Chapter 460 Ruble Devaluation (Correction): Crisis is always an opportunity

November 14, 1997, a Friday, was the Lower Yuan Festival according to the Chinese lunar calendar.

Don't get me wrong, the Lower Yuan Festival is not the Middle Yuan Festival. It's not a ghost festival; it's just a time for ancestor worship.

However, for Russians, this is clearly not a day to celebrate.

Russians returning home from get off work or school, ready to enjoy their weekend, are met with a shock when they turn on the television.

The ruble has been devalued.

Their young and handsome First Deputy Prime Minister sat behind the table, speaking into the microphone, and announced in a serious tone: the ruble will be devalued by 15% in one go.

Oh no, this is really bad news.

Even though Russians have long lost faith in the ruble, not only in remote rural areas but also in large enterprises, 73% of business is still done through barter. Cash, as Russia's legal tender, is only used to pay 8% of taxes.

But whether or not to use it is one thing, and whether or not the ruble is valuable is another.

Even more critically, there's a famous saying in the Russian Federation: "Russia is Russia, and Moscow is Moscow."

Unlike other regions where cash has disappeared, Moscow's financial markets are exceptionally hot.

Every corner was filled with discussions about banks and exchange rates, and tycoons and stock traders chatted and laughed, easily completing the trap of wealth and power.

Inevitably, the ruble is a very important and unavoidable medium in this process.

Here, everyone's life is inseparable from the ruble.

Therefore, they cannot remain indifferent to the devaluation of the ruble.

Even Lydia, the wife of tax police major general Punonin, a high-ranking government official's family member, couldn't help but jump up from the sofa when she saw the news.

Because she was moving so fast, the face mask she was applying to her face almost slipped and fell to the ground.

Lena was startled by her mother's commotion. She was intently watching the television, trying to analyze the news—it was extra homework her father had given her; she had to learn how to extract useful information from the news, analyze it, and draw relevant conclusions.

This excited the middle school girl. Her father's request for her to do this meant that he had high expectations for her, as an heir, not as a spoiled little princess who didn't need to think.

Therefore, she must give it her all to showcase her talent and potential and not disappoint her father.

No one had told her about the consequences of disappointment, but the 15-year-old girl vaguely understood that it would mean she would be abandoned.

A father can endlessly tolerate his little princess, even if she is mediocre, ignorant, and unambitious.

However, no politician will tolerate their successor; if the latter fails to perform adequately, the next person will immediately fill the position.

Lena's ambition had been nurtured by expectations; she would not allow herself to be unqualified, and she was determined to stand up.

The sudden jolting of the sofa startled the thoughtful girl, who cried out, "Mommy, what are you doing?"

Lydia frantically pressed the face mask against her face with her left hand while frantically pulling open a drawer with her right, searching for her account book. She didn't even bother to look at her daughter: "Hurry up and get rid of the rubles in the house! Didn't you hear the ruble is depreciating?"

Good heavens, it's been stable for over a year, how can it suddenly depreciate like this?

Lena watched as the essence from her mother's face mask dripped onto the floor with her movements, and finally, she couldn't bear it any longer. She raised her voice, "Enough! What are you doing? Does Dad think we'd go hungry? The ruble has been devalued so many times, and when have we ever gone hungry? Eggs, butter, milk, beef, vegetables, fruits, grains, beautiful clothes, and cosmetics—when have we ever lacked them?"

Lydia's shoulders trembled instinctively from the shout, and she even glanced back slightly, but only for a moment before she busied herself again: "Your father isn't some corrupt official who raks off money from the house. Our family is no different from ordinary people. How can we survive if we don't live frugally?"

"Can you stop fooling yourself?" Lena finally snapped. "Real ordinary people don't use imported face masks or cosmetics, and they don't idle around! How do real ordinary people live? They're like your colleagues, like my classmate's mother. After working three hours a day, they rush to the subway station to get another job! They also do another part-time job at night. Holding multiple jobs is the norm for ordinary people, and part-time income can account for more than half of the family's income. If our family is really just ordinary people, why don't you do part-time work? Dad works more than 18 hours a day and doesn't have time. What about you? You only work three hours a day."

Lydia was stunned. What kind of part-time job? This was so far removed from her life. Why would someone with a stable job do a side job?

Besides—

She finally found her voice: "What strange things are you saying? If I go to work part-time, who will take care of you? Who will take care of this family?"

However, the person being cared for remained unmoved, looking at her mother expressionlessly: "Tonya and I are already in middle school. We eat at school. We're not babies. We can take care of ourselves. We can clean. We can use the washing machine."

Lydia, like a cat whose tail had been stepped on, finally snapped, her voice becoming shrill: "So you mean I'm useless, that you don't need me anymore, is that it?"

"Yes! We don't need your self-aggrandizing sacrifices!" Lena vented her dissatisfaction without restraint. "It's clearly your own lack of ambition that keeps using us as an excuse. We don't need it, we haven't needed it for a long time!"

She looked at her mother's face under the light, which was covered by a face mask. It was a white mass, and all the features were covered up, making her look like a faceless person.

The mother's face overlapped with another face, becoming a female employee at a tollbooth.

When the school organized a social research activity to conduct research at the toll station, the toll station was urging its employees to find new jobs as soon as possible, because the toll station did not need so many people; there couldn't be more people collecting tolls than paying them.

If you look for a job now, at least you have some buffer time. If you wait until later, it will be too late.

However, the employees remained unmoved, believing that if they kept delaying, the government would eventually pay their wages.

People only started to protest after the tollbooth was abolished and everyone lost their jobs.

Lena clearly remembers one of the 38-year-old female employees crying and repeatedly emphasizing to the reporter, "All I know how to do is collect money. I can't do anything else. What am I supposed to do? How am I supposed to live?"

At that time, some classmates sneered and muttered: "I also want to collect money for a lifetime. Where is there such a good thing?"

The world is changing, and everyone has to adapt. Why should you sit comfortably and collect money for a lifetime?

Who would sympathize with her? No one would.

The tollbooth workers earn high salaries and enjoy excellent benefits, living much better than ordinary people. Those without connections simply cannot get in. Ironically, the job requires absolutely no skill; anyone can do it.

She lost her job, and everyone just applauded.

At that moment, the face of the tollbooth employee crying with snot and tears overlapping with her mother's face made Lena feel physically nauseous, and she couldn't even hide her disgust.

My father risked his life and schemed against all sorts of people to barely maintain his position in Russia's political arena, where officials changed like a revolving door.

Where is his mother, who should have been fighting alongside him? She lives a comfortable life at home, sheltered from the wind and rain. And let me emphasize, this is the life of an ordinary person.

The implication was that I didn't take advantage of your father at all.

The father did not show any dissatisfaction, and did not even raise his voice at the mother.

But what does that prove?

The teacher never scolds the students who have been completely abandoned in the class.

Lydia was instinctively filled with fear at her daughter's eyes, a fear that came from the depths of her soul.

She instinctively turned her head and looked at the television.

Just then, the news on the screen showed Ivanov answering a call from a viewer, stating live: "The standard for using grain instead of rubles to purchase goods remains unchanged, because this time the government has proactively chosen to devalue the ruble in order to stimulate exports and encourage the development of Russian domestic industry and agriculture."

Lydia felt she had finally found something to do. She reached for the telephone on the cabinet and, as if explaining to her daughter, muttered to herself, "Yes, I need to call Ivan and ask about rubles..."

With a "smack," her hand, which had just grabbed the microphone, was slapped hard by her daughter.

The microphone was thrown down and hung on the side of the cabinet, tethered by a thin telephone cord, swaying like a person hanging.

Lena roared, "Can't you stop being so naive? Your naivety is disgusting! Are you really stupid enough to believe you can get through on the phone? Anyone with a brain knows these calls are pre-arranged! Uncle Ivanov only answers the most crucial, the most reassuring questions! Don't you understand such a simple thing?"

Lydia's face flushed red, and she was about to explode in anger.

But she saw her daughter start to cry: "If you really want to know, why can't you ask your father? You can see that your father is sitting at this table too."

"Why don't you dare ask your father? Because you won't admit it, and you know that your father won't answer any questions about work."

"Because you don't deserve it! Dad thinks you don't deserve his time! I've told you, but you don't listen; you listen, but you don't understand; you understand, but you don't change; and you change, but you don't change well. Who would want to waste their time on you?"

Overwhelmed with grief, Lena cried even harder, "Mom, what are you going to do? What are you going to do now?"

Why would a father value his middle school daughter so much and be so eager to nurture her?

Because the first family must have women step forward to assume diplomatic responsibilities.

He cherished his daughter because he had no expectations of his wife.

How can a wife like that live in a family?

Where there are people crying, there are people sighing.

Halfway across Moscow, in a container market that had closed for the night, merchant representatives gathered in the canteen, sighing as they watched the news.

Compared to the wives of high-ranking officials who whine about nothing, they are the ones who are truly frowning and miserable.

The ruble can drop so quickly, by as much as 15%, which is seriously affecting their business.

Even the second sister couldn't help but complain: "Oh dear, Mr. Wang, we really aren't making any profit like this!"

Wholesale is already a low-profit business, and with the devaluation of the ruble, it's like losing 15% of the profit. How can we continue like this?

Wang Xiao rarely leaves her villa. She keeps her presence to a minimum in Moscow. If it weren't for the fact that this reform is crucial to the life and death of the Russian economy, she wouldn't have shown her face in the container market at all.

Now she just listens to everyone's complaints with a smile, and only when the complaints subside does she sigh: "Life is tough for everyone. Right now, nobody should think about making money. The key is to keep the business going, to hold onto the market, and not to shrink or withdraw. If you can do these things, that's a victory."

She said meaningfully, "International trade is really difficult right now. Southeast Asia has been ripped off, global stock markets have plummeted, and a lot of people have lost everything. I've seen many go bankrupt. When will the market recover? It's hard to say."

The seasoned merchants present understood the unspoken meaning: in a bad economic climate, nowhere is a paradise.

No matter how tough things are in Moscow, we have to grit our teeth and bear it. Life is just as bad abroad; not only will we not earn money, but we'll also be taking risks.

Everyone understands the logic, and anyone who has done business in Moscow has experienced the devaluation of the ruble.

But everyone was still uneasy; who would want to lose profits?

Someone seized the opportunity to jokingly remark, "Just like a daughter who's married off, she's no longer part of the family. Mr. Wang, are you going to be the Prime Minister's wife of Russia? All you're thinking about is the Russian economy."

Wang Xiao immediately denied it: "Hey, you can't just eat whatever you want, and you can't just say whatever you want. I really can't stand hearing that. When did I stop taking care of you guys?"

The other person pointed at the television: "Look, Mr. Ivanov himself said that the ruble's devaluation is to stimulate production in Russian enterprises. And you're setting up stalls for farm enterprises' products, you're stealing our business."

Others echoed this sentiment.

That's right, that's right. They can tolerate minor losses. When you're traveling, what else can you do but tolerate them?

Don't be fooled by Mr. Wang's smiling demeanor as he negotiates with them. Every merchant who experienced the hostage crisis at the container market two years ago knows the truth. This Mr. Wang may have a smile on his face, but he's ruthless when it comes to his actions.

If you upset her, she might rescue you one minute and then make you die without you even knowing how.

But let's keep things separate. People will die for money, just as birds will die for food. If their long-term business development is threatened, they won't agree with a smile.

Wang Xiao rolled his eyes: "Have some self-respect, will you? Our goods are imported to Russia! They shouldn't be competing with Russian domestic products in the first place."

She glanced around and said, "Tell me honestly, since the end of last year, hasn't the market become increasingly difficult? Some of our regular customers have stopped coming."

Some people avoided her gaze and began to turn their heads away.

Some people answered directly: "Well, there's nothing we can do about it. The Russians just like European and American goods. There are too many of them coming in now. No matter how good our goods are, they still prefer European and American goods."

Wang Xiao nodded: "This is inevitable, and we cannot reverse it with our individual efforts."

She created the "Yiyou" brand less than two years after she transmigrated, and even built a plane to boast about its style, trying to make it the choice of sexy lingerie for the middle class in Europe and America.

But in fact, to this day, "Yiyou" still occupies the low-end market, relying on its high quality and low price.

Unfortunately, brand premium is essentially a derivative of cultural influence.

The economic situation and the current state of military development of China determined that its cultural influence in the 1990s was basically unable to radiate outwards.

The so-called "amazing the world" is either self-indulgence or people's momentary curiosity, and it doesn't mean anything at all.

Faced with this reality, what could Wang Xiao do? He could only accept it.

There are strategies for leveraging brand premiums, and there are strategies for offering high-quality products at low prices. The shift from export to domestic sales is also driven by the sheer size of the Chinese market, which is a vast and competitive market.

A realistic person like her would naturally acknowledge the growing popularity of Western goods among Russians, and wouldn't fantasize that they would suddenly develop a genuine love for Chinese products.

But does it matter if it's genuine or not? No, it never has been.

A gentleman judges by actions, not intentions. Even if you don't want to do something, if objective conditions force you to, you still have to accept it with a heavy heart.

Just like after the outbreak of the Russo-Ukrainian war, when capitalist countries completely abandoned the Russian market and withdrew directly, and Chinese goods entered the market to fill the gap, did Russians stop buying them?

Over time, won't the market be taken over?

The situation is similar now.

"Think about it. With the ruble depreciating, aren't European and American goods more expensive for ordinary Russians? If their income doesn't increase, don't they have no other choice but to downgrade their consumption? But even if their consumption is downgraded, their demands and aesthetic preferences won't be. Russian domestic companies can't meet their needs for products, so who will fill this market? Besides us, who else?"

Wang Xiao emphasized, "Comrades, this is a very good opportunity. Half a year is indeed a tough time, but look at the world's major companies. When they enter a new market, what is the first thing they do? Seize the market!"

"To achieve this goal, discounts, promotions, and free gifts are the norm. Only in this way can we defeat our competitors and seize the market as quickly as possible."

She looked distressed. “We can’t just be content with small gains and focus only on our immediate territory. Why do veterans eventually give up in the market? Because new people are constantly joining, and you have to develop new markets. In the future, we will definitely gradually give up the low-end market and focus on the mid-to-high-end market.”

She pointed at the television, "The devaluation of the ruble is a very important opportunity for us. Comrades, it's been more than five months! It's like they've given us five months for free! The government is bringing people here and turning them into our customers! With such an opportunity, how can any of you say I don't care about your lives? That's so heartless!"

The second sister had already quickly calculated the numbers in her mind, and said with a smile, "Oh, Mr. Wang, don't pay them any attention. You don't know them well enough; they like to talk big. But in reality, as long as you give the word, Mr. Wang, we will all follow your lead."

Wang Xiao laughed and said, "I knew it, my second sister still loves me the most."

Laughter erupted in the cafeteria.

One of the male shopkeepers seized the opportunity to stir up trouble: "We're just trying to avoid suspicion. We're a bunch of grown men. If Mr. Ivanov were to care about you, he could just arrest us and take us straight to the police station and shoot us all!"

The crowd laughed even harder.

Wang Xiao laughed and shook his head: "Alright, alright, now I have to get down to business. First of all, don't think that this market is handed to you and is easy to take over. We have competitors, and they are very strong."

The merchants looked at each other, completely baffled.

Who is it? When it comes to good quality at a low price, who can beat them?

Wang Xiao didn't beat around the bush and directly revealed the answer: "It's from Korea."

Upon hearing this, everyone breathed a sigh of relief.

It's a Korean product, what's so great about it?

Yes, yes, yes, South Korea's economy is doing well, and in recent years, Russia has been eager to curry favor with South Korea, being incredibly friendly towards it. They completely disregard their traditional friendship with North Korea, even at the expense of North Korea's interests.

Therefore, a significant amount of South Korean goods are shipped to Russia for sale.

To be honest, their clothes and shoes are really nice and very fashionable.

The problem is that Korean goods are expensive, which greatly reduces their competitiveness.

Wang Xiao tapped the table, reminding them, "Don't forget one thing: the Korean won is depreciating. On October 20th, it was 913:1, on October 28th it had become 953:1, and now it's 986. If it falls any further, it's like Korean goods are being heavily discounted. But our Chinese yuan's exchange rate remains unchanged. The Hong Kong dollar has been preserved, so the Chinese yuan's exchange rate is even less likely to change. Compared to them, do we still have a price advantage? No."

Everyone was taken aback, and the second sister even exclaimed, "Didn't the South Korean government promise that it wouldn't fall below 1,000?"

Wang Xiao said meaningfully, "This is what the current government promised. There will be a change of president this year. The South Korean stock market has plummeted, and countless large corporations have gone bankrupt this year. With this economic situation, how many South Koreans would still want to elect the current president? If a new president is elected, will they be willing to follow your rules?"

Merchants in the container market are people who deal with money, and the Moscow financial crisis has made everyone more or less aware that maintaining the exchange rate is also a very expensive thing for the government.

Taiwan simply didn't want to burn money, so it directly liberalized the economy, and as a result, it didn't suffer fatal economic losses.

Russia is now playing the same trick.

It's estimated that the South Koreans won't be able to hold on much longer, and this will likely be the final outcome.

Indeed, their currencies have depreciated, which naturally gives them an export advantage.

Seeing that no one was arguing with her, Wang Xiao began to emphasize her second point: "Don't flaunt your wealth, especially now. Don't go out and show off how much money you've made. People are having a hard time right now, and if you go out and show off, aren't you just inviting hatred? I'm putting this out there now, so no matter who asks later, you'll all say in unison that you've lost money, lost a lot of money. If you had known this would happen, you wouldn't have played the stock market. It was going so well before, and then it just started to fall, and it fell so badly that there was nothing you could do about it."

She described it vividly.

The second sister slapped her thigh and exclaimed, "Why pretend? This is the truth! I've lost a fortune! Hong Kong property prices have plummeted, and stock prices have plummeted too. I've worked for nothing these past two years!"

The merchants laughed: "You wanted to be trendy, huh? You lost money, didn't you? Who hasn't lost money in the stock market this year? Even the Americans lost money!"

Good heavens! Americans are so lively. They're always killing off this stock market speculator and that stock market speculator. It's more ruthless than a war.

As everyone was talking enthusiastically, Wang Xiao's assistant came running up and whispered to his boss, "Mr. Wang, Mr. Ivanov has arrived."

Before Wang Xiao could stand up, Ivanov came upstairs with a thud.

He first smiled broadly and bowed to everyone, then thanked them in accented Mandarin: "Thank you all for your hard work and for your trouble. I assure you all that everything will be alright in five months. I'll cover whoever's losses are."

Everyone was initially surprised, exclaiming, "Wow, after only three days, we should look at you with new eyes!"

It turns out Mr. Ivanov can speak Chinese too. Before he became an official, he spoke only Russian.

Only his assistant and a few others knew that he had memorized these words by force.

Unfortunately, to avoid suspicion, Ivanov had silently made it clear to Wang Xiao that he would not interfere with her connections in China, so he didn't learn Chinese at all.

Unfortunately, he wasn't a top student. Even with a great language environment, he still wouldn't be able to speak Chinese unless he put his mind to it.

Later, when he became prime minister, there was no need for him to avoid this suspicion. But he also didn't have the time; he essentially sold himself completely to his homeland, Russia.

Even if he changed his mind and wanted to learn, he wouldn't have the time to learn anymore.

Now that we need it, all we can do is cram at the last minute.

After the merchants were initially surprised, one of them joked, "Mr. Ivanov, you can't be so sure. How much money do you have in your pocket? Mr. Wang definitely has the money."

Ivanov couldn't understand any of this, but that didn't stop him from chuckling.

So, amidst laughter, he smoothly picked up Wang Xiao and left.

Once they were in the car, the smiles on their faces faded, and they slowly turned serious.

In fact, given the current state of the ruble in Russia, whether it depreciates or not has little direct impact on most Russian citizens.

There is only one group that will react very strongly: the bankers, also known as the oligarchs.

After Russia suddenly became a hot investment destination, Russian bankers found it very easy to obtain loans, with many Western financial institutions even chasing after them, eager to lend to them.

In this frenzied environment, all sorts of strange and wonderful things happened.

One particularly ridiculous thing happened when Khodorkovsky's Menatep Bank expressed its desire for a loan, and the lender came to investigate the bank's situation. At the very least, they needed to know who owned the bank.

Even with this question, borrowers couldn't get an answer. Menatep Bank's shareholding structure was too complex, and the bank simply wouldn't tell borrowers its actual situation, bluntly stating, "Who owns the bank is none of your business. The bank needs a $200 million loan right now, and it will be in your account within 48 hours."

Normally, shouldn't investigators from Western financial institutions just turn around and leave? How can they lend you money if you don't explain yourself clearly?

But in reality, they turned around and sent the loan over.

With loans so readily available, how many people could resist the temptation? Bankers, whether they needed loans or not, happily borrowed money from outside, then used it to buy short-term government bonds, making a fortune by profiting from the interest rate spread.

But now, with the ruble devaluing, their problems have arisen.

Not only has the interest rate differential been squeezed to almost nothing by the depreciated ruble, but they also have previous loans to repay.

Ironically, their debts are in US dollars, while their assets are in rubles.

Therefore, if the ruble depreciates, banks that are heavily burdened with Western loan portfolios and dollar futures contracts will undoubtedly suffer huge losses.

But who among these people is going to sit idly by? They will definitely not swallow this bitter pill; they will surely find ways to retaliate fiercely.

Fearing that Wang Xiao was overly worried, Ivanov reassured her, "It's alright, exporters will welcome this policy. The money they earn is in foreign exchange. With the ruble depreciating, they'll pay less to the oil and gas field workers, so it's definitely a good deal for them."

While most of these exporters are not as well-known as the Big Seven, many of them are local bigwigs who can influence the local economy.

They profited by helping the Russian central government mitigate the risk of unrest at the local level caused by the ruble's devaluation.

Wang Xiao nodded and said softly, "If these people react too strongly and we really can't suppress them, then let's move the plan forward."

What plan? It's a plan to throw America into chaos again, of course.

The situation in the United States is now calm, and the Dow Jones Industrial Average is rising steadily, showing a thriving trend.

It's so enviable!

Yeah, so you shouldn't expect to have an easy time either. When everyone else is struggling, why should you?

Besides, only when you're having a hard time can everyone else have a better life.

————————!!————————

[Hug] Good morning!

I don't know why I mistakenly wrote the Dow Jones Industrial Average as the Dow Glasgow Index. The rest of the text is wrong. I'm trying to correct it.