Chapter 350: Do You Think Everything Will Go According to Your Plan?

That same afternoon.

I called Vice President Cho Myeongsu and Chief Secretary Kang Inhan into my office, and the three of us were having a leisurely conversation.

— Vice President Cho, how high have gold futures prices risen?

— I just checked. They’ve broken through the 1.3-million-dollar mark.

— Then we’re only 6 dollars away from the target price.

— Are you really planning to sell the gold futures at 1.36 million dollars?

KBH Investment had invested 48 billion dollars, purchasing futures at around 885 thousand dollars.

That meant selling them at 1.35 million dollars would generate a return of more than 53%.

I thought that was more than enough, but Vice President Cho Myeongsu seemed to think otherwise.

— Vice President Cho, if you eat too much at once, you’re guaranteed to get indigestion.

— I understand what you mean, but I still can’t shake this feeling of regret.

— Chairman Xi may change his target return.

— In that case, would we be able to sell the futures at an even higher price?

Bzzzt—

At that moment, the phone lying on the desk began to vibrate.

I quickly glanced at the screen and saw the caller’s name.

It was Vice Chairman Tang Guochang.

After excusing myself to Vice President Cho Myeongsu and Chief Secretary Kang Inhan, I answered the call.

— Vice Chairman Tang, I’m listening.

— Director Cha, I just received an urgent call from Minister He Lifen.

— Bring me up to speed quickly.

— Chief Secretary Zhang Hui asked Minister He why gold futures prices had suddenly skyrocketed. What should he tell him?

Korea Investment, Hangang Group, and Bongard Investment Group had poured a combined 100 billion dollars into purchasing gold futures.

That was precisely why the price had shot vertically from 1.2 million to 1.3 million dollars.

However, explaining every detail to Vice Chairman Tang Guochang would make the conversation drag on.

— Bongard Investment Group injected an additional 100 billion dollars into the gold futures market.

— Ah, I see. I’ll pass this fresh information along to Minister He.

— Please do.

— One more thing. Chairman Xi has summoned the heads of the state-owned banks to Zhongnanhai.

I thought I understood what Chairman Xi Jinping was planning.

He intended to pressure the heads of the state-owned banks, squeeze money out of them, and then use it to buy gold futures.

— Thank you for the valuable information.

— Ha-ha. Come on, there’s no need to thank me.

— How about having Minister He Lifen attend the meeting with the heads of the state-owned banks?

— Excellent idea. I’ll discuss it with Minister He.

At that moment, CIA Director Eddie Griffin’s number appeared on my phone.

The reason for his call was obvious, so after apologizing to Vice Chairman Tang Guochang, I switched to the new line.

— Director Griffin, have you arrived in the United States?

— An hour ago. President Douglas summoned me immediately, so I’m on my way to the White House right now.

— I see. Has Chairman Zhen contacted you?

— He has, but what the hell is going on over there?

— Chairman Xi rushed into the gold futures market to replenish his emptied secret funds.

I briefly explained the recent events and what was likely to happen next.

— ...Chairman Zhen plans to buy Chairman Xi’s gold from him at a low price.

— Ah, so that’s what this is about... And when will this whole thing be over?

— Within a week at the latest.

— It can really end that quickly?

— Right now, Chairman Xi has gathered the heads of the state-owned banks in one place so he can squeeze funds out of them.

— Understood. If anything new comes up, keep me informed.

After ending the call with Director Griffin, I turned to Vice President Cho Myeongsu.

— I’ve been thinking. There’s a chance Chairman Xi will try to drive the market down and open short positions.

Vice President Cho Myeongsu immediately understood what I meant.

In order to maximize his profits, Chairman Xi Jinping desperately needed to drive the price of gold futures as low as possible.

And under the current circumstances, the only way to crash the market was through massive short selling.

My words were a direct hint.

We had to prevent Chairman Xi Jinping from successfully playing the market on the way down.

In a cautious tone, he asked whether his guess was correct.

— That’s exactly right, Vice President Cho.

— I’ll return to my office immediately and develop countermeasures.

— Do it.

Vice President Cho Myeongsu practically ran out of the office, flinging the door open.

Chief Secretary Kang Inhan glanced after him and asked me:

— When do you think Chairman Xi will try to open the short positions?

— Considering the time it’ll take him to squeeze money out of the banks, most likely tonight or tomorrow morning.

— Looks like tonight is going to be another long one. How about we end the meeting and get some rest?

— Ha-ha. I was just about to suggest the same thing.

***

Bang!

Chairman Xi Jinping slammed his fist down on the table with all his strength, as though venting his accumulated rage, and swept a heavy gaze across the heads of the state-owned banks.

The frightened bank presidents lowered their heads and stared at the floor.

After glaring at them in displeasure, he turned to Chen Sipeng, President of China Construction Bank.

— President Chen, what is the reason for your objection?

— Just four days ago, the price of gold futures was around 1.05 million dollars. Now it has already broken through 1.3 million. Considering that, the risks are far too high.

Chairman Xi Jinping turned his head toward Zhang Hui, Chief Secretary of the Central Committee Secretariat, who was sitting beside him.

Instantly understanding the Chairman’s intent, Zhang Hui spoke without hesitation.

— President Chen, you know what Bongard Investment Group is, don’t you?

— Of course.

— Then this should be easier for you to understand. Four days ago, Bongard Group poured an enormous amount of money into the gold futures market.

— And the reason the price of gold futures has just exceeded 1.3 million dollars is that Bongard Group dumped 100 billion dollars into the market.

Minister He Lifen also joined in, adding his own remark.

After giving Minister He a grateful nod, Zhang Hui continued.

— Bongard Group would hardly throw around such enormous sums without careful calculations. What do you think of my assessment, President Chen?

— I fully agree with your conclusion, Chief Zhang.

— Let’s assume Bongard Group bought futures at an average price of 125 dollars and is aiming for a 20% return. At what price do you think they would sell?

— At 1.5 million dollars.

— If you buy futures at 1.3 million dollars and sell them at 1.5 million, the return would be around 15%. Isn’t that an excellent result over such a short period?

The words, ‘Why don’t you try making a 15% return that easily yourself!’ nearly burst from China Construction Bank President Chen Sipeng’s mouth, but he displayed superhuman patience and remained silent.

— I share your view, Chief Zhang.

— And knowing all this, you still object?

— I apologize for my mistake.

At that moment, Lin Jialun, President of the Industrial and Commercial Bank of China, raised his hand, signaling that he had something to add.

— Chairman, I don’t believe we necessarily have to buy futures at 1.3 million dollars.

— Are you saying we can acquire them for less than 1.3 million? Did I understand you correctly?

— Exactly, Chairman. We simply need to play the downside and open short positions.

— Explain your plan in more detail.

— The principle is no different from trading stocks. Short selling is a strategy where you borrow securities from a broker, sell them, then buy them back after the price falls in order to repay the debt. The same mechanism can be applied to the gold futures market.

Chief Secretary Zhang Hui immediately spotted one enormous flaw in President Lin Jialun’s answer.

If the price of gold futures failed to fall after they opened short positions, the losses could become astronomical.

He voiced his concern and asked President Lin Jialun what he thought about it.

— If we pour an astronomical amount into short selling, panic will inevitably spread among investors. That will inevitably trigger a crash and a wave of panic selling.

— I see. Suppose we direct 100 billion dollars into short selling. How far would futures prices fall?

— I’ve never worked with short selling on such a massive scale, so I can’t give you an exact figure. However, the drop would definitely be substantial.

Chief Secretary Zhang Hui nodded in understanding and continued.

— I’ll now announce the Chairman’s decision, so listen carefully.

— We’re listening.

— Each bank will transfer 20 billion dollars to the Industrial and Commercial Bank. President Lin, you will use the funds transferred by the banks to open short positions in gold futures.

— It will be done.

President Lin Jialun answered in a brisk, confident voice, clearly pleased that such an important task had been entrusted to him.

Chief Secretary Zhang Hui continued with a satisfied expression.

— Once the futures investment operation is complete, your principal will be returned along with an additional 5% investment profit.

— I understand the proposal, but we must also take the possibility of losses into account.

— In the event of losses, we guarantee that at minimum your principal will be returned.

— If repayment of the principal is guaranteed, then we have absolutely no reason to refuse an investment in futures.

— I completely agree with President Lin...

Following President Lin Jialun, the other bank presidents expressed the same position.

— Isn’t that a little shameless?

After Chief Secretary Zhang Hui’s cutting remark, the bank executives lowered their heads in embarrassment once again.

Having given them all the necessary information, he yielded the floor to Chairman Xi Jinping.

Xi Jinping slowly looked around at everyone present and spoke in a calm, measured voice.

— I decided to invest in gold solely for the purpose of replenishing the treasuries of your banks. I hope there is no misunderstanding on that point.

Bank President Chen Sipeng sneered inwardly.

Chairman Xi Jinping’s lie was painfully obvious.

Of course, he had no intention of voicing those thoughts aloud.

While he remained lost in thought, the Chairman continued pressing his point.

— ...Achieving a high return requires maximum speed. As soon as this meeting ends, return to your banks immediately and transfer the allocated funds to the Industrial and Commercial Bank.

— Understood.

— Thank you for your work. The meeting is over. President Lin, come with me.

***

— President Lin, what will the final return be? — Chairman Xi Jinping asked as he took the seat at the head of the table.

Using the calculator on his phone, President Lin Jialun spent some time running the numbers before answering.

— We would need to bring in experts to calculate it precisely, but roughly speaking, it should be around 33.3%.

— Is that really possible?

— Once we open the short positions, the price of the futures will fall to 1.2 million dollars. Then all we have to do is buy the futures at that price and sell them at 1.5 million.

— But wouldn’t that only give us a 25% profit?

— You also need to add the 8.3% profit from the short sale itself.

— Ah, right! I didn’t think of that immediately. So what will the net haul be?

— Including our bank’s funds, the total investment will amount to 250 billion dollars. Out of the 33.3% return, 5% will have to be paid to the banks as compensation, leaving your share at 28.3%. In that case, the net profit will be a little over 70 billion dollars.

Those numbers literally took Chairman Xi Jinping’s breath away.

Previously, Politburo member Liu Peiqi and North Korea had extorted 75.6 billion dollars from his secret funds.

Thanks to the thirty tons of gold intercepted by Deputy Secretary Zhang Jinan, he had managed to partially fill the hole.

And now, while he had been racking his brain over how to cover the remaining shortfall, President Lin Jialun had come to him with the suggestion of investing in gold futures.

And just now, the man had announced an expected profit of more than 70 billion dollars!

At this rate, not only would he immediately recover all his losses, he would also come out enormously ahead.

How could he not be delighted?

— Ha-ha-ha! So that’s how it is?

Still, President Lin Jialun thought it necessary to warn him about the worst-case scenario.

— If the necessary conditions don’t align perfectly, we won’t be able to secure the target return.

— Naturally.

— I have one question, Chairman. If we suffer losses, how do you intend to return the banks’ principal?

— I’ll sell the gold I received as a gift from Deputy Secretary Zhang and repay them with that.

— Ah, now I understand.

Ignoring President Lin Jialun’s response, Chairman Xi Jinping turned to Zhang Hui, Chief Secretary of the Central Committee Secretariat.

— How high have gold prices risen?

— I just checked. 125 dollars per kilogram.

— Ha-ha-ha-ha!