Golden Spoon Investment Portfolio - Chapter 306

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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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306. Now that I think about it, that was indeed the case.

In the Executive Office, with its expansive floor-to-ceiling windows overlooking the East River, Seok-won sat in the center of the sofa, flanked by Landon Shore on one side and Andrew on the other—who had recently been promoted to Chief Investment Officer in recognition of his contributions.
Once Daisy, the secretary, had set down the tea she’d brought on a tray and stepped out, Seok-won leaned back against the plush sofa cushions and spoke.

“I hear abnormal signs have begun appearing in Thailand.”

Andrew, meeting his gaze, responded with considerable gravity.

“Yes. Beginning with Citibank and Societe Generale, foreign banks and investors who have made substantial investments in Thailand are halting new loans and withdrawing their capital.”
“It seems anxiety has set in about whether Thailand can repay its nearly 70 billion dollars in foreign debt.”

Observing how Seok-won responded with calm composure, as if he’d anticipated this situation, Andrew continued.

“When a country maintains strong economic growth year after year, even substantial debt poses little problem. But the moment that growth falters, it becomes an enormous burden.”

As Seok-won nodded in agreement, Landon Shore naturally joined in.

“Growth has declined by over 2% compared to last year, and as Thailand’s domestic real estate market has frozen sharply with prices plummeting, the cascading effect has caused non-performing loans at banks that extended excessive mortgage lending to surge, intensifying the anxiety.”
“And with the current account deficit not shrinking but continuing to expand, there’s no way to avoid mounting pressure for baht devaluation.”
“You’ve assessed it precisely.”
“You mentioned Thailand’s current account deficit this year could exceed 15 billion dollars?”

Andrew answered Seok-won’s question immediately.

“That’s correct. Our projections indicate it will be around 15 billion dollars, equivalent to 8% of Thailand’s GDP.”
“8% of GDP… A deficit of that magnitude would be stranger if problems didn’t arise.”
“What’s more alarming is that this isn’t temporary—the current account deficit continues to expand persistently, with the amounts growing larger.”

Thinking it over again, the pattern of declining growth and widening current account deficits was strikingly similar to Korea’s situation.

‘It’s not just Korea and Thailand—most Asian nations except Japan are likely facing identical circumstances: Indonesia, the Philippines, and so on.’

Considering this, had Korea’s economic resilience been only slightly weaker than Thailand’s, the epicenter of the Asian financial crisis might have been Korea rather than Thailand.
Dismissing the stray thought that had surfaced, I looked at Andrew and asked.

“The Thai government must be aware of this atmosphere. What kind of response are they showing?”
“They seem to have sensed that the situation is unusual, and they’re planning to replace the Finance Minister soon to calm foreign investors’ concerns.”
“What exactly are they planning to do?”

Since this could influence the coming confrontation with the Hedge Funds, I leaned forward with keen interest.

“There’s talk that they’ll implement austerity measures by cutting government budgets by billions of dollars, strengthen bank lending regulations, and pursue acquisitions and mergers of troubled banks.”
“That’s quite a bold reform policy. If it’s implemented as planned, it could lower foreign investors’ concerns.”

Andrew responded with a skeptical tone.

“That would be true if the plan succeeds, but it won’t be easy.”
“Why do you think it will be difficult?”
“First, with the economy deteriorating, voices of discontent and opposition are already emerging not just from the opposition party but also from within the coalition government itself regarding austerity measures.”

Unlike Korea, Thailand adopted a parliamentary system where the majority party that wins the general election forms the cabinet and administers the government.
However, since no party secured a majority in the recent general election, the ruling party had no choice but to form a coalition cabinet by bringing in other minority parties.
As a result, discord within the cabinet was inevitable as different parties pursued their own beliefs and interests.

“Rather, both the opposition and some members of the coalition government are strongly arguing that they should expand fiscal spending to stimulate the economy instead of implementing austerity. So currently, the chances of reform policies succeeding are very low.”
“Now that you mention it, that seems to be the case.”

Indeed, if the reform policies had succeeded, Thailand wouldn’t have fallen into a foreign exchange crisis.
I picked up the teacup in front of me, took a sip of the moderately cooled coffee, and set it down. Landon Shore spoke.

“It looks like the Hedge Funds will make their move soon, targeting a devaluation of the baht. Should we move along with them at that time?”

Andrew also looked at me with sparkling eyes.
I crossed my arms and pondered for a moment, then shook my head and spoke.

“Let’s just observe the first round for now.”

Unlike other times, my cautious attitude made Landon Shore furrow his brow in confusion.

“Do you think Thailand will be able to withstand the Hedge Funds’ attack?”
“The warning signs are certainly on, but with foreign exchange reserves reaching 38 billion dollars, they won’t collapse immediately even if they come under attack.”

Andrew immediately countered.

“It’s true that Thailand has substantial foreign reserves, but considering that over a trillion dollars in foreign currency is traded daily in the international financial markets, if the Hedge Funds make a coordinated push, those reserves will evaporate in an instant.”
“Precisely. Even the proud Bank of England and Japan mounted desperate defenses, yet ultimately they were forced to capitulate, were they not?”

It was only natural to assume that Thailand, lacking the economic might of Britain and Japan, would crumble under such pressure.

“Compared to those two nations that faced prior assaults, Thailand does indeed possess relatively weaker economic stamina. However, there exists one weapon that Britain and Japan never possessed.”
“What might that be?”
“The bilateral agreements Thailand’s government established with neighboring nations last year.”

Landon Shore and Andrew exchanged low exclamations of understanding.

“Ah.”
“We had overlooked that.”

Witnessing the Bank of England and Japan’s struggle against the Hedge Funds’ assault, central banks across the globe recognized they could become prey at any moment.
Asian nations felt the same urgency and, as a countermeasure, had preemptively forged agreements to form a coalition of mutual assistance—central banks would cooperate to support any member nation facing currency crises.
Thailand had similarly concluded pacts with Singapore, Hong Kong, and Malaysia, wherein their central banks would collaborate to provide support should a currency crisis emerge.

“A single twig snaps easily, but many bundled together are far more difficult to break.”

Andrew nodded gravely in agreement.

“If neighboring nations provide support to Thailand, this will certainly become a far more challenging battle.”
“Especially if Hong Kong enters the fray, victory becomes far less assured.”

Landon Shore added his own assessment with a stern expression.
As Asia’s financial hub, Hong Kong possessed not only massive foreign reserves of 92.8 billion dollars but also sophisticated financial expertise unlike other Asian nations, making it a formidable adversary for any Hedge Fund.

“Moreover, having witnessed the costs of taking the initiative in the previous two instances, the Hedge Funds will likely begin cautiously with light jabs, testing the waters before committing fully.”
“In other words, they won’t recklessly charge in like Don Quixote and become mere cannon fodder, depleting the Bank of Thailand’s dollar reserves.”
“Exactly.”

Landon Shore’s expression shifted to one of understanding as he considered this.

“Indeed, I myself would be reluctant to do someone else’s dirty work.”
“So when the Hedge Funds launch their assault, we’ll do the opposite—we’ll purchase Thai baht.”
“…!”

Landon Shore and Andrew’s eyes widened in shock at this entirely unexpected directive.

“Are you saying we should take a long position in the baht rather than a short position?”
“That’s right.”

Seok-won spoke with composure as he observed the bewilderment on the two men’s faces.

“As I just mentioned, unlike the hedge funds that will certainly hold back and watch each other cautiously, Thailand will commit its full strength to defending the baht. In the first round, the Bank of Thailand will likely emerge victorious.”

Andrew, catching on to what I was aiming for, leaned forward with gleaming eyes.

“Ah, so the baht won’t fall—it will actually rise.”
“Since it’s a high-risk gamble, the hedge funds that launched the attack will suffer considerable losses. But that won’t make them throw in the towel.”

Landon Shore nodded and continued the thought.

“They didn’t exhaust all their firepower to begin with, and the Bank of Thailand’s foreign reserves will be significantly depleted from defending the exchange rate. So before they can recover their strength, they’ll push even harder the second time around.”

Seok-won felt inwardly satisfied at the response—it was exactly what you’d expect from a hedge fund manager commanding attention on Wall Street.
Interlacing my fingers, I rested my hands on the armrests and continued.

“With their stamina already depleted, they won’t be able to withstand the second attack. So we’ll switch our position before that and sell off the baht.”

Landon Shore slapped his knee and let out an exclamation.

“You’re planning to ride the waves like a surfer, capturing every fluctuation of the baht going up and down.”

Andrew also gazed at me with admiration and spoke.

“Wow. To conceive of such a strategy—truly remarkable.”

Though I sat there calmly, the truth was that without my memories from before the regression, I would never have attempted such a high-risk tightrope walk and would have simply played it safe by shorting the baht.

‘If I try to capture everything going up and down but end up riding the wave backwards, I won’t just miss out on profits—I’ll take a massive loss.’

But because I knew how the situation would unfold going forward, I could make such a bold bet.

‘Still, it’s better to be cautious and double-check before crossing the bridge.’

Because my existence had caused so many changes, I couldn’t guarantee that events would unfold identically to their original trajectory.
Once this Asian financial crisis passed, so much would be different that there was a high probability the future wouldn’t follow the path I knew.

“I’d prefer if things unfolded as expected, but variables can emerge at any moment. Let’s monitor the Hedge Funds and Bank of Thailand’s movements more carefully.”
“Yes, understood.”

Landon Shore, answering briefly, asked with an eager expression about how much profit they might generate from this bet.

“How much should we wager on the initial bet?”
“If we invest too heavily and the Hedge Funds’ losses become substantial, we risk becoming the variable ourselves rather than riding the wave. Let’s keep it moderate—around one hundred million dollars.”

Landon Shore nodded, his expression tinged with slight regret.

“It’s a bit disappointing, but this is just a warm-up before the main game anyway. I’ll proceed with that amount.”
“I agree that’s precisely the right scale.”
“Besides, even if the Bank of Thailand successfully defends the baht, the stock market will absorb the full shock and plummet dramatically. We’ll have more than enough opportunity to profit through our options contracts—no need for regrets.”

Both men recalled the CDS options contracts they’d arranged with the Japanese Securities Firms and broke into broad smiles.

“Now that you mention it, we do have that.”
“When the Thai stock market collapses, the Japanese Securities Firms who sold those CDS options will be tearing their hair out.”

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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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