Chapter 256 – Be friends with him
Fu Rongqi looked at Feng Yu and asked unbelievingly: “Us will declare war on Iraq? How is that possible?”
“Why not? The United Nations wanted Iraq to withdraw its troops from Kuwait and even the Soviet Union agreed. But Iraq refused. The Iraqis wanted the resources of Kuwait. Also, if Kuwait became one of Iraq’s province, it would affect Europe, US, Japan and many other countries’ economy. It will also allow Iraq to control the oil prices. One more important thing was the US wanted to show the Soviet Union their war ability and see their reactions.”
Iraq had also been an allied with the Soviet Union, and the Iraqi army was equipped with the Soviet Union weapons. If not, they would also not be able to invade Kuwait within a day.
In the Gulf region, the Iraqi army was the most powerful. But compared to the rest of the world, Iraq was nothing. Iraq had started a war against Iran in the past, and other nations did not do anything to them. But Kuwait was different.
Every war will affect the global economy and this time it was the same. Feng Yu continued to analyze about the war from different perspectives.
“That’s not right. If there is really going to be a war, then oil prices should rise instead. After all, the oil well will be destroyed in the war and oil supply will drop. This would be in line with Saddam Hussein’s motive of limiting the oil supply and increasing oil prices.” Fu Rongqi does not understand why prices will fall. When there was less supply, and demands remain the same, the prices should rise. This was basic economics.
“The world still has many other countries that export crude oil. There is still Iran, Saudi Arabia, and the Soviet Union. They will try to use this opportunity to increase their production of crude oil. But Europe, US, Japan and other countries would surely come together to suppress oil prices. Most importantly, the depreciation of the Rubles means that USD had appreciated. When USD appreciate, crude oil prices which are inversely related to USD will fall!”
Feng Yu’s forecast was very bold, and although it was reasonable, Fu Rongqi was not convinced. But Fu Rongqi agreed with Feng Yu’s analysis of the gold market.
Fu Rongqi really wanted to know if Feng Yu had analyzed all these by himself or he has a team behind him. Or, this information was from China’s government, and Feng Yu only had access to this information.
“Xiao Yu, you are so familiar with the global economics. Is there many people like you in China?” Fu Rongqi asked.
“Not only in China.” Feng Yu smiled. I will let you guess. You can never guess the right answer. I am someone who had lived through this period before!
“Xiao Yu, what do you think of Hong Kong’s economy? What do you think is worth investing?”
Hong Kong? Feng Yu did not expect Fu Rongqi to ask him about Hong Kong. Hong Kong was the Fu family’s playground. Why are you asking me?
Feng Yu thought for a while and replied: “Telecommunications and real estate.”
The telecommunications industry in Hong Kong was controlled by two men who shared the same surname, Lee. If the Fu family wants to enter this industry, the risk will be too high. But the real estate market was huge. The Fu family can enter this industry without any problems.
Now, Hong Kongers were still afraid of Hong Kong’s return to China. They thought the Chinese Government would confiscate their assets and they would be the same as the Chinese. They would get the same low salaries.
Many Hong Kongers migrated to other countries like England, Malaysia, and Singapore. They could take away most of their assets but what about their properties? If everybody were leaving Hong Kong, then no one would be buying their houses!
Although the property market in Hong Kong had shown signs of recovery these two years, the property prices were still very low. Many people preferred to rent houses instead of buying, even when they could afford to do so. Their rental was more expensive than the housing loans.
Feng Yu had also thought about this before. If he got spare cash on hand, he wanted to buy a few plots of land or a few buildings in Hong Kong. Property value will increase by at least two folds in 1995.
This was a safe investment, and the returns are high. But the disadvantage of this investment was a lot of capital was required.
“Xiao Yu, do you intend to do some investment in Hong Kong? If you need any help, I am willing to help you.” Fu Rongqi said. Feng Yu had told him so many information. Even though it was considered as payback for Fu Rongjing’s losses, Fu Rongqi also cannot take Feng Yu’s information for free.
“Fine. If I need it, I will let you know.”
……
After the meal, the Fu family left. Feng Yu made a phone call. He had hired people to search for the Hong Kong’s future expert in gold trading. Feng Yu wanted to recruit him.
“You are Mr. Feng? I didn’t expect you to be so young.” He Zhaoji met with Feng Yu, and he was stunned for a few seconds. He was thought that a businessman wanted to set up an Investment company. This was the businessman from China? He was too young. Did he really have so many funds?
“Mr. He, I can’t explain myself well over the phone. I prefer to meet with you personally. I have funds of over 500 million USD, and I wanted to set up an Investment company in Hong Kong to make some investments. Recently, I felt that the Gold market will do well, and I heard that you are an expert in this area. That’s why I wanted you to come over to help me. What conditions do you want? You can tell me.”
“Mr. Feng, you trust me so much?”
“I need to test you first. I want to hear your views on the upcoming gold market before I can decide.”
Even if one uses 500 million USD to trade conservatively, the annual returns would still be at least 10%. That’s 50 million USD returns. If he manages this Investment company, his yearly salary should be 500,000 USD and above. This was much more than him trading in gold himself.
But there were disadvantages too. Some brokers lost their boss’s investment and were murdered. But He Zhaoji decided to gamble this time. He was confident if his analysis of the gold market. He knew he would be able to help his boss to earn a lot and get a hefty commission for himself.
He Zhaoji starts to tell Feng Yu about his on the gold market. Feng Yu listened carefully and did not interrupt him. He Zhaoji from Feng Yu’s past life became famous suddenly from 1990 to 1991. He Zhaoji’s analysis of the gold market was the same as Feng Yu, and he had been trading gold for over 5 years. He had the experienced. This man must be recruited!
……
Fu Rongqi listened to the views of his team of Financial analysts on the gold market. They agreed that the gold prices will continue to rise until the end of the year, but only some analysts agree that gold prices will plummet early next year before rising again.
As for crude oil prices crashing early next year, nobody agreed. All of them felt that if a war were to start, oil prices would rise instead!
Feng Yu had forecasted the Rubles to continue to depreciate, the Soviet Union’s situation worsening and the US waging war. No one from Fu Rongqi’s team was able to forecast these situations.
If all that situations really happened, then it proves that Feng Yu’s source of information was really powerful!
Fu Rongqi decided to wait and look at the situation. If all those situations Feng Yu predicted really happen, then the Fu family only have one choice. They must continue to be friends with Feng Yu!