Director Oh, who had been buried under a crushing workload, barely fought off his heavy eyelids as he picked up the internal phone.
“Team Leader Lee, come to my office.”
These were suffocating days.
As tariff threats from the United States continued, various administrative ministries had been clamoring at him day after day to predict the future. But even if he was the head of a pension fund’s risk team, how was he supposed to know the future?
If the tariffs became reality, the blow to Korean companies’ exports to the U.S. would be enormous. But if they handed over the 550 billion in U.S. investment funds wholesale, it was also certain that Korea would suffer an IMF-level crisis.
At least the Korean government, trying to appease America, had brought out the card of opening the agricultural market. He could only hope Donald would be satisfied with that and lower the tariff to 15%.
“You called for me, Director?”
When I opened the door and stepped in, Director Oh’s sharp glare greeted me first.
“You’re looking well, Team Leader Lee?”
“Yes... well. The stock market’s unprecedented, after all. Our recent domestic and overseas investment returns are close to 30%. I’m wondering if we’ll ever see another boom like this.”
“Glad to hear you’re having such a grand time. But what am I supposed to do? I’m dying because of you.”
“...”
“What the hell happened when you went to the Ministry of Economy and Finance? Tell me everything. Don’t leave anything out.”
I spoke in an aggrieved voice.
“Nothing happened.”
“Then why did the head of the Tax Office at the Ministry call me in a voice like he was about to explode?”
“...That man is the strange one.”
“What?”
“They say the National Assembly is going to pass two supplementary budgets. And yet the Tax Office isn’t thinking of collecting taxes, they’re saying they’ll roll it over with more government bonds again, aren’t they? So I strongly opposed it and came back. As you know, Director, in the current market, the opportunity cost of government bonds is far too high.”
Director Oh rubbed his temples.
“...If the pension fund doesn’t buy government bonds, who will?”
“With all due respect, I want to change that structure now.”
“What?”
“In a market like this, government bonds are practically interest-free. Because we keep lending them money like that, I think the Ministry treats us like a piggy bank.”
“Team Leader Lee?”
“But we can’t keep taking it anymore. If we absolutely must buy bonds, I’ll buy U.S. Treasuries, which pay twice the interest of Korean government bonds. If it doesn’t have to be bonds and other safe assets are acceptable, I’ll buy gold.”
The price of gold, which had recently begun skyrocketing again, had become my firm backing.
At present, the pension fund’s gold-related portfolio amounted to roughly 30 trillion won. Most investment teams were posting tremendous results thanks to the unprecedented stock market boom, but even if all those results were combined, they still couldn’t catch up to the gold I had bought three years ago.
Gold prices had surged roughly 300% compared to back then.
If the pension fund had still not invested in commodities, it might have lost at least tens of trillions of won. To us, failing to earn money we could have earned was a loss as well.
“Are you going to keep talking nonsense?”
“Director...”
“I know full well you have another goal, so just say it directly. What is it? Why are you suddenly picking a fight over government bond yields?”
“...I’m not picking a fight. The Ministry keeps treating us like a piggy—”
“You little—!”
In the end, I had no choice but to tell the truth.
“I think the Ministry keeps demanding one-sided sacrifices from us.”
“What?”
“The steel market... Its market share has already collapsed because of dumping from China, and now this U.S. tariff has driven the final nail in the coffin.”
“You idiot, how is the Ministry supposed to solve that? That’s why I told you. No matter how I look at it, there doesn’t seem to be any hope in domestic steel.”
“That’s why I’m going to force a showdown.”
“A what?”
“The Ministry’s attitude isn’t consistent. They know what will happen if domestic steel disappears, so they tell the pension fund to increase its holdings, but when it comes to help at the national level, they say they won’t provide any.”
“You little bastard, don’t tell me—”
“Yes. I’m going to either sell it all off completely or draw out government-level assistance. If the Ministry comes up with countermeasures at the national level, we can increase our stake in the steel industry even further.”
Director Oh lowered his head with a grave expression.
“What exactly do you mean by national-level assistance?”
“What’s scarier than U.S. tariffs is dumping. Of course, if we approach it with tariffs, the Chinese authorities will impose retaliatory tariffs, so we need to go with a subsidy strategy as well.”
Director Oh sighed and turned on the TV.
The news that immediately appeared was reporting on today’s siege of Sejong City.
“Team Leader Lee, do you see this? They said they’d open the rice market and drastically reduce agricultural subsidies, and today’s rally drew 400,000 people. The Blue House’s approval rating has plummeted to 35%. If the ruling party didn’t have 190 seats, the president would have been impeached long ago.”
“...”
“They’re cutting agricultural subsidies, so how are they supposed to provide steel subsidies? Ask for something realistic!”
“...We still have to do it.”
“What?”
“Can the Gyeongbu Expressway and prime farmland coexist? If you lay down a road, you have to give up farming. If you want to farm, you have to give up the road.”
It was a difficult problem.
Whatever the case, in national management, moments inevitably came when choices had to be made. Both sides had their own rational reasons, so it was difficult to find an answer through dialogue and compromise alone. Of course, if farmland had been chosen over roads, perhaps Korea might have grown into an agricultural powerhouse.
“Even if rice is too much, we have to save steel. Given Korea’s geopolitical structure, that’s more efficient.”
But unfortunately, in the memories of the future I knew, there was no Republic of Korea as an agricultural powerhouse. Nor did any special situation unfold where global crop yields suddenly collapsed and the whole country struggled with famine. The thing that always caused trouble in the commodities market was oil, while food commodities were always relatively stable by comparison.
Of course, the fear of famine, etched into Homo sapiens DNA over hundreds of thousands of years, would not be easy to shake off, but if we wanted to grow, we had to overcome that fear.
“...Director, we have to do it!”
When I spoke passionately, Director Oh shook his head as if he were fed up.
“So what are you going to do? Boycott government bonds until the Ministry creates an anti-dumping team?”
“Yes.”
“Yes, my foot! If Korea’s credit rating drops because of that, are you going to take responsibility?”
“That’s the Ministry’s responsibility.”
“...What?”
“They’re the ones in a hurry, and time is on our side. If we don’t buy government bonds, the Tax Office will have to collect more taxes. Who do you think will give up their stubbornness first?”
I recalled the face of the Tax Office Director, who looked like a snake.
We had exchanged only a few words, but he was not that stupid. His brains seemed to be naturally suited to bad things, but at the very least, he was capable of grasping reality.
“Haa...”
I spoke to Director Oh, who was sighing.
“Director, if the Ministry provides a national response instead, I’ll increase our investment in the domestic steel industry. It’s worth trying.”
*
“A pup that doesn’t know to fear the tiger. Tsk, tsk.”
Lee Seongjun, Director of the Tax Office, set down the official document with a rotten smile.
It had been a bland fight. The moment he made one phone call to the man’s superior, the pension fund immediately sent over a document of surrender.
They would cooperate fully with every government bond issuance by the Ministry of Economy and Finance.
“Manager Choi, did you make the call?”
“Yes. I spoke directly with their head of risk.”
“What did he say?”
“They said they’ll purchase more shares in the domestic steel industry within this week. The shares they’ve already purchased have already appeared in the stock disclosure.”
Lee Seongjun clicked his tongue.
“See? They can do it. There’s always a way, isn’t there?”
“Exactly.”
“How is the Ministry supposed to directly support the domestic steel industry? If the pension fund increases its stake and defends the stock price, that naturally becomes support. This is the proper way to provide national support.”
“As it happens, I demanded an apology from their division head regarding this matter.”
Director Lee smiled faintly.
“An apology too?”
“Yes. I demanded disciplinary action against the bastard who acted recklessly in front of you, Director.”
“You didn’t have to go that far. Haha.”
“If he couldn’t manage his subordinate, he deserves to be scolded. They’ve already been whining a lot lately because there have been so many bond issuances, so I took the opportunity to say a word.”
Lee Seongjun smiled with satisfaction.
“Well, if you’ve already got the rice cakes, might as well hold the ritual. So what did he say?”
“I gave him a thorough dressing-down, so someone from their side should be calling to apologize soon. If they don’t show a sincere attitude, I intend to inform the Blue House that this problem occurred.”
“Manager Choi, you really do know how to get work done. Still, don’t push them too hard. They’re our precious piggy banks.”
“Yes, yes. I’ll adjust the intensity properly.”
Issuing bonds was ultimately the government’s decision. If the ruling party heard that such an incident had taken place, they would give them a severe scolding.
“By the way, is steel really doing that badly these days?”
“Ah, yes. Separate from this issue, it’s true that the industry is struggling.”
“How bad is it?”
“They say the stock price has been cut in half despite the pension fund increasing its stake about eightfold. Asan Steel has already implemented voluntary retirement, as far as I know.”
“Is it because of the U.S. tariffs?”
“They say the damage is greater from dumping out of China than from that. Their low-price offensive is so fierce that even domestic companies have begun using Chinese steel.”
Lee Seongjun snorted.
“Then it’s not like the Ministry throwing them a few coins would make any difference, is it?”
“Of course not. Even from a long-term perspective, steel doesn’t have a bright outlook. It seems the pension fund asked us for help because they didn’t want to be the only ones losing money, so they tried to drag us down with them.”
“Impudent bastard. Tsk, tsk. I’ve changed my mind, Manager Choi. Teach that young punk a proper lesson.”
Lee Seongjun ground his teeth. The by-election was coming soon. Should he make his first task after pinning on the gold badge putting the pension fund in its place?
There was also the method of harassing him relentlessly until that one man was driven out. Once he grasped power, there would be more than enough ways to teach him a lesson.
-D-Director!
But his pleasant imagination did not last long. It was because his secretary had burst in as if the place were on fire.
“What is it? Why are you making such a fuss?”
-W-We have a serious problem. The government bonds for individual investors issued last week were undersubscribed.
Lee Seongjun shot to his feet.
“W-What?”
-They didn’t even fill 50%...
“No, why? We even gave those an extra 0.5% in interest. There’s no way they should be undersubscribed!”
-Well, sir... the pension fund has started selling KEPCO bonds.
Lee Seongjun’s face went cold and stiff.
KEPCO bonds had an issuance volume in the 80 trillion won range, and in effect, they were the ones responsible for the benchmark interest rate in Korea’s bond market.
-KEPCO bonds are about 1 percentage point higher than government bonds, and demand is all rushing over there right now. Not only that, but we understand that the pension fund is selling off the majority of its public bonds...
Lee Seongjun was a smart man. He quickly grasped what this meant.
“Manager Choi... call the pension fund right now! Right now!”