Chapter 116: Bubble Warning
Chapter 116: Bubble Warning
Washington D.C., the heart of American politics.
I was surrounded by reporters as I stepped out of the airport.
“Mr. Kim Shin, we understand you are here to attend the economic conference hosted by President-elect Biden.”
There were over a hundred of them.
I wondered if there had always been this many economic and political reporters.
Journalists from various countries, not just the United States, were gathered in Washington.
The reason they swarmed me was likely because my reputation and social standing were higher than I’d thought.
‘Just don’t cause any trouble.’
I wasn’t used to dealing with reporters.
One or two would be fine, but this swarm was a madhouse.
“Were you certain of Earth Channel’s success?”
“You accepted President-elect Biden’s invitation. Is there anything you’d like to say to him?”
“When do you think the COVID-19 situation will stabilize? Just one word, please!”
Reporters raised their hands, firing off a variety of questions.
When the COVID-19 vaccine was released, I had to be cautious about meeting with the press because it was a matter of life and death.
As for attending the economic conference, I had simply intended to grace the event with my presence.
I figured I could give the reporters some decent answers they could use for their articles.
“Many people are enjoying Earth Channel. We’ve taken a successful first step, but I believe continuous effort is even more important. We will produce and discover a great deal of content and strive to bring you entertainment.”
It was a satisfactory, textbook answer about Earth Channel.
An answer made possible because I had studied potential responses with Lee Jong-yeop on the plane.
Korea is incredibly specialized when it comes to cramming for tests, isn't it?
“What about a message for President-elect Biden?”
A CNN reporter asked, raising his hand.
“Hmm…”
Something to say to the American President-elect.
I shouldn't act conceited toward a president elected by the people.
Honestly, I didn’t have much to say.
“I don’t know much about American politics. However, he is the person chosen by the great voters of the United States. I expect he will govern well.”
It was just the right amount of lip service, not too over the top.
* * *
After giving some cursory answers to the reporters at the airport, I went to a luxury hotel in Washington and got some much-needed rest.
Having arrived two days early, I had plenty of time.
Lee Jong-yeop said with a smile, “Sir, I think you handled that well.”
“You think so?”
“If you turn on the TV, you’ll see the interview. The hosts’ assessments are favorable, too.”
Now that I was famous, anything I did was easily televised.
“Not interested. I don’t particularly want to seek it out.”
“We have some time before the meeting. Would you like to do some sightseeing in Washington?”
“The reporters will probably make it uncomfortable. Let’s just rest at the hotel and then attend the meeting.”
“Yes, sir. Understood.”
I had planned to take it easy in Washington, but a guest came to visit me at the hotel.
“Hey, we meet in Washington.”
“It’s good to see you.”
It was Elon Musk, the eccentric genius who had become the world’s richest man thanks to Tesla’s soaring stock price.
A lot had changed in our respective fortunes since we last met.
In my case, I had earned over 50 billion dollars from Tesla’s stock surge, so it was a major step up, to say the least.
“Congratulations on the success of Earth Channel. Haha. I heard it already has over 300 million subscribers. I’m excited to see how many people will end up watching it.”
“I’m happy that the public likes it, but the pressure is immense. We are working hard to discover and invest in content.”
The conversation briefly turned to Earth Channel. For businessmen, shop talk was inevitable.
“Anyway, I should tell my major shareholder about Tesla’s future. Do you remember what I said about the manufacturing process last time?”
He explained that Tesla’s factory had implemented a method of assembling cars in three stages, like Legos: the front section, the middle section with the battery, and the rear section.
“By cutting out useless steps, we’ll drastically reduce production time. Plus, since it’s stamped out all at once, we’ve even improved the structural integrity. Tesla is leading an innovation in R&D and production that other car companies can’t follow.”
Listening to Elon Musk made me wonder about the limits of human potential.
The goals he set were so ridiculously high that it felt like he was constantly making leaps forward.
His only human flaw, however…
“The workers just need to work more.”
…was that he was a workaholic.
“In two years, Tesla will be producing a million cars in China. The economic prosperity China has achieved is incredible. The Chinese market will be a key region for Tesla’s production and consumption.”
He wouldn’t stop praising China.
He was a remarkable person, no doubt, but he made a lot of claims I found hard to agree with.
‘Well, this is pretty mild. Better than fishing from a breakwater on a windy day.’
It was certainly better than fishing while being battered by wind and rain or scorched by the hot sun.
And listening to Elon, there was often much to learn.
* * *
The President-elect’s economic advisory meeting.
The event was held in a large conference hall near the White House.
“This way, please.”
Refusing an invitation from the President-elect could be seen as rude, so I had arrived early, planning to just fill a seat in a corner.
“This seat?”
“Yes, that’s correct.”
A chair had been prepared right to the president’s left.
Lee Jong-yeop, who had come as my assistant, had no designated seat and stood against the wall, sending me a text.
―Lee Jong-yeop: It seems you’ve been cast as the mascot for this meeting, sir.
―Kim Shin: Mascot?
―Lee Jong-yeop: You’re a young entrepreneur, aren't you? With a great image, too.
―Kim Shin: What kind of image do I have?
―Lee Jong-yeop: An image of challenge and success. Something like that? You're also the owner of the company making the COVID-19 vaccine, so you're an important figure to the U.S. government.
―Lee Jong-yeop: It’s just for show for the broadcast cameras. I think you should just enjoy the moment.
I figured it wasn’t so bad to be sitting in a good seat near the president.
‘I’d better not doze off if it gets boring. That would be a disaster.’
U.S. government economic officials, Wall Street titans, bankers, and entrepreneurs began to arrive one by one.
“Kim Shin of Earth Resource.”
“A pleasure to meet you. I’m John Williams, President of the Federal Reserve Bank of New York.”
I exchanged light greetings and business cards with people as they arrived. I noticed that no one looked down on me or ignored me.
‘This must be why money and fame are so important.’
It was a materialistic thought, but it brought back distant memories of my days working part-time at an internet cafe, bringing people ashtrays.
“I’m a subscriber to Earth Channel myself. It has a lot of interesting documentaries.”
“We are working hard to acquire more for our viewers.”
“Your investment returns this year are truly… I was shocked when I read the articles.”
As I made small talk, a crowd of people gathered around me.
An aide from the presidential transition team announced.
“The President-elect is now entering.”
President-elect Biden entered the conference hall, giving a slight wave.
“I know you are all busy people, so thank you for coming. Now, let’s talk about the future of the American economy.”
And so, the economic advisory meeting began.
* * *
I had expected the meeting to be somewhat boring.
‘They’ll just talk about this and that regarding the economy.’
As someone invested in the New York Stock Exchange, it wasn’t a bad thing to hear what these people had to say directly.
Though it would be much more convenient to just read the news online.
“The Fed aims to achieve 2% inflation over the medium term, which should not be a difficult standard to meet. We will provide all necessary support for America’s economic growth and full employment.”
“The policies that have led the recovery of the U.S. and global economies must be maintained.”
The Fed representatives said they would continue to use zero interest rates and quantitative easing.
They were lending money to the market at low interest rates and buying up government and corporate bonds.
“The virus has not yet peaked. With high industrial and consumer inventories, inflation is unlikely to occur.”
“We need to be more aggressive with fiscal expansion to promote economic growth.”
The manufacturing executives were demanding aggressive government spending.
“Contrary to articles in the Wall Street Journal, we do not foresee a scenario where a sharp rise in inflation would necessitate fiscal tightening within the next two years.”
“We see no need to respond to temporary inflation. The Fed will not take preemptive action even if inflation exceeds 2% for a period.”
High-ranking officials and economists showed great confidence regarding inflation.
As the nation with the great reserve currency, the dollar, they seemed unconcerned about debt.
“What about the stock market?”
“While there is some debate about a bubble, we have judged these claims to be unfounded. The current stock prices are at a level that has already priced in the expectations of robust corporate growth.”
“America is making a comeback across all industries. We believe the current rise in stock prices reflects a natural trend.”
The Wall Street financiers were also overwhelmingly positive in their outlook.
I listened quietly to this for about an hour.
‘If these people are right, it seems like anyone can make money from investing next year.’
When I invested in the New York Stock Exchange back in March, I never expected to achieve such high returns.
Back then, the market was on the verge of suffocating from fear.
Compared to those days, wasn’t the current market one of greed and madness?
Tesla alone had risen 40% in the last nine days.
A company that produces 500,000 vehicles a year had become the sixth-largest company in the U.S. by market capitalization.
Its market cap had increased by hundreds of billions of dollars in just nine days.
‘Even with its high growth potential, it still makes up less than a tenth of the future car market.’
Tesla, which was turning a profit and increasing production, was in a relatively better position.
The stock prices of almost any company with the word “contactless” attached to it had soared.
Even companies whose actual sales or profits hadn't increased proportionally, and those whose debt had grown due to COVID-19, saw their stock prices rise.
‘The dot-com bubble and crypto proved it. No asset goes up forever.’
Maintaining a sense of balance as an investor was a difficult thing.
Why do small-time investors often have higher returns?
It’s probably because they can maintain their composure.
There’s nothing more regrettable than not being able to earn more when everyone else is feasting.
When stock prices fall, you wait, believing they’ll recover if you just hold on, but then they plummet into the abyss.
Perhaps the peak is when everyone is making money and revealing even greater greed.
‘A recovery from COVID-19. Maybe stocks will go up more, but isn’t it about time to start selling?’
It felt like everyone was lost in a rose-colored fantasy.
I was quietly observing the meeting when President-elect Biden spoke to me.
“Mr. Kim, as a miracle investor, what is your outlook on the future of the U.S. economy?”
“…”
The debate on inflation paused, and all eyes in the room turned to me.
“Would you give us a word?”
President-elect Biden personally handed me the microphone.
The broadcast cameras moved to focus on me.
It was a situation I couldn’t escape without saying something.
‘Maybe…’
I remembered the time I told everyone in the group chat that we needed to sell when the price of crypto was soaring.
When the market was insane with greed and madness, and wishful thinking was at its peak.
‘Somehow, the people gathered here feel like a contrarian indicator.’
Even ordinary people should be afraid of taking on debt, yet the government and banks were proactively handing out money.
I took the microphone and spoke my honest thoughts.
“I don’t know much about the future of the U.S. economy, but I believe the current stock market is full of bubbles.”
“Bubbles?”
“There’s an excess of money everywhere. You say that even after the U.S. government and the Fed printed trillions of dollars, inflation didn’t occur. So you say it’s okay to print a few trillion more to revive the economy, but do you know how much money is circulating in the investment markets? The money that propped up the stock market is now heading toward real estate and crypto.”
“…”
I could feel the room freeze over.
Wasn’t this like pouring a bucket of cold water on the President-elect of the United States, the most powerful person in the world?
But I felt I had to be honest.
“If the government and the Fed make the wrong decisions, the American people will be the ones to suffer. If food prices and housing costs rise, those without disposable income will be hit the hardest. From families raising children to everyone else, all people will suffer.”
“…”
“I think everyone needs to come to their senses. No one has the right to be complacent. If you make an irreversible mistake, the people will be the ones to bear the full brunt of the damage.”
As I spoke, I felt like I was causing a massive incident.