Golden Spoon Investment Portfolio - Chapter 408

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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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408. Let’s Begin.

[Financial Institutions to Purchase All Non-Performing Loans by January Next Year]
[Shin Century Investment Trust Ordered to Suspend Operations Starting Tomorrow]
[Government to Guarantee Banks’ Foreign Borrowings Up to 20 Billion Dollars]
[Corporate Liquidity Crisis Inevitable to Disrupt This Year’s Tax Revenue]
[Exchange Rate Surges Even After IMF Agreement, Threatening 1,700 Won per Dollar Today]
[IMF Demands Integration of Finance Companies, Banks, and Supervisory Bodies]
[IMF Support Interest Rates Expected to Rise 2-4 Percentage Points]
[Concerns Over Korea Becoming World’s Top Debtor Nation with 200 Billion Dollars in Foreign Debt]
[Foreign Exchange Market Surges Daily]
[Record-Breaking Unemployment Numbers This Year Due to Chain Bankruptcies of Corporations]
[How Long Will Foreign Exchange Market Instability Continue?]

Since the foreign exchange crisis erupted, the lights in the Ministry of Finance and Economy’s office never went dark, night after night.
Despite our desperate efforts to resolve the situation, circumstances only grew more dire with each passing day.

“Today’s bill default rate reached a record high of 7.23 percent. With Elcanto and Haeahn Pharmaceuticals filing for bankruptcy, the number of defaulted companies this year has now reached 230.”

Deputy Prime Minister for Economic Affairs Choi Jin-woo, haggard from days without proper sleep amid the relentless barrage of grim reports, spoke in a parched voice.

“The number of bankrupt companies has reached historic levels.”

Vice Minister Shin Seung-gi, seated on the sofa to the left, responded with equal exhaustion evident in his demeanor.

“The crisis at finance companies and securities firms is now spreading to the banks that lent them money. More critically, the astronomical surge in non-performing loans stemming from successive bankruptcies of major corporations has become a severe problem.”
“The confirmed amount of non-performing loans held by banks and finance companies has exceeded 32 trillion won, correct?”
“Yes. As a result, banks struggling to maintain BIS capital adequacy ratios have completely halted new lending and begun recovering existing loans, causing liquidity in the market to dry up even further.”

Deputy Prime Minister Choi Jin-woo sighed involuntarily, his frustration mounting.

“It’s a vicious cycle, pure and simple.”

Vice Minister Shin Seung-gi continued, his expression darkening.

“What’s even more alarming is that fear is spreading through the market that if Shinra and Seonam Securities are followed by Shinseogi Investment’s collapse, it could trigger a full-scale financial crisis.”
“….”
“Whether it’s banks or securities firms, everyone’s scrambling to secure cash, call transactions have nearly ground to a halt, and interest rates have skyrocketed. If this continues, the entire financial system could collapse.”
“What are the current market interest rates?”
“They’ve soared to 30% annually.”
“Hmm.”

Choi Jin-woo, the Deputy Prime Minister for Economic Affairs, let out a low groan and furrowed his brow.

“That’s essentially impossible to borrow at.”

Shin Seung-gi, the Vice Minister, added in a gloomy voice.

“On top of that, the exchange rate continues to surge, making the burden even heavier.”
“I heard it nearly broke through 1,700 won today.”
“Yes. When it broke through the resistance level during trading, the Bank of Korea immediately intervened and barely managed to pull it back below 1,700 won.”
“More precious dollars wasted.”
“If we’d left it alone against the currency speculators’ attacks, the exchange rate would have surged uncontrollably. We had no choice.”

At that, Choi Jin-woo, the Deputy Prime Minister for Economic Affairs, shook his head weakly.

“I’m not blaming you. I’m just frustrated.”

Choi Jin-woo, the Deputy Prime Minister for Economic Affairs, swallowed a sigh and asked.

“How much foreign exchange reserves do we have left now?”

Shin Seung-gi hesitated briefly before answering.

“Just under 8.8 billion dollars.”
“Good heavens….”

Faced with the bleak situation, Choi Jin-woo, the Deputy Prime Minister for Economic Affairs, leaned back and ran his hand through his hair.

“It feels like we’re bleeding out day by day.”
“We’ve requested the IMF, IBRD, and ADB to accelerate their scheduled support payments. If that goes through, we should be able to catch our breath.”

Yet Choi Jin-woo’s expression remained far from brightening.

“Whether they’ll grant the request is uncertain, but even if things go well, it won’t exceed 8.5 billion dollars at most. That amount will only be enough to put out the immediate fire.”

Vice Minister Shin Seung-gi understood well that the sum was insufficient, so he couldn’t offer any response.
Watching Vice Minister Shin Seung-gi bite his lip and lower his head, Deputy Prime Minister Choi Jin-woo’s expression hardened.

“No matter how much foreign currency we secure, if it continues to drain away like pouring water into a bottomless pit, it will be useless. We need a fundamental solution that can completely overcome this crisis.”

But he too found it difficult to come up with any viable approach.
Deputy Prime Minister Choi Jin-woo spoke with a gloomy expression, as if lamenting.

“It feels like I’m floundering in a swamp.”

If only there were even a straw to grasp, but even that wasn’t visible in this situation.
Deputy Prime Minister Choi Jin-woo pressed his temple with one hand as if his head ached, and spoke.

“If there’s nothing more to report, you may go.”
“Yes.”

Vice Minister Shin Seung-gi gathered the folder he’d left in front and rose to his feet.
Shortly after the door closed, Deputy Prime Minister Choi Jin-woo exhaled another sigh and habitually reached for a cigarette pack.
Since becoming Deputy Prime Minister, his smoking had only increased—these days it seemed he was smoking two packs daily.
When Deputy Prime Minister Choi Jin-woo saw that even the cigarette pack in his hand was empty, he squinted his eyes.

“Damn it.”

Deputy Prime Minister Choi Jin-woo crumpled the pack with force and tossed it into the trash bin below, then muttered with his forehead in his hand.

“Nothing ever works out.”

Just as he was about to press the intercom to call the Female Secretary outside, his phone vibrated.
Deputy Prime Minister Choi Jin-woo pulled out his phone from his pocket, checked the screen, and immediately pressed the answer button.

“Chairman Park. What brings this call?”
[I hope you’ve been well. I’m not sure if I should be calling when you’re so busy.]

Leaning back against the plush sofa, Deputy Prime Minister Choi Jin-woo offered a bitter smile as he spoke.

“To be honest, I’m not doing well.”
[You must be deeply concerned with the cascade of defaults among financial institutions and corporations continuing unabated.]
“That’s part of it, but the real headache is the exchange rate. You know the won broke past 1,700 per dollar during today’s trading session.”
[Market anxiety remains pervasive, and with currency speculators returning to the fray, it seems unlikely the exchange rate will decline anytime soon.]
“That’s why I can’t sleep at night.”

Choi Jin-woo, the Deputy Prime Minister for Economic Affairs, was certain that his health had deteriorated by a decade since assuming this position.
With his smoking increasing by the day and insomnia now plaguing him, it would hardly be surprising if he succumbed to stress-induced overwork.

“I’ve poured tens of billions of dollars into foreign currency bonds, yet the situation hasn’t improved—it’s only gotten worse. I have no face to show you.”
[You’ve done everything possible, but the surrounding circumstances simply haven’t cooperated. There’s nothing more to be done.]
“Your words provide some comfort, I must admit.”

Choi Jin-woo’s expression softened as his mood lifted slightly.

“You didn’t call just to exchange pleasantries. Tell me what this is about.”

Seok-won’s smile faded, and he spoke in a grave tone.

[If my calculations are correct, your available foreign exchange reserves should have fallen below ten billion dollars by now. Am I mistaken?]

Choi Jin-woo fell silent for a moment at this sensitive question, then replied in a slightly strained voice.

“I’m afraid I can’t answer that.”

Though he offered no explicit confirmation, Seok-won had little difficulty inferring from his reaction that his suspicions were correct.

[Of course not. I understand the Ministry of Finance and Economy is currently negotiating to accelerate the disbursement of funds pledged by the IMF and other international financial institutions ahead of schedule.]

Choi Jin-woo’s expression registered surprise at how thoroughly Seok-won seemed to grasp the Ministry’s movements.
Then, recalling that Seok-won was the owner of the Eldorado Fund, a figure of considerable prominence on Wall Street, he readily acknowledged the facts.

“You’re right. Your information network is impressive indeed.”
[Even if negotiations proceed smoothly and the second tranche arrives by year’s end, it will prove insufficient to stabilize the foreign exchange market. Of course, something is better than nothing.]

Choi Jin-woo was inwardly startled by how precisely Seok-won had identified his deepest concern.
Yet he betrayed nothing, focusing intently on what came next.

[Even if you bring in foreign currency, it will merely end up in the hands of currency speculators and foreign investors desperate to flee Korea, just as happened with the first tranche.]

Choi Jin-woo, the Deputy Prime Minister for Economic Affairs, responded with a somewhat reluctant tone.

“But we can’t just sit idle and do nothing about it, can we?”
[That may be true, but if this vicious cycle continues like this, the currency speculators will only line their pockets while the people bear an enormous burden from foreign exchange losses.]

The financial support from the IMF and other international financial institutions and foreign governments was certainly not free money.
It was all borrowed funds, so interest had to be added and repaid later.
That’s why there were concerns that once all the bailout funds came in, Korea’s external debt would balloon to two hundred billion dollars, making it the world’s most indebted nation.
While it was unavoidable that foreign financial firms and investors would withdraw their capital, the government—or rather, the people—would have to repay massive amounts of dollars in the future, yet currency speculators were illicitly intercepting those funds, which was infuriating.

“I’m not at ease either.”

But what could possibly be done about it?
Just as helplessness began to spread across Choi Jin-woo’s face, Seok-won’s clear voice pierced through the phone.

[In a situation like this, the best solution is to completely overturn the board in one decisive move.]
“What?”

Choi Jin-woo furrowed his brow, phone pressed to his ear.

[I have a way to change the game. Are you interested?]

It was the moment when a straw of hope grasped the desperately flailing hand.
Choi Jin-woo’s eyes widened as he bolted upright in his seat.

“Is that really true?”
[You know I don’t speak carelessly.]

Choi Jin-woo swallowed hard and asked urgently.

“Tell me what this method is.”

* * *

December 2, 1997.
As the foreign exchange market prepared to open, the Foreign Exchange Bank Trading Floor was engulfed in heavy tension.
With financial instability and cascading corporate bankruptcies continuing unabated, the exodus of foreign investment showed no signs of stopping, and the failure to extend short-term foreign debt only heightened the sense of crisis that Korea would once again be driven to the brink of national default.
The exchange rate, which had been climbing steeply, surged by over 50 won in just four days, now threatening the 2,000 won mark and amplifying the anxiety further.
Na Un-hak, unshaven and disheveled from not having time to shave, stared at the monitor before him with a hardened expression.
Everyone instinctively sensed the crisis looming ahead, and the entire trading floor was suffused with tension as taut as a drawn bowstring.
Seol Gyeong-sik, fidgeting beside me like a dog desperate for relief and watching for any sign, spoke in a low voice.

“Surely we won’t break through 2,000 won today, right?”
“I hope not… but given the market sentiment, it’s better to be prepared.”

Seol Gyeong-sik’s face darkened further, having hoped for reassurance that it wouldn’t happen, even if it were a lie.

“If the exchange rate reaches 2,000 won per dollar, doesn’t that mean the country is truly ruined?”

Na Un-hak responded with silence instead.
His silence only deepened the anxiety, and Seol Gyeong-sik’s eyes wavered aimlessly.
“Senior….”
“…It’s going to be a difficult day, so stay sharp and focused.”

Na Un-hak spoke in a subdued voice.
His eyes remained fixed on the monitor without wavering for even a second, betraying his tension.
Moments later, with a loud alert, the foreign exchange market opened and trading began.

[USD/KRW : 1,960.11 (
+53.43)]

As the first transaction occurred at 1,960 won—up 53 won from the previous day—everyone erupted in shock, cursing and sighing in dismay.

“Insane!”
“My God….”
“Damn it! At this rate, we’re really going to break through 2,000 won.”

Everyone on the trading floor, stunned and dazed, stared at the won-dollar exchange rate displayed on the massive ticker board.
The exchange rate, which had been below 1,000 won just at the beginning of the year, had now climbed to nearly 2,000 won—this was a catastrophe of immense proportions.
Na Un-hak, though he had braced himself, felt dizzy as the rate actually soared to 1,960 won, his mind going blank as he could only stare at the monitor, unable to do anything.

* * *

The exchange rate, which had started at 1,960 won, surged terrifyingly to 1,990 won within mere minutes.
The market descended into complete panic as everyone rushed to dump Korean won, and no one was willing to buy.
Within just one hour of trading, even the last line of defense—the 2,000 won per dollar threshold—had been breached.

[USD/KRW : 2,067.01 (
160.33)]

Seok-won, seated at his desk in the President’s Office, picked up his mobile phone and made a call.
The line rang, and shortly after, Landon Shore’s voice came through.

[Go ahead, boss.]
“Begin.”
[Understood.]

After issuing the brief command and ending the call, Seok-won stared coldly at the exchange rate ticker displayed on his monitor.

“They’re raising toasts right now, but soon their cheers will turn to screams.”

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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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