Spy Wars: Red Shopkeeper

Chapter 260 New Guest
Noon the next day.

When Ma Shiqi returned from his meal, he asked Gu Yansheng.

"Minister, I've heard some rumors that the Japanese are going to requisition grain. Is that true?"

"The municipal government is really a broken bellows; it doesn't keep its mouth shut at all."

Gu Yansheng leaned back, picked up his coffee cup and took a sip. He had read the newspaper that morning and there was no news about forced requisitions.

"What did you hear?"

"You know, there are people in the Jiangbei gang who do grain business. One of my brothers was suddenly contacted by another businessman last night, wanting to buy a batch of rice, saying it was for allocation purposes."

He didn't think too much about it at the time. He figured the new rice would be on the market soon, so getting rid of the old rice would be a good thing and would also earn him some goodwill, so he sold it.

He only found out this morning when he talked about it with other businessmen that he wasn't the only one whose goods were being snapped up.

He sensed something was amiss, so he asked around. Some rice shops had already started raising prices, but when he asked the shopkeepers why, they wouldn't give any reason. He found this very strange.

Knowing I was here, they came to have lunch with me and asked me to help them find out some information.

Has there been any change within the city government?

The Jiangbei gang is considered one of their own, and Gu Yansheng doesn't mind revealing a little bit about it.

“The Japanese are going to buy up grain, and it’s a lot of it. You should ask your friend to buy as much grain as possible. Shanghai won’t be far from the grain shortage, maybe just a few days away.”

"Is it that serious? A food shortage during the autumn harvest season?" Ma Shiqi's expression changed slightly.

Gu Yansheng put down his cup and added, "You must store it properly after you receive it. It's hard to say what might happen later. If they search house to house and find it, there will be no hope."

"Minister, how much grain do the Japanese want to collect?"

"One hundred thousand tons."

"One hundred thousand tons?" Ma Shiqi gasped, then thought for a moment that there was no need to ask any more questions. "Thank you, Minister. Is it alright if I make a phone call to inform him?"

"It doesn't matter if the Jiangbei gang finds out, just keep it within their own reach and don't spread it."

"That's for sure, I'll remind them."

"Well, let's go."

Gu Yansheng watched Ma Shiqi leave. The hoarding and speculation had arrived, and all of them had official backgrounds. It was estimated that they had connections with various heads of the municipal government, with Fu Xiao'an being the biggest one.

The Japanese want to collect 9,000 tons every month to ensure a smooth transition in Shanghai without any trouble—that's wishful thinking.

Two days later, the news had spread, rumors were circulating, and a small-scale panic began. Now that Shanghainese had learned their lesson, they immediately went out to stock up on food.

"Minister," the subordinate hurried upstairs to report, "Vice Minister Gao Zhongwu wishes to visit you and is at the door."

"Gao Zhongwu? What's he doing here?"

Gu Yansheng's mind was racing, but his steps didn't falter as he went downstairs to greet him. "Haha, Minister Gao, what brings you here?"

"Minister Gu." Gao Zhongwu stepped forward with a smile. "I came here to take care of some business. That guy was so clueless. He wouldn't even give me a drink of water. I talked for so long that my mouth was dry. I was just thinking of asking you for a drink of water. Did I disturb you?"

Your home is only one kilometer from here, so next time you can come up with a better excuse.

"No need to disturb you, please come upstairs." Gu Yansheng saw them upstairs.

After sitting down, Gu Yansheng asked, "What brings you here? Negotiations?"

"Yes."

Gao Zhongwu sat down to drink tea and started rambling on about various things. Gu Yansheng took the opportunity to ask about the progress of his negotiations with the Japanese. After talking for a while, Gao Zhongwu finally got down to business.

"Minister Gu, I don't know if you've been paying attention to the stock market lately. I heard you talking about stocks on the plane last time, and I actually checked it out when I got back. The cotton yarn market is booming right now, public sentiment is extremely high, and stock prices are rising one after another. It's practically like you can make money just by going in."

But I just don't understand, if everyone's making money, then who's losing money? Is there really such a good thing as a free lunch?

I sent you back from Hong Kong for negotiations, how come you've gotten involved in stock trading?

Gu Yansheng laughed heartily, "Minister Gao is testing me. You studied economics, why would you need to ask me about something like this?"

Gao Zhongwu shook his head and chuckled, "I'm no good at it. I've been busy with foreign affairs and my economic skills have fallen behind for too many years. How can I compare to you, Mr. Gu, who is focused on government affairs and has a high sensitivity to economics? That's why I came to ask you for advice."

Gu Yansheng smiled faintly, "What do you mean by asking for advice? I only know a little bit. We can discuss it. The stock market is all bought with money. When external funds enter Shanghai, the price naturally rises. It doesn't necessarily mean that someone will lose money. It's possible for everyone to make money."

Of course, this is assuming the water level hasn't dropped.

"Mr. Gu, do you think the cotton yarn market is bullish?" Gao Zhongwu has been paying attention to cotton yarn recently.

"I'm bullish," Gu Yansheng replied with a smile.

"But there are rumors circulating in the market these past two days that the Japanese are going to forcibly requisition grain. The municipal government forcibly requisitioned grain once last year, which led to a stock market crash. There's a lot of money being sold off on the exchange these past two days, for fear of another stock market crash. Do you think it won't happen again?"

"Bought it?"

"Hehe, Minister Gu is incredibly insightful, you could tell?"

Nonsense, why are you analyzing and getting so worked up over a piece of junk news? Do you even need to guess? Besides, there's a high chance they bought quite a lot.

"It won't drop for now, just hold on to it."

"Why? I hope Mr. Gu can enlighten me." Gao Zhongwu frowned, leaned forward, and looked very serious.

"The reasons are complicated. Forced requisition will cause prices to fall, but whether prices fall or not is not solely determined by how forcefully the Japanese impose requisition."

Gu Yansheng also chatted with him casually about this and that.

The process doesn't matter, what's said doesn't matter, the result is an increase, and Gao Zhongwu will figure it out himself in the future.

"Look, I really feel like I met you sooner, Minister Gu. We chatted for so long that I've taken up your time. I'll go back and study it some more."

"Okay, walk slowly."

Gu Yansheng went downstairs to see him off. Gao Zhongwu was still useful, so he was left to boast to Boss Dai.

Ding-ling-ling. Ding-ling-ling.

Gu Yansheng went upstairs to answer the phone, "Who is this?"

Fu Xiao'an's voice came through, "Hey, Brother Gu, I just had a meeting with Lu Ying, Li Shiqun and I, and we've drafted a rough plan."

"Grain collection will begin tomorrow. Just letting you know; they'll assign someone to handle security."

"okay, I get it."

The next day, the municipal government held a press conference to officially announce the start of grain requisition. To avoid causing panic, they did not say 100,000 tons, but only that grain prices would rise slightly, but it was not a big problem and Shanghai could handle it.

As soon as the news broke, stocks on the exchange plummeted. Investors didn't believe such nonsense. The painful experience of forced land expropriation last year still haunted Shanghai residents, and there was a lot of selling pressure.

Newspapers reported that the target of this levy was 100,000 tons, and claimed with certainty that hundreds of thousands of people would starve to death.

Let fragile emotions completely collapse.

Cotton yarn futures prices were already high, which many people thought were inflated. Now, with this panic event, the price almost fell below 200 from 280.

However, Fu Xiao'an was prepared and began to invest funds to take over the goods.

According to Fu Xiao'an, "A general decline in the stock market is not a bad thing. I want to buy stocks at this time. At the price of 200, I will buy as many as I can. I will not only prevent it from falling, but I will also make it rise."

If we can withstand the first wave of decline, things will be much easier afterwards.

While everything else is falling, mine is rising. This is the only stock that's steadily increasing. Brother Gu, do you believe that one day all the stock market investors in Shanghai will flock to cotton yarn trading?

That makes sense; having a lot of money means you can do whatever you want.

Fu Xiao'an's prediction came true: the price of cotton yarn stopped falling at 200 and then rose steadily, immediately becoming the most eye-catching stock in the entire Shanghai stock market.

The Japanese couldn't collect grain from the concessions, so the people in the concessions didn't have any immediate pressure to eat, and those who wanted to speculate on stocks continued to do so.

Gu Yansheng's strategy, coupled with newspaper publicity, drew funds from other declining stocks to join the surge in cotton yarn prices, making cotton yarn futures extremely popular.

With more funds joining, the price quickly climbed back above 280 and approached 300 within just a few days.

As a round number, the price level is inherently daunting, but the battle between bulls and bears over 300 yuan was broken in just one day, and the price of cotton yarn continued its upward trend with high spirits.

310, 320, 330.

The sky is the limit for cotton yarn futures.

During this period, countless funds in the concessions went from short to long and vice versa. They simply didn't believe cotton yarn was worth that price. Reason told them they should short cotton yarn, but reality told them that cotton yarn prices were still rising. They didn't have enough capital to dump the stock and make money.

They sell, and retail investors buy, and the retail investors buy with great enthusiasm. Their courage is giving them a headache. They don't have many chips to begin with, and if they sell even more, they'll be forced out of the game themselves.

The only option is to short and then buy back, but rationality then comes out to tell them that this won't work.

This isn't something they're orchestrating; that's the biggest problem.

Fu Xiao'an can give those who want to manipulate the market. People have already come forward to take over. It's time to sell when it's time to sell, sell while pushing up the price, and secure your profits.

During this period, a bandwagon effect emerged, and the stock prices of factories related to cotton yarn began to soar.

Enterprises like Yong'an Yarn Factory and Huafeng Yarn Factory, which produce cotton yarn and are listed on the stock exchange, have plenty of stories to tell.

With cotton yarn prices rising, cotton yarn mills are bound to make money, so the stock price increase is perfectly reasonable.

In the spot market, even at 300 yuan, they are selling very well. Merchants can't wait any longer; they have to place orders and ship them back. If they wait any longer, it will be too late.

Now, all signs indicate that funds are highly accepting of the rising price of cotton yarn, and the price of cotton yarn has entered a major upward wave, soaring directly to 400. The concessions are in a frenzy, and stock investors throughout Shanghai are in a frenzy. Many people have become rich overnight, and consumption has also improved.

Mitsui Corporation.

The heads of several Japanese companies in Shanghai sat down for a meeting.

In this cotton yarn market boom, apart from Sato Seiken, who likes to speculate on stocks and made a profit, almost no one else benefited.

"The Chinese are too cunning. They didn't give any hint of raising prices when they were buying cotton. This couldn't have been decided in a day. They had planned this all along."

“This was done by Fu Xiao’an. I’ve asked around and found out that he was the one who spearheaded the price increase of cotton yarn for all merchants.”

"Fu Xiao'an is such a bad person."

"There's no point in worrying about that. The question now is how we can benefit from this."

Actually, everyone made a little money. Each family owned a cotton yarn factory. When Fu Xiao'an raised prices, they also raised their prices to sell.

However, their high-quality cotton yarn was basically only supplied to the needs of Japanese residents and the military in Hongkou, and military supplies accounted for the majority, so the profits were not much.

They would also be criticized by overseas Chinese.

"Sato-kun, did you call us here today because you have something on your mind?"

"Yes, there is." Sato Seiken smiled faintly: "The cotton yarn market is so hot, I've been thinking about how to let everyone get a share of the pie. I figured it out yesterday, making money is actually very simple."

They raised the price of cotton yarn to 400, so we took advantage of the high price and dumped all the military-supplied cotton yarn on the market, selling it to those merchants without keeping a single piece.

"Then how do we deliver the goods?" The others were taken aback.

What will the soldiers wear if they can't deliver the goods on time?
Sato Seiken remained calm. "Why do you think Fu Xiao'an didn't announce the price increase of cotton yarn before the cotton even reached his hands?"

Because of fear.

Because he doesn't have the power to set the price of cotton.

Essentially, it's because he has no power.

That's simple. Sell all the cotton yarn for 400, then issue an order to limit the price of cotton yarn, just like grain is now, only allowing it to be sold for 70.

We sell them for 400 and buy them back for 70, making a profit of 330 silver dollars per piece of cotton yarn. Ten thousand pieces would be 330 million silver dollars!

The group exchanged glances, all amazed by the idea. "Great idea, I have no objection."

"I don't have any objection either."

"Then it's settled. But you should be careful not to dump too much at once. Dump it to several merchants to avoid the cotton yarn price dropping too quickly."

Moreover, we can't say it's for military use; we have to say it's surplus from our production.

Furthermore, all your newspapers must publicize that cotton yarn prices will continue to rise; we must ensure the situation remains extremely favorable until we have finished shipping our goods.”

"understood."

Sato smiled. "This is very important. I remind you again, you absolutely cannot let the market collapse."

The stock market has been quite interesting lately. Fu Xiao'an's funds, as well as British and American funds from the concessions, are all speculating on cotton yarn.

As far as I know, many British and American funds that initially shorted cotton yarn joined the ranks of those going long halfway through.

However, I have been shorting, and I already have quite a few short positions, and that number will only increase.

You can also join in, but place short orders very gently so as not to attract attention.

Buy in small amounts now, and then short in large amounts once we've finished shipping our cotton yarn. Give us time to place our orders. This is the key to preventing a market crash. I hope everyone remembers this.

With spot cotton yarn, we earn 330. With cotton yarn futures and leverage, we can make thousands of dollars in profit from a single bale of cotton yarn!
Ladies and gentlemen, this time, we are going to reap the rewards of global capital!

The heads of several major Japanese companies were shocked by Sato's idea, and then excited, as it had been a long time since a group of people had joined forces to strangle an external enemy.

"Sato-kun, let's do it your way. Our army will be invincible, and our capital will stand at the top of the world. Cheers!"

"Japanese companies are selling cotton yarn."

At the teahouse, Fu Xiao'an came to find Gu Yansheng and brought up the matter.

"So what if we sell? Will it affect our inventory?" Gu Yansheng didn't find anything strange at first. Japanese companies produce cotton yarn anyway, so it's normal for them to sell at high prices.

But Fu Xiao'an was too familiar with the Shanghai market.

"There's nothing wrong with the Japanese selling cotton yarn, but the quantity is too large. I know exactly how much cotton yarn the Japanese have."

I had already calculated how much they could produce each month and whether it would affect our sales.

Now, some businessmen have told me that the Japanese have secretly contacted them, increasing the supply of cotton yarn. Not only is the quality good, but the price is the same as ours, so they're getting businessmen to buy cotton yarn from them.

Is the quantity large?

“It’s huge. I asked the workers in their factory, who are Chinese. The cotton yarn that was supposed to be stored in the warehouse was meant to be given to the army on time, but now the Japanese management has let the merchants come to see the goods in the warehouse. I suspect they have sold the cotton yarn meant for the army.”

Gu Yansheng also sensed something was wrong.

Selling military supplies isn't about money.

"The military's cotton yarn orders must have been placed long ago. Now that they've been sold, how will they deliver the goods?" Gu Yansheng thought for a moment. "Unless they sell first and then buy back, driving down the price to make a profit?"

This is a possibility that is easy to deduce.

However, there was a problem: the military cotton yarn used by the Japanese army itself was of better quality, while the cotton yarn sold on the market was of lower quality.

Even if Japanese companies later try to take back the products through underhanded means, they can only take back a batch that has been marketed. It is unlikely that they can take back the original products, as such a large quantity would be too dispersed.

Gu Yansheng looked at Fu Xiao'an, "What do you think?"

"Let's liquidate and leave." Fu Xiao'an sneered. "I don't want to get involved with the Japanese. If they really forcibly seize the land, I'm afraid I won't be able to escape. I'll liquidate and leave. If they forcibly seize the land, we can make money by shorting the market with the Japanese."

I just wanted to ask your opinion. Leaving in a hurry will definitely mean earning less, but it's safer.

Cotton yarn production takes time. They've sold out of their stock, but there's still cotton yarn that hasn't been produced. If the Japanese drive down the price, they'll definitely lose some of that profit, but overall they'll still make a profit, just a smaller one.

"Safety first, I have no objection." Gu Yansheng was very cautious. "But can so many orders be sold out in such a hurry?"

“There are buyers.” Fu Xiao’an smiled and dusted off his trousers. “These days, people from the concession have called me a lot, asking me to work with them.”

"Aren't they already doing it?" Gu Yansheng asked, puzzled. At this price, there must have been a significant influx of funds from the concession.

"They think the market price is too expensive, so they ask me to sell them a batch of goods at a discount. The reason is that they feel it's not safe to buy at the original market price, and they're afraid that I'll turn around and dump the goods and cheat them."

If I sell it to them for a few dozen yuan less, even if I dump the shares, they'll still have a safe space to run away, right?
Consider it me paying out of my own pocket to show my sincerity by partnering with them to create a market. These people are shrewd.

There are advantages, though; prices can continue to rise.

"Oh." Gu Yansheng understood immediately.

Fu Xiao'an said, "I didn't agree at first. When you were trying to trick me, why didn't you think of letting me off the hook? Don't you think so?"
But now that this new situation has arisen, I really have to pass this coveted prize to them and let the Japanese have their fun.

"Hahahaha." Gu Yansheng laughed happily, "If they want it so badly, then let's give it to them. We'll put our weapons away and call it a day."

"Okay, then I'll go back and set it up. I'll sell a little at each store so they can all feel involved."

(End of this chapter)