The Currency Speculator
More precisely than any contract or promise, if one were to explain what currency speculation truly meant, it could be described as a form of gambling. One would take currencies from foreign states whose values fluctuated, repeatedly exchanging and converting them to capture the resulting profit. Naturally, this required at least two distinct types of currency, along with shifts in the exchange rates between them.
In that sense, the Warring States era offered an ideal environment for currency speculation.
The Seven Powers that dominated this age each issued their own distinct coinage, though a few states shared similar designs. In my previous life, I had learned about them in middle and high school, and in this life, the knife money issued by my homeland of Yan was particularly famous. Many other forms of currency circulated across the continent as well.
These currencies could first be categorized by shape. The main types were spade money, shaped like the head of a shovel; knife money, modeled after blades; and the familiar circular ring money. Yet the classification did not end there. Within each broad category existed numerous subtypes.
For spade money alone, there were the hollow-handled variety, the flat-headed, the pointed-foot, the square-foot, the round-foot, and the long, perforated multi-state spades. And when one added the variations of knife and ring money, dozens of different currencies competed in the market. This proliferation occurred because not only states but private individuals minted and used their own coins.
Still, there was no need to memorize every single type. Three key points were sufficient to grasp the system of the era.
First, spade money was primarily created and used by merchants for trade, knife money was officially issued and circulated by states, and ring money was used almost exclusively in Qin. Second, knife money prevailed in the coastal states of Qi and Yan, while spade money dominated the central agricultural regions of Zhao, Han, Wei, and Chu. Third, even within a single state, multiple types of currency circulated simultaneously.
Understanding these basics was enough to claim a solid grasp of contemporary monetary policy.
The question, then, was how to generate profit through currency speculation in such an environment. In truth, substantial capital was required to earn significant returns this way, especially if one intended to deliberately crash a particular exchange rate.
George Soros, the undisputed master of this field, did exactly that.
The legendary speculator had artificially created a massive disparity between the British pound and the German mark, reaping astronomical profits. To achieve this, Soros had pooled every available resource through multiple hedge funds. By short-selling the pound, he drove its value into a nosedive and essentially stripped Britain to the bone.
Of course, I could not replicate Soros’s methods. Even if I recruited Nogucheon as a partner, our available funds were far too meager, and the very concept of short-selling did not exist in this era. Nevertheless, I had considered currency speculation because I had no need to deploy enormous capital to forcibly collapse exchange rates.
“The coins issued by Wei have already lost much of their value.”
The currency of Han—which had essentially become a vassal of Qin—was on the verge of being worthless, while Wei’s coins, after repeated defeats and the loss of significant territory, were steadily declining as well. There was no need for me to engineer a collapse; the losses from war had already devalued them on their own.
“It is indeed… an astonishing idea, Young Master. But suppose we gather Wei’s currency. If Wei ends up collapsing like Han, would we not simply incur losses?”
Nogucheon caught on quickly. He had clearly understood the principle of buying when value was low and exchanging again once it recovered for profit, and he had even recognized the opposite risk. I, however, felt no concern whatsoever.
“Why do you think Wei’s currency has fallen in value?”
“Is it not because Wei’s prestige—the very foundation upon which its money is used—has weakened?”
“That is correct in general terms, but there are two more specific reasons.”
As Nogucheon had noted, the first was reduced demand: Wei’s national power had waned, its territory and population had shrunk, and its markets had contracted. The second was a surge in supply. Refugees fleeing Qin’s attacks into Zhao had exchanged vast quantities of Wei currency for Zhao coins.
It was the simplest application of the law of supply and demand. Demand fell while supply rose; therefore, value plummeted.
“Conversely, if demand increases and supply decreases, Wei’s currency is bound to regain its original value.”
“That is precisely why I ask whether it is truly possible. Demand? Supply? My learning is shallow, so I do not fully understand such difficult concepts as you do, Young Master. But I do know that Wei’s situation is far from favorable.”
“It will recover. Without fail.”
“Pardon?”
To those living in the present, it might seem that Han had already met such a fate and that Wei would soon be completely subjugated by Qin. But history would not unfold that way.
Wei does not fall until after the ascension of Qin Shi Huang. Before that, it fought fiercely alongside the other states against Qin. Given that, the envoy Wei sent this time will succeed in forming an alliance with Zhao.
That would increase internal demand within Wei. Meanwhile, supply was already shrinking. Because the concept of using currency for financial games was underdeveloped, few places exchanged Wei coins at anything resembling a fixed rate. What little exchange had existed in the early days had ceased; now people simply melted the coins and sold the bronze as raw material. Circulation had decreased, which meant supply had contracted.
It is unfortunate that currency has a floor value because it is made of raw materials.
That also placed a limit on potential profits. Even in the best-case scenario, I could not hope for the astronomical gains Soros had achieved.
“Soon the Zhao court will seek an alliance with Wei to jointly resist Qin. Zhao can no longer stand alone against Qin, so they will do whatever it takes to revive Wei. At that time…”
“The demand for the Wei currency we have stockpiled will rise, allowing it to recover its value.”
Nogucheon no longer raised objections. He simply stood with his mouth agape, slowly shaking his head.
“How did you even conceive of such an idea, Young Master? Treating currency as a commodity… I have met several great merchants who are said to be extraordinary, yet none of them ever thought this way.”
In truth, currency speculation itself was not a difficult concept. Yet the great inventions of any age often arose from simple notions that no one had considered in daily life. Later, people would wonder why they had never seen it before, but bringing an entirely new idea into existence always required an almost accidental flash of insight.
“So, can you handle it?”
“Leave it to me. This is, after all, the gambling den where the realm’s wealth gathers. Even if we operate openly, no one will notice what we are doing.”
Nogucheon had looked at me with admiration when he lost to me at Six Po, but this time his eyes shone with genuine awe as he made his bold declaration. To him, I was no longer a foolish child courting ruin but the possessor of a brilliant mind far beyond his own comprehension.
Reading his sincere desire to commit fully to our partnership, I felt inwardly relieved. Outwardly, I maintained a calm demeanor and cautioned him.
“Do not let your guard down. We must be cautious. It would not benefit us if anyone discovered my involvement.”
“I will keep it in mind.”
Seeing the resolute light in Nogucheon’s eyes, I realized no further instructions were necessary.
When it comes to practical matters, Nogucheon—who has built his reputation rolling in these very circles—will know far more than I do.
After discussing several additional details of the plan, I left the safe house Nogucheon had prepared. Outside, the world remained wrapped in deep darkness. I had waited for a night with a waning moon precisely to avoid being seen.
Only after slipping back into my quarters did I finally release the breath I had been holding, careful even to muffle the sound. As the tension drained away, my limbs tingled.
“Haha…”
I had once been unable to give a proper presentation for a simple group project, yet here I was acting like some kind of secret agent. If I told my past self that one day I would be doing these things, I probably would have scoffed and demanded to know what nonsense I was spouting.
“Position really does shape the person.”
“Really?”
“Hup!”
The sudden voice nearly made me faint. Even as I stumbled, the thought of not being discovered made me clamp a hand over my mouth to stifle a scream.
“Whew… It’s you, Jeong. I almost had a heart attack.”
I had kept this matter secret even from my household. Aside from Seok, whom I had tasked with contacting Nogucheon, I had not even informed Han Jing of tonight’s activities.
“Did I startle you that much? Still, it was wrong of you to leave without telling me.”
“Ah, I’m sorry about that.”
It was not an empty apology. I did feel a twinge of guilt for hiding my actions from Jeong and the others. Still, it could not be helped. After all, the saying went that to deceive others, one must first deceive those closest to them.
“The reason you went out today… it was because of me, wasn’t it? Or rather, because of us?”
“Well… yes, that’s part of it. But you don’t look like you just woke up. Did you already know I was going out tonight?”
“Mm. You seemed different from usual today. I thought something must be happening.”
I had believed I had concealed everything perfectly, yet she had noticed. Not even Han Jing, who had spent the most time with me, had seen through it. Clearly, having lived by reading the moods of others for so long had made Jeong exceptionally skilled at detecting changes in people.
“Let’s go inside first.”
“Before that, promise me one thing.”
“A promise? What is it?”
I spoke with slight anxiety, worried that someone else might see us standing outside.
“I won’t ask you to tell me everything. But… if you ever have to do something dangerous because of me, please don’t hide it. Tell me.”
Once we overcame the current crisis, such situations might not arise again, and the request itself was not difficult. If my promise could bring Jeong even a little peace of mind, what reason was there to refuse? I nodded willingly.
“I promise.”
“Really?”
After being separated from her mother in the previous incident, Jeong now had no one to rely on but me. A single light remark could not fully dispel her anxiety. When she asked for confirmation once more, I extended my little finger.
“Shall we seal it with our pinkies?”
“Like this?”
With slightly clumsy movements, Jeong wrapped her little finger around mine.
“And then we press our thumbs together. Yes, like that.”
Though puzzled, she faithfully followed my instructions.
“Where I came from, this is how we made promises. It means we will absolutely keep them.”
“Absolutely…”
Jeong’s finger tightened around mine with surprising strength. It was still only the grip of a child, yet the force I felt in my heart was far greater.
“Yes. It is a promise I will keep unless the dark night falls from the sky like rain, and unless horns grow upon a horse.”