstand the international speculators. Ultimately, they would have no choice but to withdraw from the ERM.

British Prime Minister John Major and the Chancellor had repeatedly stated publicly that the UK would stick to its current policy, insisting that the pound would remain in the ERM, and expressed great confidence in the UK's economic future.

At noon, in the offices of Mirror Group Newspapers, Tina Brown, the editor of the Daily Mirror, asked about the Hollywood director Woody Allen's incest scandal.

Arthur laughed, "Woody Allen? What's that got to do with me? Feel free to report it however you want, as long as it boosts sales. You can even do an exclusive interview with his girlfriend, Mia Farrow!"

For tabloids like the Daily Mirror and The Sun, it was all about eye-catching content.

Arthur actually agreed with The Sun's Page 3 girls. Since the 70s, The Sun had featured topless models on its third page, significantly boosting its sales!

"Got it, I understand," said Tina Brown, feeling relieved by Arthur's words. She could now act without reservations.

After Tina Brown left the office, Arthur stood by the window, looking out at the financial district by the Thames, muttering, "It'll be exciting to witness the humiliation of the Bank of England!"

Having just brought down the Soviet Union, the American Jewish community was now targeting the UK.

*****

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