[Chapter 839: You're Already in the Hole]
From the perspective of the Federal Reserve, claiming they cared deeply about Mexico was nonsense. Their primary concern, of course, was American interests.
The world today was vastly different from what it had been decades ago. It had shrunk and flattened. When it came to currency or production resources, one had to adopt a global perspective.
Investors were frantically withdrawing their investments, and this capital naturally needed suitable targets. There was no doubt that as the world became tumultuous, the aversion to risk would spike, making America the most attractive investment destination.
Higher economic growth and lower inflation--this was what every country desired. If they couldn't find a way to channel these funds, Paul Volcker's efforts over the years would all go to waste.
This was probably why he was so furious.
"Nick, are you crazy? Do you even know what you're doing?"
"George, we have no choice. Don't forget, I'm a genius trader."
"Nick, that account has already lost tens of millions. No way, I can't go on like this. You're insane."
In a vacation villa in Sentosa, two sharply-dressed men were engaged in a heated argument.
Once leverage got involved in securities trading, it strayed far from genuine investment. To put it nicely, it was speculation; to be blunt, it was gambling.
With 10,000 contracts of the Nikkei index, a single point change could result in hundreds of thousands in the account of Barings Bank.
And that wasn't in yen! If it had been in yen, they would be looking at losses of millions. The Nikkei index, bouncing around 18,000 points, made even a minor point change equivalent to purchasing real estate in Tokyo.
And they called that investing?
Forget about it; when he said that, did he even believe it himself?
The argument inevitably concluded with George giving in. After all, they had already lost so much, and getting a job on the floor meant risking imprisonment. It was better to take a chance than to be stuck in that situation.
Poor George would never have imagined that later on, they would purchase futures not by thousands or tens of thousands, but Nick Leeson, in his flight from the law, held a staggering 100,000 contracts of the Nikkei index.
Ha! Not even pros like Soros or White Investments would dare to play that way.
It was exhilarating--one point increase in the index translated to millions in profit.
Of course, facing the other side of the coin was just as thrilling. When Nick Leeson got caught, he was numb to it all. Rather than fleeing, he had become a mere shell of his former self.
If he were to run, why go to Europe? Africa would have been the better choice.
The big shots celebrating on Downing Street wouldn't have imagined that they had actually avoided falling into Mexico's trap. Unfortunately, they had jumped right into a pit of their own making.
Barings Bank wasn't just some small institution; it was one of the banks responsible for managing the family fortune. So the repercussions of their downfall needed no further explanation.
Fortunately, they hadn't put all their eggs in one basket. Otherwise, it would have been game over.
"What? How do you know all this?"
Coughing, he explained, "There's a rather unreliable director who brought this story to the big screen. While it didn't get much attention, it still gained a bit of recognition."
Unfortunately, Nick Leeson couldn't benefit from it. The little royalties he had, they were seized by creditors. Coughing again, it was clear his writing skills were lacking--such a rich subject didn't turn into a bestseller.
This sparked an idea for William White: power must be checked. The authority of traders must be controlled.
William was surprised that Barings Bank managed to last over two centuries.
With such a level of management, in his eyes, surviving for two hundred years without collapsing was nothing short of a miracle.
"What the hell is this nonsense plan? Enough said; oil prices must be crashing."
"Yes, boss, they allowed low-priced Mexican oil into the market, and oil prices immediately plummeted. Just now, they dipped below $14."
With the drop in oil prices, William White was understandably upset. He didn't have many petrochemical plants in the U.S.; he wouldn't benefit from cheap Mexican oil.
As for who would benefit?
Naturally, it was Exxon and Mobil.
On one side were the Bell brothers, and on the other, the Standard brothers. Both had the Rockefeller Foundation lurking behind them.
"You old man, you're ruthless."
"Filson, is there any chance we could shove that oil back into the ground?"
Facing his boss's outlandish suggestion, Filson was at a loss. Coal and iron ore mining were simple--just slow down extraction, and the mine remains theirs.
But oil was different; don't talk about strategic reserves--that didn't have profit as its goal.
"It's not feasible, boss. The North American economic growth rate is stagnating--that's a fact. If the situation worsens, oil prices will drop even further.
Storing these commodities is expensive, and as for shoving it back into wells, boss, we primarily have offshore drilling platforms."
"Ugh, these idiots. I hope they know what they're doing. Who would have guessed Standard Oil's foundation was so deep?"
Some things didn't require evidence. Who benefited the most? Who had the most suspicion? It was that simple.
What? Mexico's economy was already troubled; excessive borrowing didn't solve their economic dilemma.
True enough. If it weren't for joining the North American Free Trade Agreement, their situation, while still grim, wouldn't have led to a complete collapse.
In less than a year, if there was no direct correlation, no one would believe it.
At the very least, if American agricultural products hadn't flooded in, their farmers wouldn't have gone bankrupt. Even if export values barely matched imports, they would still be in the red.
The U.S. and Japan's factories in Mexico only produced those goods. If they couldn't offer those parts, the product's added value wasn't theirs either.
Unfortunately, Mexico had clearly fallen for the U.S.'s trick.
Now that they were in such a mess, any talk of regret seemed absurd. Of course, if they had been a bit wild, they would have found a way out. If all else failed, they could simply withdraw.
"Yeah, boss, if this continues, things will get bad."
"Really bad, huh? Filson, don't worry about it. Those old-timers wouldn't care. I honestly don't either. It just means that the U.S. will have many new Latino friends.
Sigh, aside from possibly improving soccer skills, there's not much else."
William White's quip was met with firm agreement from Filson. With such an extended border, it was easy to cross. Walking a dog a little too far, and you might just end up in another country.
"Sir, White Investments did well enough; it'll cover these losses."
"Oh, by the way, Exxon and Mobil seem odd--there's been some tension recently, but now their actions are coordinated.
Is it possible they're planning to reconcile?"
"Hahaha, this antitrust business is amusing. They keep breaking apart, only to end up banding together again. I just wonder if those little Bells will merge.
Tsk, tsk, they probably won't agree to my buyout. A lab stepping in to acquire? That's just too ridiculous."
In these tumultuous times, William White could only remain in America. His kids certainly preferred it here. Lanai Island was better suited for those old-timers.
*****
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