Chapter 9: Lock-In

The Hunter family's strategic moves were vast and diverse in terms of funding sources. But their main sources were still desert tycoons and banks. Back then, those desert tycoons were very arrogant. The term "acting high and mighty" was sufficient to describe any situation. These guys equated national strength with wealth. Using oil as a weapon is really not a good idea. It was still a bipolar world then. The two major powers didn't lack oil. Using oil as a weapon was laughable. Why did the USA plant a nail in the desert region? The world is big; just swapping locations should be fine. This was actually part of their global strategy. Such an important oil-producing area couldn't be directly taken, but some level of control was necessary. The USA was quite fragile then, and economic transformation wasn't easy. Ignoring outdated industrial output was one thing, but how to solve the massive unemployment problem? These were all issues that needed addressing. The Long Island villa was naturally not as good as White Farmstead; after all, it was just a temporary stopover. Luckily, William White didn't mind, given his age, burgers and soda should still be his favorite. In fact, he still ate burgers, but these were so high-end, they didn't even taste like burgers. The school's burgers were worse than McDonald's, but he couldn't forget them. One had to admit, some people just had peculiar tastes. After lunch, Fulton served him a glass of red wine and a plate of cheese, all homemade. The quality, of course, was top-notch. Texas red wine was very rich, much like the Texan personality. Pairing it with cheese wasn't really suitable; this wine was better for Texan hearty dishes. Bordeaux wine was more fitting for cheese. But as vineyard owners, it was usual for them not to drink other brands. And when entertaining guests, it's even less likely. No matter how poor the wine, it was still a source of pride. Besides, their wine wasn't bad; it was quite famous in Texas. His father had been trying to expand the brand for years. But unfortunately, no matter how hard he tried, White Vineyard remained a regional brand. Outside of Texas, few people recognized it. To be honest, wine was just a beverage. Not just in Texas, even in Bordeaux some brands were only popular in small cities. How many wine brands were there in Bordeaux? Probably only industry insiders could figure that out. "Fulton, inform them to lock in." "Young Master, we're not doing short-term trades anymore?" "When gold was $35 an ounce, silver was under $2. Now, with gold possibly going over $400 an ounce, what's the fair price for silver?" "Well, if the ratio between silver and gold remains unchanged, it should be around $20." "You see, there's still a big upside. Why should I care about short-term profits? Besides, frequent trades can alert our opponents." "Understood, Young Master. Do we need to increase our positions?" "No, our funds are limited now. Much of the money we have can't be used." "Got it, Young Master. I will notify them immediately." Short-term trading funds wouldn't stay overnight, especially in metal futures, because of too many uncertainties. When the U.S. trading window closed, London was still trading. If any unexpected event occurred, you would have no tears left to cry. William White's action of locking in once again led the Hunter family to misjudge. Holding positions overnight wasn't entirely unusual. Usually, those who did so were either silver mine owners or companies needing large amounts of silver. This kind of lock-in was typically for small amounts and mainly for risk hedging, not profit. Silver was an important industrial material, with many factories in actual need of it. If silver prices fluctuated abnormally, they could suffer losses. In such cases, paying a bit to lock in current prices was their only risk-avoidance method. This was actually the original intention of futures markets. Like stock futures, buying up is not much of an issue -- the worst is losing money. But short-selling has higher risks; failing to return what you borrowed could land you in jail. It's the same with short-selling stocks. If you don't have silver in hand, you need to borrow it. If you can't return it, you face legal action. Currently, most silver physical holdings were with the Hunter family. Therefore, short-selling was very weak because they didn't have silver. And naked short-selling carried significant legal risks. So, a bizarre scene appeared in the market. Like gold, silver was climbing, but almost in a continuous upward spiral with no substantial pullbacks. Americans weren't unfamiliar with this. A few years ago, soybean futures were similar, with the Hunter family at the helm. The futures market was fully rigged then until the government intervened. The Hunter family made nearly $200 million in profits on the surface. Such blatant market manipulation without any penalties was indeed baffling. In their view, since they succeeded once, doing it again was no problem, since someone would cover it in the end. The futures market was smaller than the stock market. With the Hunter family back, everyone decided to get rich together. With speculative funds continuously entering, silver prices were further pushed up to the $5.8 range. What? Not much of a rise? Let's not kid around. The leverage was already close to 30 times. If you invested $5 million and silver prices rose by 10%, you'd make over $10 million. Even with lesser gains now, profits were still notable. Although the situation wasn't rock-solid, it was manageable. If this scenario unraveled, the futures market would be in chaos. Saying William White wasn't nervous was impossible. He had already invested more than $3 million, family assets, in fact, their last shot. If they couldn't turn it around this time, they'd need other solutions. Fulton was a bit excited, with a paper profit exceeding $1 million in just a few days. According to the Young Master, silver could hit $20. Although that's what the Young Master said, Fulton didn't quite see it that way. Taking profits early was the key. Even if it hit $8, it would be extraordinary. Since the discovery of the New World, the silver-to-gold ratio had been declining. Initially, it was around 1:10, later dropping to about 1:40. During World War II, with a large outflow of gold, Roosevelt launched the silver plan, tying silver directly to the U.S. dollar for a considerable period. The Hunter family's intentions were clear -- to establish a silver empire. If executed well, they could even replace the Seven Families. ***** https://www.patreon.com/Sayonara816.