章節 508: Chapter 508: Gold, Black Gold, and Greenback
Liu Tianqi is an outstanding financial talent. Having worked at HSBC for so long, he is familiar with the specific operations of banks. Thus, when managing Jiuding Bank, he naturally pays attention to the significant impact of international gold prices.
Since 1974, international gold prices have been on the rise. By October 1977, the price of gold had increased from $130 per ounce to $180 per ounce.
In October 1977, the Federal Reserve began to engage in periodic operations with the dollar, initiating super-loose monetary policies. The dollar started to depreciate and continued to do so until October 1978, after which it stabilized. Meanwhile, international gold prices had risen to $244.
The "Three Golds," namely gold, black gold (oil), and greenback (USD), are intricately linked.
In the early 1970s, after the collapse of the Bretton Woods system—a world monetary system established after World War II—gold and oil prices both detached from their fixed exchange ratio with the dollar, leading to significant price surges. The three elements are closely connected, with each balancing the others, hiding relative stability within their fluctuations, and showing absolute volatility within apparent stability.
When the dollar depreciates, capital seeks the hard currency of gold as a safe haven, leading to a surge in global capital flow into the gold market, thus driving up international gold prices.
So, relatively speaking, investing in gold for Jiuding Bank can indeed preserve and even increase asset value.
However, Liu Tianqi analyzed that the Federal Reserve's periodic depreciation of the dollar had lasted for a year and was likely to remain stable for a longer period. Investing in gold now might not yield returns as quickly as the current rise.
But now that Chairman Xia Yu has pointed out that international gold prices are going to rise and suggested speculating on London gold futures, Liu Tianqi believed that Xia Yu must have some crucial information that he was unaware of.
This was worth paying attention to!
"Chairman, will gold prices rise in the future? What is the reason for this?"
Liu Tianqi asked, his expression very serious and slightly anxious.
He hoped the issue was with the intelligence rather than his own ability, as a failure in the latter would be a significant blow.
Xia Yu's eyes flashed with a sharp glint, and he said solemnly, "Iran's strike movement is about to undergo a qualitative change. I predict it will evolve into a revolution, and it is highly likely that Iran will stop exporting oil!"
"How is that possible?"
Liu Tianqi was stunned, his eyes wide, and he spoke in disbelief.
But looking at Chairman Xia Yu's serious expression, he had to take a deep breath to calm himself.
Since Xia Yu said so, given his international perspective and Jiuding News Agency's news gathering and exploration capabilities, Liu Tianqi had to believe in this possibility.
He knew that Iran was undergoing internal strife. Since January this year, there had been large-scale protests against the monarchy, and from August, there had been large-scale strikes.
However, by now, in early December, he had not observed significant changes, so he didn't expect that one of the Middle East's powerful countries, Iran, might be on the brink of revolution.
But if Iran did indeed experience a revolution, it would have a tremendous global impact.
This is because Iran is too special!
In the industrial era, oil is the lifeblood of industry. Iran, located in the heart of the Middle East, is the second-largest oil exporter in the world. If a revolution were to occur, and as Chairman Xia Yu suggested, if oil exports stopped, no developed country in Europe or America could escape the consequences.
A reduction in international crude oil would cause oil prices to soar, leading to a series of adverse effects!
Just considering the world's largest economy, the United States, which has long relied on oil and the dollar as its two main pillars.
With the U.S. already facing a fiscal deficit crisis, inflationary pressures, and a weakening dollar, a spike in oil prices would undoubtedly reduce the dollar's purchasing power, increase the pressure on dollar depreciation, and exacerbate domestic inflation.
The dollar has been depreciating for a year now, and although the Federal Reserve has managed to stabilize it, this is still a controlled situation.
However, if international crude oil prices suddenly surge, such uncontrollable factors would disrupt the Federal Reserve's plans. Capital, pressured by the dollar's depreciation, would be sold off, and capital would rapidly seek refuge in the gold market to preserve value.
Thus, international gold prices would definitely enter a new round of skyrocketing. Between January 1977 and October 1978, gold prices increased by over sixty dollars per ounce in one year. This time, the rise will be even higher!
This is definitely a huge crisis!
Of course, with advance notice and preparation, a crisis can turn into a great opportunity. Acting early allows one to reap the most significant benefits!
Thinking of this, Liu Tianqi's mind was stirred, and his face turned slightly red as he said to Xia Yu, "Chairman, if what you say happens, I will definitely stop other investments and buy all the gold to make a significant profit!"
Xia Yu laughed confidently and said, "According to the analysis, the likelihood of a revolution in Iran is over ninety percent. Therefore, investing in gold is highly promising. Avoid New York gold futures and focus on London gold."
Currently, there are two major gold trading markets in the world: London and New York, and they differ significantly.
The U.S. is one of the global centers for gold futures trading, with the main futures being traded on the COMEX Exchange in New York, commonly referred to as "New York gold."
New York gold is a futures contract with a fixed term, and leverage is limited to below thirty-five times.
London gold, on the other hand, is quite different.
London gold is a spot contract, traded 24/7, with no fixed trading hours, and the contract has no expiration, with leverage up to one hundred times.
London is the oldest gold trading center and the largest gold market in the world. It is characterized by the lack of a fixed trading venue, meaning there is no actual trading floor.
In other words, trading lacks regulatory oversight, making it highly suitable for capital movement.
Compared to the heavily regulated New York gold, Xia Yu, who is keen on discreet operations, naturally favors the less regulated London gold.
"Chairman, when do you think Iran will erupt in revolution?"
Liu Tianqi asked again. This question is crucial. If the timing is right, a crisis can be an opportunity, but if not, an opportunity can turn into a crisis.
Xia Yu thought for a moment and said decisively, "Unless something unexpected happens, the revolution will occur by the end of this month, at most within half a month!"
"Half a month!"
Liu Tianqi's expression was grave, mumbling to himself as he quickly thought about how to maximize benefits.
Seeing this, Xia Yu smiled faintly and said to Liu Tianqi, "Tianqi, we still have some time. We need to make money, but we also need to acquire a bank. Which bank are you interested in?"
Liu Tianqi was taken aback, frowning slightly. How did the topic shift back to bank acquisitions? Wasn't he just advised to invest in gold?
It seemed the Chairman meant that they could both invest in gold and acquire a bank?
With limited funds, how should this be managed?
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