Golden Spoon Investment Portfolio - Chapter 294

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This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
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294. Convert everything to cash while the rate is still low.

“The baht, you said?”

As Rodney furrowed his brow and looked over, George Hamilton gave a subtle nod and leisurely reached for the glass of whiskey on the table before him.

“More precisely, it’s about Thailand’s economic situation.”
“…!”

Grasping the implication, Rodney’s expression grew grave as he straightened his posture.

“You’ve chosen Thailand as your first target?”

George Hamilton took a sip of whiskey, set it down, and answered in a measured tone.

“The financial market is substantial in size, and more importantly, compared to other Asian nations, it’s far more open—making it easy to inject and withdraw investment capital. It’s the perfect first target for shearing, wouldn’t you say?”

After a moment’s consideration, Rodney leaned forward in his seat.

“It’s an excellent idea. The timing is perfect—Thailand’s economic growth rate, which had maintained over 8% annual growth and sustained prosperity, has adjusted downward to 6.7% this year and is showing signs of decline.”
“Exactly. The Thai government and people, having enjoyed years of economic boom, don’t realize the warning lights are flashing. They’re treating this slowdown as merely catching their breath.”

Rodney shrugged his shoulders and spoke with cynical amusement.

“They’re so intoxicated by the sweet abundance of flowing dollars that they can’t even conceive that a crisis might be approaching.”
“Which is why, despite already exceeding demand and reaching saturation, they’re recklessly borrowing dollars, and high-rise buildings and luxury mansions are sprouting up like mushrooms in Bangkok, the capital.”

With Thailand’s domestic interest rates at 18% compared to dollar and yen rates of merely 6-8%, corporations and ordinary citizens alike borrowed foreign currency to conduct business or purchase real estate.
As asset values rose, the cycle repeated—borrowing more money to purchase real estate or stocks—and the bubble grew to increasingly unmanageable proportions.

“According to the data, the ratio of non-performing loans in Thai financial institutions has begun surging sharply since early this year.”
“It’s already exceeded 7%, and there’s a very high probability it will reach 10% by year-end.”

Ever since hearing from George Hamilton about the possibility of a financial crisis, Rodney and the Quantum Fund had been meticulously monitoring the economic conditions of Asian nations.

“Then it seems we’ll soon start seeing institutions notice the risk and begin withdrawing their funds one by one.”
“Citibank and Societe Generale are already showing such movements.”

Societe Generale, established in 1864, was not only one of the oldest banks in France but also one of the largest financial institutions in Europe.

“It’s only a matter of time before other foreign investors catch wind of the instability.”
“They’ll try to keep it quiet until they’ve safely withdrawn all their invested capital, but given the substantial sums involved, word will spread quickly.”
“Everyone has an uncanny sense for the scent of money. That’s how it’ll be.”

As George Hamilton set down his glass of Underberg, ice clinked against the sides with a crisp sound.

“When do you think the possibility of baht depreciation will surface?”

Rodney, who had already given this considerable thought, answered without hesitation.

“By early next year at the latest, the sense of crisis will spread through the market.”

George Hamilton nodded in agreement, apparently sharing similar thoughts.
Watching this, Rodney cautiously offered his opinion.

“If we enter too early, we risk suffering losses. Wouldn’t it be better to begin selling baht once the possibility of a currency crisis starts to emerge?”

George Hamilton crossed his arms and let out a thoughtful hum.

“Thailand’s foreign exchange reserves are around thirty-eight billion dollars, correct?”
“That’s correct.”

By current standards, Thailand’s foreign exchange reserves seemed small relative to the size of its economy, but since most Asian nations had never experienced a financial crisis caused by sudden dollar outflows, they maintained similarly modest levels of foreign reserves.
Korea was no exception.
George Hamilton stroked his cleanly shaved chin with one hand, deliberating for a moment.
Then, having reached a decision, he lifted his head and spoke to Rodney across from him.

“Let’s wait a bit longer. Once Thailand’s economy clearly begins to deteriorate, that’s when we’ll aggressively dump the baht.”

Rodney’s expression turned puzzled at this unexpected answer.

“Won’t that be too late?”
“No. Even if the bubble is on the verge of bursting, we’re taking on an entire nation. We need to move carefully.”

George Hamilton, leaning back in his chair, continued in a measured tone.

“Once the attack begins, Thailand will undoubtedly mobilize its foreign exchange reserves and the government and central bank will throw everything into defense. But if we strike too early, we risk exhausting ourselves while someone else reaps the rewards.”

Rodney, immediately grasping George Hamilton’s intention, curved his lips into a smile.

“So you’re saying we should wait until the Thai government is worn down from fighting other hedge funds, then deliver the final blow ourselves.”
“Exactly. The greatest gains come when your opponent loses their will to fight and falls into panic.”

Rodney’s mind worked quickly, calculating the timing.

“If we assume the crisis surfaces in early next year, we should launch our full-scale attack about one or two months after that.”

George Hamilton gave a small nod of agreement.

“That sounds right.”

Rodney leaned forward with his hands on his knees, his voice tinged with subtle enthusiasm.

“How much capital should we prepare for the baht attack?”
“We don’t know how long they’ll hold out. And once Thailand falls, we’ll need to move immediately to Indonesia and the other neighboring Asian nations for the next round. Secure as much capital as you can possibly gather.”
“Understood.”

Rodney smiled broadly.

“I’m already looking forward to the grand game that awaits next year.”

He then regarded George Hamilton across from him with newfound admiration.

“Designing a gamble of this scale against not just one nation but all of Asia—only you could pull this off, Mr. Hamilton.”

George Hamilton smiled faintly at the reverent gaze, then lifted his rocks glass and swallowed the whiskey.

* * *

[
Gunwoo General Construction Faces Final Bankruptcy Crisis
Gunwoo General Construction, a subsidiary of Gunwoo Corporation, has been driven to the brink of final bankruptcy.
Gunwoo General Construction, which suffered its first default on the 5th after failing to cover a 250 million won promissory note, has now suffered its third first-stage default today after failing to cover a 90 million won promissory note returned to the Woo Young Bank Yeouido Branch.
Even if this problematic promissory note is resolved, since the company has already failed to settle promissory notes three times, a single additional first-stage default would trigger immediate final bankruptcy proceedings.
With all 22 construction sites nationwide—comprising 11,075 housing units, including the 4-building, 386-unit apartment complex currently under construction in Daegu Dong-gu Sincheong 3-dong—currently halted, the Housing Business Mutual Aid Association’s guarantee liability is reported to have reached an astounding 600 billion won.
Meanwhile….]

Reading the prominent front-page article about Gunwoo General Construction’s bankruptcy, Seok-won’s expression hardened as he released a small sigh.

“If a major construction firm ranked 26th in contract hierarchy undergoes final bankruptcy proceedings, this will deal quite a significant blow.”

Though the company was making a final desperate struggle for survival, it had posted losses exceeding 69 billion won last year alone, leaving its finances completely depleted with virtually no possibility of recovery.

“That makes eight major construction companies that have gone bankrupt this year alone.”

In truth, the crisis now gripping construction firms was somewhat inevitable.
Most construction companies that had profited handsomely from the large-scale new city development projects undertaken during the previous administration had recklessly expanded their operations and grown their scale.

‘But spring cannot last forever.’

When the government implemented the real estate real-name system to curb real estate speculation and new city apartments were completed in succession, raising the housing supply rate dramatically, the real estate market suddenly turned cold.
Inevitably, massive unsold inventory accumulated, and construction firms whose cash flow was abruptly cut off collapsed in a domino effect, filing for bankruptcy en masse.

“Last year, 145 construction companies went bankrupt and closed their doors, yet more than 100 have already collapsed in just the first half of this year… there could be no clearer warning signal of crisis than this.”

While construction is indeed a cyclical industry, the sudden surge in bankruptcies and the collapse of even top-tier major general contractors could be seen as a canary in the coal mine—a harbinger of economic crisis.
Seok-won tapped the desk lightly with his fingertip, taking a moment to gather his thoughts, then extended one arm and pressed the intercom button.

“Contact Director Eom and have him come to my office immediately.”
[Understood, sir.]

After hearing Na Seong-mi’s response, Seok-won leaned back against the plush chair and murmured to himself.

“It seems a bit early, but I should begin preparing from now on.”

Shortly after, there came a knock, and Finance Director Eom Tae-jun, wearing a purple necktie, opened the door and entered.

“You called for me.”

Eom Tae-jun approached the desk, bowing slightly as he spoke.

“How much reserve capital are we currently holding?”

As Seok-won got straight to the point, Eom Tae-jun’s expression showed a hint of puzzlement, but he answered without hesitation.

“Excluding the funds currently invested by the Asset Management Division, we’re maintaining approximately 79 billion won in liquid assets that can be withdrawn at any time.”
“The reserve capital has grown considerably since I first arrived.”
“The cash you invested last time hasn’t been touched and remains untouched. Additionally, when you instructed us to liquidate a significant portion of our investment portfolio, the recovered funds flowed in, which increased our reserves.”

Seok-won nodded and asked again.

“What’s the current won-to-dollar exchange rate?”
“With the recent slump in exports continuing, the exchange rate has risen significantly. As of this morning, it’s trading at 826 won per dollar.”

A dollar for less than a thousand won seemed incredibly cheap, but considering it had been 772 won at the end of last year, this represented a substantial increase.

‘Even so, when I think about how the exchange rate will skyrocket to nearly 2,000 won when the International Monetary Fund crisis hits, I’d say it’s still cheap.’

Seok-won dismissed the fleeting thought and clasped his hands together on the desk as he spoke.

“Convert all our reserve capital into dollars.”

Eom Tae-jun’s eyes widened in shock.

“All of it, sir?”
“Yes.”

Eom Tae-jun’s mouth fell open, dumbfounded by the sudden directive.

“Why the sudden decision to convert everything?”
“I’ll explain the details later. For now, just do as I say.”

Unable to hide his bewilderment, Eom Tae-jun said nothing further in the face of Seok-won’s resolute expression, groaning inwardly.
Then, as if resigned to his fate, he watched Seok-won’s expression carefully before speaking.

“Since the exchange rate is quite elevated right now, wouldn’t it be better to wait until the dollar price drops somewhat before converting?”
“No. It will only continue to rise from here. There’s no chance it will fall.”

Seok-won answered with unwavering conviction.

“I’m sorry?”

Eom Tae-jun’s expression betrayed his confusion, but Seok-won pressed on, undeterred.

“So before the exchange rate breaks through 900 won, we need to convert everything back to cash.”
“…!”

In other words, Seok-won was asserting that the exchange rate would soon exceed 900 won.
At Seok-won’s resolute declaration, Director Eom Tae-jun raised his eyebrows, thinking inwardly that this was absurd.

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This chapter was translated by Lunox Novels. To support us and help keep this series going, visit our website: LunoxScans.com
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