Investor That Can See The Future

Chapter 478

I went with Ellie to my mother’s hotel.

We sat in the hotel coffee shop and waited, as her mother had been away for a while. As if there was a step-meeting, business wives rushed in.

When they saw me, they quickly approached us. There were many faces that I had greeted before.

“Good morning. CEO Kang Jin-hoo.”

“You came today with your mother-in-law.”

“Your mother is so beautiful.”

“Maybe this will suit you well.”

“Congratulations on your marriage.”

All of the business wives pretended to be close, calling Ellie her wife. After they had gone to the other seats, I asked Ellie.

“Doesn’t the title ‘momma’ look a little old?”

Ellie grinned,

“How are you? I am good.”

He seems to be enjoying this situation.

Well, if you like Ellie, it doesn’t matter.

I asked her.

“Who are Ellie’s parents?”

As I said before, Ellie was born to a Korean-Hong Kong father and a British mother. And both of them are currently working in Hong Kong.

“He’s a good guy. You are always worried about me.”

Ellie is the only child like me. She says she’s probably worried about her because she’s the only girl, so she said she wanted her to stay if she could, even when she said she was going to the Korean branch. Although she still respected her daughter’s will and let her go.

“She told her parents that she had a boyfriend after meeting Jin-hoo,” she said. I didn’t tell you about Kang Jin-hoo.”

“You must have been surprised when you found out.”

“of course. You are still amazed.”

After she did a commercial photo shoot, the fact that we were dating went out in the press and made the world known, Ellie, she says, and her house was turned upside down, she says. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . She couldn’t have imagined that the man her daughter was dating would be the richest man in the world.

“Your parents must like me.”

Ellie laughed and said,

“I am sure you will like it.”

“I wish I did.”

After the meeting, you will feel that you are really getting married, right?

As we were drinking coffee together, I saw snowflakes falling outside the window.

Ellie looked up at her snowy sky with a happy expression on her face.

“So pretty.”

“It’s the first snow this year.”

The people who were sitting in the coffee shop and talking were all looking out the window.

Ellie jumped up and grabbed my arm from her.

“wake up.”

“Where are you going?”

“I’m going out to meet the snow.”

I laughed out loud.

“Are you a kid?”

“Come on!”

“Oh, okay.”

* * *

December is the month of settlement.

As the year’s business is over and the accounting is confirmed, all companies have been busy, and financial companies have been particularly busy.

Although there are some differences between individual companies, it was generally evaluated that Korean financial companies did well this year.

Because the market was good.

The KOSPI, which stayed at the 2000 line for 10 years, broke through the 3,000 mark, and is now facing 3500 due to expectations for inter-Korean economic cooperation.

Cyclical markets such as batteries, semiconductors, automobiles, electronics, and bio continue to continue, and there is also a forecast that it may break the 4,000 mark next year. Slowly, talk of overweighting the MSCI index began to appear.

One of the biggest reasons why the Korean economy was able to grow like this in spite of the global low-growth trend would be the OTK Company.

OTK Company was so dependent on the individual’s abilities that it could be called a private company after the earthquake.

If he makes a mistake, the entire company is in a staggering structure. However, as if to ridicule such concerns, Kang Jin-hoo led the world economy by demonstrating his outstanding investment skills this year.

There was one more noteworthy thing about OTK Company.

This is the breakthrough of OTK Games. The company’s value soared with the success of Lost Fantasy Online following Lost Fantasy M.

At the current growth rate, OTK Games is highly likely to overtake Faceit and become OTK Company’s two major industries along with Karos.

It was none other than the Vice President who decided to invest in OTK Games. In addition, not long ago, he announced that he would do a hostile M&A against Icestorm, which turned the whole game world upside down.

Although it was overshadowed by Kang Jin-hoo, the mayor’s evaluation was that the vice-president also had excellent insight.

With the market moving without much volatility, shocking news from the US hit the financial world.

The US Federal Reserve has announced that it will raise interest rates by 75 basis points or 0.75 percent!

Federal Reserve Chairman Robert McClay spoke to reporters after the Federal Reserve ended.

“I am raising the federal funds rate, currently operating at 2% from 1.75%, to 2.75% from 2.5%. Because we met our employment and inflation targets early, and we believe the U.S. economy will continue to be robust, we believe that a sustained and phased rate hike is appropriate to meet and sustain the Fed’s goals.”

As soon as the words were finished, reporters began to ask questions.

* * *

The world was shocked by the news of the US interest rate hike.

The financial sector was not in a hurry. The stock market also experienced mixed fluctuations.

Raising interest rates is proof that the US economy is doing well. But at the same time, it meant that the money released from the market would be recovered and tightened.

You might think that the 0.75 percent increase in interest rates is such a fuss, but if this is the US base rate, it’s a different story.

As soon as I saw the announcement, I headed to the Golden Gate Building. Taek-gyu followed him and asked.

“Is it that big of a deal?”

“The base rate is the most powerful card the government can use against the market.”

Golden Gate was also in an emergency meeting. The employees are also busy monitoring the market.

After waiting for about an hour, Hyunjoo’s sister and Ellie returned to the office of the branch manager.

“Did you expect this announcement?”

Hyunjoo’s older sister shook her head.

“Interest rates were at the bottom, and the economy was booming. That interest rates would go up was something everyone had predicted. But this is too steep.”

In the meantime, the Fed has raised or lowered 0.25 percent in increments of 0.25 per cent to check for changes in the market. But this time, it raised 0.75 percent at a time. This means that interest rates that will be raised three times are raised at once.

“The problem is in countries other than the United States.”

As Chairman McClay said, the US economy is strong. They probably raised interest rates because they thought they had enough room to survive.

But what about other countries?

It is no exaggeration to say that only the United States is doing well in the world economy these days.

The California Restoration Project was the fuel that fueled the already booming US economy. Thanks to this, not only IT and other high-tech industries, but also the construction and manufacturing industries were revived and entered a state of full employment, and now it is enough to worry about overheating of the economy.

There are two main considerations in raising the base rate. It is the employment rate and inflation.

said Ellie.

“In the United States, prices are fluctuating due to the booming economy. Inflation is also at its highest in ten years.”

In both cases, sufficient conditions have been created to raise interest rates.

Taek-gyu crossed his arms and said.

“Did not President Ronald hate rate hikes?”

Chairman McClay had previously expressed his opinion on an interest rate hike several times before, and each time President Ronald spit out slurs that were almost abusive because it was ruining the American economy.

I shook my head.

“Rising interest rates is the prerogative of the Chairman of the Federal Reserve. Even the president cannot interfere in it.”

As many people don’t know, the Fed is a private, independent, non-governmental organization.

This is not particularly strange. With only a difference in form, almost all countries guarantee the independence of central banks.

This is because of the difference in their roles.

The government prioritizes economic growth. Naturally, they prefer low interest rates rather than high interest rates, and expansion rather than tightening. The central bank, on the other hand, prioritizes price stability. So, sometimes they cooperate and sometimes they check and lead the national economy.

This is also true of Korea.

Just as the United States is divided into the Ministry of Finance and the Federal Reserve, Korea is divided into the Ministry of Strategy and Finance and the Bank of Korea. In addition, the base rate is also independently determined by the Governor of the Bank of Korea.

But to the end, that is the principle, and the reality is that the government’s influence is at work to some extent.

“At what point will interest rate hikes stop?”

At my question, Hyunjoo noona put on her glasses and said.

“Well. As you can see, the U.S. did not pay attention to other countries when raising interest rates.”

During the oil shock, the key interest rate was raised to 21 percent in a short period of time.

In other words, even if you just put it in the bank, the principal will double in 4 years. Money flowed into the bank, and the price surge caused by the oil shock has stabilized.

However, as the dollar was overvalued, the US manufacturing industry suffered a crisis, and the US resolved the crisis by forcing its counterparty currency to appreciate. That’s the famous Plaza Accord.

In addition, interest rates were raised to 6.5 percent a year before the dot-com bubble and to 5.25 percent a year before the global financial crisis.

The Federal Reserve is the central bank of the United States.

When the central bank raises interest rates, it is correct to consider only the domestic situation without paying attention to other countries. However, there is one difference between the Fed and the central banks of other countries, that is, the dollar is the key currency.

The dollar is the reference point of money, and all currencies move in price in relation to the dollar. As such, it is no exaggeration to say that the Fed is effectively the world’s central bank, and the interest rates of central banks around the world are determined by the base rate set by the Fed.

Ellie objected.

“But isn’t it a little different now? It would not be easy to not care about other countries like before.”(Read more @ wuxiax.com)

The current world economy is so closely connected that it is difficult to compare it with the past.

The IMF crisis in Korea and the collapse of the real estate bubble in Japan in the 1990s did not have a significant impact on the world economy.

But now, the global economy is shaken by the crisis that occurred in Greece.

If other countries are shocked by the rate hike, it is likely to return as a boomerang to the US economy.

“No one knows what Chairman Maclay is thinking. But in terms of the intensity of his speech, it will not end here.”

Immediate rate hikes are also a problem, but Chairman McClay’s remarks were a bigger problem. He said he would raise interest rates “continuously and gradually”.

This signaled that the Fed would continue to raise rates until it meets its target.

“Even if it’s the same 0.75 percent, raising it that much when it’s 5 percent and raising it that much when it’s 1.75 percent is a different story. As a percentage, the former increased by 15 percent, but the latter by over 40 percent.”

In other words, for the borrower, the interest burden increases by more than 40 percent in an instant.

“What if it goes above 5 percent?”

Hyunjoo’s older sister shook her head.

“It’s impossible. How many countries do you think will survive those interest rates? Then there will be an unimaginable shock.”

“Well, I guess so.”

Before the financial crisis, it was easy to find deposits that paid interest of 5 percent or more at any bank.

However, after the financial crisis, the situation was completely different.

Developed countries, including the United States, lowered interest rates and released unlimited money to prevent recession and deflation. And the money flowed all over the world.

Low interest rates increase debt. And the increased debt makes it difficult to raise interest rates again.

“If you raise it to the maximum, the upper 3 percent will be the limit. Inflation is also a temporary phenomenon.”

In the past, when money was released, it was natural for prices to rise. However, the development of production technology, the realization of economies of scale and reduction of production costs due to the global value chain, the emergence of large distribution companies such as AMZ and Alijiny, and low oil prices have brought down prices.

As my sister said, it would be a burden for the US to keep raising interest rates.

Ellie muttered.

“Chairman Maclay is not that hawkish. No one expected he would make such a choice. What kind of change of heart did you have?”

At that, I stopped. I felt an unfamiliar feeling of insecurity.

Normalizing low interest rates is natural. But is it just that? Maybe there is another reason?

At that moment, Eli looked at me and asked.

“What’s wrong?”

“Yes?”

“You’re suddenly making a serious expression.”

I said with a smile.

“it’s nothing.”

Would that be a useless idea?