Return to 1958 and build a century-old giant

Chapter 913 Large-scale Investment in Agricultural and Livestock Industries

Instead of answering directly, Yang Wendong asked, "Barney, what do you think of my investment acumen?"

“Of course, it’s the best in the world,” Barney replied with a smile. “If you weren’t an entrepreneur, but an employee, Goldman Sachs would be willing to pay a huge price to poach you.”

Yang Wendong smiled faintly and said, "I'm preparing to make a large investment and also plan to bring in some allies. I wonder if Goldman Sachs would be interested, or perhaps some of Goldman Sachs' partners would also be fine."

Investment banks like Goldman Sachs don't actually have a lot of assets themselves. Instead, many external investors entrust them with funds, which is what makes these top investment banks manage trillions of dollars in assets.
However, although the funds do not belong to them, they generally have the right to dispose of these funds unless requested by the client, so the scale of funds they can mobilize is extremely terrifying.
Once a good project comes along, they flock to it and make huge profits.

Of course, if problems arise, they will also suffer a terrible fate. The subprime mortgage crisis in 08 was triggered by these investment banks, which in turn detonated some other investment banks, leading to the sudden demise of Lehman Brothers.

Barney immediately became interested and asked, "What kind of investment?"

“South America.” Yang Wendong pointed to a world map beside him and said, “You know what happened in Mexico last month. I estimate that the whole of South America is having a hard time. They are heavily indebted, and the interest rates in the United States are very high. So I predict that they will all have problems one by one. This is a good opportunity for us to buy at the bottom.”

Last month, the Mexican government's forced default on its debt due to a lack of funds shocked global financial markets.

And this is just the beginning. In the future, several countries in South America will experience financial crises as a result.
The fundamental reason is that in the 1960s and 70s, the South American economy was doing well, and the United States and overseas capital invested heavily. These countries began to borrow heavily to develop, or to provide welfare to the people in order to win elections, thus mortgaging their future.

As a result, the two oil crises severely impacted the global economy. In order to save themselves, Europe and the United States began to raise interest rates on a large scale to suppress inflation and attract overseas funds to flow back to their countries, which led to a shortage of dollar liquidity in many places.
Southeast Asia is also facing this situation, but they developed later and did not borrow enough in the early stages, so the problem is not too big. In South America, however, the money has been withdrawn, which is similar to a company whose cash flow has collapsed, but still has a heavy debt and extremely high interest rates.

As a result, Mexico and several subsequent governments were forced to default on their debts, causing their currencies to plummet and decades of economic development to be destroyed.

Barney laughed and said, "Eric, we on Wall Street know what's going on in South America. Even if you didn't tell us, we would have taken action."

“I know, but you invest yours and I’ll invest mine,” Yang Wendong said. “We won’t interfere with each other. Your bank has a huge amount of funds, so you shouldn’t mind cooperating with me on a portion of it, right?”

The hungry wolves of Wall Street will go wherever there is meat. Today's South America and the Asian financial crisis a decade or so later will be their feasts, and many of them will even be triggered by them.
Behind Mexico's debt default was the shadow of hedge funds led by George Soros. These hedge funds borrowed heavily in a country's currency and then sold it off frantically, forcing the country to use its foreign exchange reserves to bail out the market.

But how can a medium-sized country withstand the massive influx of hot money? In the end, it can only exhaust its foreign exchange reserves and be at the mercy of others. At the same time, Wall Street takes the opportunity to absorb the country's high-quality assets, and the World Bank and the International Monetary Fund will also take the opportunity to make various political demands, etc.

The US typically conducts a financial harvesting operation around the world about once every ten years, and each time it is generally very successful.

This is why the mainland will maintain very strict foreign exchange controls in the future. Faced with this financial Cthulhu, once free foreign exchange is opened up, no developing country can withstand it. Even if the mainland becomes the world's industrial Cthulhu more than 40 years later, it will still be a junior in the financial field.

Of course, finance and industry are contradictory, and generally one can only choose one; it is impossible to have both.

Barney thought for a moment and asked, "So, what industries do you intend to invest in in South America?"

Yang Wendong said, "The agricultural and animal husbandry industry."

"The agricultural and livestock industry has very low profit margins," Barney asked, puzzled. "With your business, why would you be interested in these industries?"

Yang Wendong said: "The agricultural and animal husbandry industry does have a very low profit margin, but it is stable. So as long as the leverage is sufficient, the profit can be quite considerable."
According to my prediction, if the South American economy falters, a large number of state-owned farms and ranches will inevitably be sold off at low prices, and even a lot of wasteland will be sold at bargain prices. As long as we take this opportunity to acquire enough land and cultivate it well, we will have very stable returns in the future.

Barney thought for a moment and said, "Agriculture and animal husbandry are not exactly stable either. Although everyone needs to eat, the prices of agricultural products fluctuate every year."

Yang Wendong said: "Indeed, prices fluctuate every year, but I believe that grain prices will continue to rise steadily in the future. The biggest factor for this is the rapid increase in demand in the market."
The whole of Asia is currently developing rapidly, which I don't need to elaborate on, and Asia's population accounts for more than half of the world's total.
This population of billions, once the economy improves, will have a huge increase in demand for food. Similarly, the Middle East also has hundreds of millions of people, yet the local environment is almost barren. This was understandable when they were very poor, but now they are quite wealthy, so their demand for food and meat is bound to be even higher, right?

“From that perspective, it does make sense.” Barney thought for a moment and then said, “However, the grain market is already controlled by the four giants, A, B, C, and D. Even if we get involved, it will probably be difficult for us to get a share.”

“Then let’s build another company of the same level.” Yang Wendong suddenly said, “I started getting involved in the grain trade in Asia more than ten years ago. Although it is far smaller than ABCD, I have some connections in Southeast Asia, the Middle East and even Africa.

But before, it was just minor skirmishes. Now that I'm preparing to invest heavily in the food and food trade industry, things will be completely different, so I need to find some allies in the United States.”

Given the current size of Changxing Group, Yang Wendong is generally unwilling to get involved in smaller markets; no matter how much effort he puts in, the scale will remain limited.

Many well-known large market industries are highly monopolistic and even linked to the government, making them difficult to participate in, such as oil, military industry, automobiles, and telecommunications. Even if one does participate, it can only be done on a small scale.
The food industry, while very important and related to national defense, is so fragmented that it presents considerable opportunities, especially now that South America is experiencing an economic crisis, which presents the best opportunity.
Furthermore, once wealth reaches a certain level, diversified investments become necessary. Land with permanent ownership is an asset that will never go out of style, and arable land is finite. In his previous life, super-rich individuals like Bill Gates bought numerous farms after becoming wealthy, even becoming America's leading ranchers. Barney's heart stirred, and he said, "To create another company similar to ABCD, Eric, your ambition is truly grand?"

“It’s not absolutely impossible. ABCD’s main market is still Europe and America. As for the Asian region, we’re just getting started.” Yang Wendong said, “This is our opportunity. There’s still a possibility of conquering it again, especially the mainland. This is a huge market. Even if we don’t take it all, just a part of it would be enough to create a new grain giant.”

“The mainland? Isn’t the mainland a grain exporting country?” Barney retorted.

Yang Wendong said, "We are indeed an exporting country now, but with such a large population in the interior, as long as the economy develops further, the demand for food will inevitably exceed what the domestic population can meet."

This is inevitable. Although the mainland has many agricultural hotspots, it cannot withstand the large population. As the economy develops in the future, people's average demand for food will inevitably increase.
In the past, the mainland relied mainly on imports for soybeans because there was not enough land, so staple food crops were prioritized.

As long as I have enough land in South America, I can grow soybeans with peace of mind and guarantee a stable business.

"You really have high hopes for the future of mainland China. I heard you've invested hundreds of millions of dollars there?" Barney asked with a smile.

Yang Wendong said, "Yes, I am also Chinese, so naturally I have confidence in my country."

“Why don’t you consider buying a lot of land in the United States? The relationship between China and the United States is good now, and I have some farms in the United States for sale,” Barney said.

Yang Wendong shook his head and said, "No need. I have already acquired a super-large farm in the United States. That was just for fun, but now it's a serious business. Investing in agriculture in the United States is still not as cost-effective as investing in South America."

The current relationship between China and the United States is indeed good, but it's hard to say what will happen in the future;
Even without knowing the future, given China's size and population, it definitely has the potential to become one of the world's giants.
Some Western politicians are aware of this, but since their positions are short-term, they only need to consider their current interests. Even if disaster strikes in the future, it won't concern them.
Barney thought for a moment and said, "Alright then, I can't make the decision on this matter. I need to go back and discuss it with the board of directors. Besides, even if our board of directors agrees, such a large investment still requires authorization from the client."

"With Goldman Sachs' capabilities, convincing clients shouldn't be difficult, right?" Yang Wendong asked with a smile.

Barney smiled and said, "Well, if the board approves, it shouldn't be a problem. With so many clients, someone will surely agree."

"Okay, then I'll wait for your good news." Yang Wendong nodded and said;
The main reason for bringing the US side on board is that they need the US's political background. Otherwise, if a Chinese company were to invest heavily in South America and encounter a scam, it would be really difficult to deal with it.

With Goldman Sachs backed by the Americans, the partnership can naturally protect their own interests.

As for Goldman Sachs, Yang Wendong was not worried at all. He had cooperation with them in other fields, and these were all intertwined entities with shared interests.

Just like the cooperation with Hollywood, it is precisely because of the large number of cinemas in Asia that Hollywood needs its help, so even if they want to undermine its investment returns, they dare not go too far.

Another reason is that investing heavily in agriculture in South America is indeed very capital-intensive, and even with his current asset size, it would be difficult for him to invest a sufficient scale on his own.

Since this is a non-strategic industry and has little to do with his prophetic abilities, he naturally needs to attract external funds, and more external funds will also facilitate future bank financing.

Barney continued, "There haven't been any sovereign defaults in South America yet, but judging from the trend, it'll be soon. When do you plan to make your move?"

“There’s no rush. The economic crisis over there will take several years to recover,” Yang Wendong said comfortably. “I contacted you first because it involves a lot of money, and we need to prepare in advance.”

Barney nodded and said, "That's true. Such large-scale transnational investments do indeed require early preparation."

"Haha, the more thorough the preparation for an investment, the higher the returns will naturally be," Yang Wendong said with a smile.
In South America, there are many farms with permanent ownership rights, and these are his targets;
His conglomerate is already quite large, and he needs to make appropriate investments in some industries that may not yield high returns but can provide long-term stability. In the future, he will also establish family rules that these industries cannot be sold, as they will serve as a basic guarantee for the future generations of the family.

After all, the saying "wealth doesn't last three generations" is one of the truths accumulated over thousands of years. No matter how powerful Yang Wendong was while he was alive, he couldn't guarantee what the future would hold.
Of course, with all the methods he has used, even if the Yang family declines in the future, it won't be as powerful as it is now, but it will still maintain its status as a top family. Just by collecting rent, it will be comparable to the world's top 500 companies.

“Okay, I’ll head back now. I’ll inform the board of your request,” Barney said.

"Thank you very much," Yang Wendong replied politely.

After seeing Barney off, Yang Wendong went to the window of his office, looked at Central Park in front of him and the Statue of Liberty in the distance, and fell into deep thought.
The building he's in now is a recently purchased property; it's not very tall, and would be considered average in New York.
It wasn't that he was unwilling or unable to afford it, but rather that he was considering what happened in 2001. Who knows if history would change? What if someone chose another high-rise building besides the World Trade Center? He would be in trouble.
Of course, no matter what, he definitely wouldn't come to New York, or even the United States, during that period;
I don't have a lot of real estate investment in the United States; it's all for commercial purposes.

PS: Please give me a monthly ticket
(End of this chapter)