Mediterranean hegemon

The president started talking about politics, and everyone really had nothing to say and could only use economic means to achieve political goals as much as possible.

Francisco said: “Now United Group’s debt ratio is very low and its capital is large, so there is no problem in using it for mortgage loans. During this wave of crises, United Bank has perfectly withstood the consideration of the 4 billion liquidity gap without a single default event. , there is not even a procedural default, and the reputation is very good in the market. The key is interest rates. Due to the impact of the crisis, bank loans are now generally tightened, basically 5% or more. Although the Federal Reserve does not say anything to us now, I I think their awareness of precaution has not subsided; Wall Street banks also have concerns and hostility of one kind or another. I personally think that if the $1.8 billion package deal is reached and the subsequent balance of the loan is $1.3 billion to $1.5 billion, I think there will be no problem. To get 3 billion in one go, I’m afraid there will be certain risks. If I were asked to come forward, I would choose to borrow 1.5 billion from the United States, 1 billion from the United Kingdom, and 500 million from France... That’s pretty much it.”

Antonio said: "The capital of Britain and France can be borrowed, but they will have other requirements in industry. France will definitely have to talk about oil issues, and Britain will definitely have to talk about equipment issues. In a word, it is easy to borrow money to buy things, but borrowing money without buying things or I didn’t buy enough, trouble..."

Leo frowned and said: "You can issue long-term bonds in the United States, but this time the interest rate will be a little higher, 6%. I think it is safe to issue 500 million... Defaults are common in the market now, and a company with such a good reputation as United Group may be Not much, but the top priority is to get several rating agencies to raise the rating - it turns out we are not so fragile!"

"If they are willing to give 6%, Britain and France can also give it. I think it won't be a problem to give another 500 million..."

"What if I contribute 7-8%? Do you think it's okay to get 4 billion?"

Leo was shocked: "If 4 billion with 8% interest, the interest would be nearly 320 million a year. And this time is different from last time. Investors have trust in United Group and will not sell in panic. At that time, even if there is a crisis, we will not be able to repurchase it cheaply.”

"We will not buy back this time, but we will extend the time as much as possible, such as 10 years."

"But a 10-year 8% long-term bond means that the interest is basically equal to the principal. Is this really good? I'm afraid I won't be able to pay it back by then." Leo shook his head and said, "To be honest, if you don't want to mess with Italy Crisis rescue, if we don’t doubling it in ten years, I am sure that we will turn losses into profits in ten years. The assets of United Group are actually very good, and the products are also very good. It is purely because the stall is too big and the investment projects are one after another. The amortization is too much; but if I continue to build projects and build stalls, I really have no hope of making a profit..."

"There is no need to make a profit." Contini said slightly, "Let me tell you a judgment... The current currency values ​​of European and American countries will eventually be unable to maintain their value and will at least double in value within 10 years - if measured in gold, it may more than double!"

Leo asked in confusion: "Why is this? Don't use the Italian lira to measure it. The lira is indeed relatively fragile and will jump up and down at the slightest sign of trouble, but the British pound and the US dollar are very stable. They are the gold standard! The lira is only the gold exchange standard!" "

Antonio and Francisco were also puzzled.

"Because..." Contini lowered his voice, "In the end, the gold standard of various countries will not be able to maintain and they will exit one after another. Then the deficit will increase, the finances will be severe, and the major currencies will more than double in value..."

"Ah!" The three of them all expressed surprise: The stock market crash is just an investment and securities issue, and withdrawing from the gold standard is a fatal blow to the economy. It shows that the fiscal and financial systems of various countries and the basis for economic operations that currently rely on them are all broken. It collapsed, which was much more violent than the stock market crash.

"President Hoover revealed it?"

"No! I judged it!" Contini explained, "The current economic situation is very simple. Since hundreds of billions of dollars have been wiped out with the evaporation of the stock market, the overall purchasing power has been greatly reduced, but the production capacity will not be reduced for a while. , which will lead to serious overproduction. There are only three channels to solve this problem: first, domestic digestion; second, increase export; third, on-site destruction.

Destroying it on the spot is the stupidest way. It means that social resources and social productivity are wasted, and the economy cannot circulate. Therefore, we can only take two paths: domestic digestion and increased exports. You are all experts in this field. Please tell me, what is a good way to consume so many supplies without allowing the currency to depreciate? "

Several people were silent: the so-called domestic digestion is actually a purchase based on public finance, that is, the state plays the role of the final purchaser. Although the state has the right to issue currency, currency cannot be created out of thin air. As far as the United States is concerned, either Is it a national debt, or is it just turning on the printing press to print more bills? Issuing more U.S. dollars will definitely cause inflation and currency devaluation, but issuance of more national debt won’t? In the final analysis, national debts still have to be repaid. Nowadays, interest rates of 5-6% are common, and government bonds are not exempt. Otherwise, no one will buy them. Once the fiscal deficit is long-term, we will definitely end up going the way of the printing press. This is the inevitable devaluation. source.

The so-called increase in exports is of course to compete for the international market. The most advantageous competitive weapon is low prices. There are many ways to achieve low prices, such as improving technological levels and improving production efficiency. But for the powerful countries in Europe and the United States, these are almost the same. ? The fastest and easiest shortcut is to depreciate the local currency, which will promote export growth due to the overestimation of the currency of the importing country. If the other country imports too much, it will either set trade restrictions and engage in a trade war, or competitive depreciation. Generally speaking, the former is easier to adopt but will cause In international disputes, there is nothing wrong with competitive devaluation. That's fine. If you devalue, I will also devalue. We will devalue one after another, and finally form a comparison until a new balance is achieved.

It's easy to think along this line of thinking: If everyone is devalued, if we continue to maintain the gold standard, wouldn't it be a waste of gold flowing out? Although gold has little substantive effect, it is a symbol of a country's wealth and heritage. How can it be possible to flow out on a large scale? The only solution is to cut off the relationship between gold and currency and withdraw from the gold standard, which in turn opens a smoother door for devaluation... It may be reluctant at first, but as long as a country takes the lead, this action will create a domino effect.

The three of them are all smart people, and they understand everything after careful consideration.

"So, I have to get a loan worth 3 billion, preferably 4 billion U.S. dollars: part of it is used to deploy the rebound of U.S. stocks, and a guarantee amount of 1 billion U.S. dollars is arranged here. In addition, our own stocks can also be mortgaged, which can support 30 With a position of 1 billion US dollars, the second 1 billion is deployed in gold futures and spot, betting on gold price increases. In fact, it is not an increase in gold prices, but currency depreciation; the remaining 1.5-2 billion is used for the introduction of US equipment." Contini said. He came up with his own idea and said enthusiastically, "In my mind, I have never thought of using industrial profits to repay the loan. That would be too stupid and too tiring. Speculation means making money through operations. This is called speculation!" I am engaged in industry to revive the Roman Empire, not to work for these Wall Street tycoons and bankers - they are not worthy!"

These words were extremely domineering and arrogant, but others thought it was normal and completely in line with Contini's personality and temperament. Besides, he was right - such a large industry as United Group cannot be managed honestly like Fiat. All the money earned from industry was made by the CEO through various operations and speculations. It took Fiat two full generations to reach its current scale, and the United Group only took seven years. If you stick to that little bit of industry and learn from Fiat, I'm afraid Now the United Group cannot break through the US$100 million pattern.

The structure is different, the vision is different, and the decision-making methods are different. United Group is currently the only super-large multinational consortium in the world that does not rely on industry to make its fortune - this is called suffocating for dreams!

Originally, people like Antonio would never believe that one could become rich through speculation, but now a living example is before us: In 7 years, United Group started from scratch and made a profit of US$8.6 billion purely through speculation. , excluding nearly 2 billion US dollars in losses in the main business and more than 1 billion US dollars in various abnormal expenses (such as building warships and tanks), in the end not only achieved a net asset of more than 5 billion, but also created Italy's first A large consortium with a far larger scale has completely subverted his imagination and surpassed traditional economic concepts. Now he has a blind belief in Contini: the young master is a born saint and can do anything!

"Having said that, I will act according to this policy, issue long-term bonds with a limit of no more than 8%, and absorb another US$4 billion in borrowings. Since the value is going to depreciate, the more the better!" Leo said with emotion, "Of course I don't It would be stupid to go up to 8% all of a sudden. Let’s try the water at 5% first…”

Contini smiled slightly, but kept another sentence in his heart and did not say it out loud: What the United Group does will be a big blow to the governments and industrial consortiums of other countries, which means that the average market profit center will be forcibly pushed up. Others must also issue bonds at an interest rate of 8% or higher, otherwise investors will definitely buy joint bonds with good reputation and high interest rates. An interest rate of 8% is enough to crush companies and governments with insufficient income levels. However, ,whocare?