Chapter 81: That Time I Bet Big to Pay Off Debt in South America (2)

TL: Skye

After the meeting wrapped up, Yu-jin picked up the phone and dialed the familiar hotline number.

The party on the other end: US President Drump.

Sure, Drump had been the one to suggest the investment in the first place, but a sum as enormous as $10 billion, and at 10x leverage no less, was a whole different conversation.

'Bite off more than you can chew and you choke.'

After taking a deep breath, Yu-jin got Drump on the line and informed him of the plan: to take the $10 billion raised through the government bond issuance and pour it into a dollar inverse position at 10x leverage.

If Drump objected, he was prepared to scale the investment back. But...

[It's fine. Do whatever you want.]

"...You're really okay with that?"

His reaction was surprisingly cool.

[You're making a legitimate investment in a capitalist market. Who am I to stop you?]

"If this breaks the wrong way, our side could make a killing. Which would mean the United States takes a serious loss."

[If you make a lot, you just share the profits. What's there to worry about? That's what an alliance is. That's what friends are for.]

Yu-jin snorted out a laugh at the smarmy reply.

"...If the investment pays off, I'll bring American firms in on the infrastructure projects down the road. And I'll fast-track construction on the Drump Hotel and Resort while I'm at it. American companies expanding into San Marcos are going to need somewhere to be wined and dined, after all."

[Pffhahaha, I like you. You're quick on the uptake.]

Having wrapped up the negotiation by tossing him just enough of a bone, Yu-jin sank deep into his chair.

"What's he think he is, some kind of stock-tip guru?"

*

New York is home to the beating heart of global finance.

Wall Street, as they call it. The people working there, where the world's leading financial institutions had taken root, were nervously awaiting the Fed's rate decision, now just three days out.

"The employment numbers came in way too strong. Unemployment's down."

"Damn it, that gives the Fed all the excuse it needs to hike rates."

"There's no way around it if they want to rein in inflation. Chairman Powell's going to come out swinging with hawkish talk."

"No matter how hard Drump hounds him, Powell won't budge an inch."

The market's expectations were converging on a single outcome.

A rate hike.

Which meant, in turn, a rising dollar index.

"Build up the dollar long positions! Now's the time!"

"Dump every emerging market currency! Swap into the safe-haven dollar!"

"Bet on the climb!"

Wall Street's traders began buying up dollars all at once.

And in San Marcos, the fallout was rolling in like a tsunami.

"Your Excellency! The dollar index is climbing!"

The stake San Marcos had laid down was $10 billion. The position: an inverse bet on the dollar losing value. And leveraged a full ten times over, at that.

Meaning that a mere 1% rise in the dollar index would vaporize $1 billion, ten percent of the principal, into thin air.

And in fact, San Marcos's investment had already sunk to minus $900 million.

The numbers on the monitor were turning a sickly blue, but Yu-jin showed no particular reaction.

"......"

But that was just the shell. On the inside, Yu-jin's composure had already crumbled to dust and scattered to the wind.

'No, big bro Drump, what are you doing? You said it'd go down!'

His hands were shaking, his legs trembling.

'Should I just cut my losses now?'

Maybe he should call up big bro Drump and ask him to settle for a draw?

And then, two days later.

Just as the losses pushed past $900 million and crept toward a full billion.

[Jerome Powell is a disaster! He's killing our economy! If he doesn't cut rates immediately, I will use every means at my disposal to remove Jerome Powell and tear the Fed to pieces!]

It was unprecedented: the President of the United States, Drump, publicly floating the dismissal of the Fed chair and strong-arming the central bank into a rate cut.

And the blast radius was nuclear.

"Wha, what the?!"

Wall Street plunged into panic.

"You see his socials? Drump's really about to go off the rails!"

"He's going to fire the Fed chair? Does that even make sense?"

"That's not what matters right now! Uncertainty just blew wide open!"

One senior fund manager bellowed, the veins standing out on his neck.

"The President just attacked the Fed! This is a question of confidence in the dollar itself!"

"Then what about rates?! What happens to rates now?!"

"A hike? You think a hike's the problem? He's screaming at them to slash rates this instant and flood the system with cash!"

A rate hike? Price stability?

None of that mattered anymore

"Anybody got an in at the Federal Reserve? Go find out which way the wind's blowing!"

"Word is the Fed is taking President Drump's remarks under serious consideration!"

"Oh, goddamn it!"

The terror that the Fed might buckle under Drump's political pressure swallowed every bullish signal whole in a single gulp.

"Hold anything now and you're dead! Liquidate every long position!"

"Sell! Shut up and sell it all off!"

The traders began slamming the sell button all at once.

And naturally, San Marcos's account, having bet ten-to-one on the downside, flipped into the green.

A return that had been sitting at minus 10% blew past zero in an instant, surging to plus 10%, then plus 30%.

"Your Excellency! It looks like the investment's paid off!"

Ricardo had come sprinting in, and just as he said, the money was practically photocopying itself.

"I..."

Only now did Yu-jin let out the breath he'd been holding, sinking deep into his chair.

"I did tell you. That it would fall."

He'd done no such thing, but to Ricardo and Isabella it simply registered as a calm, low murmur.

And a day later, with the Fed announcement finally about an hour away.

"One hundred percent! We've cleared $10 billion in profit!"

Yu-jin's win-it-and-repay gambit had gone and doubled up.

At this rate, a return of 150%, even 200%, wasn't beyond the realm of dreams, but Yu-jin gave his instruction calmly.

"Senior Secretary Ricardo, sell off every last position we're holding, right now."

"...Sir? But if we hold out just a little longer, the Fed will announce a rate cut, and then our returns would be maximized, wouldn't they?"

"No. I won't put money that holds this nation's future aboard a ship full of uncertainty. The profit we've made is plenty as it stands, isn't it?"

A decision made because he was utterly terrified.

Yu-jin thought.

'No way I can put complete faith in some stock-tip guru.'

From here on, he'd believe only half of whatever Drump told him.

In the end, at Yu-jin's order, Ricardo made the call to close out the positions, and at last San Marcos's investment came to a close.

And then.

[Breaking: Fed to Hold Benchmark Rate Steady... Hopes of a Cut Dismissed]

[Chairman Powell: "We will not yield to political pressure. Controlling inflation comes first."]

The Fed's decision was to freeze rates.

A policy diametrically opposed to Drump's vow to cut rates no matter what.

[Breaking: President Drump Nominates New Candidate for Fed Chair.]

In response, Drump played his strongest card, nominating a new Fed chair, but Jerome refused to bend in the end.

It was the moment Drump's boastful promise of a rate cut came crashing down.

At that, the market breathed a sigh of relief and started buying up dollars again, and the dollar index, which had cratered, traced a triumphant upward curve right from the very point where Yu-jin had sold.

"Ah..."

Ricardo took one look at the graph and collapsed onto the floor with a thud.

What if Yu-jin had let greed get the better of him and held on even a single day longer?

It was a dizzying near-miss, one where, far from any profit, they'd have coughed up a good chunk of the principal itself.

He thought.

'His Excellency saw all of it coming...!'

How else could a result this divinely inspired have come about?

Isabella, too, gazed up at Yu-jin, her face overcome with emotion.

Yu-jin, for his part, swiveled his chair and silently looked out the window.

In truth his legs had simply given out and he couldn't stand, but combined with the gloomy, shadowed atmosphere unique to the office, it gave off an air of mystery.

The look in his aides' eyes was now crossing past respect and into the territory of religious faith.

And Yu-jin, gazing out the window...

'I think I pissed myself a little...'

...resolved never to gamble with the nation's money again.

*

The next morning. The grand conference hall of the Presidential Palace.

The faces of the cabinet members, summoned on emergency notice, were frozen with tension.

Usually, a situation like this meant one of two things.

Either something major had happened to the country, or else...

'Surely... he isn't planning a purge?'

'I worked my tail off, there's no way I'm getting hauled off to the mines, right?'

'Did my people skim something behind my back?'

Or maybe Yu-jin had reached some big decision.

The senior secretaries couldn't hide their unease, but Yu-jin, seated at the head of the table, wore an expression that was almost excessively serene.

If anything, the corners of his mouth were turned ever so slightly upward.

Yu-jin gave a light cough.

"Why the long faces, everyone?"

"Ah, no, it's nothing. It's just, with the sudden summons, we wondered whether something had happened..."

"Oh, something happened, all right. Something very big."

At his words, a cold shiver ran down the senior secretaries' spines.

Yu-jin shot a glance at Ricardo, the Senior Secretary for Finance, standing beside him.

"Senior Secretary Ricardo. Make the announcement."

"Yes, Your Excellency!"

With trembling hands, Ricardo unfolded the results report.

"As of 9 a.m. this morning, the management of the funds raised through our government bond issuance has been concluded."

Fund management?

The ministers murmured among themselves. Hadn't the bond proceeds been earmarked for laying down infrastructure?

"On His Excellency's orders, we invested $10 billion in a dollar inverse position, and the final return came to... 101.4 percent, for a total profit of $10.14 billion."

Silence.

It was a perfect silence.

They say that when people are shocked beyond a certain point, they don't scream so much as stop breathing entirely, and this was exactly that.

They'd made $10 billion?

In a matter of days?

And by playing with borrowed money, no less?

The senior secretaries just stared at one another's faces, as if they couldn't believe it.

Clap-clap-clap-clap-clap!

Then, the moment someone started to clap, a standing ovation erupted, loud enough to bring the conference hall down.

"You're truly magnificent!"

"There's no doubt Heaven sent Your Excellency down for the sake of San Marcos!"

"Such foresight! How is it even possible?!"

The look in the secretaries' eyes had gone past respect and tipped over into near-fanatical devotion.

And no wonder, for in a country this poor, $10 billion was an astronomical sum.

Amid the cascade of praise, Yu-jin raised a hand in a show of feigned modesty.

"I simply got lucky, that's all."

When the result turns out good, the process gets romanticized. That's just how it works.

Yu-jin, not about to let the mood go to waste, cut straight to the heart of the matter.

"All right! Enough patting ourselves on the back. Now it's time to spend this money."

Yu-jin took up his ceremonial sword and pointed it at the screen.

On the display, in bold lettering, hung the words [San Marcos 6-Year Economic Development Plan].

"Now that we have the money, I intend to put the plan into high gear."

Yu-jin's eyes flashed with a fierce light.

"As of today, I formally proclaim the founding of the San Marcos Electric Corporation. And of the $10 billion we just earned, I'll be pouring $3 billion into energy infrastructure."

The ministers swallowed hard. A $3 billion project. The scale was beyond anything they could even picture.

"We'll build a large-scale solar power complex on the plains near Libertad. At the same time, we'll begin work on the transmission and distribution grid in preparation for the nuclear power plant to come down the line."

Yu-jin tapped sharply at the map.

"The power generated here will become the engine that drives our industry going forward."

The Minister of Construction, his face flushed, raised his hand.

"Your Excellency, in that case, how long should the timeline be...?"

"As fast as possible."

Yu-jin cut him off decisively.

"The moment you leave this room, Senior Secretary Aman, post the call for bids. With one condition: American firms only."

"Your Excellency, solar modules are cheaper from China than from the United States. The price difference is nearly threefold."

"We just made a fortune, $10 billion, off the United States. If we don't offset that somehow, relations between our two countries could freeze over in a hurry."

Only then did Aman understand, and he nodded.

"...That's certainly true."

"In exchange, let's make sure we get quality and speed."

"Quality and... speed, you say?"

"Yes. We award it to whoever can do it as fast and as flawlessly as possible. Spell that out clearly in the bidding terms."

"Yes, understood!"

"And... Senior Secretary for Construction."

"Yes!"

"Secure the site first. The groundwork needs to be finished before the bidding even starts."

"Understood!"

"The Senior Secretary for Finance will draw up the budget execution plan."

"Yes!"

"And as for you, Chief of Staff Isabella..."

With each order Yu-jin handed down, a thunderous chorus of acknowledgment rang out and reverberated.

*****

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