Chapter 92: There Might Be Changes with Volcker

Glancing at the top of the screen to confirm the current program being watched, which was a live broadcast from the television station, Carter rubbed his eyes again and took another look at the price of gold on the market.

$534.7 per ounce.

In comparison to silver, which had nearly doubled in the past month and a half, gold, which had once experienced a surge, was no longer the darling of economic media.

As the television reporter continued to extol the virtues of silver, Carter, watching the price of gold, habitually reached for a cigarette from the living room table. Lost in thought amidst the smoke.

As mentioned earlier, gold is a weapon against inflation. According to the normal rhythm, as long as inflation in the United States is not curbed, the price of gold will continue to rise. From around $500 per ounce to around $534 per ounce now, this also proves that gold is still on the rise.

However, due to the recent rise of silver, the momentum of gold seemed insignificant. Faced with the crazy surge of silver, gold's 6.94% increase seemed as harmless as a little transparent thing. If it weren't for the glimpse he caught just now, Carter wouldn't even remember there was such a thing.

So, the question arises!

Thinking back to the scene where he was frightened by Volcker's "moderate increase in money supply," even he, as someone who knew the future, couldn't help but wonder. If other people heard Volcker talk about "moderately" increasing the money supply, would they think inflation would continue? And if inflation continued to rise, wouldn't the price of gold also rise?!

After all, in the context of high inflation, money becomes less valuable the more it is printed. Investing in gold as a hedge is a very common way to protect against value during periods of high inflation.

In other words, if most people haven't realized Volcker's true intentions yet, the price of gold will continue to rise. Moreover, compared to the abnormal surge of silver, gold seems more stable.

Because this is not about manipulation by anyone, the pure market trend, the economic trend determines that it must rise! As long as inflation does not decrease, gold will not fall!

So the question now is to understand the market's reaction to Volcker's measures. If there are signs of mistrust, indicating that the market still believes inflation will continue, now is the time to invest in gold!

Especially now, with the market's attention focused on silver. Purchasing gold futures contracts should not attract attention, unlike last time when Julian told him that shortly after purchasing, the trades were locked.

"Hey? Julian, are you busy right now? Can we chat for a bit?"

With his savings almost depleted, Carter couldn't sit still. He picked up the phone at home and called Julian.

"Oh, it's Carter, right? You changed your phone, I was wondering who this was?"

"Hahaha, this is my home phone. It's Thanksgiving break, I'm resting at home. I was just thinking, are you in the office? Why aren't you spending time with your family and taking a good rest for a couple of days?"

"Ah, don't mention it. The market changes every day now, if I'm not keeping an eye on it, I feel uneasy. When the market stabilizes a bit, I'll take a break. Let's not talk about this, did you call to ask about the stock acquisitions?"

A wry smile followed by a long sigh, Julian's voice returned to its usual professional tone.

"The stock acquisitions are going well. ADM acquired 4,000 shares at around $60 per share, spending $240,000. AMD, at $25 per share, also acquired 4,000 shares, spending $100,000. The remaining $60,000 was invested in Intel, around 3,400 shares, but Intel underwent a stock split in April, two shares split into three shares, plus Intel's initial public offering had a large number of shares issued, so the purchased Intel shares actually have a lower weight compared to the other two."

Stock splits, two shares split into three shares, mean that the original two shares are split into three. There's not much change in the interests of the original shareholders. For example, if a shareholder originally held four thousand shares, now he has six thousand shares. But the weight remains the same as before, because you have more shares, others have more too.

However, the value of a single share will be lower due to the split, but trading becomes more flexible. Previously, when the shareholder had four thousand shares, it was troublesome to sell one-third, and the price per share was relatively high, which was not conducive to small investors buying.

After this split, both shareholders can get rid of their stocks, and small investors can buy them too. So stock splits are a way to increase trading volume and indirectly boost stock prices.

This isn't difficult to understand, but Carter's focus isn't on stocks right now.

"Okay, no problem, I trust your ability, Julian. I called to ask you about the recent actions of the Federal Reserve. Especially regarding interest rates and money supply."

ADM and Intel have been listed for quite some time, and they have undergone many stock splits. The amount of shares he acquired, even though it's a drop in the bucket compared to their total shares, doesn't need his attention. Although AMD was listed on the New York Stock Exchange later, they have been issuing shares since 1972, but due to their late listing and the initial issuance of only 525,000 shares, even after two stock splits, the total number of shares is only around 1.18 million, and his 4,000 shares represent about 0.34% of AMD's shares.

If calculated based on AMD's highest market value in the future, which is $19.75 billion, this investment of around $100,000 will bring him a return of over $670 million after more than forty years.

It's ridiculous beyond belief, absolutely ridiculous! Although this is a very theoretical value, it still makes Carter feel the horror of early layout and the true horror of being a time traveler!

"This matter, if you hadn't called me, I was also thinking of calling you to discuss it. Volcker's recent behavior is a bit confusing, it's too abnormal. From what I know, he's not someone who easily compromises. So when the Fed announced this news last month, I didn't mention it to you. I think he might be compromising temporarily to deal with pressure from the White House, to put it plainly, it's just to fool Carter in the White House."

Just as Carter was marveling inwardly, Julian's puzzled voice came through the receiver. When he heard the words "fool Carter in the White House," Carter couldn't help but chuckle. It seems like many people are fooling our dear leader now, one more Volcker isn't much, one less is not less. Without interrupting Julian, Carter continued to listen carefully to what he had to say next.

"But recently, the increase in the discount rate and the changes in the federal funds rate... Logically, the rise in rates should prove that my judgment is correct, that Volcker is tightening the money supply to suppress market demand. But the problem lies here, the rise of a fraction of a percent is simply a drop in the bucket compared to the nearly ten percent inflation rate we're about to break through. It's like a drop in the ocean, it's not going to do much to curb inflation."

"Instead of saying that Volcker is tightening, it's more like this is just a very normal temporary increase. I'm a bit unsure now. After all, there's a big difference between the Fed chairman and the Fed governor. Maybe, after becoming Fed chairman, Volcker has changed."