Chapter 246
Chapter 246
-----------------------------------------------------------------
Translator: crow
Chapter Title: Chapter 246 - 불 태환
-----------------------------------------------------------------
-----------------------------------------------------------------
Translator: crow
Chapter 246: Gold Inconvertibility
-----------------------------------------------------------------
The Cultural Revolution barely caught Pyongyang's attention.
The Korean government didn't have the luxury to worry about Communist China.
'We're too busy keeping up with America right now.'
I summoned the Bank of Korea governor and ordered him to resume gold purchases.
We'd held off for years at Goldwater's request—enough courtesy shown.
"How much should we buy, sir?"
"How much gold do we have now?"
"2,500 tons."
Then we'd buy another 2,500 tons.
Even then, holding 5,000 tons would suit a world number-two economy.
Plus, it'd be a nice jab at America.
Once Korea restarted gold buying, prices began to climb.
The U.S. ambassador rushed to my residence.
"Your Excellency, you know resuming gold purchases in Korea puts Washington in a tough spot."
Of course I knew.
That's why I was doing it.
"We need safe assets like gold too. We've taken enough hits holding faith with Washington."
"Your Excellency."
"Even just not demanding convertibility shows plenty of loyalty."
'They think because I've played nice, I'll keep being a pushover.'
Goldwater might've been different, but Kennedy had no charm—why cooperate?
When I stood firm, the ambassador backed off.
Korea's gold buying continued.
Demand exploded, driving prices higher.
America faced a headache.
"I'm here for gold redemption."
As soon as prices rose, Europe's hyenas sailed back to New York.
"You guys are insane."
"No, we just don't want to lose out."
Europe's finances were already battered by Korean companies' onslaught.
Naturally, they didn't want to miss redemption profits.
"Keep this up, and you'll all regret it."
I smirked as America gritted its teeth fulfilling demands.
'How long can they hold out?'
In the original timeline, America suspended convertibility in 1971.
This world was ahead of schedule—no reason to lag.
America had poured unimaginable sums into the arms race.
Korean companies' assaults accelerated dollar outflows.
Maintain convertibility like this?
Even Reagan preaching a strong dollar couldn't pull it off as president.
I had academics push "gold inconvertibility" on America.
"Suspending convertibility drops the dollar's value, boosting U.S. goods' competitiveness temporarily. Then they can compete with Korean products."
"That's the neighboring impoverishment strategy—ruining others' economies to fix your own."
"Is that bad? America saves itself first, helps friends later."
I leaked this logic relentlessly to Washington.
Aides worried early suspension would speed up petrodollar plans.
"What if America rushes petrodollars?"
"The world knows oil's worth now. Who'd sell cheap to America?"
None.
Oil sheikhs would demand massive premiums.
Negotiations would drag like bedroom soccer.
Once the dollar collapsed, I'd bet on three years of chaos.
My goal: maximize the won's share in that gap.
No pipe dreams of reserve currency status, though.
Just euro level.
Euro-sized ambition—that was me.
Modest.
But Kennedy didn't bite on my inconvertibility pitch.
"Reckless suspension would chaos the world economy. America will honor its promise to back the dollar with gold to the end."
Kennedy reaffirmed convertibility on TV.
Stubborn guy.
"Your Excellency, convertibility looks solid through Kennedy's term."
I agreed—Washington wouldn't quit easily.
Time to seed crisis: gold running out.
So far, only Europe demanded.
What if Asia joined?
Unfortunately for America, Asian nations held heaps of dollars.
From our market-making dumps into their treasuries.
"Spread rumors through markets: dollars soon inconvertible."
I signaled Asian nations to redeem.
"Kennedy's lying. It's a bank run scare—grab cash now. Latecomers lose."
"But Korea's sitting on tons of dollars?"
"Oh, Korea swapped dollars for bonds and real estate ages ago."
Plausible stats and faked data looked legit.
Asia panicked instantly.
What if dollars tanked?
They'd lose assets sitting idle.
"Launch the ships!"
Soon, dozens of Asian-flagged vessels swarmed the Panama Canal.
America first mistook them for Korean merchant fleets.
Reality hit like a bomb.
"They're here... for gold redemption?"
"Not small change. Thirty billion dollars' worth."
The Fed and U.S. government flipped out.
We watched, munching popcorn.
"Please trust our dollar. Our credit's rock-solid."
"We want gold we can trust! Hand it over! Gold!"
Asia's redemption demands were astronomical, lighting fires under Europe's asses.
"Those Yanks might run out before us?"
"Nobody's watching America—let's redeem everything."
"Launch our ships."
News of Europe's hyenas returning broke America's will.
Fulfill all that, and U.S. vaults would empty.
Even I'd declare inconvertibility as Kennedy.
"Starting today, no more exchanging dollars for gold."
The Kennedy administration announced unilateral suspension via special bulletin.
Dollar devalued too—from $35 to $38 per ounce.
Nations howled at sudden suspension and devaluation.
"Gold! Give me my gold! My gold!"
"What about world trade? Everything's dollar-pegged!"
Global economy plunged into chaos.
As pegged currencies swung wild, only Korea stayed sane.
We'd prepped (pressured for) this era alone.
"We cut dollar pegs. The won's backed by EA. Trust Pyongyang for trade."
I swiftly shifted to floating rates.
"Ha. Smart switching to won trades. Solid, guaranteed value."
Middle East oil barons signaled switching settlements to won.
"Excellent choice."
Petrodollar or not later, shrinking won's share post-gain was impossible.
But expansion brought issues.
"Your Excellency, won's surging sharply."
"Expected."
"Beyond expectations."
Per capita GDP rocketed overnight.
"Per capita GDP over $4,000 already?"
Even discounting 10% dollar drop, too fast.
EA devaluation effects? Negligible.
"Could hit $4,500 by year-end."
Absurd pace.
This trend: Korea mainland nearing two-thirds U.S. size.
Good? Hell no.
Bubble growth was disaster fuel.
Won appreciation was anticipated from inconvertibility plotting.
Not this much.
Anyway, countermeasures for rising won:
One: Curb real estate speculation—national disease.
Money flooding property? Bubble Japan 2.0.
Suppress absolutely.
Two: State sovereign fund outflows massive domestic capital abroad.
Yank funds en masse—plunge rates regardless of foreigners' hype.
Sustain to work.
Three: Cut utilities for exporters, add subsidies.
Or competitiveness-crushed firms collapse screaming.
Four: Wage freeze five years—ease firm burdens.
Won surge outpaced wage hikes.
Five: Ramp imports from nurtured Southeast Asia etc., shrink trade surplus.
Cut incoming forex first.
No need balance sheets screaming invincible.
All stopgaps, but sufficient.
Dollar stabilizes? Play our hidden card.
'Quantitative easing devalues then.'
Exports dip short-term from appreciation, but world-top firms tough it out.
America, Europe, Asia—not ready to fight us yet.
Picked this timing for those reasons.
Pain had payoffs.
Mobilize bloated assets for foreign assets/bonds—double net overseas fast.
Like original Japan.
For won status, I'd endure brief pain(?).