Gold

by Darrell Delamaide

  “Makes sense,” he said. Sense? The currency markets hadn’t been shut down since the early 1970s, when traders failed to keep up with the new phenomenon of floating exchange rates. He felt a brief flash of fear. Were the authorities going to be able to handle this market?

  With a bound, he was at his phone, putting through a call to Chicago. “Bob,” he said to Bob Johnson, his counterpart at U.S. Commodities News in Chicago, “I got a rumor here the Fed may shut down currency markets this afternoon.”

  “We’ll get on it.”

  The Fed had been on an unsteady course since Peter Wagner had been forced out by the administration two years earlier. Wagner, a colossus intellectually and physically, had held a firm hand on the markets in the first half of the decade. His successor, Hugh Roberts, was widely perceived as being under the sway of whichever administration authority had the upper hand in the constant debate over economic policy. But it was the Federal Reserve Bank of New York, still under Wagner appointee Mark Halden, that would have the decisive say on currency markets. Drew had met Halden at a couple of European conferences, but there would be no chance of getting through to him now. Better to let Chicago handle it.

  “Any more on this rumor?” Drew asked.

  “Seems pretty widespread,” Bart said over his shoulder as he punched out another number on the phone.

  Maybe the Bank of England was calling around to the big British clearing banks to calm the market. Geoffrey Butchard at the Norfolk didn’t pay attention to just any rumor.

  “Better lead with it,” Drew said, getting a nod from Bart as he listened to the phone.

  Bart swiveled around to face his screen and began typing on the keyboard, keeping the phone receiver cradled on his shoulder.

  “Fed has called a press conference,” said Tom, who was keeping at it like the pro he was.

  “Want me to spell you?” Drew offered. Tom had been in the slot more than two hours without a break, which meant as many as one hundred fifty decisions on news items.

  “No, I’m all right.”

  In the movies, now would be the time the editor sent the copy boy out for coffee and sandwiches. But copy boys had long since disappeared from newsrooms, along with keypunchers, proofreaders, and news assistants. Through the miracle of computers, journalists had taken over all these functions. In his cynical moments, Drew sometimes wondered how much longer journalists themselves would be in the newsroom.

  Bart had found someone to confirm that the Bank of England was telling people to take it easy. It went into the second take; the first was already out.

  “This is getting big,” Tom said. Drew grunted, and Tom and Bart giggled. “I mean really big,” Tom went on. “Looks like they might shut down the Big Board. Forty million shares in the past hour.” Drew remembered the time, little more than a decade ago, when forty million was a record for the day. “The Dow’s up, but trading is very erratic and mixed,” Tom summarized, from the reports flashing across his screen.

  Margin calls, Drew realized. As the price of gold went up, a lot of buyers on margin had to put in more cash. They effectively borrowed on top of a small down payment in cash to meet the full price of their holdings. But that down payment was a percentage of the price, so as the price went up, the amount of the down payment went up too, and the investors had to pay in more cash. To get the cash, they were probably moving money out of stocks.

  “Margin calls,” confirmed Tom, reading from the screen. It was just after 1 p.m. in New York, and the hastily summoned press conference was convening at the New York Fed. “Bronson and Cotts are with Halden,” called out Tom, punching furiously at the keyboard. The presidents of the New York Stock Exchange and the New York Commodities Exchange were with the New York Fed chief for the meeting with the press. That could only mean one thing: they were going to close all the markets. Drew couldn’t whistle too well, so what emerged was more like “whooey.” He had never seen that before.

  U.S. Authorities Close

  Financial Markets

  The headline flashed across the screen. Drew, standing again behind Tom, let him do the obvious codes: ALL, FLA. He felt certain all their European customers were still in their offices this evening.

  New York (USCN)—U.S. authorities announced that all major financial markets in the country are suspending operations immediately because of “disturbances in the gold market.”

  The announcement was made by Mark Halden, president of the Federal Reserve Bank of New York, Harold Bronson, president of the New York Stock Exchange, and John Cotts, president of the Commodities Exchange. They said the suspension extended to all major stock and commodities exchanges in the country.

  —More—

  Drew was at terminal 3. He wondered if Corrello had expected this much shit to hit the fan. The second take came up on his screen.

  U.S. Financial Markets -2-

  Halden said the Group of Ten central banks had agreed to suspend all currency trading pending a meeting tomorrow at the Bank for International Settlements in Basel, Switzerland.

  The U.S. markets affected are the New York Stock Exchange, the American Stock Exchange, the Philadelphia Stock Exchange, the Pacific Stock Exchange, the National Association of Securities Dealers over-the-counter market, the New York Commodities Exchange, the Mercantile Exchange, the Chicago Board of Trade, the International Monetary Market, and most other stock and commodities exchanges.

  —More—

  Drew switched the story back to Tom and dashed for his buzzing phone. “That’s right, Meg, it’s all yours,” he told the Geneva correspondent on the phone. She would be on the doorstep of the BIS at eight o’clock the next morning to cover the central bankers’ meeting in Basel.

  Halden said the suspension was only to give the market some “breathing space” to assess the impact of developments in South Africa. Markets would be reopened in a day or two, once the authorities had reestablished “an orderly trading environment.”

  Drew had felt a tingling at the back of his neck since the headline first came onto the screen. This must be what it’s like in a nuclear power plant when a meltdown starts, he thought. Had they shut down the reactor in time?

  “Tokyo’s declaring a bank holiday,” Tom called out, routing the story to Bart.

  Something was nagging in the back of Drew’s mind. He went into the office and rang MacLean’s number. It was nearly 7 p.m. No answer. Where in the hell was MacLean?

  TWO

  MacLean sat quietly at gate A-22 in Heathrow, waiting to board flight SR303 to Geneva. It was an effort of will for him not to fidget, but fear was stronger than nervousness.

  He had not expected success on such a grand scale. For years he had waited for an opportunity like this one. He had nurtured his clandestine contact to Fürglin, both of them feeling a certain exasperation in their mutual loathing. But they were patient in their greed, awaiting the right opportunity.

  There was an expectant buzz in the waiting room as the attendant escorted an elderly lady through the gate to board first. MacLean kept his seat and held his green boarding card ready. A small smile momentarily lit his face. He had bought an economy class ticket so as not to draw any attention to himself. But he could have afforded first class and would be able to afford first class from now on. Two and a half million dollars gave him more than enough to smile about! The figure danced in his head. Too small to merit much attention in a WCN news story, it was a fortune that would sustain him in style in Rio.

  MacLean watched calmly, steeling his will, as waiting passengers rose to cluster at the gate. Swissair was boarding the smoking section first, rows 17 to 28. He was in row 8. He waited, a short middle-aged man with a growing tonsure on top of his head and a mustache punctuating his spare, meager face. His beige trenchcoat was worn, and his flannel shirt and woollen tie looked quaint. His suspenders, hidden under his jacket and coat, were even quainter.

  He had his revenge now. The wait had been long, but the satisfaction he felt was worth it.
They had made him suffer for his beliefs, his convictions, and now it was their turn to suffer. He had learned. The bitterness of many years welled up and furrowed his brow.

  MacLean rose with the others and let himself be jostled along by the crowd. Fools, MacLean thought, looking at the group of preoccupied businessmen around him, holding their attaché cases and duty-free sacks as they thrust forward in the throng. The seats were assigned but still they pushed ahead. No discipline, no patience; they were all fools. He had beaten them. Their world revolved around money, and now he had more money than any of them. Or would have it shortly.

  He took back his boarding pass from the stewardess and walked down the ramp to the plane. Tomorrow he would go to the address in Geneva that Fürglin had given him and pick up the money. Then he would fly to Rio via Milan, to further hide his tracks.

  He had called Fürglin from the pay phone two blocks from the office. The Swiss had listened quietly and said nothing for a full minute. “This is it, then.” It was half an assertion, half a question. They had planned it too long for there to be any misunderstanding. Fürglin hung up, and MacLean went to his flat to pack a small suitcase. He didn’t have much to take—or to leave behind.

  He sat in 8-D, on the aisle, not even removing his coat, after putting his bag in the overhead luggage rack. The newspapers of course had nothing yet. Most of these pompous asses probably didn’t even know what was going on, MacLean thought, snorting in spite of himself.

  The plan with Fürglin had grown slowly. MacLean had met the Swiss trader at one of the rare press receptions the journalist had attended. Usually he avoided such affairs; he hated to stand there, cocktail in hand, watching those wolves in pinstripes slinking around, on the make. His flannel shirt and brown sport coat made him stand out amid the blue and gray of business suits. Nor did he have that sleek, manicured look of expensive haircuts and health club fitness. Most of the hungry-eyed crowd sidestepped him, as they would dog droppings on the pavement.

  Not Fürglin. Falstaffian in his dimensions, the trader had approached him with a big smile that had only a trace of condescension in it. He had spoken to him as an equal, registering no surprise when MacLean disclosed he was a journalist. Fürglin was, in fact, very interested in MacLean’s work. A couple of weeks later, Fürglin invited him to lunch. He wanted to maintain contact, perhaps exchange tips from time to time. MacLean realized that Fürglin had a design in all this, a design that dovetailed nicely with his own half-formed notions of revenge.

  The stewardess came by checking seat belts. She smiled at MacLean when he looked up, but the Canadian was lost in his thoughts and didn’t respond.

  They had hounded him out of Canada, the capitalists. A trade union activist, he was branded as an agitator; there was hardly a worse evil in their narrow nineteenth-century minds. First there had been the intolerable harassment at work, then the punctured tires and broken windows, and then the near-accident. His efforts had met with indifference among the soft, spoiled university graduates in the newsroom. They saw him as the anachronism, even though they were the ones caught up in this primitive system of exploitation.

  The sudden thrust of acceleration interrupted his bitter reverie. He peered past his neighbor to see the receding airport lights below as the 737 climbed. The bell chimed, liberating smokers from their uncustomary restraint.

  Fürglin and he had met regularly over the years, in an out-of-the-way Italian restaurant off Moorgate. Their talk had been veiled at first, but then increasingly open. MacLean learned more about how markets function, and Fürglin learned how and where WCN got its news. They refined their plot, sketched scenarios, outlined the opportunities. It was no small killing they wanted. They wanted a major market move, and Fürglin wanted a half hour’s head start. He spoke vaguely of “friends” who would back him when the time came, magnifying the take.

  MacLean took the plastic tray that was handed to him, even though he wasn’t hungry. He didn’t want to draw attention to himself. He flipped up the lid, noticing that Swissair still used stainless steel tableware, not plastic. He snorted again. Rich bastards.

  MacLean had recognized his chance as soon as he saw it. It was a routine day, and he was so accustomed to the pulse of the slot that the flow of news was almost a narcotic for him. The telex from South Africa shattered the routine.

  Produmesnil, Exmerwe.

  How did he get a telex out of Johannesburg?

  Terrorists have blown up gold mines. could affect 80 pct rpt 80 pct production. Underground sources say ALF responsible. series of explosions overnight. More later.

  MacLean had immediately torn off the message, including the copy. He looked up to see Drew, sitting in his office, talking animatedly on the phone. MacLean held the message on his lap, below the desk. Bart was absorbed in his screen; Tom would not arrive for nearly an hour.

  MacLean read the telex again. He folded it and put it into the pockets of his khaki pants. He picked up the phone and punched out his home number. As the phone rang in the empty flat, MacLean addressed his dentist, saying that he had to see him immediately. Then he called Drew over, pleading his aching tooth, and left to call Fürglin. He left no trace of the telex, with its news that would shake the markets.

  “Tomato juice,” MacLean said in response to the stewardess’s question. The flight originated in London; it was perfectly normal to speak English. He didn’t order champagne. That might be remembered.

  He had called Fürglin again afterward. The trader and his “friends” had bought massively in gold futures and heavily in the spot market. When the news came across the wires, prices in both markets shot up. As the full import of the move became evident, Fürglin started selling and had liquidated most of his positions before the market gridlocked. He was exhilarated on the phone; they had nearly tripled their money in less than two hours. He didn’t tell MacLean how much that represented in absolute terms; the journalist had no idea who these friends were or how much money was involved. Whether it had been $10 million or $100 million, though, it was now three times as much.

  MacLean’s price had been agreed on beforehand, a fixed amount that would enable him to live in comfort for the rest of his life. He was forty-six, and his notions of comfort were modest enough.

  MacLean closed the lid on his food, which was untouched. He settled back into the seat. In less than an hour, he would be in Geneva.

  ~

  Spring transformed the hillside in Pretoria. The vivid splashes of red, yellow, violet, and white against the green lawn created a heady gaiety in the balmy air. Crowning the terraced flowerbeds, the Union Buildings all but blazed in the sun, their ochre stone sharply etched against the blue sky. The graceful columns opening up to the town below had an almost Olympian aspect.

  Oleg Abrassimov was impervious to the color and the weather. The tinted windows of his Mercedes limousine were shut, and he looked neither left nor right as his chauffeur wound up the twisting road. They drove past the bronze Voortrekker’s monument and up behind the wings of the building. Du Plessis was waiting on the pavement as the limousine crunched to a stop.

  The Russian looked incongruous as he stepped out of the black car. Palm leaves rustled softly in the spring breeze, but the stern gray face of the Soviet official presented an icy front to nature’s allure. Dressed only in a sober gray suit in the mild temperature, he seemed to miss his heavy overcoat and broad-rimmed black hat. After all, it was November and it should be cold.

  Abrassimov walked with du Plessis and his two aides around the pillared half-circle and into the courtyard of the east wing. Du Plessis led them up the wide stone staircase, explaining that the office was just on the first floor.

  The half-closed shutters kept the high-ceilinged room dim, but that suited Abrassimov better than the bright sunlight outside. Du Plessis indicated one of the worn leather armchairs at the table opposite the desk.

  “My colleague from Foreign Affairs was kind enough to loan us his office,” began du Plessis, taking th
e second chair. The two aides, one very young and the other somewhat older than du Plessis, sat discreetly to one side in straight-backed chairs. “We thought it would attract less attention to meet up here.”

  Abrassimov said nothing. He had met Andreis du Plessis just once before, at the Soviet embassy in London. A plain, trim man in his early forties, du Plessis exuded sobriety.

  These were sober days for the director general of the South African Finance Ministry. More than ever, the country depended on gold. South Africa owed its wealth to the rich deposits encircling Johannesburg. The white rulers had exploited the natural resources and the cheap black labor to create a standard of living unparalleled on the African continent and equal to that of the wealthiest Western countries—for the whites. But generations of ruthless oppression had caught up with them. Economic development had compelled them to bring more blacks into the cities, to pay them higher wages, to train them. And now the blacks were no longer willing to play the proletariat; they wanted a greater share of the wealth.

  Pretoria’s intransigence in the face of this demand had isolated the country. An economic and financial boycott had crippled South African industry and threatened the basis of that comfortable world the whites so much wanted to keep.

  The only exception was gold. Nobody boycotted gold. Middlemen with massive sources of finance bought and sold gold regardless of political resolutions or financial withdrawal. There was no right or wrong, moral or ethical, when it came to the dull yellow metal yielded by the bowels of the Rand.

  So now gold was everything for South Africa. It alone could finance the premium prices for the clandestine imports desperately needed to maintain a skeletal industry and basic consumer requirements.

  Du Plessis was not a fanatic. Trim, with thinning hair, wire-rimmed glasses suiting his bureaucratic mien, and a Huguenot chin, the veteran number-two had been a familiar and widely respected figure in international financial circles. Before South Africa suspended its debt payments in 1985 and then imposed martial law, he had been invited regularly to business conferences, a peer discussing the course of world finance. But he was also an Afrikaner. The time for debates, for equivocation, was past.