CH17 - Currency System

Late at night, past midnight.

Chairman Park Tae-hong was sitting alone in his study, which was tastefully furnished with mahogany wood furniture. He was dressed comfortably and holding a glass of whiskey with ice while leisurely reviewing some documents. As he was absorbed in his work, there was a gentle knock on the study door, and a slender middle-aged woman entered. It was his wife, Mrs. Jo Deok-rye.

Even though she was over fifty, Mrs. Jo still maintained her graceful beauty. Carrying a tray in both hands, she approached and spoke to him.

"Is there a lot of work?"

"Well, there are a few things I need to take care of."

Chairman Park put down the documents and stretched his back naturally.

"I'll be a little longer, so go ahead to bed."

"Alright."

Mrs. Jo, who had personally prepared some snacks, placed a white plate on the desk. It was a plate of canapés, with crispy crackers topped with ham, cheese, and halved fruit.

"You shouldn't drink on an empty stomach. It's bad for your health."

"It's not like I'm drinking much…"

"A little?"

Mrs. Jo cast a sidelong glance at the whiskey bottle pushed to the corner of the desk.

"Ahem." Chairman Park cleared his throat and looked away, embarrassed. Mrs. Jo shook her head in mild exasperation.

"You're at the age where you need to start paying attention to your health."

"Oh, enough with the nagging. I'm still in good shape."

Chairman Park flexed his arm, proudly showing off his muscles.

"Look at this. How many men my age have muscles like these? Stop worrying and go get some sleep."

"You stubborn old man."

He had always relied on his sturdy physique and put on a show, just as he had done when he was younger. Knowing that he wouldn't listen even if she nagged, Mrs. Jo decided not to pester him further. Instead, she pushed the plate of snacks closer to him.

"Fine, but at least eat the snacks."

"Hmph."

Chairman Park snorted, but then, as if he couldn't help it, picked up a ham and cheese canapé with his fingers and popped it into his mouth.

"I'm only eating it because of your effort."

"Of course. As if I'd expect otherwise."

Mrs. Jo didn't miss the opportunity to throw in a parting shot as she left the study.

"Don't stay up too late working."

Waving his hand dismissively as if telling her to shoo, Chairman Park grumbled to himself as he picked up another canapé.

"She wasn't like this when we were younger. Seems like she's getting more and more naggy."

Still, he knew she was only doing it out of concern for him. Even the snacks she brought—she could have easily asked the housekeeper to prepare them, but she made them herself and brought them to him.

They were perfectly seasoned to his taste, and the neatly stacked canapés showed the care she put into making them.

"Tastes pretty good."

Chairman Park looked at the plate, now half-empty after just a few bites, and clicked his tongue in slight disappointment.

Just then, the phone on his desk rang. Suspecting who it might be, Chairman Park quickly reached out and picked up the receiver.

"Hello."

[Father, it's me.]

The voice of Seok-won came through the receiver, slightly distant due to the international call, and Chairman Park responded in a composed manner.

"It must be morning over there by now."

[Yes. I saw your message and called you right away.]

Due to the time difference, it was night and day between them, so Chairman Park left a message with the dorm manager through Chief Secretary Gil Seong-ho.

"Aren't you supposed to be in class?"

[My class starts at 10, so it's okay.]

Seok-won had a pretty good idea why he was asked to call, but he played innocent.

"So, what was the reason you asked me to call?"

Chairman Park glanced at the investment statement from Salomon Brothers on his desk and spoke.

"Are you pretending not to know?"

[Haha, I guess the mail from Salomon Brothers has arrived.]

With the receiver to his ear, Chairman Park raised an eyebrow in mock annoyance.

"Yes, it has, you rascal. I was so shocked, I almost had a heart attack!"

[Haha, you're so strong, I doubt that would happen.]

Chairman Park found himself bemused by his usually exemplary second son's sudden display of cheekiness.

'This kid…'

It was surprising to see such a change in his son's demeanor, but Chairman Park, who had quietly worried that his son was too much of a straight-laced academic, didn't find this change unwelcome.

'Come to think of it, the old Seok-won would never have even considered such a risky investment, let alone without saying a word about it.'

Reflecting on it, it seemed that his son's personality had changed significantly after the shooting incident.

'They say going through a major ordeal can change a person's mindset, and that might be what's happening here.'

The mere memory of hearing about the incident still made Chairman Park's heart skip a beat and his hands tremble. Nevertheless, he was relieved that the change was for the better. Smiling, Chairman Park replied.

"You cheeky rascal! I'm already past the age where I need to listen to that kind of talk. Your mother nags me so much about taking care of my health that I'm getting ear calluses."

[Mother has always been a bit of a worrier. But if people saw her outside, they'd never guess she was like that.]

"Flattery will get you nowhere. Did you think I'd just let it slide that you used ten times leverage?"

Chairman Park scolded him playfully, though there was still a smile on his face.

[You figured it out? But it's no lie that you're still young.]

"Thanks a lot for that."

Chairman Park's smile faded, and he lowered his voice, turning serious.

"It's good that things turned out well, but what on earth were you thinking, using that much leverage?"

Seok-won also dropped his playful tone and responded calmly.

[I was confident.]

Chairman Park, still holding the receiver to his ear, raised an eyebrow in interest.

"Confident?"

[Yes. If you're sure of winning, isn't it right to raise the stakes as high as possible?]

Chairman Park silently thought, 'This kid…' as he continued.

"But what if you were wrong?"

Without hesitation, Seok-won answered.

[If I made the wrong decision, I'd have to take responsibility for it.]

The somewhat reckless remark made Chairman Park frown slightly in disappointment.

"Using ten times leverage could have resulted in losses far exceeding the principal. Could you have handled that on your own?"

The implied rebuke was that, in the end, he would have relied on his parents if things went wrong. 'Maybe he's letting his enthusiasm get ahead of him without thinking about the consequences.'

He was still young, so it was understandable. However, just as disappointment was starting to creep in, Seok-won's resolute voice came through the line.

[Of course.]

"What do you mean?"

Chairman Park found himself taking on a slightly more pressing tone, but Seok-won responded without hesitation.

[I made sure the position would be automatically liquidated before the losses exceeded the principal.]

Hearing that he had set a clear stop-loss line, Chairman Park paused for a moment.

[I'm an adult now, so do you think I'd start something without being prepared to take responsibility?]

Seeing this unexpected maturity, Chairman Park quickly smoothed over the momentary disappointment and refocused.

"Hmm. But you would have lost your principal, wouldn't you?"

[I'd be lying if I said that wouldn't hurt, but investment always carries risk, so it couldn't be helped.]

The principal amount involved was over 100 million dollars, a significant sum even for Chairman Park himself. Faced with his son's remarkably calm attitude, Chairman Park found himself at a loss for words.

'Damn, I can't tell if this kid's got no sense of money or if he's just got guts.'

One thing was certain: his second son wasn't just a bookish nerd—he was also capable of taking bold risks when necessary.

'That's something a successful entrepreneur needs.'

Chairman Park's assessment of his second son rose another notch.

Feeling pleased, Chairman Park adjusted his grip on the receiver and spoke.

"Well, it's fortunate that the results were good. I saw that the profits have increased significantly—what do you plan to do now?"

Seok-won responded immediately as if he had been waiting for the question.

[I was actually going to mention this. I'm planning to establish an investment firm in the U.S.]

"What?"

Once again, Chairman Park found himself surprised by his son's words, his curiosity piqued.

"So, you're planning to get into investing seriously?"

[Yes. Being in the U.S. and seeing the wider world, I've realized there are countless opportunities and ideas to make money.]

"Like with your investment in the pound?"

[Now that I have capital, I want to try turning the ideas I've only imagined into reality. To be honest, this recent endeavor was more of a test to see if my predictions would hold true in the market.]

Chairman Park let out an involuntary chuckle at the thought of testing the market with over 100 million dollars.

He had initially planned to bring Seok-won into the company and teach him the ropes after graduation, but hearing that his son wanted to start his own investment firm left him feeling somewhat taken aback.

"So, you're not planning to return to Korea but stay in the U.S.?"

[I haven't decided that yet.]

"You still have time before graduation, so think it over carefully. And remember, the money you invested this time is yours—do with it as you see fit."

Even though it was a vast sum, and he could have easily imposed conditions, Chairman Park decided to let his son manage it freely. Seok-won responded with a voice full of gratitude.

[Thank you. I won't let you down.]

"See that you don't."

Chairman Park smiled thinly.

He was willing to do this because Seok-won had achieved results and, more importantly, had shown a clear determination to pursue something.

"You should get to your class. I'll let you go now."

[Alright, I'll call you again soon.]

After hanging up, Chairman Park took a sip from his whiskey glass, satisfaction evident in his murmured words.

"The boy's really grown up."

***

"In summary, the Bretton Woods system established a fixed exchange rate where the value of the dollar was tied to gold at a rate of $35 per ounce. Under this system, all member countries could exchange their dollars for gold at this rate."

The elderly professor with white hair continued his lecture in front of the blackboard.

"To maintain this system, the most crucial requirement was that the United States had to hold a sufficient gold reserve. With this assurance, member countries pegged their currencies to the dollar, and exchange rates were allowed to fluctuate within a 1% range. If the exchange rate moved beyond this range, governments were obliged to intervene in the foreign exchange market to stabilize their currency. This essentially meant that under the Bretton Woods system, member countries opted for a managed float tied to the dollar."

After passionately explaining the lecture, the professor suddenly checked his wristwatch and said:

"We'll continue the rest next time. Let's end today's class here."

It was 20 minutes earlier than usual, leaving the students puzzled, as the professor usually utilized the entire class time.

"Hmm. You all don't seem pleased? Should I continue?"

"No, thank you!"

"Thank you for the lecture, Professor!"

Hearing the loud and enthusiastic responses from the students, the professor chuckled as he gathered his books and notes from the lectern.

Then, as if remembering something, he said:

"Oh, Seok-won."

"Yes?"

Seok-won, who was sitting in the front row, looked up, surprised to hear his name called.

"I heard you're playing in the game tournament finals against MIT today, is that right?"

"Oh, yes."

Seok-won was caught off guard that the professor knew about the game tournament, and nodded, feeling a bit flustered.

"It's always good for students from neighboring schools to interact and build friendships. And remember, winning or losing doesn't really matter."

The professor chuckled warmly and gave Seok-won a playful wink.

"But it's better to win, isn't it? I'm rooting for you, so good luck."

Realizing now why the lecture had ended early, Seok-won forced an awkward smile.

As the professor patted his shoulder and left the lecture hall, Seok-won groaned inwardly, burying his head in his hands.

'It's just a game tournament—why does everyone know about it?!'

As Seok-won sat there, feeling embarrassed, other students who had attended the lecture approached him with words of encouragement as they left.

"The match is at Moby Dick's, right? We'll come watch, so give it your all!"

"Crush those MIT nerds!"

"We're rooting for you! Win that trophy!"

"Here you are!"

Roy, who had parked his scooter, waved his arms enthusiastically as he waited for Seok-won.

"Huh, why's your face so red? Did you catch a cold or something?"

"Never mind that, just start the engine already."

Feeling increasingly embarrassed, Seok-won covered his flushed face with his hands, slung his backpack over his shoulder, and quickly exited the building.

As Seok-won settled onto the back of the scooter and urged him to go, Roy, still puzzled, shrugged and obediently started the engine.

TL/n - 

Bretton Woods System

***

For Non-Finance People =>

Think of a small village where everyone agrees to use seashells as money. Each seashell is worth a certain amount of gold.

*

The Agreement

Fixed Value: Everyone in the village agrees that 1 seashell is worth 1 gram of gold.

Trade: If you want to buy something, you use seashells. The value of seashells doesn't change because everyone trusts that 1 seashell will always be worth 1 gram of gold.

*

How It Works

Stable Prices: Because the value of seashells is fixed, you always know how much things cost. For example, if a loaf of bread costs 2 seashells today, it will cost 2 seashells tomorrow.

Trust: People trust seashells because they know they can always exchange them for gold.

*

What Happened

Over time, the village grew, and it became harder to keep enough gold to back all the seashells. Eventually, they decided to stop using gold to back the seashells, and the value of seashells started to change based on how much people wanted them.

***

For Finance People =>

The Bretton Woods system was an international monetary framework established in 1944 during the United Nations Monetary and Financial Conference held in Bretton Woods, New Hampshire.

Here are some key points about it:

Currency Pegging: The system required countries to peg their currencies to the U.S. dollar, which was in turn pegged to gold at a fixed rate of $35 per ounce.

International Monetary Fund (IMF) and World Bank: The Bretton Woods Agreement led to the creation of the IMF and the World Bank to oversee and support the new international monetary system.

Stability and Cooperation: The system aimed to promote international economic stability and prevent competitive devaluations of currencies.

Collapse: The system effectively ended in the early 1970s when the U.S. stopped converting dollars to gold, leading to the adoption of floating exchange rates.

The Bretton Woods system played a crucial role in shaping post-World War II economic policies and international trade.