Golden Spoon Investment Portfolio - Chapter 403

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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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403. Well, I’m afraid that might be rather difficult.

November 7, 1997. Gwanghwamun Government Complex Building 1.
A cold wind swept through the office of the Deputy Prime Minister for Economic Affairs as the beginning of winter arrived, and the temperature had plummeted. Senior officials from the Ministry of Finance and Economy had gathered in the room.
Though negotiations with the International Monetary Fund had finally concluded, the scathing criticism and condemnation pouring in from the public over the agreement’s contents, combined with political pressure, had left everyone looking far more haggard than before.
Deputy Prime Minister for Economic Affairs Choi Jin-woo, in particular, who had not only been summoned to the National Assembly but also subjected to an investigation by the Board of Audit and Inspection, wore an expression of utter exhaustion, with deep shadows beneath his eyes.
He looked as though he were struggling to bear a heavy burden entirely alone.
As the heavy silence settled over the room, Deputy Prime Minister Choi Jin-woo, cigarette poised between his fingers, turned to address the Ministry officials seated on the sofas across from him.

“You said the first tranche of IMF funds—5.2 billion dollars—has already been completely depleted?”

Jung Ji-hoon, the Director of Financial Policy, responded immediately with a grim expression.

“Yes, sir.”
“What do you mean it’s all gone just days after we received the dollars?”

At the irritation in his voice, Director Jung Ji-hoon offered an explanation, his expression troubled and apologetic.

“We anticipated that once the IMF agreement was finalized, foreign investors and financial institutions would cease their capital withdrawals and international confidence in Korea would be restored. However, the reality proved otherwise.”
“….”
“Instead, they appear to be treating the rescue funds from the IMF as a ticket to escape Korea.”

Director Jung Ji-hoon continued carefully, watching the expression of Deputy Prime Minister Choi Jin-woo, whose nose had wrinkled in displeasure.

“Until now, even those who wanted to flee Korea were unable to do so due to the shortage of dollars in the domestic market. But the moment the IMF rescue funds arrived, they saw it as their opportunity to escape, hastily converting their won to dollars and leaving the country.”

Vice Minister Shin Seung-gi, seated on the left sofa, interjected with a stern expression.

“It appears our projections were simply off the mark.”
“Ugh.”

Deputy Prime Minister Choi Jin-woo let out a groan of frustration, his brow furrowing as though gripped by a headache.

“We endured endless ridicule and worked desperately to secure those dollars, only to find that capital flight hasn’t slowed—it’s accelerating. This is absolutely maddening.”

The IMF support funds were literally just brushing past the Bank of Korea before flowing directly into the hands of foreign hot money and overseas bond syndicates, hemorrhaging out of the country—it was enough to make anyone’s blood boil.
Shin Seung-gi, the deputy minister, spoke with an expression full of concern.

“We’ve urgently requested that the IMF accelerate the second round of funding as much as possible. However, if foreign capital continues to flee at this rate, we’ll be pouring water into a bottomless pit.”
“That’s true.”

Choi Jin-woo, the Deputy Prime Minister for Economic Affairs, lit a cigarette with a troubled expression.
He drew the smoke deep into his lungs, exhaled it slowly, and then laid out a countermeasure that had come to mind.

“What if we temporarily restrict foreign exchange conversions?”
“While that would reduce foreign currency outflows in the short term, unless we fundamentally change how foreign investors view Korea’s stability, we’ll only be buying time. It will be difficult to actually prevent dollars from leaving the country.”

In response to Jung Ji-hoon’s reaction, Shin Seung-gi also added his words with a negative attitude.

“Restricting the withdrawal of investment funds would violate the agreement we made with the IMF, and it could become problematic.”

Choi Jin-woo, the Deputy Prime Minister for Economic Affairs, let out a small sigh and nodded.

“With opposition and ruling party presidential candidates already calling for renegotiation, one wrong move and this situation becomes far more complicated.”

Frustrated by the situation, he clicked his tongue briefly and asked, looking at Shin Seung-gi.

“Since we’re on the subject, what’s the IMF’s reaction to the presidential candidates’ statements?”
“Officially, they’re emphasizing that all presidential candidates signed commitment letters before the agreement was reached, and they’re treating it as merely an incident that occurred during the presidential election process, not taking it too seriously.”

Shin Seung-gi continued in a grave voice.

“However, unofficially, Governor Townsend has pressured us by suggesting that if the opposition and ruling party presidential candidates don’t retract their renegotiation statements, the IMF may withhold the promised support payments.”
“Damn it!”

A curse escaped from Choi Jin-woo’s lips upon hearing this.

“It feels like we’re walking on thin ice every single day. These politicians aren’t helping at all—they’re just causing chaos. It’s absolutely maddening.”

Choi Jin-woo, the Deputy Prime Minister for Economic Affairs, vented his frustration with a deeply furrowed brow.
It infuriated him that he and the Ministry of Finance and Economy were being blamed as the culprits behind the foreign exchange crisis, and now these politicians were making renegotiation statements that threatened to blow the whole situation apart. The anger was unbearable.
But with the nation teetering on the brink of catastrophe, he couldn’t afford to sit idle. He stubbed out his nearly finished cigarette in the ashtray and spoke.

“Do whatever it takes to persuade the International Monetary Fund to release the second tranche of support funds on schedule. If the bailout truly gets suspended, then we’ll have no choice but to declare a genuine moratorium.”
“…I’ll do my best.”

Choi Jin-woo, the Deputy Prime Minister for Economic Affairs, fixed Shin Seung-gi with a stern gaze.

“This isn’t about trying—we need to secure those dollars by any means necessary, without hesitation. If we fail, everything we’ve worked for up to this point will be for nothing!”
“Understood.”

The urgency in his voice made Shin Seung-gi’s expression harden with resolve.

“I’ll meet with the presidential candidates from both the ruling and opposition parties, though I’m not sure they’ll listen given how absorbed they are in the election.”

Both parties were competing to criticize the agreements made with the International Monetary Fund to boost their approval ratings, making it unlikely they would listen. Yet sitting idle was not an option.

“What if we temporarily suspended operations at five additional finance companies in the Seoul area with high debt ratios? It might help appease the International Monetary Fund.”

Lee Dong-wook, the director, offered his opinion cautiously.

“You’re suggesting we issue additional suspension orders?”
“Yes. That way, we could also prevent cascading corporate bankruptcies caused by indiscriminate debt collection from finance companies in crisis.”

Choi Jin-woo, the Deputy Prime Minister for Economic Affairs, stroked his chin thoughtfully for a moment before reaching a decision.

“We only recently ordered nine finance companies to temporarily close their doors. Issuing another suspension order won’t be without consequences, but given the circumstances, we have no choice. Go ahead with it.”
“Yes.”

Choi Jin-woo, the Deputy Prime Minister for Economic Affairs, turned his head to look at Shin Seung-gi.

“How is the dollar-denominated bond issuance that the Industrial Bank is pushing forward progressing?”
“We’re holding investment briefings in New York and actively conducting sales.”
“This must succeed if we’re to restore foreign investor confidence and escape the foreign exchange crisis. Keep checking the situation regularly and provide whatever support is needed.”
“Understood.”

After issuing several additional directives, Choi Jin-woo, the Deputy Prime Minister for Economic Affairs, clutched his throbbing head and leaned back against the sofa.
Despite receiving financial support from the International Monetary Fund, the situation wasn’t improving—if anything, it was growing worse with each passing day, and his chest tightened with anxiety.

* * *

That night.
Seok-won, dressed in comfortable clothes, sat alone on the plush sofa in the living room, savoring wine leisurely while listening to Vivaldi’s “The Four Seasons” flowing from European luxury vacuum tube amplifiers and speakers.
As expected, the sound quality was on an entirely different level compared to what money could typically buy.
As I closed my eyes to appreciate the melody—as if aristocrats were dancing in pairs in a grand ballroom—an uninvited vibration and ringtone suddenly pierced through.
I picked up the mobile phone resting on the reception table and checked the screen to see Landon Shore’s number from New York.

“It’s me.”

I lowered the music volume with the remote and answered the call immediately.
Landon Shore let out a small exclamation, apparently hearing the background music.

[It sounds like you were listening to music. Hmm, that’s a familiar tune… Is that Vivaldi?]
“That’s right. I didn’t know you were so knowledgeable about classical music.”
[I attend concert halls occasionally for charity events. It’s more for networking purposes, but the instrumental sounds that fill the concert hall are quite powerful and enjoyable.]

I took a sip of wine and replied.

“I just acquired new Focal speakers and was testing out the sound quality.”
[Focal speakers—those are among the finest speakers even recognized in Europe.]

His words were accurate, so I smiled slightly.

“The sound is indeed as good as its reputation. By the way, did you attend the global bond investment briefing held by the Industrial Bank?”
[Yes. I attended in person as you instructed.]

Before issuing dollar bonds, the Industrial Bank held a briefing session at the Plaza Hotel for major Wall Street investors, which also served as a preliminary demand survey.
Naturally, the Eldorado Fund—which had grown beyond being a rising star to become a major fund with significant influence on Wall Street—also received an invitation to the investment briefing.

“What were the bond issuance terms?”
[They said they would add 300 to 350 basis points to the LIBOR rate for a 3-year maturity.]
“That’s four times higher in spread than the 4-year dollar bonds the Industrial Bank issued back in May this year.”
[It seems they raised the interest rate considering that Korea will be receiving IMF bailout financing.]
“True—circumstances have changed since then, so if they had offered the same terms, no one would have bought the bonds.”
[That’s likely the case.]

It was natural to raise interest rates as investment risk increased.

“What was the atmosphere like?”
[Many institutions showed interest and attended, including JP Morgan, Goldman Sachs, and major commercial banks like Citibank.]

With the phone pressed to his ear, Seok-won asked with a hint of anticipation in his expression.

“Then we can expect the bond to perform well, can’t we?”

But contrary to his hopes, Landon Shore’s response was skeptical.

[I’m afraid that might be difficult.]

Seok-won asked with a puzzled expression.

“But you just said there was significant interest from many parties.”
[After the briefing ended, I spoke with them, and they all said the interest rate was too low.]
“We quadrupled the spread premium compared to the bonds we issued a few months ago, and they’re still not satisfied.”
[That suggests Wall Street views Korea as quite unstable, doesn’t it?]

Seok-won accepted the point with a bitter expression.

“It’s because the presidential candidates are advocating for renegotiating with the International Monetary Fund.”
[That’s part of it, but fundamentally, many believe Korea will struggle to overcome the International Monetary Fund crisis and return to normalcy.]
“So we’ve fallen from being one of Asia’s four dragons to becoming a snake.”
[Precisely. Some predict Korea will sink into the middle-income trap like Mexico or the Philippines and collapse entirely.]

From this alone, I could understand how foreign investors, particularly those on Wall Street, were viewing Korea at this moment.

“If the atmosphere is like that, the Industrial Bank might fail to issue its bonds.”
[There’s a high probability that will happen.]

Since the Industrial Bank was a state-owned bank funded by the government, its creditworthiness was essentially synonymous with Korea’s creditworthiness.
The fact that no one wanted to purchase the dollar bonds issued by the Industrial Bank meant that market confidence in Korean government bonds had plummeted to junk bond levels.

“If the Industrial Bank fails to issue bonds as expected, foreign investors’ exodus from Korea will accelerate even further.”
[It will.]

Seok-won nodded heavily.

“Understood. Contact me immediately if there are any developments.”
[Yes, I will.]

After ending the call and lowering the phone from his ear, Seok-won lifted his wine glass with a darkened, somber expression.

“The moment news of the bond issuance failure spreads, panic will surge and the exchange rate will skyrocket through the ceiling.”

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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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