Golden Spoon Investment Portfolio - Chapter 375

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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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375. If that’s the case, I believe I can resolve it for you.

The following day, with the exchange rate still surpassing 1,000 won per dollar and the foreign exchange market teetering on the brink of chaos, Lee Eun-hyung, Deputy Prime Minister for Economic Affairs, arrived at the Blue House alongside Noh Gang-woong, Governor of the Bank of Korea, summoned by the President.
As if to underscore the ominous atmosphere enveloping Korea, massive dark clouds hung heavily beyond the expansive window of the President’s office.
President Kim Sung-gyu, seated in the center position of honor, his expression visibly displeased, glared at Lee Eun-hyung and Noh Gang-woong seated side by side to his left, then bellowed.

“You assured me the exchange rate would never exceed 1,000 won! What in the world is happening here!”

Lee Eun-hyung, Deputy Prime Minister for Economic Affairs, lowered his head in shame.
Merely days prior, in this very room, he had made bold proclamations about the exchange rate, leaving him utterly speechless now.

“The media keeps prattling on about the possibility of a foreign exchange crisis like the Southeast Asian nations are experiencing. Is that truly a concern?”

Pressed with urgency, Lee Eun-hyung, perspiration beading on his forehead, responded hastily.

“It’s true that currency speculators are launching attacks, exploiting the sharp rise in exchange rates, but we needn’t worry about a full-blown foreign exchange crisis.”
“Then why is the exchange rate climbing like this?”
“It’s merely a temporary phenomenon stemming from the financial sector’s deterioration due to successive major conglomerate defaults beginning with Hansei Group, coupled with credit rating agencies downgrading our national credit rating, and foreign investors fleeing as the stock market plummets.”

President Kim Sung-gyu shifted his gaze toward Noh Gang-woong.

“Do you concur?”

Noh Gang-woong cast a sidelong glance at Lee Eun-hyung beside him, then spoke in a grave tone.

“It’s true that multiple adverse factors have converged simultaneously through sheer misfortune, destabilizing the exchange rate. However, as we witnessed in Southeast Asian nations and Hong Kong, currency speculators are like ravenous wolves—the moment a vulnerability appears, they descend with ferocity. Therefore, we must take preemptive measures before the situation deteriorates further.”
“Tsk!”

President Kim Sung-gyu clicked his tongue sharply and pressed further.

“Specifically, what exactly needs to be done?”

Noh Gang-woong responded.

“We must actively defend the exchange rate by deploying our foreign exchange reserves.”

President Kim Sung-gyu’s face fell as he listened to the proposal.

“Aren’t we already doing that?”
“Rather than merely dampening the surge by pouring water with a bucket each time the exchange rate spikes significantly, we should drop a water bomb to cool down the overheated foreign exchange market entirely.”
“But wouldn’t that be even more dangerous if our foreign exchange reserves shrink substantially?”

Gu Hyung-gi, the Chief Secretary seated across from him, voiced his concern.

“Of course, such risks exist. However, to prevent the situation from spiraling into a foreign exchange crisis as the media suggests, we need to demonstrate through action the government’s unwavering resolve not to simply stand idle while the exchange rate rises.”

Lee Eun-hyung, the Deputy Prime Minister for Economic Affairs beside him, also chimed in.

“Precisely. Hong Kong took such a hardline stance and fought to the bitter end, didn’t they? They repelled the attacks of currency speculators who laid waste to Southeast Asian nations.”
“Hmm.”

Yet as President Kim Sung-gyu hesitated and failed to make a swift decision, Deputy Prime Minister Lee Eun-hyung pressed his case once more.

“If we aggressively defend the exchange rate while bringing back foreign investors who have withdrawn, allowing dollars to flow in, we can calm the anxiety in the foreign exchange market.”
“How exactly would we accomplish that?”

Seeing President Kim Sung-gyu’s expression brighten with interest, Deputy Prime Minister Lee Eun-hyung answered immediately.

“We expand the foreign investment limit in stocks from the current 23% to 26%.”
“Will that be effective?”

As he asked with a skeptical expression, Deputy Prime Minister Lee Eun-hyung spoke with strong conviction.

“Every time we’ve raised the investment limit in the past, foreign investors have invariably brought dollars and purchased stocks. This time will be no different.”
“The stock market is in free fall and the market sentiment is poor due to cascading defaults among major corporations. There’s no guarantee it will happen this time, is there?”

Chief Secretary Gu Hyung-gi interjected with his observation, and President Kim Sung-gyu nodded slightly in agreement.

“As Secretary Gu says, if we go through the trouble of raising the investment limit only to have foreigners not return, it’s all for nothing, isn’t it?”

Then Deputy Prime Minister Lee Eun-hyung immediately explained the basis for his conviction.

“It’s true that the stock market situation is unfavorable. However, conversely, because the exchange rate is rising and KOSPI has fallen sharply, foreign investors have merit in investing again.”
“Why is that?”
“It’s simple. As the exchange rate rises, they can exchange more won for the same dollar, so they’ll gain exchange rate profits from the moment they invest. Moreover, if they buy stocks at bargain prices now—when the market has crashed due to fear and stocks are cheaper than their true value—they can reap substantial gains when the index rebounds. Where else could there be easier money?”
“Hmm. Your reasoning seems sound.”

As President Kim Sung-gyu nodded in agreement, Deputy Prime Minister Lee Eun-hyung leaned forward and spoke with conviction.

“If we stabilize the exchange rate quickly through aggressive measures, even the currency speculators who’ve already taken heavy losses in Hong Kong will become frightened and retreat.”

President Kim Sung-gyu tapped his fingers against the armrest of the sofa, deliberating for a moment before reaching a decision.
He then lifted his head and spoke to Deputy Prime Minister Lee Eun-hyung.

“Very well. I’ll give you full authority. Stabilize the exchange rate by whatever means necessary.”

Hearing the answer he’d hoped for, Deputy Prime Minister Lee Eun-hyung’s rigid expression softened as he bowed his head.

“I won’t disappoint you.”
“You’re well aware there’s a presidential election in December.”
“….”
“Before the formal campaign begins, resolve this situation so it doesn’t negatively impact the voting. You understand what I’m saying.”

Under President Kim Sung-gyu’s steady gaze, Deputy Prime Minister Lee Eun-hyung immediately bowed his head.

“Yes. I’ll do as you say.”

President Kim Sung-gyu leaned back against the sofa and spoke with exasperation.

“There’s truly never a moment’s peace until the very end of my term.”

* * *

September 10, 1997.
The Mercedes sedan carrying Seok-won crossed the Dongjak Bridge and sped along Gangbyeon North Road.

[….As the exchange rate surpassed 1,000 won per dollar and the foreign exchange market has shown instability for several days, Deputy Prime Minister Lee Eun-hyung announced emergency financial market stabilization measures at the Gwacheon Government Complex today.
The main provisions include expanding bond market openness from January 1st next year by increasing investment limits for large corporations’ unsecured convertible bonds and completely abolishing investment limits for small and medium enterprises, as well as expanding cash loan imports including foreign exchange securities issuance. Additionally, to stabilize the stock market, the government will significantly increase the proportion of pension fund stock investments, encourage listed companies to repurchase their own shares, and simultaneously expand foreign investment limits to 26 percent starting two days from now.
Furthermore, to curb the rapid surge in exchange rates, the government announced that foreign currency purchases for deposit and possession purposes—which were scheduled to be implemented next month—will be completely prohibited starting today.
Deputy Prime Minister Lee Eun-hyung stated that corporations and financial institutions will actively cooperate in stabilizing the foreign exchange market….]

Seok-won, leaning back against the leather seat in the rear, gazed out at the expansive Han River visible through the window with an expressionless face, clicking his tongue sharply at the news emanating from the radio.

“The fundamentals are in ruins, and foreign investors are scrambling to flee Korea. There’s no way they’ll come back just because we raise investment limits.”

From the start, foreigners had been selling stocks and continuously withdrawing their investment capital, so investment limits weren’t the problem—rather, their share had already shrunk considerably.
In this situation, raising investment limits would hardly produce any meaningful effect.

“In fact, it’s just signaling that the government is desperate, so to foreigners it’ll sound like an evacuation siren telling them to run.”

At that moment, Han Ji-sung, seated in the front passenger seat, turned his head back and asked.

“Chairman. What did you say?”
“Nothing. How much longer until we reach Headquarters?”
“We just crossed the Wonhyo Bridge, so I’d say about five minutes until we arrive.”

Seok-won nodded slightly and turned his gaze back toward the car window.

Shortly after, arriving at the Daeheung Group Headquarters located in Mapo, Seok-won stepped out of the car with Han Ji-sung, his attendant secretary, and headed straight up to the Chairman’s Office.
Upon opening the door to the Attached Office and stepping inside, six employees—both men and women—who had been sitting at their desks immediately rose to their feet at the sight of him.

“The Chairman is inside, isn’t he?”

At Seok-won’s question, Choo Se-young, a section chief with a slightly receding hairline, quickly stepped forward and answered.

“Yes. In fact, the Chairman instructed us to show you right in as soon as you arrived.”

Seok-won turned his head back and spoke to Han Ji-sung.

“Wait here, Han Deputy.”
“Yes.”

As he took a long stride forward, Choo Se-young lightly knocked on the solid wood door to the inner Chairman’s Office, grasped the handle, opened it, and stepped aside.
Passing Choo Se-young and entering the Chairman’s Office, Seok-won found Park Tae-hong, the Chairman, seated in the center of a spacious sofa, with his elder brother Park Jin-hyung, President of Daeheung Textiles, Chief Secretary Gil Seong-ho, and Executive Director Jo Yun-won seated on either side.
Park Tae-hong, who sat with a cigarette between his fingers, lifted his head, looked at his second son, and gestured toward the empty seat.

“Sit down now that you’re here.”

Seok-won gave a slight bow to Park Tae-hong and moved toward the empty seat next to his brother.
As he exchanged nods with the other two men and took his seat, Park Tae-hong spoke, looking toward Jo Yun-won.

“Continue where we left off.”
“Yes, sir.”

Jo Yun-won cleared his throat softly before speaking.

“Following the collapse of Ssangbong Group a few days ago and now Hanni Department Store in Gwangju, the banks we deal with have notified us they cannot provide the loans they previously agreed to.”

Park Tae-hong’s thick brows furrowed slightly as he spoke.

“But they said it was possible just last week, didn’t they?”

Jo Yun-won, meeting his gaze, replied with an uncomfortable expression.

“That’s true, but in the meantime, exchange rates have surged dramatically, and more importantly, the cascading defaults have swollen the financial sector’s non-performing loan portfolio to unmanageable levels. It seems additional lending will be difficult for the foreseeable future.”
“Hmm. This is troublesome.”

As Park Tae-hong clicked his tongue, Chief Secretary Gil Seong-ho also opened his mouth with a grim expression.

“I’ve made inquiries here and there as well, and it appears that commercial banks are also struggling to secure funding due to credit rating downgrades and soaring exchange rates.”
“No matter how poor the economy is, I never expected liquidity to dry up this severely. We’ll see even more defaults in the coming days.”

Park Tae-hong sighed with evident concern.
Then Seok-won, who had been listening quietly, caught his eye cautiously and asked carefully.

“I heard you converted all the debt into long-term loans. Do you need funds urgently?”
“Not exactly. The atmosphere lately has been so poor that I wanted to secure additional cash reserves as a precaution. But circumstances aren’t cooperating.”

Hearing that there were no problems with the group, Seok-won felt inwardly relieved and spoke with a smile.

“If that’s the case, I think I can help resolve it.”
“Hmm?”

Park Tae-hong, cigarette in mouth, looked at his second son with a puzzled expression.

“How exactly do you plan to resolve it?”

Seok-won placed a folder he had received from Han Ji-sung before entering onto Park Tae-hong’s desk.

“It’s the fund earnings statement from the capital you entrusted to me previously.”

Chairman Park Tae-hong’s eyes widened in astonishment.

“A profit statement? You’re saying you’ve already earned enough to bring me this?”
“Yes. Let’s take a look at the details.”

Seok-won flashed a confident smile.
Seeing his second son—a man who never spoke carelessly—radiating such unwavering confidence, it was certain he had achieved remarkable profits.
Chairman Park Tae-hong’s face brimmed with anticipation as he hastily stubbed out the cigarette between his fingers in the ashtray and seized the folder.
He closed his eyes briefly as if offering a prayer to heaven before scratching a lottery ticket, then opened the folder wide.
Upon confirming the profits, Chairman Park Tae-hong drew in a sharp breath.

“Whoa!”

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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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