He is Already a Tycoon at a Young Age! - Chapter 78



Only Krnovel

#078

“Up until now, whenever you made an absurd yet groundbreaking suggestion to this old man, you always gave a valid reason.”

“Yes, my grandfather decided after listening to my story.”

“Yes, I know, I don’t need to bring up old stories, but there was a good reason why you lied to your father.”

At his grandfather’s words, my father frowned slightly, perhaps recalling the time when Korea Semiconductor was acquired, but then became calm again.

“Yes, Grandpa, so this time I will explain the valid reasons and the facts I have analyzed.”

“Okay, let me hear it.”

“Currently, Southeast Asian countries with weak capital are facing a foreign exchange crisis and an economic crisis. South Korean economic experts are confident, as if they were forced to, that the economic crisis in Southeast Asia will not directly hit South Korea, but I think differently.”

“If not, will the ongoing economic crisis in Southeast Asia have a direct impact on the South Korean economy?”

“Yes, people in South Korea are confident that South Korea will soon become an economically advanced country, but I think we have only just now escaped the status of a middle-income country.”

“I agree with you on that point.”

“Now that South Korea has finally escaped the status of a middle-income country, everyone thinks it is on the threshold of becoming a developed country. However, the capital market defense capability is still weak for a developed country. If foreign investors withdraw their investments all at once and start recovering their investment funds, the South Korean economy will immediately face a crisis.”

“Probably so.”

“For foreign big capital, the economic crisis in Southeast Asia was just a practice game. They wanted to see how much Asian countries would shake when they were shaken by big capital.”

“… If Southeast Asia is the practice game, does that mean the main game is Korea?”

“South Korea has a stronger economy than Southeast Asia and has more to eat. That’s what I think. Grandpa, the economic crisis in Southeast Asian countries will slowly move northward like a typhoon and hit South Korea directly. I’m sure Grandpa has been briefed by his financial director, but the level of insolvency in domestic financial institutions is quite high. But the ones lending money to financial institutions are banks.”

“yes.”

“The banks are already insolvent. In addition, it is public knowledge that Seungbo Steel’s illegal lending is excessive. Now, domestic banks will fall into the worst possible insolvency, and the absolute nature of banks that never fail will be broken.”

“The bank… is going to fail?”

“Yes, it’s common in America and Europe.”

“Is that what you think?”

“I think so. The absolute insolvency of banks will create a financial crisis in South Korea, and that financial crisis will grow bigger if the civilian government is complacent. It will eventually lead to a foreign exchange crisis.”

“And then there’s the foreign exchange crisis?”

“Currently, it is about 600 won per dollar. This is the figure that came out because the foreign exchange authorities of the civilian government intervened in the exchange rate market and focused on defending the exchange rate. In order to defend the exchange rate, they will spend at least 2 billion dollars a month. So… how much foreign exchange is left in South Korea right now?”

“Do you think that the foreign exchange reserves held by the country have almost run out?”

“yes.”

If you secure dollars, you won’t have problems when importing or exporting.

‘As the foreign exchange crisis struck.’

The companies that are having the hardest time are those that pay for raw materials overseas in dollars. Of course, other companies are having a hard time too.

“I don’t think there would be even $7 billion left by now.”

“If what you say is true, then the government’s exchange rate defense will not last for four months.”

“So, the financial crisis that started in Southeast Asia will eventually push South Korea to the point of national bankruptcy. And Thailand will be the first to start.”

“A national bankruptcy situation?”

“Yes, in times of war or national crisis, the value of absolute assets such as gold or the dollar rises.”

“That’s true.”

“No one is aware that South Korea is headed toward national bankruptcy.”

“So, what I’m saying is that Ji-seong analyzed and found out something that no one else knows about, and now we’re all going to prepare for it together.”

“Grandpa, we always need to keep some dollars anyway.”

“That too.”

South Korea is a country that survives on exports. So, it is essential to import raw materials.

If the dollar soars in a situation of national bankruptcy, exports themselves may become difficult due to a lack of raw materials.

‘Even if we export it, there’s nothing left.’

Because as the dollar soars, raw material prices will rise.

“I think the won-dollar exchange rate will rise to 2,700 won by the end of this year.”

“The current exchange rate is about 600 won per dollar, so that means it will increase by more than 4 times.”

“You won’t believe me, right?”

“That’s true.”

“If you think that the country is in a state of national bankruptcy, you will understand why the won-dollar exchange rate is skyrocketing.”

“Jisung, even if that’s true, will it really go up fourfold?”

“Yes, I am sure of it, so I have already placed an order with Pacific Investment Finance to invest in derivatives related to the baht crash.”

It’s worth a whopping 1 billion dollars.

[Invest in futures related to the Thai Baht crash on the Chicago Mercantile Exchange and the London Exchange?]

I remembered what James had asked me back then.

[Yes, it’s a billion dollar amount. Obviously, the Thai Baht will crash.]

[Yes, I understand.]

[And invest in the Indonesian rupee crash.]

Among Southeast Asian countries, Thailand will be hit hardest by the economic crisis.

Accordingly, the baht will also plummet, so I invested in the baht’s plunge as well.

‘Starting with Thailand.’

Next is Indonesia.

Taiwan eventually gives up defending its exchange rate

‘Hong Kong is also facing an economic crisis.’

Japan will likely be the only country whose economy will not be hit hard by the Asian financial crisis.

‘As I remember.’

The Thai baht crash occurred around July.

So, right now, you can make huge profits by investing in short-term futures for 3 months.

“Jisung, you’re saying you’ve already invested in the Thai baht crash?”

“Yes, Grandpa, Thailand and Indonesia will bring me huge profits.”

“To Indonesia? Oh, yeah. That might be true, but it might not. What about the risk?”

“Nothing is 100% certain, but investing requires taking risks. And I am actively preparing for those risks. As a businessman and as the head of a group, my grandfather also has to prepare for risks.”

“Are you saying that we need to secure dollars to hedge against risk?”

“Yes, it is easy to get loans from American or European banks with the shares held by the Samjung Group. And even if the company issues corporate bonds now, they will all be sold.”

“Should we borrow dollars using the group’s shares as collateral?”

“Yes, that is the first measure, and the second measure is that affiliates of the Samjung Group that focus on exports should immediately change their contracts to pay in Korean Won when importing raw materials or parts.”

“Normally, transactions are made in dollars, so who would want to receive Korean Won?”

“If there is an immediate benefit, there is no reason to refuse. If you accept payment for raw materials in Korean Won instead of dollars, try offering to pay 10% more than the original price.”

If that happens, Samjung Group will see double its profits.

“Make them pay 10% more than the current price and pay in Korean Won instead of dollars?”

Grandfather’s expression changed.

“Uncle.”

“Yes, father.”

“Is it possible?”

“If it’s 10%, they’ll reject it. But if you offer 20-30%, they’ll be tempted.”

“Uncle, that’s what you think.”

After speaking to my father, my grandfather looked at me again.

“However, that method is a double-edged sword.”

“If we were to sign a one-year contract starting now in Korean Won, it wouldn’t be double-edged sword.”

“Just one year?”

“Yes, Grandpa.”

“So, Ji-seong, are you saying that after the exchange rate skyrockets, it will stabilize after about a year? Does that mean that South Korea will face a bankruptcy crisis and then recover in just one or two years?”

“Yes, I think it will take about three years, and when the civilian government faces a national bankruptcy situation, it will ask the Japanese government for help, but the Japanese government will flatly refuse. Then, in the end, it will apply for a bailout from the IMF.”

“You really seem to be convinced that South Korea is going to fail.”

“Yes, to be exact, just before it was ruined.”

“Hmm!”

Grandfather groaned.

“Uncle.”

Now, only Grandfather’s choice remains.

“Yes, father.”

“What do you think?”

“I will trust Ji-seong. And Samjung Electronics must prepare for the national bankruptcy of the Republic of Korea even now.”

“Dad, are you going to do it?”

“yes.”

“Okay, anyway, the Samjeong Group was going to be passed on to Ji-sung through you, so let’s trust Ji-sung’s judgment this time too.”

My grandfather made a decision after much deliberation, but from then on he just gave orders.

“First, propose payment in Korean Won to all overseas trading companies as Ji-sung said. Also, immediately obtain loans from American or European banks using corporate bonds and shares as collateral. If it’s now, before South Korea collapses as Ji-sung said, you can borrow a lot of dollars in the form of corporate bonds or shares of group affiliates.”

“Yes, I understand, Father.”

“And uncle, you will now be inaugurated as Vice Chairman of Samjung Group. You will also become the President of Samjung Group.”

“Already?”

“Already? GL Group’s Vice Chairman, who is much younger than you, is also here.”

“Ah! Okay, I understand.”

After my father answered, my grandfather looked at me.

“Okay, Ji-sung, let’s go all-in on the South Korean national bankruptcy situation like you said.”

“Yes, Grandpa.”

“If South Korea collapses anyway, the value of our companies will inevitably plummet. Let’s use this crisis as an opportunity to grow the group even further. Even bigger.”

Grandpa has made up his mind.

I decided to risk it all on the national bankruptcy.

After that, preparations were made to acquire numerous companies that would collapse.

“I also plan to acquire valuable companies.”

“Hahaha, then it’s competition.”

“Yes, that’s right. Taean Group will grow bigger.”

“Then, Ji-seong, send this old man a list of companies that Taean Group is considering acquiring as you wish. There is no need for the same group to compete with each other and raise acquisition funds unnecessarily.”

“I think so too. And I, no, Taean Group is planning to acquire Daenam Special Steel first. Then Seungbo Steel. And along with that, we will also acquire Jinsoo Group’s soju company.”

“Do you really think that Jinsoo Group is also shaken?”

My grandfather asked with a look of utter surprise on his face.

‘The Jinsoo Group.’

It has the largest liquor company in the country as its affiliate.

In other words, it means that it is the best of the best.

“Yes, Taean Group plans to acquire all the valuable companies it can get its hands on.”

“Huh, then I’ll leave the Jinsoo Group off my list.”

“Yes, Grandpa.”

“I should take this opportunity to properly learn about cars.”

“grandfather.”

“why?”

“You can never beat Daehyun Group with an ordinary automobile business.”

“So, are you telling me to give up?”

“Just give it to me.”

“Huh? You want the car?”

“yes.”

“You just said that you can’t beat Daehyun Motors with a car?”

“That’s true for regular cars, but other cars are different.”

“Another car?”

“Yes, Grandpa. I’m thinking about electric cars.”

Electric car.

This is why Taean Electronics established a wireless battery division and is actively investing large sums of money in developing next-generation batteries.

‘Tesla is now….’

It hasn’t even been founded yet.

‘So I’m going to start it first.’

Electric vehicles will be Taean Group’s first overseas business venture.