Chapter 218: Inflation Rate Higher than Interest Rate

Carter shook his head, not agreeing with Jim's point of view.

"I don't deny that, but just as I believe in the creativity of this nation, I think this problem won't hold them back. Just like how they managed to create an atomic bomb with an abacus—oh, it's a simple, manual calculating tool."

"Against all odds, they achieved something that seemed almost impossible to us. They've done it before, so why can't I believe they can do it again?"

Carter raised his glass, smiling:

"We love bottom-fishing in investments, don't we? Finding those companies that look weak on the surface, even on the brink of bankruptcy, but with solid fundamentals and great potential, to invest in for maximum returns."

"It's the same with countries. When the time is right and I have the extra money, I'm more than willing to bet on China. If their development is anything like I believe it will be—"

"How much return do you think I can get?"

"Wasn't the atomic bomb with Soviet assistance... well, fine, I admit you're right! Investing in a country, if successful, indeed brings returns far greater than investing in individual companies. When I get the chance, I think I'll visit China myself to see if it's really as good as you say."

Jim wanted to refute Carter, but on second thought, there was no need.

After all, no matter how much they argued, neither had been to China. Without investigation, there's no right to speak. Compared to himself, Carter seemed to have a deeper understanding of China at the moment.

Getting into a heated debate wasn't Rogers' style. So, although he still thought Carter's view was somewhat idealistic, Jim gave up on persuading him and instead asked another question:

"Less than a month until your summer break, right? Any plans?"

"Not yet. Do you have any ideas?"

"I'm thinking of going to the beach, maybe Hawaii. How about we go there when you're free?"

"Sure, no problem. I'll call you to set a date after my break starts!"

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"Uncle Goodman, please do me a favor and contact Eastwind Express to send two trucks to New York to help my friend move. Here's the address."

The next afternoon, as soon as Carter returned to Douglas, he started arranging the move for Old Chen's family.

"Sure, I got it. Why were you gone so long this time?"

Goodman glanced at the address, finding it a minor task, so he readily agreed.

"Something came up, and I visited some friends, so I stayed a few more days. By the way, I might go to Hawaii during the summer break, so I'll need you to take care of the bank. Did anything happen while I was away?"

"I knew I couldn't count on you to stay put."

Hearing that Carter was planning to leave again during the summer, Goodman felt somewhat helpless but not surprised. He was used to this routine by now and remained unperturbed.

"Things have been generally stable. Mr. Ginas called yesterday. The contract for purchasing factory equipment is finalized, and once the plant is built, the equipment can move in. We're also recruiting technical staff."

"Any issues with recruitment?"

"Not really, Memphis is a big city after all, so there's talent available. Plus, with the current wave of unemployment, recruitment isn't too difficult. However, our manager position at Eastwind Express can't remain vacant forever. It's manageable during the training phase, but once the factory and cold storage are complete, the company needs leadership to function properly."

"Is it hard to find managers?"

Carter asked casually while unpacking his luggage.

"It's not easy. Managers generally aren't the first to lose their jobs, and our location is too remote. Some interested candidates back out when they hear they'll be working in Douglas. Besides, Eastwind Express hasn't started generating revenue yet, so people are hesitant to join, fearing the company might go under in a couple of months."

"Alright, I'll think of something. Anything else?"

Carter pulled out a suit from his bag and set it aside, then handed over a stack of shop exchange agreements:

"By the way, I swapped a shop in New York this time. It's a two-story building in Lower Manhattan, each floor about 200 square meters. Find someone to help with the move and assist with renting it out. It used to be a restaurant."

"Why did you think of buying a shop in New York?"

Goodman took the agreement, once again amazed by Carter's unconventional thinking. Unlike many domestic companies that aim for big cities, many large American companies tend to be local giants. Even in finance, Fidelity Investments, for example, still has its headquarters in Boston, avoiding New York or Chicago.

Thus, Goodman couldn't understand the logic behind acquiring a shop so far away in New York. What use is it, given such a distant location?

"Technically, it wasn't a purchase; it was a swap. Remember the shop Robert compensated me with? I exchanged it for this."

"That's better. Swapping a 300-square-meter shop for a 400-square-meter one in New York is a good deal."

"With a residential unit included!"

Goodman:

Never before had Goodman felt such a profound understanding of the phrase "don't judge without knowing the full picture."

"By the way, you mentioned something else?"

"Yes, the commercial loan interest rate has surpassed 20%, and the federal funds rate has dropped slightly but is stable around 13%. This trend is concerning. You might have seen in the news that people are organizing protests in Washington."

Goodman looked worried. Although commercial loans typically have short terms, he felt the current 12% rate for mortgage and shop loans seemed too low.

If market interest rates remain high, their rate effectively means a loss.

When Carter initially set the annual rate at 12%, Goodman was hesitant. The current inflation rate was already close to this figure, even slightly higher.

Now, the inflation rate was approaching 13% with no sign of decline. Well, there were signs of slowing growth, which was apparent to anyone observant.

But merely slowing growth didn't solve the real problem. Even with a 13% inflation rate, a 12% annual interest rate meant a loss. On paper, it seemed profitable, but in reality, the purchasing power of the currency controlled by their two banks was declining.

In such an environment, the more loans they issued, the greater the loss.

"It's good news. It shows Volcker is reliable. In a couple of years, inflation will be under control."

"I admit it's good in the long run, but it's bad news for us right now, Carter!"