Golden Spoon Investment Portfolio - Chapter 58

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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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58. This will be quite the spectacular finale.

The limousine sped along the straight highway for some time before arriving at the International Airport south of San Francisco.
True to its status as a major hub airport even by American standards, a single Gulfstream IV business jet stood parked in one corner of the expansive tarmac, surrounded by countless aircraft from around the world.
Unlike the bulbous commercial airliners, the sleek white fuselage of the business jet gleamed brilliantly in the sunlight.
A black limousine glided smoothly toward the business jet and came to a stop beside it.
As the Caucasian driver in a suit opened the car door, I stepped out alongside Landon Shore.
While the driver attended to the luggage, the two of us climbed the stairs and entered the business jet, where a graceful Stewardess greeted us with a radiant smile.

“Welcome aboard.”

I acknowledged her greeting with a slight nod and took a leisurely look around the interior.
The spacious, comfortable cabin, appointed with the finest materials, resembled a luxurious penthouse in the sky—opulent and refined.
I moved deeper inside and settled into a broad leather seat facing Landon Shore.

“This is quite impressive.”

I gazed at the thick carpet beneath my feet and the bright wall panels, my expression one of satisfaction.

“Thanks to you, boss, I’m experiencing a private jet for the first time, and it truly is extraordinary.”
“First class is nice, but compared to this, it’s the difference between a suite and a deluxe room.”
“Ha ha ha. That’s certainly true.”

I leaned my head back contentedly, savoring the comfort of the seat that enveloped my body.

“Flying is usually such an ordeal, but with this, I could travel as much as I wanted. It’s a shame we’re only borrowing it this once.”
“With your financial resources, boss, you could easily purchase one of these. Why not buy one while you have the opportunity?”

I asked with a sharp glint in my eyes.

“How much does one of these cost?”
“The price varies greatly depending on how it’s configured, but I’ve heard the aircraft we’re in is worth 25 million dollars.”
“Well, it’s not cheap, but it’s not something I couldn’t afford either.”

I had multiplied my fortune to hundreds of millions of dollars through the pound sterling collapse and British index investments.
Moreover, even at this very moment, I was earning substantial profits from European bond investments, so it wasn’t mere bravado—I genuinely had the financial capacity to purchase a private jet whenever I wished.
Just then, the Stewardess, who had received the luggage the driver brought aboard, approached us.

“We’ll be taking off shortly. Please fasten your seatbelts.”

Once Seokwon and Landon Shore had located their seatbelts and fastened them, the Stewardess asked with a warm smile playing at her lips.

“Thank you. Is there anything else you need?”
“I’d like a whisky. What do you have available?”
“We have Macallan 25-year and Balvenie 17-year prepared.”
“I’ll have the Macallan.”
“I’ll have the same, please.”

At Landon Shore’s words, the Stewardess bowed her head.

“Understood.”

As the Stewardess left, I turned my head from my seat and gazed out through the round window.
The limousine that had brought the two of us made a wide U-turn and receded from view.
Soon the turbofan engines mounted on both sides of the fuselage roared to life, and the private jet that had been stationary began to move slowly forward.
Exiting the hangar, the private jet moved along the extended taxiway and came to a stop at the far end of the open runway.

[Good morning. This is Captain of Flight N8507.
We warmly welcome our VIP passengers aboard.
Our aircraft will depart San Francisco shortly and head to John F Kennedy International Airport in New York.
The estimated flight time is five hours and ten minutes. We wish you a safe journey until we land.]

Shortly after the Captain’s announcement concluded, the private jet received clearance from the control tower and pushed its engines to maximum power.
It then raced swiftly down the long runway, thrust powerfully against the ground, and soared into the sky.
The private jet lifted off, leaving the sprawling cityscape of San Francisco behind, and soon vanished among the pristine white clouds.

* * *

Two days later, Manhattan, New York.
I sat on the executive office sofa overlooking the blue East River, with Landon Shore and Andrew on either side of me.
Setting down the report in my hand, I spoke.

“A 36% return rate—the results aren’t bad at all.”

Then Andrew, seated to my left, responded with a note of regret.

“I could have achieved higher returns, but Mundell Partners and other hedge funds swept through the European bond market with massive purchases, preventing us from reaching our initial targets.”
“Everyone’s jumping in now that there’s money to be made—it’s like a feeding frenzy of piranhas.”

Watching Landon Shore grumble about the intensified competition from hedge funds flooding into the European bond market where he’d been quietly profiting, I spoke.

“As I mentioned before, it’s the nature of hedge funds to chase money wherever it flows. We’re no different, are we?”
“Well, I suppose that’s true.”
“Besides, I anticipated this would happen from the moment we first ventured into European bonds. There’s no need to overreact.”

I shrugged and continued.

“It’s not as if we’ve claimed exclusive rights to the European bond market.”
“We were making good money, and now others are trying to cut in and take a piece—that’s what’s bothering me.”

Watching Landon Shore smack his lips in frustration, I leaned back in my chair with an unbothered expression.

“Besides, I was already planning to start liquidating our bond positions soon. If other hedge funds are flooding in to absorb the volume, that’s actually ideal.”
“…!”

Completely blindsided by this revelation, Landon Shore and Andrew widened their eyes in shock.
We were making enormous profits with almost no effort—like swimming while touching the ground—and suddenly I was talking about pulling out. Their reaction was inevitable.

“Are you saying you’re discontinuing bond investments?”

Andrew furrowed his brow as he asked, and I nodded.

“That’s right.”

Landon Shore then leaned forward, unable to hide his bewilderment.

“Competition has intensified with other hedge funds entering, but it’s still a golden goose laying golden eggs. Why would you abandon that?”

Andrew also looked at me with an expression of disbelief.

“The pie in Europe has shrunk, but if we expand our investments into Canada and Asian markets including Japan, we can easily increase profitability further.”

In reality, hedge funds like Mundell Partners, blinded by profit, were expanding their reach beyond the United States and Europe into Asia, pursuing indiscriminate sovereign bond investments without a second thought to risk.
I picked up the teacup before me, took a sip of coffee, and spoke calmly.

“The government borrows money by selling government bonds to hedge funds, hedge funds borrow from brokers like JP Morgan and Goldman Sachs, and brokers draw funds from other investors to keep the cycle turning. How much longer do you think this structure can sustain itself?”
“…!”
“Until now, this circular flow has operated without issue, but the moment one link breaks, the enormous leverage becomes unsustainable, and the bubble bursts instantly.”

The room fell into heavy silence.
Seokwon’s words were shocking.
If the bubble burst as he predicted, it would mean catastrophic chaos in the international bond market.
Andrew asked with a grave expression.

“You’re saying the problem will originate in the bond market?”
“The current low interest rate environment is abnormal, so it would be more accurate to say we’re returning to normal.”
“….”

Seokwon spoke calmly, observing the two men’s hardened expressions.

“The party is enjoyable, but it can’t last forever, can it?”

Then Andrew pushed his glasses up with his finger and offered a counterargument.

“There are debt issues, certainly, but the economy is thriving thanks to low interest rates. I doubt anyone would suddenly reverse course.”
“Agreed. The party may not be eternal, but I don’t think it’s time to go home yet.”
“Perhaps not. But there’s one critical variable everyone seems to be overlooking.”
“What’s that?”

Seokwon answered Andrew’s question in a subdued voice.

“Inflation.”
“…!”
“If liquidity continues to be released excessively as it is now, inflation becomes inevitable.”

Though still a minority, voices of concern about inflation were emerging from academia and parts of Wall Street due to excessive liquidity.

“You both know that the Federal Reserve’s dual mandate is price stability and maximum employment.”

Yet the two men remained skeptical.

“That’s true, of course, but there are no signs of inflation yet. Would the Federal Reserve really throw cold water on the economy without cause?”
“I share that view. If the Federal Reserve tried to raise rates, the White House would be the first to oppose it.”

To prevent inflation, the government would inevitably need to cool down an overheated economy—something the United States government would hardly welcome.
Hedge funds like Mundell Partners were betting on precisely this, aggressively increasing leverage to invest in bonds.

“Isn’t it always when everyone feels secure that shocks arrive suddenly?”

I laid out my thoughts methodically.

“The Federal Reserve worries about inflation, but they won’t want the economy to freeze either.”
“If rising rates trigger a recession, all the blame will fall on the Federal Reserve, so naturally they’d want to avoid that.”
“That’s why they’ll raise rates only slightly—just enough to signal to the market that the Federal Reserve is responding to inflation.”

Andrew caught on immediately.

“By warning the market, they’re trying to preempt expectations of inflation from rising.”
“Exactly right.”

Landon Shore tilted his head in confusion and asked.

“If we proceed as you describe, rates would rise and yields would decline somewhat, but the bond market shouldn’t be shaken to that degree, should it?”

Andrew nodded as if he shared the same view.

“I wish things would unfold as planned, but reality rarely cooperates.”

As both men’s gazes fixed on me, my expression hardened.

“The Federal Reserve hopes that raising rates will only suppress inflation, but there’s one thing they’re overlooking.”
“What would that be?”
“The enormous leverage accumulated in the bond market.”
“Ah….”

A realization flashed through Andrew’s mind, and he exhaled softly.

“Even a modest rate increase would be catastrophic for hedge funds that have maxed out their leverage.”

Landon Shore’s face drained of color as understanding dawned on him.

“The more leverage they’ve used, the more devastating even a slight drop in bond prices would be. At the first sign of decline, they’ll panic and rush to reduce positions.”

Seokwon, his gaze darkened with gravity, picked up the thread of their conversation.

“Once a Hedge Fund or two that lack liquidity begin dumping their holdings and drive prices down, it triggers a cascade of forced selling, and ultimately the margin calls spread across the entire market like a death spiral.”

Landon Shore and Andrew stood stunned by the ominous scenario, their mouths hanging open in shock or groaning softly in contemplation.
They couldn’t dismiss it as mere speculation—the bond market bubble had inflated to such dangerous proportions that even a minor shock could trigger catastrophic consequences.
A heavy silence settled over them as Seokwon sat quietly, allowing the two men time to absorb the gravity of the situation.
After a brief moment, Andrew spoke first.

“I can’t say with certainty that it will happen as you describe, but given the possibility, it seems prudent to exercise caution.”
“The party might continue a bit longer, but it’s far better to leave early and sleep comfortably at home with my feet up than to linger and get caught in a downpour.”

Despite the serious tone, both men had quickly regained their composure.
Seokwon gave a small nod and spoke.

“Then let’s begin liquidating our bond holdings systematically starting now.”
“Understood.”

Landon Shore then licked his lips and spoke with a face full of regret.

“We’ve made quite a bit of profit from bonds, but it’s a shame to see it end now.”

Seokwon flashed a broad grin, his white teeth gleaming.

“Since Landon’s right that it feels a shame to end the party this way, shouldn’t we make the finale thrilling before we leave?”
“What do you mean by that?”

Seeing Landon Shore’s confusion, Seokwon explained.

“After we’ve liquidated all our positions, we’ll place a bet on bond shorts.”
“Ah!”

Andrew’s eyes lit up as he leaned forward in his seat.

“Then if bonds crash as predicted, we could reap substantial profits.”
“I don’t know why I didn’t think of that sooner. You’re truly remarkable.”

Landon Shore, catching on a beat late, also widened his eyes in admiration.

“Since this is the final dance to wrap up the party, let’s make it spectacular.”
“Hehe, I’ll make sure to decorate the finish beautifully, just as you say.”
“It’s going to be a truly magnificent finale.”

Anticipation bloomed vividly across Andrew and Landon Shore’s faces.

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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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