Chapter 458 Bursting the Bubble with Your Own Hands
In fact, Sheffield didn't quite understand whether the people were really out of money. In terms of finance, the slave owner was almost an idiot. But it didn't matter. There was a knowledgeable person who had just been poached. The headquarters of the Union Bank in New York was quite shabby, and it was not even as impressive as the Union Bank in Los Angeles.
Who made Sheffield a younger brother in front of these Wall Street wolves in New York? It's just that he felt that the United States' largest city could not tolerate the lack of a United Bank institution, so he reluctantly ran a bank. The interest rate was lower than that of other banks, and the bank could not provide quality services. If he had not personally ordered that the workers of the United Company must open an account in the United Bank, and had not used this behavior that was obviously not in line with market rules to cover it up, the operation of the United Bank would have been even more bleak.
It is true that letting Blair move from Knickerbocker Trust and Investment Company, one of the three largest trust companies in the United States, to a place called a bank to make plans and strategize is like the saying "water flows to the lowest place". However, Sheffield and Blair both believe that this is temporary. If other banks have collapsed, the United Bank will be the winner as long as it exists. After all, this is a world of bad things, and the survivors will be the kings.
"Boss, that's not true. Our country has a population of 80 to 90 million. The area around New York Metropolis is the most economically developed and densely populated area in the United States. Even if there is a shortage of money among the people, they will not be unable to solve the subscription of 29 million US dollars. The shortage of money does exist, but it is not among the people." Blair had to explain the logic to his slave owner boss. "The key reason is that the interest rate provided by the New York City government's tax-free bonds is only 4%, which is obviously not enough. In comparison, the blue chip stocks held by major financial institutions in New York can reach about 6%."
"In this situation, citizens will certainly not use their money to buy government bonds because the rate of return is not high." Blair pointed out the reason for the failure of the New York Treasury bond issuance in a very affirmative tone.
"Based on my understanding of the banks in the Midwest, the problem is huge! Even if the problem is not with the private sector but that the interest rate on government bonds is not as high as the return on blue chip stocks in the stock market, if there is a problem in one area, it will definitely spread to the entire industry, without exception." Sheffield was not completely ignorant, but he did not understand the methods of these Wall Street wolves, but he still knew what the banking institutions in the Midwest were like. In fact, these funds could only be drawn from major financial centers, because under the influence of agricultural financing, national banks in agricultural areas of the United States only held very small cash reserves, only 5% of the book funds.
With 5% of the book funds, if there is any disturbance, all these banks will be run and go bankrupt. Many banks are supported by related trust companies. If any trust company goes bankrupt, a group of banks will be crushed. The collapse of these banks will only cause more citizens to flock to other banks, and the butterfly effect will erupt.
"Can you make United Bank a giant in the financial field after this storm?" Sheffield stared into Blair's eyes and asked word by word.
"It depends on how much money I have!" Blair was stunned, but he immediately realized that his boss had decided to live out his financial tycoon addiction. This might be his only chance in his life. He changed his face so quickly that even the slave owner was shocked. He had no elegance or refinement like an elite, and promised with a ferocious face, "Boss, I will give you a huge reward."
"I'll give you 100 million!" Sheffield stood up coldly and looked down at Blair's face. "The cash will be delivered from Arlington soon. As for me, New York may exceed my risk awareness in a while. I want to go home."
The slave owner does not know who is the bear and who is the bull, but he is definitely one of the bears, and a long-term bear. Regarding the financial crisis at the beginning of the century, there are rumors that it is not serious, but he does not believe it at all. In the same year, Britain and Germany started a naval arms race? Countries began to increase their armaments?
It was only later that the war broke out in Europe that people looked at the United States and it did not seem serious. Sheffield now knows that in the past year, the San Francisco earthquake caused serious damage, and a large amount of money was invested in the reconstruction of San Francisco. Even New York, as a financial center, was once short of cash.
Although it recovered later, liquidity dropped significantly and copper prices could not be raised. The Knickerbocker Trust Investment Company increased its bet in an attempt to get out, and the New York City government failed to issue bonds and could not raise money.
Sheffield now even doubts that Standard Oil is acting like a rogue and saying that it has no money. It is questionable what the funds in the account are used for. His relationship with his brother-in-law Rockefeller Jr. is obviously a plastic relationship.
He was ready to go back home and not stay in New York under such dangerous circumstances, and give the trading position to Blair. The slave owner only knew about historical events and was sure that such an incident had occurred, but if it really happened, the specific details and observations still had to rely on real financial talents to trade.
Sheffield, who was preparing to return home, finally decided to temporarily live in Chicago, the transportation center of the entire United States. Edith Rockefeller was very happy and asked with joy, "Why do you want to go to Chicago?"
"I just want to go and take a look!" Sheffield did not say that the financial crisis was about to come and he wanted to find a city that was convenient to everywhere to make plans. It would be too weird to say it out loud. If he really made a lot of money, it would not be too late to brag about himself then.
Early that morning, Sheffield read an article in the Wall Street newspaper, the Commercial and Financial Chronicle, which said, "There is not enough money in the United States, the British Empire, or even on the European continent. In response, people are saving money all the time, new transactions are rare, and the demand for funds by the railroads seems to have declined. Therefore, as long as we are careful and there is no more panic, we should be able to survive the financial contraction this fall."
After reading this article, Sheffield immediately decided to book a ticket to leave New York, which surprised Edith Rockefeller. "There's no need to be so anxious. What happened?"
"Look?" Sheffield handed the newspaper to Edith Rockefeller, who asked puzzledly after reading it, "What's wrong?"
Sheffield narrowed his eyes in helplessness. Edith Rockefeller's advantages were the same as his, she was rich and had billions! As for her disadvantages, she was even worse than him. He was incompetent in unfamiliar industries. This woman was even worse than him.
The slave owner pointed at his nose and said, "Look at me, Edith! I said I want to promote racial equality and give equal rights to the black community. Do you believe me?"
"Stop it!" Edith Rockefeller patted Sheffield on the shoulder and chuckled, "Do you believe what you said? Isn't this an obvious lie?"
The smile suddenly stopped, and Edith Rockefeller's eyes were fixed on the content of the newspaper again. Then she heard Sheffield speak again, "Book your tickets and go to Chicago immediately. The words these Wall Street mouthpieces say are more outrageous than my support for black equality. If they say it's okay, then there must be a problem."
"I'll call right away!" Edith Rockefeller said hurriedly when she saw the slave owner's look.
After leaving Rockefeller Manor and boarding the train, Edith Rockefeller asked, "You think there will be a financial crisis, so why didn't you say anything at Rockefeller Manor?"
"Your brother has guessed it, otherwise he wouldn't have refused to pay the Justice Department. The White House has recently accused Standard Oil of being a wealth plunderer, holding a large amount of cash but not using it. John can tolerate this, which means he won't hand over the cash, at least not now." Sheffield said in a persuasive manner, "You know but there is nothing you can do about it. It's better not to know."
"How dare he lie to me? I'm his sister." Edith Rockefeller muttered to herself in disbelief when she heard this.
Sheffield grabbed Edith Rockefeller's restless little hand and said calmly, "Edith, this is very normal. In the face of an impending disaster, even the best personal relationships cannot be trusted. John did nothing wrong. Once the news leaks out, something unexpected may happen. This is the same for everyone."
Regarding Standard Oil's failure to pay the fine in a timely manner, a White House spokesman used an unprecedented tone to criticize it. The spokesman said that some large companies ignored the federal government's policies and united to create financial pressure at all costs; they abandoned our policies while enjoying the profits stained by sin.
From the perspective of a large enterprise, Sheffield concluded that this was just a scapegoat, and that the federal government might have sensed the economic instability. Even the $25 million fine imposed on Standard Oil was almost the same as the amount of public debt issued by the New York City government.
The White House spokesman's behavior of shifting the blame is just like the ancestor of a real estate businessman in the future. Good things are for the Presidential Palace, bad things are for the Federal Reserve. No one knows economics better than me. It turns out that the actual operation was first practiced by Roosevelt.
The White House and New York bankers both felt that the problem was the other's fault, and they both tried to cover it up. However, if the Standard Oil fine was really Roosevelt's attempt to kill the rich and help the poor, this operation would be a huge threat to all large companies and a precursor to a dictator.
The moment he arrived at the Chicago train station, Sheffield went directly to the Farm and Livestock Agreement and sent a telegram to Jimmy, the head of United Mines, "The negotiations are terminated. It is announced to the public that United Company officially rejects the acquisition plan of Knickerbocker Trust Investment Company."
The slave owners are now going to burst the bubble that triggered the financial crisis with their own hands.
(End of this chapter)
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