Golden Spoon Investment Portfolio - Chapter 362

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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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362. So China was pulling the strings behind the scenes after all.

August 5, 1997, Wall Street in New York.
More than a month had passed since the hedge funds began their assault on the Hong Kong dollar, and George Hamilton, arriving at the Quantum Fund headquarters on 7th Avenue in Manhattan, summoned Rodney, the Chief Investment Officer, and Ian, the Chief Manager, to his office.
With the three men seated around the leather sofa inside the room, George Hamilton, occupying the seat of honor, spoke in a somewhat subdued voice.

“Yesterday alone, there were over twenty billion Hong Kong dollars in selling pressure in the foreign exchange market, yet we couldn’t break through the upper band of the exchange rate.”

Ian, the Chief Manager who had orchestrated the assault on the Hong Kong dollar throughout the night, answered with a weary expression.

“Not only us, but many hedge funds that have joined the attack continue to hammer away relentlessly, yet the Hong Kong Government is proving far more tenacious than we anticipated.”

Rodney, the Chief Investment Officer seated across from him, added with a notably serious expression.

“By raising the base interest rate further and essentially abandoning the stock and real estate markets, the Hong Kong Government is throwing all its resources into defending the exchange rate. The battle is becoming increasingly difficult.”

Hearing this, George Hamilton’s brow furrowed as if displeased with the situation.
Noticing his expression, Rodney gently sought to reassure him.

“From the beginning, didn’t we anticipate that Hong Kong would be more difficult to breach than other Asian nations?”

Ian, the Chief Manager, also offered a somewhat optimistic assessment.

“Though they’re holding firm, they’ve expended considerable dollar reserves in defending the exchange rate, so time should be on our side.”

Yet for some reason, George Hamilton’s frown refused to ease.

“Perhaps. The problem is that a new variable has emerged.”

At those words, Rodney’s eyebrows knitted together as he asked.

“You don’t mean China is showing signs of intervention?”

Ian, the Chief Manager, also stiffened his expression as he looked toward George Hamilton.

“No.”

George Hamilton, who had been leaning back in his chair, shook his head, and Rodney, the CIO, furrowed his brow even deeper.

“Then what variable has emerged, sir?”

George Hamilton spoke with a displeased expression.

“The White House.”
“Pardon?”

Both men’s eyes widened in complete surprise at this entirely unexpected revelation.

“Did you just say the White House?”

Rodney, the CIO, pulled his body forward while speaking, unable to hide his bewilderment as he repeated the question.
His expression made it clear he suspected he had misheard.
George Hamilton nodded and replied with an irritated tone.

“Yes.”
“No. Why would the White House….”

Faced with Rodney’s confused reaction, George Hamilton crossed his arms and explained in detail.

“Last night, Chief Secretary Huxley called me and said that Chairman Zhang Zedong himself contacted the White House directly to express deep concerns about the current situation in Hong Kong.”

Rodney, the CIO, immediately showed his disapproval.

“Still, it’s difficult to accept the White House putting the brakes on private investment activities.”
“Exactly.”

Ian, the Chief Manager, nodded in agreement, sharing the same sentiment.
The United States was a nation that prioritized individual freedom and rights to such an extent that it was enshrined in the Constitution itself.
Wall Street in particular, where investors traversed the globe conducting investment activities and generating profits, embodied this tendency even more strongly.
Yet hearing that the White House, after receiving a call from the Chinese Chairman, would attempt to interfere with free investment activities naturally provoked resistance.
George Hamilton’s expression hardened as if to say this was obvious.

“At first, I was displeased and tried to dismiss it, but apparently the White House is in a bind too. They said that if Hong Kong devalues its currency, China would have no choice but to significantly depreciate the yuan to defend its exchange rate.”

Rodney, the CIO, immediately grasped the situation and frowned.

“If China truly devalues the yuan, it will severely disrupt the White House’s plan to induce a weak dollar, reduce fiscal deficits, and revitalize the economy.”
“Indeed.”

Ian, the Chief Manager, now understood why the White House had intervened, and his expression grew grave.

“But we’ve already spent an astronomical sum short-selling the Hong Kong dollar. If we stop now, the losses will be catastrophic.”

George Hamilton nodded at Rodney’s concern-laden words.

“That’s what I said too.”
“So what did they say?”

George Hamilton interlaced his fingers across his chest as he sat on the sofa.

“They’re giving us four days.”

George Hamilton continued, observing the two men leaning forward intently to listen.

“Since the White House finds it burdensome for us and other Wall Street hedge funds to suffer massive losses, they’re granting us one final window to force Hong Kong’s surrender.”
“What happens if we fail to collapse Hong Kong within those four days?”

Rodney asked with a grave expression.
George Hamilton’s face remained as impassive as a sculpture as he answered quietly.

“Then we’re to cleanly withdraw from Hong Kong.”

The faces of both men grew deeply serious.
In the silence that descended upon the office, George Hamilton narrowed his eyes as he posed the question.

“Can we secure their surrender within four days?”

Unlike Ian, who hesitated to answer, Rodney took a moment to collect his thoughts, then met his gaze.

“It won’t be easy, but if that’s the deadline we’re working with, I’ll do whatever it takes to meet it.”

George Hamilton nodded slightly, as if he had received the answer he desired.

“From this moment on, for the next four days, we’ll mobilize all our resources to bring down the Hong Kong dollar.”
“Yes.”
“Understood.”

Rodney, the CIO, and Ian, the Chief Manager, responded with grave expressions.

***

Brring. Brring.

In the darkened room.
Seok-won, who had been lying in bed, stirred at the insistent ringing of his mobile phone and stretched one arm to the side.
He fumbled across the nightstand, found his phone, and answered the call with his eyes still closed.

[Boss, it’s me.]

At the sound of Landon Shore’s voice, Seok-won spoke with the drowsy expression of someone still half-asleep.

“What time is it?”
[It should be around 1:30 AM Seoul time.]

Seok-won forced himself upright and grabbed the wristwatch lying on the nightstand to check the time.

“What’s happened at this hour?”
[The Hong Kong dollar is being sold off massively in the New York foreign exchange market—it looks like the Quantum Fund’s doing.]
“Isn’t that something that’s been going on for over a month?”

At my casual response, Landon Shore’s voice hardened over the phone.

[In the past three hours alone, the volume sold has exceeded 2 billion Hong Kong dollars.]
“…!”

Sleep vanished from Seok-won’s mind in an instant. He gripped the phone tighter and asked urgently.

“Did you just say 2 billion Hong Kong dollars?”
[Yes. That’s just what the Quantum Fund has sold on its own.]

Over the past month, currency speculators including the Quantum Fund had relentlessly dumped Hong Kong dollars, but the peak daily selling volume had been around 3 billion Hong Kong dollars.
Yet in just three hours—and not from all the speculators combined, but from the Quantum Fund alone—Hong Kong dollar sales had reached two-thirds of that peak volume, which was nothing short of astonishing.
Seok-won instinctively sensed that something extraordinary was unfolding.

“What about the movements of other hedge funds?”
[After initially being caught off guard by the Quantum Fund’s sudden rampage, they’re now all increasing their selling volumes and following suit.]
“Then the Hong Kong dollar exchange rate must have spiked considerably.”
[Yes. Under the massive selling pressure, it briefly broke through the upper band limit to 7.965 Hong Kong dollars per dollar, but the Hong Kong authorities launched emergency countermeasures and have now pulled it back within the band.]

Seok-won pressed his forehead with his hand as he questioned the Quantum Fund’s sudden movements.

“The selling intensity is still maintaining at the same level, correct?”
[On the contrary, it’s growing stronger with each passing hour.]

Even now, the volume of Hong Kong dollars being dumped was enormous, and rather than diminishing, the selling pressure was intensifying—Seok-won’s expression hardened at this report.

[As the foreign exchange market roils, the Hang Seng Index futures are plummeting over 7% in the aftermath.]
“When exchange rates become unstable, capital flight from the stock market accelerates proportionally. It’s inevitable that it would have an impact.”

No matter how I analyzed it, I couldn’t fathom why George Hamilton—who had been gradually depleting foreign exchange reserves and methodically dismantling Hong Kong—would suddenly launch such an aggressive, impatient assault.

“Did something change in the market while I was sleeping?”
[Nothing particularly significant. However, there is one thing that stands out.]
“What is it?”
[Word coming out of Washington is that Zhang Zedong, the Chinese President, called the White House directly to express serious concerns about the hedge funds’ attack on Hong Kong. There’s also a rumor that he mentioned the possibility of devaluing the yuan depending on how the situation develops.]
“…!”

Upon hearing this, Seok-won felt as though he’d been struck on the back of the head.
In my original recollection, Hong Kong had held out stubbornly to the end, but with steep interest rate hikes, the stock and real estate markets had collapsed, and foreign exchange reserves had dwindled so severely that surrender would have been unsurprising at any moment.
Yet the sudden cessation of attacks by the Quantum Fund and other hedge funds had always been a mystery.

“I thought something felt off, but it turns out China was pulling the strings behind the scenes all along.”

Since it had transpired beneath the surface, it would have remained invisible to the public eye.
Hearing the words that had carelessly slipped from my lips, Landon Shore asked with a puzzled expression.

[What did you say?]
“Ah, just talking to myself.”

Seok-won, who had glossed over the matter vaguely, leaned his back against the headboard and contemplated the situation.
If China simply unleashed its foreign exchange reserves to directly support Hong Kong, it risked becoming a target for currency speculators.
So instead, they had employed a method of pressuring the White House—which desired a weak dollar for American economic stimulus—by circumventing direct involvement.

‘Now that I think about it again, it’s truly an ingenious solution.’

While maintaining an outward appearance of passively observing Hong Kong’s difficulties, China was precisely identifying and exploiting the opponent’s vulnerabilities from behind. I was reminded once again that China was an adversary I could never afford to underestimate.
Clearing his thoughts, I immediately issued instructions to Landon Shore.

“Keep a close watch on the movements of the Quantum Fund and hedge funds. And find out whether Chairman Zhang Zedong really did call the White House, and get me more precise details about what was discussed.”
[Understood.]

After ending the call, Seok-won rose from the bed.
Sleep had already fled completely, and I knew that lying back down would be utterly futile.
Leaving the bedroom, I crossed the spacious living room where only indirect lighting was on, made my way to the kitchen, opened the refrigerator, and took out bottled water.
As I poured the cold water into a cup and drank it, my thirst finally subsided and my mind cleared.

“Since I’m already awake anyway, I might as well check the market conditions.”

Holding a mug of freshly brewed coffee, I entered the trading room I had set up in my home and powered on the computer and Bloomberg terminal.
Listening to the whirring sound of the fan spinning, I sipped the coffee and settled into my chair, waiting for the system to finish booting.
Once the Windows screen appeared, I moved the mouse and opened the Hong Kong Dollar trading window.

[HKD : 7.81 (▲0.11)]

Despite the Hong Kong authorities’ intervention, the exchange rate was slightly exceeding the upper band limit of 7.80. I let out a low, contemplative murmur and spoke to myself.

“George Hamilton really is pushing this with determination.”

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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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