Empire of the Ring

Chapter 552: Gold Exchange (1)

Among the Kurdish immigrants, there were quite a lot of people who had worked in the militia and quit due to personal reasons.

Most of them had to give up being in the Kurdish militia group unintentionally to help their struggling families. They were classified as a reserved force to go out and fight with a gun in times of emergency even though they no longer worked for the militia.

After settling down in the royal territory, former militiamen showed great interest to Royal Guards as the safety of their family members was no longer their concern of living.

It was good news to Cho Chul-hwan, the commander of the Royal Guards, as former militia members with experience in combat were volunteering to join. He was keeping quiet because it was a little too early to ask the Kurd immigrants to join in Royal Guards and form their own special unit, but he was excited that they had come to him first.

Cho Chul-hwan cautiously mentioned about accepting Kurdish militiamen at the royal territory’s regular leadership meeting.

“Your Highness, it’s a waste of resources if we don’t use the people with combat experience. It’s a little early, but I’d like to assign them as security guards first and select the best fighters to incorporate them to Royal Guards.”

“Isn’t it too hasty to do that now?”

“But there are a few reasons to hurry. They used to be in war, so it’s difficult for them to adapt to normal life. I highly doubt that they can work as regular workers in factories. If anything, they’ll just be a distraction to other workers. And when they get soaked in a comfortable life, their fighting power will drop dramatically because their tension will naturally drop. I don’t want to lose great fighters.”

As Chul-hwan’s opinion had a point, no one in the room made an opposition.

“Okay. Then try to selectively accept them and form their own security force. Also, you’ve got to set a high standard for applicants. Don’t just accept anyone.”

“Your Highness, if there are any applicants, I’d like to confirm their qualifications. It’s unclear how many of the former militia fighters will be coming in because most of the militiamen are hard-liners who chose to stay in Syria.”

“There will be hundreds of times more migrants in the future than the Kurds who settled down here already. There will be at least 10,000 more militiamen coming in. If you can’t recruit enough former militiamen, let’s recruit young Kurdish people too.”

“Then I will make a Kurdish security force first.”

“Alright. Please target people who can speak English as much as possible.”

Although the whole Kazakhstan was a conscription system, the Kurds who just moved to Kazakhstan were excluded from it. Since they did not speak Russian, the government also saw them as unhelpful.

***

German government officials visited the Arirang royal territory.

The governments of developed countries in Europe usually did not get directly involved in helping individual companies win orders abroad. However, it was a bit of a peculiar case the German government acting with a local company trying to make it to Kazakhstan. The fact that the German government offered to help an individual company win orders was intended to create a link with Kazakhstan.

Even though it was an unofficial visit, there were strangely many high-rank officials who came to the palace. There was the vice foreign minister, the deputy finance minister and the deputy chairman of the central bank. The fact that vice-ministerial-level officials were here meant that there was a matter to be discussed in secret.

“Thank you for coming all the way to see me.”

“It’s an honor to meet you, Your Highness. Please forgive me for not taking the official procedure to meet you.”

“I don’t care if it’s official or unofficial. You’re here for a purpose, and I hope you return home with an achievement.”

“You must already know the purpose of our visit.”

Youngho could roughly guess the purpose of their visit, but he kept quiet.

Eriksson had told him that German banks were secretly collecting gold bars these days.

It was an open secret that the Kazakh royal family owned a lot of gold mines. These days, buying gold bars was getting more and more difficult, so central banks had been asking the Kazakh government to increase the sale of gold, but the government had not responded to them on the pretext of the royal family.

“As you may have guessed, the purpose of our visit is to buy gold. I contacted the Kazakh authorities, but they said that the royal family controls the gold. So, I came to see you.”

“I’m afraid I can’t give you the answer you want to hear. We can’t afford to export gold to a foreign country because we’re increasing our gold reserves.”

Youngho rejected their request first because he could guess what they would be offering him in exchange for gold.

Although gold trading was said to be active these days, the amount traded between countries was only a few dozen tons at best. The central banks of each country were bent on collecting gold to try to reach a deal of that much. It was evident that there was so much distrust in the dollar or euro, which was the key currency.

“I’ve heard that the royal family has gold in stock, and if you sell some to us, I’d like to offer some benefits in return.”

“Benefits in return?”

“Yes, our government recently found out that Kazakhstan is working hard to improve its defense capabilities. So, we’d like to offer the technology transfer of our defense industry.”

“It’s tempting to hear about Germany’s advanced defense technology.”

“Not only that, we can help build a new city. In other words, the German government is willing to offer a loan.”

“The U.S. government and the World Bank have already promised us loans.”

“Can you handle a million Kurds with that alone? It should be backed up with a construction that costs at least ten billion dollars. Spending such money could hinder your plan to strengthen Kazakhstan’s defense power.”

“You’re right, but we have enough money for that.”

“Wouldn’t it be safer if more foreign capitals can be brought in?”

Although Youngho had enough money from the former president Nazarbayev’s and his daughter’s slush funds and from gold mines’ production, it was true that it was like insurance to bring in a lot of foreign capital no matter how much money he had.

“To my knowledge, your country’s gold holdings are second only to the U.S. I’d like to hear why you’re trying so hard to buy gold.”

“It’s a policy to reduce the portion of cash in our foreign currency reserves. It doesn’t mean much.”

It was a blatantly stupid answer.

The limits of the key currency were slowly revealed and each country was scrambling to secure gold in order not to lean further against the dollar due to the U.S. protectionist trade policy. Germany’s gold reserves stood at some 3,300 tons but were no longer increasing since 2016.

This was because the number of customers looking for gold bars increased a lot, and it became more difficult to buy gold.

“Kazakhstan is also trying to reduce the portion of the dollar just like Germany. Is the situation bad enough for you to come here to get more gold?”

“Hmmm.”

When Youngho raised a question, the vice finance minister looked troubled.

He seemed to have underestimated Youngho’s knowledge of the world’s economic situation.

“There are not many gold mines in our country. We wouldn’t have to do this if we had global gold deposits like Kazakhstan. We won’t have a promising future once we spend all of our gold holdings for industrial use. That’s why I’m asking you for a favor.”

“How much do you need?”

The German ministers had already suggested benefits in return, so Youngho did not want to reject them too many times. If they could be satisfied with a reasonable amount of gold, he was willing to sell it for the sake of the friendship between the two countries.

“We need about 300 tons.”

“300 tons at once?”

“Of course not. We’d like to get it over a five-year period. Would it be possible?”

Germany would try to buy gold not only from Kazakhstan but also from other countries. It was plain to see how much gold would be secured if it did so.

“That’s worth to discuss with our government.”

“If Kazakhstan decided to sell gold to us, we’ll purchase it at 130 percent of the market price.”

130 percent of the market price seemed to be high, but because the dollar was constantly falling, it was not much of a deal. As Youngho was not satisfied, he was quiet. Then the vice foreign minister continued,

“We will transfer our technology in the defense industry that Kazakhstan wants, including our submarine technology and tank technology.”

Germany seemed to be in a hurry to get gold since German conventional submarines and tanks were the best in the world.

“What would you do with a submarine in the Caspian Sea?”

“Submarine technology is going to be necessary for both military and civilian purposes. If you secure technology for submersibles capable of operating in deep waters will help develop the Arctic Ocean.”

The bait of submersible technology sounded quite tempting to Youngho.

The Caspian Sea, let alone the Arctic Ocean, still had plenty of places to explore.

Kazakhstan had been pumping up oil, and it was yet to confirm other resources buried beneath the sea. Korea had also adopted Germany’s submarine manufacturing technology.

“As you know, we’ve already signed military technology agreements with our allies, including Sweden, Britain, and the United States.”

“Of course, U.S. and British products are also. But if our precision technology is transferred, Kazakhstan’s technological power will be multiplied.”

“This is not a one-sided decision by the royal family. It should be discussed with the government.”

“I hope to hear good news.”

“It’s a great opportunity for us to get the advanced technology from Germany, but the gold export unit price is just not what we’ve expected.”

“That’s why we’re offering defense industry technology.”

“New technology doesn’t guarantee a sudden defense strength.”

“...”

“We need a factory to produce products based on that technology. Will it be possible?”