Becoming a Russian Oligarch After Rebirth
Chapter 1349 - 1074: Making Everyone Rich Together_2

Chapter 1349: Chapter 1074: Making Everyone Rich Together_2

However, A Bu was still quite cautious. He frowned and asked, "Misha, although I have no doubts about your keen Investment acuity, the idea that the United States might experience a major economic crisis... I just find it unlikely. My Investment advisor has been urging me to allocate more capital to the United States, and all the various reports and materials he’s presented prove that the American economy has been flourishing for years, with the trend set to continue for many more. Look at the US stock market and the real estate market—they’re both rising."

Indeed, this Investment wasn’t about playing small, but about making a big splash.

It’s possible that everyone present might have to fork out tens of billions, or even hundreds of billions of US dollars!

If all that money were to go down the drain, even someone as wealthy as A Bu would find it a bit too much to bear...

Apart from Yelena, he surely was the poorest one of those present!

Even Yelena herself controlled an Industrial fund worth hundreds of billions of US dollars, with far more capital at her disposal than him...

Therefore, he had to be cautious and ask for clarification before deciding how much to invest.

Wang Ye had anticipated this and did not expect everyone to just hand over tens of billions or hundreds of billions of dollars after a few words. After all, no matter how much they trusted him, with such a massive Investment at stake, they had to be careful.

With a light smile, Wang Ye picked up his glass of water, took a sip to moisten his throat, and began to explain in detail the background and reasons for this Investment to the few people present.

"As everyone knows, the United States is very wealthy, with every family owning big houses and several cars, and waste is a serious issue.

The main reason for this phenomenon is that the American people have a strong propensity to consume, with almost everyone having the habit of spending beyond their means, using credit cards and loans as a matter of course.

Of course, the government of the United States is the same; their National debt is remarkably high, ha ha."

Everyone nodded in agreement; over the past two or three decades, the United States had been far ahead, with a quality of life far surpassing most other countries, and even residents in other developed countries like England, France, Germany, and Japan couldn’t compare to Americans.

Could it be that Americans created wealth far beyond what people in other developed countries did?

No!

To put it simply, consumerism is rampant; they are spending money that belongs to the future.

It’s often said, "An ordinary American can’t come up with four hundred US dollars in savings." Although this statement is somewhat exaggerated, it’s not far from the truth.

In fact, it could be said that many ordinary Americans not only can’t come up with four hundred dollars in savings but may also be saddled with tens or even hundreds of thousands of dollars in loans...

Big houses are bought with loans, cars are bought with loans, and even home appliances, furniture, and smartphones are also bought with loans.

It’s just that for the past few decades, the American economy had been continuously and prosperously developing, and the unemployment rate has been very low, so everyone’s expected income was stable, which is why such spending habits could be sustained.

But what if there were changes to the economic environment...

...

Wang Ye continued, "Recently, I’ve observed a phenomenon, namely the increasing number of defaults on Subprime loans in the American financial market. Right, everyone knows what Subprime loans mean, right?"

Khodorkovsky and the others all nodded, indicating their understanding.

Subprime loans are essentially a type of real estate loan. Americans all want to live in big houses, but even in a wealthy country, there’s always a lower-income group, right? This low-income group also desires to live in such Big Houses, but they can neither pay upfront nor afford traditional loans, so what can they do?

Originally, according to the bank’s standards, these customers with poor credit were not eligible for loans.

But how could they bear to refuse the masses’ yearning for a better life? That would be too undemocratic, too unfree!

So, the smart Wall Street Elite came up with the novel idea of "Subprime loans."

These are loans taken out by the lower-income group for their houses. Because these loans carry higher risks, the interest charged is naturally higher than that of standard loans, which seems reasonable.

Subsequently, Subprime loans became a high-risk, high-return business.

Many banks and Financial institutions got involved, and just the business of these loans amounted to hundreds of billions of dollars in scale, to say nothing of the massive derived businesses.

Wang Ye continued,

"I believe this economic crisis is caused by subprime lending.

There are four parties involved in subprime lending: the borrower, the lending institution, the investment bank, and the insurance company.

Sometimes I can’t help but marvel at the sophistication of the finance industry in the United States, they’ve nearly perfected it, as can be seen with subprime lending.

But it is a double-edged sword. When the economy is stable and growing, everyone can make money with a smile, but once there is an economic issue,

for example, if housing prices stop rising, if loan interest rates go up, if unemployment increases, what consequences will that cause?"

Thinking back to what Wang Ye had just mentioned about the "frequent defaults on subprime loans," Yelena blurted out, "Residents default, and lending institutions, banks, as well as insurance companies fall into crisis!"

Wang Ye nodded, "Indeed, this is just the beginning. I predict that after a while, a large number of American-funded banks will go bankrupt, inevitably causing a financial tsunami that will sweep across the United States and the whole world!"

Everyone shivered, not from the cold—if what Wang Ye predicted came true, the consequences would be unimaginable...

But as Wang Ye said, a crisis is both a danger and an opportunity!

Since we can foresee the trend in advance, it’s very easy to make a big fortune by entering the American financial market early. No wonder Wang Ye is confident that this money can double in two years!

Just shorting the US stock index or bank stocks would make a huge profit, not to mention shorting subprime bonds and other derivatives.

And while the amount of money is staggering, in the vast American financial market, it’s just a drop in the bucket, unlikely to draw too much attention.

"Okay, I trust your judgment, Misha. Tell me, how much money do we need to put in, and how will the profits be distributed?" Constantin said straightforwardly.

After all, clear accounts make for good friends. Although everyone has a good relationship, especially him—after all, Wang Ye is his granddaughter’s husband.

But it’s better to agree on the rules in advance to avoid disputes later on.

The others nodded as well, in agreement.

Wang Ye smiled and said, "I will establish an offshore company abroad and register a hedge fund. To make everyone more comfortable with investing, and of course to reassure those royal families in Europe as well, I will guarantee the investments for this venture!

That is to say, I can guarantee a minimum return of 50% on everyone’s investments. If it falls below this number, I will make up the difference."

Khodorkovsky’s brow furrowed because this meant Wang Ye was taking on a huge risk!

Before he could say anything, Wang Ye immediately added, "Since I’m taking on the biggest risk, I should obviously receive the corresponding profit.

So, if the profit from this investment exceeds 100%, I’ll take half first, and then the rest will be distributed based on everyone’s share of investment!"

Khodorkovsky couldn’t help but chuckle upon hearing this—it turns out this kid wasn’t just being charitable after all; he had been waiting for his chance.

However, it was reasonable. Although Wang Ye had confidently convinced everyone that the United States would experience a significant financial crisis, they were actually not entirely convinced.

It was only because of Wang Ye’s track record of "unbeaten battles" and the astonishing returns from Polar Bear Investment that they were willing to join Wang Ye in this venture.

But now that Wang Ye had directly guaranteed the risk, promising at least a 50% return for everyone, there was no reason to hesitate—they had to invest!

Wang Ye was taking on the greatest risk, so it was only natural to demand a larger share of the profits.

And after all, it was only after the profits exceeded 100% that he would take half—it was fair and reasonable...