The Conglomerate Family Became A Villain [EN]: Chapter 237

237. Currency War (4)

Japanese Prime Minister’s Office.

Three men sat facing each other, their expressions heavy with concern.

“The pressure from the United States is considerable.”

“I am aware.”

“If this continues, we will be summoned back to the United States.”

What Japan feared was the United States wielding a blade like Super 301 [a U.S. trade law used to address unfair trade practices].

“What do you suggest we do?”

At the Prime Minister’s question, his right-hand man responded.

“It would be best to lower the interest rates twice in a row to release money into the market.”

“Doesn’t lowering interest rates devalue the yen?”

“Generally, yes. However, each time we lower interest rates, the real estate and stock markets heat up. This creates another effect.”

The Prime Minister listened silently to his right-hand man.

The right-hand man continued.

“When real estate and stocks rise, foreign capital flows in, increasing the value of the yen. The sharp rise in the yen in the first half of this year was largely due to Charlie Jung’s $15 billion investment.”

Jung Hyun-woo’s name had now reached the ears of the Japanese Prime Minister.

“Are you saying that if we lower interest rates, foreign capital will flow into Japan, and at the same time, the value of the yen will rise?”

“That’s right.”

Jung Hyun-woo’s direct investment in Japan amounted to $3 billion, but this $3 billion, when converted into yen, had the effect of significantly increasing the yen’s value.

This was an effect that even Jung Hyun-woo had not anticipated.

“One more thing, selling U.S. Treasury bonds could also be a solution.”

The man known as the Prime Minister’s left-hand man shook his head.

“Selling U.S. Treasury bonds could increase the value of the yen, but the United States would not like it.”

Selling U.S. Treasury bonds made it difficult for the U.S. government to raise money.

In simple terms, it was an action that complicated the work of the U.S. Treasury Department.

“Lowering interest rates alone is not enough.”

The man known as the left-hand man lowered his head and said.

“What about widening the range of interest rate cuts?”

“Widening the range of interest rate cuts?”

“Instead of lowering it by 0.25% each time, we lower it by 0.5%.”

The right-hand man widened his eyes at the left-hand man’s suggestion.

“Then the base interest rate will be lowered by 1% in just two moves.”

He argued that it could shock the Japanese economy.

The Prime Minister groaned softly.

“Hmm…….”

There was no way to increase the value of the yen without shocking the Japanese economy.

‘A checkmate situation.’

He enjoyed playing chess, so he didn’t like these checkmate situations.

“We can’t be summoned back to the United States again.”

The left-hand man and right-hand man realized that he had made a decision.

“Your Excellency, your orders.”

The Prime Minister took a breath and said.

“Lower it by 0.5% twice.”

He had concluded that bond sales were not an option.

Two days later.

The Bank of Japan implemented a drastic interest rate cut of 0.5%.

* * *

Jung Hyun-woo reacted nonchalantly to John Pierre’s urgent voice.

“What are you so surprised about?”

John Pierre raised his voice, sounding frustrated.

“The value of the yen has rebounded significantly in just one day.”

The yen’s value had fallen to a 22% increase compared to last year. However, after the Bank of Japan’s interest rate cut announcement, the yen rose sharply, exceeding 30% again.

Accordingly, Victoria Corporation’s stock price also recovered to $40. Currently, Victoria Corporation is walking a tightrope between 3rd and 4th place in terms of market capitalization in the United States.

“Didn’t I tell you? The Japanese government will follow the U.S. government’s lead.”

Jung Hyun-woo was still talking about the Plaza Accord [an agreement between major economies to depreciate the U.S. dollar].

“I didn’t think the agreement would be implemented this well a year ago.”

“The Plaza Accord is not just a negotiation or agreement. It is a kind of trade treaty secretly agreed upon by the finance ministers of Western developed countries in New York.”

Jung Hyun-woo thought Wall Street was taking the Plaza Accord too lightly.

“Charlie, are we going to continue to maintain the current investment?”

Jung Hyun-woo nodded and replied.

“Of course.”

Jung Hyun-woo didn’t think it was time to back down now.

‘The Seoul Olympics haven’t even happened yet. A hasty retreat would be worse than not moving forward at all,’ he thought.

John Pierre lowered his voice and said.

“Then we will also invest this year’s investment funds in the Japanese stock market.”

The investment from Victoria Fund was not limited to $3 billion.

Jung Hyun-woo additionally invested $1 billion earned by Victoria Corporation this year into Victoria Fund.

This money was invested in the Japanese stock market every month, and as of the end of October, the return on investment was 52%.

“Do so.”

Click.

Jung Hyun-woo, who hung up the phone, raised both hands high.

“Hoo… John is too quick to celebrate or despair.”

His attention was entirely focused on Tetris.

‘I need to get the rights.’

The rights to Tetris were a shining treasure. If he could get his hands on it, it would be like Gollum getting the One Ring [a reference to “The Lord of the Rings”].

‘The problem is the U.S. government.’

As of 1986, the Cold War was not a problem to be taken lightly.

For an American company that believed in capitalism and liberal democracy to secure content from the Soviet Union could be considered an act of treason if handled poorly.

‘It’s not about the money.’

Obtaining the approval or at least the tacit consent of the U.S. government was more important than the amount to be paid to secure the rights to Tetris.

Beep.

Jung Hyun-woo pressed the intercom button and said.

“Luna, what’s going on?”

“It’s a call from Miss Marin. Shall I connect you?”

“Yes, please.”

Luna immediately connected Lyra Marin’s call to Jung Hyun-woo.

“This is Charlie.”

“Charlie, congratulations.”

Jung Hyun-woo tilted his head to the side.

“Congratulations for what?”

“You’ve escaped the crisis.”

Jung Hyun-woo had never thought of it as a crisis from the beginning.

‘Lyra seems to have seen the situation as serious.’

He said nonchalantly.

“The Japanese government couldn’t go against the U.S. government.”

“But Wall Street’s direction was different.”

Lyra Marin was a financier, so she tended to place more importance on the flow of money and the will of banks than on U.S. government policies.

“Wall Street isn’t always right.”

Lyra also agreed with this opinion. However, the alliance of Wall Street’s major banks was not something to be taken lightly. If they joined forces, they could create crises or opportunities that didn’t exist.

“Anyway, it’s best to see it as having overcome a major crisis.”

“Lyra, what are you going to do with Bank of America?”

Lyra Marin replied in a bright voice.

“We’re going to stay the course.”

The reason her voice was bright was that she had prevented the short selling of the yen and the mark [German currency before the Euro].

This was an action that could have brought losses to Bank of America if handled poorly.

However, as the Bank of Japan implemented a sharp interest rate cut, it became clear that her judgment was correct.

“If Bank of America stays the course, does that mean you’re going to watch Japan and Germany as they are?”

Lyra Marin answered his question.

“No, we’re also preparing to invest in Japan.”

“At Bank of America?”

“We’ll probably create a fund next year.”

A fund will be established for investment in Japan.

Bank of America’s full-scale investment in Japan was underway.

‘The value of the yen will rise further.’

Lyra Marin wanted to invest in Japan based on her own judgment, not Jung Hyun-woo’s.

“We’ll be competitors.”

“Wouldn’t we be allies rather than competitors?”

Lyra Marin now thought that the trend was investment in Japan.

‘Even if there’s a bubble in the Japanese economy, I have no choice but to invest in Japan in this situation.’

To her, the Japanese bubble looked like sweet cotton candy.

* * *

Jung Hyun-woo and Victoria Corporation could be said to have escaped the crisis, but Goldman Sachs and Morgan Stanley were like encountering a huge reef.

“How did this happen?”

“Japan has implemented an interest rate cut without warning.”

The representatives of the two companies sighed repeatedly.

“Isn’t it normal for the value of the yen to fall as money is released into the market when interest rates are cut?”

“Generally, that’s the case, but Japan’s real estate market is unusual.”

“What do you mean Japan’s real estate is unusual?”

Goldman Sachs’ investment expert, Mac Corbin, narrowed his brow and said.

“Japanese real estate is fiercely rising thanks to the Bank of Japan’s drastic interest rate cut. As a result, Japanese people are gathering money that was scattered overseas back to Japan.”

Japanese people prefer domestic investment to overseas investment.

This was fueling the strength of the yen.

“Hmm, that’s not good.”

“The problem isn’t just that.”

“Is there another problem?”

Mac Corbin nodded and replied.

“Western banks, including Bank of America, are expanding their investment in Japan. As a result, U.S. dollars are being converted into yen and entering Japan.”

Morgan Stanley could only let out a long groan.

“Dollars are being converted into yen. This is definitely not a good thing.”

“As of mid-November, the yen is pointing to a 40% increase compared to last year.”

The time they started short selling was around 36%. In other words, their short selling had completely failed.

“The losses are enormous.”

Morgan Stanley asked.

“How much have you lost?”

Mac Corbin held up three fingers.

“$300 million?”

“$3 billion.”

If the loss was $300 million, he wouldn’t have such a serious expression.

“Are you saying you lost $3 billion?”

“Frankly speaking, it’s a critical situation.”

If it rises further from here, even the mighty Goldman Sachs will have difficulty bearing the losses.

“Are you going to kneel like Terra?”

Mac Corbin frowned when Terra was mentioned.

“We can’t retreat like Terra.”

“But the situation isn’t good, is it?”

“Wouldn’t Morgan Stanley put in more effort?”

Goldman Sachs thought that Morgan Stanley still had some leeway.

“Are you saying to do more short selling?”

“40% is an abnormal number no matter how you look at it.”

For a country’s currency to rise 40% in one year, the indicators showed the same effect as the country’s economy growing by 40%.

“It’s definitely not normal. But considering the market’s frenzy…….”

“Are you saying you’re going to stop investing here?”

Morgan Stanley had formed an alliance with Goldman Sachs to short sell the yen and the mark, but it was not in a leading position. Their losses were currently only around $200 million.

‘If we can end it with $200 million, it wouldn’t be an astronomical loss.’

Of course, a loss of $200 million could tear apart Morgan Stanley’s financial statements this year.

“I don’t know if Big Head will allow it.”

Big Head was the nickname of Chairman Kyle Montana.

“That won’t do.”

Goldman Sachs desperately needed the firepower of the allied forces.

“How about looking into Lehman Brothers instead of us?”

Lehman Brothers had not participated in the short selling of Victoria Corporation last year, so they were considered to have some leeway.

“I’m already on my way back.”

“Oh, what did Lehman say?”

“They say they can only invest $100 million more.”

“That is…….”

Mac Corbin strained his neck.

“That’s probably saying they’re pulling out.”

Goldman Sachs had poured the most money into this short selling.

If the short selling failed as it was, Goldman Sachs itself could be shaken.

“How about visiting Terra?”

Mac Corbin raised his eyebrows at the cautious suggestion.

“Terra?”

“Isn’t currency speculation their area of expertise?”

Mac Corbin put his hands together.

“Terra…….”

One person came to his mind.

* * *

John River’s expression in front of Jung Hyun-woo didn’t look very good.

“I’ve read the report.”

At Jung Hyun-woo’s words, John River scratched his head.

“Charlie, as I wrote in the report, the Soviet Union doesn’t have any company that owns the rights.”

The Soviet Union was a completely socialist country. Individual property was not recognized, and the same was true for copyrights. Everything was owned by the state.

This meant that if you wanted to obtain the rights to Tetris, you had to negotiate with the Soviet Union, not the Soviet creator.

“What happens if an American company negotiates with the Soviet government?”

“Well, the legal team says there are no precedents.”

Since there was no precedent for importing Soviet games or movies, the legal team could only give principled answers.

“What about theoretically?”

At Jung Hyun-woo’s question, John River replied.

“Theoretically, it’s possible. However, considering the Cold War situation, it could be seen as an act of treason.”

If treason was applied, Victoria Corporation might have to close its doors instead of paying a fine.

‘In the worst case, the CEO who made the decision could go to jail.’

Jung Hyun-woo sighed briefly.

“Hoo……. If I come to a conclusion, it’s like this? It’s very difficult to get the rights to Tetris in the current situation?”

John River nodded and replied.

“I had no choice but to come to that conclusion.”

Jung Hyun-woo closed the report he had handed over.

“Let’s think about it a little more.”

John River asked him.

“Aren’t you giving up on Tetris?”

Jung Hyun-woo replied in a calm voice.

“It’s a game I can’t give up on.”

“Charlie, I admit that Tetris is fun. But I don’t think it’s a game worth taking such a big risk.”

Jung Hyun-woo had read what John River had written at the end of the report.

John River had written down Plan B in case he couldn’t get the rights to Tetris.

If you mention that Plan B, it was as follows:

– Create a game using the Tetris algorithm and use that instead.

– Create a Tetris with more powerful effects to avoid trademark rights.

– Develop a new puzzle game with a similar feel to Tetris.

John River thought that this problem could be solved by paying homage to Tetris.

Of course, Jung Hyun-woo’s thoughts were different. He was not interested in making money by creating a game similar to Tetris. What he was interested in was Tetris itself.

‘Tetris will be ported to countless games in the future.’

Tetris held the record for being released with the most variations and on the most consoles and devices.

“John, review the technical aspects.”

Review the technical aspects.

This meant that he would not give up on Tetris.

“Charlie?”

Jung Hyun-woo turned around and said.

“I’ll try to persuade the U.S. government.”

John River doubted his ears when he heard his words.

“Charlie, persuade the U.S. government? Will that work?”

To Americans living in 1986, the Soviet Union was nothing more than an evil empire.

‘How can you allow a businessman to negotiate with the devil?’

He thought there might be a backlash.

“Wouldn’t it be good to try anyway?”

“What if the U.S. government suspects our company?”

Victoria Corporation was closely connected to U.S. government agencies, including the CIA.

John Pierre was worried that all of these links would fall apart.

“It’ll be okay.”

Trust me.

Jung Hyun-woo had no choice but to say this.

“I understand.”

Immediately after John River left.

Sarah walked in. She was wearing a blue dress, but it looked a little cold because it was late autumn.

“Charlie!”

Her voice was excited.

Jung Hyun-woo knew that John River had not just returned, but had gone to Sarah and told her about his plan.

“Is it about John?”

“John was worried about the company and came to see me.”

Jung Hyun-woo knew exactly what Sarah and John River were worried about.

“I won’t go straight to them.”

“Then?”

“I’m going to meet with Congressman Edinburgh and ask for his cooperation.”

“Are you saying you’re going to reach out to the political world?”

Jung Hyun-woo put his hands together and raised his voice.

“Isn’t that why we lobbied, in preparation for times like this?”

Sarah lowered her voice when he said he would go to Congressman Edinburgh and ask for advice.

“What if Congressman Edinburgh says no?”

“Then I’ll have to give up.”

Jung Hyun-woo had no intention of giving up on Tetris, but he thought he could retreat strategically.