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Chapter 876: Chapter 761: The First Pill
"Agreed," came the two words.
The words excited everyone present.
No one knew how much money Myanmar Bank had now, because it was impossible to calculate.
But the amount was definitely enormous, for many of their funds were preserved in value through the Asia Dollar, and the volume of Myanmar Kyat held by Myanmar Bank was so high that even they could not compute it.
This money circulated back into the Myanmar market by Myanmar Bank, indirectly stimulating the Myanmar economy and leading to their making another fortune, although in doing so, Myanmar Bank took on the role of a commercial bank.
It operated in a ’wild state,’ devoid of the restrictions on reserve requirements.
It also broke the constraints set by Lang Cai on Myanmar Bank’s operations in Myanmar, stimulating the domestic economy while giving rise to a significant economic bubble, causing the velocity of currency circulation in the local Myanmar economy to far exceeded their expectations.
However, this did not negate the positive role played by Myanmar Bank.
As for those side effects.
They weren’t concerned about them.
"I can arrange for Myanmar Bank to provide low-interest loans, but I have one condition, at least thirty percent of the loan must be used to purchase products and services from the Myanmar Economic Zone," Ling said.
"That’s no problem," Lang Cai agreed immediately, as this was standard practice. The RMB they borrowed this time were still going to purchase loads of Huaxia products and services. It’d be strange if Ling didn’t have any conditions.
Having said that.
Lang Cai continued, "However, I think we can do without collateral for this loan, unlike with Huaxia." If there was collateral, the weight of this bargaining chip would not be as significant.
"This..." Ling pretended to be troubled, hesitating for a moment, and finally, as though begrudgingly, nodded, "Alright, we’re all part of the same country, so naturally, I trust the country’s credit."
There are two types of loans between countries.
One is an unsecured loan, categorized as a National Credit Loan.
The other is a secured loan, which is less common.
The former, although unsecured, often comes with many conditions, the latter relatively fewer.
Domestically,
the loans between local governments and banks are mostly Credit loans, where the local government’s credit acts as the guarantee. Unless a country has completely lost the right to issue its currency, local government loans domestically are unheard of requiring collateral.
Take Huaxia, for example.
Only the guaranteed loans of local governments require collateral; direct investments from local governments, if finances aren’t enough, they just ask the banks straightforwardly, and usually, banks will comply without demanding so-called collateral.
Local governments are institutions of the state.
We are all one family.
What need is there for collateral? That’s like slapping someone else’s face. To do such a thing would be offensive, and banks aren’t worried about local governments defaulting because local governments possess a wealth of resources.
Land.
Minerals. 𝓃𝓸𝓋𝓹𝓾𝓫.𝒸ℴ𝓶
Taxation.
Thus, local governments aren’t worried about debt at all. No matter how large the local government debt becomes, to the point where the local finances can’t handle it, nobody is in a rush, with only economists bleating about potential dangers.
Now that Lang Cai has explicitly proposed borrowing from Myanmar Bank.
It’s not that he couldn’t ask for collateral.
But if you insist on needing collateral,
it directly calls into question the credit of the national government. It’s also because the Myanmar government doesn’t want to print money anymore, and Lang Cai didn’t want to open that door here; otherwise, he wouldn’t be asking Myanmar Bank for a loan.
Even if Ling didn’t lend,
For Lang Cai, it’s not a big deal to just print more money.
But Lang Cai believed Ling wouldn’t refuse.
Upon hearing Ling’s words,
Lang Cai nodded in satisfaction.
Ling’s awareness was as high as ever.
He was very pleased.
On the other side, the one probably pleased should be Tang Qing. If there was collateral, how could Lang Cai and his group be willing to lend again so readily next time, without the subsequent large loans, how could they complete the following plans.
No collateral.
It’s about cultivating their habit of ’painless spending.’
Just like mobile payments or swiping cards, when you don’t see the actual cash, the pain of spending decreases, leading to gradual addiction. So, even if Lang Cai wanted to provide collateral, Tang Qing wouldn’t accept it.
This thing.
What’s it for?
It’s going to be mine in the end anyway.
You just keep it for me for now.
"How much loan do you want?" Ling asked.
Lang Cai looked at the budget report in his hand, which now appeared exceptionally pleasant to the eye, and he even looked forward to a higher figure because the more he borrowed, the more chips he’d have in his hand.
The bigger the loss in Asia Dollars then.
After thinking for a moment, Lang Cai looked up and said, "A total of 2.6 trillion Myanmar Kyat, which shouldn’t be considered much, just about 110 billion Asia Dollars. Compared to the Myanmar Kyat Myanmar Bank has, this is just a small portion."
The amount exceeded the budget by a bit, but not by much. Anyway, borrowing more is always better. Whether it be defaulting in the future or incorporating Asia Dollars into Myanmar Kyat, this part of the ledger could be directly written off internally.
No need to pay it back.
Of course, the premise is that he must win, and Lang Cai felt he was certain to win.
Ling pondered for a moment and nodded, "No problem, but considering many project funds will flow back to the Myanmar Economic Zone and to decrease the hassle of exchange, plus the limited availability of cash Myanmar Kyat at Myanmar Bank, considering the operation of other businesses and existing assets, I suggest we loan half in Asia Dollars and pay the rest with Myanmar Kyat."
Lang Cai thought it over.
Ling was stating facts.
Myanmar Bank now had a lot of Myanmar Kyat, conservatively estimated to still have about 700 billion in cash, but the demand was also high. Seeing that Ling didn’t have enough Myanmar Kyat, he felt an inexplicable excitement. It’s good you’re short.
"Fine, I agree," said Lang Cai, smiling in agreement.
With such a consensus.
The following meeting was a happy affair for all participants.
Each department secured funds, and the interest groups behind them continued to make a killing.
Lang Cai managed to secure a huge loan without having to print money, solving one big problem while also gaining a method to counterbalance the Asia Dollar, but this was still not enough. He required more chips.
Suddenly, he felt that Myanmar could take even bigger steps, and as for the hidden risks, his conviction of victory had pushed them selectively to the sidelines.
And Ling had finally released the biggest Asia Dollar loan, which was an unexpected pleasant surprise, serving an advance ’first pill’ to Myanmar, but this pill wasn’t for treatment, it was for pain relief.
When the effect wears off, and the next bout of pain strikes, dependent on it, they will then only be able to buy medicine from him.
Soon.
The meeting ended.
Since it was a credit loan.
By the end of the meeting, the intent had already been signed, and once Myanmar completed its procedures, the formal loan agreement would be signed.
And of course, the process was exceptionally quick.
Without any obstacles.
Three days later.
All the Myanmar Kyat portions of the loans came through.
All departments were elated.
And so began the days of handing out money generously.
