Chapter 5

The Bear Kingdom is Now Mine Chapter 5

005 2,600% Price Inflation Forecast / Grandfather's Reaction

The eldest son, his father, and two uncles and aunts.

In the room, all the adult direct descendants were gathered, excluding the families of the grandfather's siblings.

Nikolai sat in a chair behind his parents with his siblings.

The cousins also sat cautiously behind their respective parents.

'Judging by the setup of this meeting, it seems something important will be discussed.'

Everyone appeared tense, as if this was their first time gathering like this, and they were watching Grandfather Yuri Yusupov's reactions, but Nikolai calmly looked around.

The most noticeable feature in the room, decorated with wooden interiors, was the books that filled two walls.

The books were not the thick, uniform hardcovers used for show in any wealthy household; it was clear that they were genuinely well-read.

'This means he didn't just inherit the family name to be here. If so, the true meaning of suddenly setting up this meeting is probably... '

Just as Nikolai was nodding to himself, Yuri Yusupov began to speak.

"Until now, we've only held meetings among adults, but the situation is different now. With the country undergoing rapid changes, it's necessary for you, as members of the Yusupov family, to understand how to act."

The cousins nodded cautiously.

Most of the Yusupov family members either attended or graduated from Moscow University.

Everyone in the room was a Moscow University graduate.

Except for two.

Nikolai and his older brother, Denis.

Nikolai, despite his genius, chose to attend an art school, and Denis studied abroad in the UK.

Yuri Yusupov was always proud of the educational achievements of the family members.

That's why he wanted to hear their opinions, thinking he might be missing something.

Moreover, he already had a fairly clear picture in his mind but wanted to gain more confidence in his judgment by seeking their opinions.

"So, don't feel burdened by this meeting. Let's get started, shall we?"

At this, Ivan, Nikolai's father, cleared his throat and began to speak.

"Last August's coup made it clear to those in the know that power would shift from Gorbachev to Yeltsin. But no one expected it to happen so quickly."

"It's because they swiftly took control of the administration and the military. It was as if they had been preparing for it."

"So, the government's plan to sell state-owned enterprises to the private sector is President Yeltsin's personal decision, then?"

Ivan's question was met with a nod from Yuri Yusupov.

"Isn't it the same as borrowing the power of the Western world to seize power? They had no choice but to follow their lead."

"The reforms and openness started under Secretary Gorbachev, but they were never as radical as this."

Boris Yeltsin, the first president of the Russian Federation.

He was the one who radically transformed the system from a 'centralized planned economy' to a 'capitalist market economy.'

Under the guise of 'shock therapy,' he implemented indiscriminate privatization and the sale of state assets to oligarchs.

These reforms caused numerous upheavals, pushing Russia into a decline.

'From people's bank deposits to all social safety nets, everything turned to scraps of paper, and corruption ran rampant.'

By the end of this year, the inflation rate will reach 2,600%, further devastating the Russian economy.

Amid the already chaotic situation, criminals are taking advantage of the disorder to commit organized crimes (local mafia), leading to a security situation as chaotic as in African and South American countries.

Nikolai, already aware of these facts, listened more intently to what would be said.

"As I mentioned, the government has announced its plan to privatize state-owned enterprises. We have two options to choose from."

At the mention of acquiring a company, some people's lips curled slightly, as if it were already theirs.

"Ivan, Yegor, Anton, Olga. What are your thoughts?"

The second son, Yegor, spoke first.

"Automobiles seem to be the best choice. Although the initial investment is high, the growth potential of the automobile industry is the greatest."

Next, the third son, Anton, and his daughter, Olga, shared their opinions.

"Is there any industry that doesn't require steel? I think the steel industry is a better choice."

"Father, in such times, a stable business is best. In that regard, a food company is the best option."

The opinions on acquiring a company were rather weak.

Yuri frowned at the suggestions, which seemed as casual as shopping at a supermarket.

Meanwhile, Ivan remained silent.

As the eldest son, who was always cautious, his opinion was of great interest.

"Yvan, why are you silent?"

In response to Yuri's question, Ivan slowly shared his thoughts.

"The government's plan to sell state-owned enterprises indicates that the fiscal deficit has reached an unsustainable level."

"That's true."

"If the government is trying to cover the deficit by selling state-owned enterprises to the private sector, is that really possible? It's just a temporary measure and doesn't address the fundamental issues."

"..."

"Father, this meeting might be a matter of life and death for our family. We need to be very careful in our judgment."

After Ivan's words, the third son, Anton, stepped in as if he had been waiting.

"The government's plan has already been announced. We need to choose two out of the five companies. What's the point of saying such things now?"

"Anton has a point. Being cautious is good, but we need to make a decision within a week."

The second son, Yegor, also emphasized the need to choose a company as soon as possible rather than being overly cautious.

Listening to the back-and-forth, the core issue was clear.

They had to choose two out of the five companies within a week.

Automobile company.

Energy company.

Steel company.

Construction company.

Food company.

The conversation continued for about 30 more minutes.

With no conclusion reached, wrinkles deepened on Yuri Yusupov's forehead.

Perhaps to cool down the heated atmosphere, his gaze turned to his grandchildren.

"Since you've heard everything, what are your thoughts?"

But no one spoke up first.

"Then, you start."

The first person called was the eldest son of the second uncle.

"I agree with my father. The automobile industry is a comprehensive mechanical industry, so it's best to start with the automobile company and, if possible, acquire the steel company as well."

"Are you saying that automobiles and steel are more important than energy?"

"The government's top priority is the energy sector. Even if we acquire it, I don't think we can operate it freely."

It sounded reasonable, but it wasn't much different from the opinions of the adults.

Yuri Yusupov, without much comment, turned his gaze to the next person.

"What about you?"

"Me, me?"

"Yes, you."

The eldest son of the third uncle, who had been absent-minded in such an important meeting, was startled by his grandfather's words. He swallowed hard and began to speak.

"In such chaotic times, it might be best to do nothing. No one knows how the situation will change with the new government. It's better to strengthen our existing business."

"Are you saying we should ignore the government's request?"

"Not exactly... but..."

He seemed to have no real ideas, but his response was somewhat better than the first one.

In fact, in such uncertain times, everyone is hesitant to move.

'Wait out the storm.' Staying still can be a strategy.

Yuri's gaze then turned to Nikolai's older brother, Denis.

As the eldest grandson, he was to be heard last, but his expression clearly showed a lack of confidence.

He had shown no interest in family affairs since returning from his studies in the UK.

"What do you think?"

"Grandfather, do we really have to acquire two companies?"

"..."

"I also feel uneasy, as my father does. 'In times of chaos, secure cash' is a basic principle of economics. Acquiring two companies would require a huge amount of money, and I'm not sure if it's the right choice."

"Looks like you didn't just play around while studying abroad."

While acknowledging Denis's words to some extent, Yuri's expression remained unchanged.

The opinions of his children and grandchildren clearly showed their limitations.

He was somewhat interested in the views of his eldest son, Ivan, and eldest grandson, Denis, but they were not decisive enough to determine the family's future.

The sons, who would be responsible for running the two companies, were determined to acquire them.

However, the grandchildren, who had a more detached perspective, shared some similarities with Yuri's thoughts.

But that was as far as it went.

Yuri Yusupov inwardly sighed.

'Maybe it was too early to reach a conclusion.'

He shifted his gaze.

Perhaps due to the mix of expectations and disappointments from today's discussion on company acquisitions, he wanted to change the subject.

He noticed his grandson who had recently returned from a trip to St. Petersburg after the engagement with the Romanov family was broken off.

"Did you enjoy your sightseeing in St. Petersburg?"

Although it was an abrupt change of topic, Nikolai, who had been fully focused, immediately responded.

"Yes, I visited many places."

"Indeed. There's nothing better than travel to forget unwanted memories."

A meeting that could determine his son's fate.

Ivan's expression remained unchanged, but his mother, Maria, looked worried.

She knew Yuri's resolute character better than anyone and felt her body trembling but held herself together.

Strangely, Nikolai's and the family's fates would be decided in this one meeting.

Nikolai waited for the right moment while listening to his grandfather.

"Let's hear your thoughts. Do you agree with your father?"

"I share the same view of the government, but we need to look more closely."

"More closely?"

"Yes. The government's plan to sell state-owned enterprises is due to a lack of funds, as my father said. They have been trying to increase the money supply through currency reform."

"And?"

"This means the currency value will drop, leading to inflation."

"Hmm."

Until now, he had been answering questions, but now he needed to take the lead.

Nikolai boldly turned the tables and asked his grandfather a question.

"Before I share my thoughts, I have a question for you, Grandfather."

"Go ahead."

"What will happen if we refuse the government's request and do not acquire the two companies?"

"Um... I might turn red, but I have enough influence to refuse. If we don't buy them, they can be bought by others."

Even a toothless tiger is still a predator.

"So, you used the family's power to secure the five companies first?"

"That's right."

By securing the best options, other families were likely eyeing them.

"The Romanov family might also be interested in acquiring them."

Yuri nodded silently in agreement.

Seeing this, Nikolai thought for a moment and then made a decision.

"Then, let's give them away as a gesture of goodwill."

A golden opportunity to strike a fatal blow to the Romanov family, who had broken off the engagement with his fiancée, Zhenya.

"What? Give them away?"

Yuri Yusupov and the relatives looked bewildered.

"Yes. When the time comes, we can buy not only these five companies but others at very low prices."

"On what basis?"

This was the crucial part.

Nikolai, drawing on his past studies and the current reality, explained step by step.

"A few days ago, I visited a state-owned store, and the prices of rye bread, flour, and sugar had increased by 15% compared to a month ago."

"The price liberalization policy could cause such an increase."

'Could cause such an increase?'

Does he not realize how dangerous the situation is?

There seems to be a lingering hope that things will improve.

Despite the impending explosive inflation and plummeting currency value, which will plunge Russian citizens into hell.

Or perhaps he is trying to deny the approaching danger.

Nikolai, realizing that the family could end up destitute before achieving their dreams, decided to be more proactive.

"Currency reform alone can lead to a sharp drop in currency value and inflation. We have abandoned the 'centralized planned economy' of decades and adopted a 'capitalist market economy.' We have also implemented price liberalization, as you mentioned."

"..."

"Moreover, we have abandoned the 'fixed exchange rate system' and adopted a 'floating exchange rate system.' The government has implemented all these changes rapidly, which will inevitably lead to two negative effects."

"Two negative effects?"

"The first, as I mentioned, is a sharp drop in currency value, and the second is inflation. These are interconnected, so one will trigger the other. Therefore, the current 15% increase is not just 15%."

"Given the changes in the country, some negative effects are to be expected."

While others might have anticipated some negative effects, as Yuri suggested, the extent of the impact could be vastly different.

"It could reach several thousand percent, not just a certain level."

"!"

"It's not an exaggeration."

Just because someone is from a prominent business family doesn't mean they understand the economy thoroughly.

Yuri Yusupov and his family, like ordinary people, are experiencing these sudden changes for the first time.

The Yusupov family, being large, has been slow to adapt to the changes.

"The collapse of a massive dam is due to a small hole, and a major earthquake is preceded by numerous warning signs. This is the moment."

Hearing this, the second son, Yegor, chuckled and spoke up.

"Very convincing. It seems our Nikolai has studied economics while drawing. But reality is different from books. Do you think others don't know what you know?"

"You're still young. You don't understand how the world works. What does a kid who only draws know? Just be reasonable."

While the third son, Anton, scolded him, the second son, Yegor, who mocked him indirectly, was more annoying.

"Then, should we follow your earlier suggestion and buy the steel and automobile companies? If the family suffers significant losses due to the factors you mentioned, will you take responsibility?"

Here, taking responsibility means stepping down completely.

The youngest aunt, hearing Nikolai's words, bit her lip to suppress a laugh.

However, the faces of the two men visibly distorted.

Just as the second son, Yegor, was about to say something, his eyes wide, Yuri asked first.

"What do you suggest?"

"Right now, we should convert all our cash into dollars or gold. We should borrow as much as possible and convert that into dollars or gold as well."

"!"

"Eventually, the principal and interest on the loans will be negligible. The companies we are giving up will reappear on the market at rock-bottom prices when the time is right, and we can buy them then."

After finishing his speech, the room was so quiet that the sound of swallowing could be heard.

After a moment of contemplation, Yuri Yusupov slowly spoke.

"You can all leave now."

He meant for the grandchildren to leave, leaving only the adults.

If they made a different decision despite such a clear opinion, it would mean the Yusupov family's luck had run out.

Nikolai, having said his piece, left the room with a sense of relief.

The decision was now in his grandfather's hands.

* * *

The room was left with Yuri Yusupov and his children.

While they had anticipated some negative effects due to the rapid changes, as Nikolai suggested, his predictions far exceeded their expectations.

With a stern expression, Yuri looked at his children and made a decision.

"Follow Nikolai's advice."

"Father! How can you make such an important decision based on a grandchild's words?"

"We can't give up everything. Missing this opportunity will significantly set our family back."

Despite the strong objections from the second and third sons, Yuri Yusupov did not change his mind.

"Convert all our funds into dollars and gold. Now is not the time to expand."

"Father!"

"Father!"

While the second and third sons protested, Nikolai's parents looked as if they couldn't believe Yuri Yusupov's decision.

"Pathetic. Blinded by greed. Tsk. How can you lack the foresight of a mere artist like Nikolai? Start immediately!"

In the Yusupov family, Yuri's word is law.

With the order given, the subordinates had no choice but to follow.

* * *

The two brothers were talking in the garden as they bid farewell to the last guest.

"Isn't it a bit much to pour all our funds into this?"

"What are you trying to say?"

"We need to set aside some funds for company operations. It seems too risky to invest most of our funds. Father seems to have taken Nikolai's words too seriously..."

"Would Father give such an order without considering that?"

The second son, Yegor, asked in a subtle tone, as if scolding the third son, Anton.

"Will you follow Father's orders?"

"What if I don't?"

"Ha. What should I do? I can't go against Father's orders, but I don't like following Nikolai's advice. Tsk, Father is getting old, how could he be persuaded by a grandchild?"

"Do as you please. If you can handle the consequences."

Despite the warning from his older brother, Yegor, Anton did not hide his dissatisfaction.

He looked at the back of his eldest brother, Ivan, and his family as they crossed the garden toward the gate.

Nikolai's advice was given, but whether to take it seriously or not was up to the individual.

Someone might make a fatal mistake by going against Yuri Yusupov's orders, just as the Romanov family decided to break off the engagement with Zhenya.