On March 20th, Korlo held another national election.
This time, Jammeh Bongo, representing the Korlo People's Party, once again ran against Thomas Kaboré of the Korlo Socialist Party for the presidency.
Four years prior, Jammeh Bongo had defeated Thomas Kaboré in the general election, becoming the new Korlo's first president.
This time, the election was no less predictable. After three days of voting, the Korlo Supreme Court declared Jammeh Bongo the winner with a staggering 69% of the votes.
This percentage was even higher than he had received four years prior.
After all, during Jammeh Bongo's four years in office, Korlo's economy had grown rapidly, and people's incomes had risen sharply. Korlo had shed its "underdeveloped" status and become the fastest-growing economy in West Africa.
Perhaps the only good news for Thomas Kaboré was that, according to Korlo's constitution, this would be Jammeh Bongo's final term as president...
If Thomas Kaboré had insisted on running in the election, his chances of success would likely have been higher.
At the beginning of his second term, Jammeh Bongo launched a new Kolo Economic Development Plan, primarily focused on further liberalizing the financial sector and encouraging public economic activity.
First, the Kolo Monetary Authority (MoF) will purchase over $15 billion worth of gold as a reserve.
This is necessary preparation for further opening up the financial sector. After all, Kolo currently maintains strict foreign exchange controls, limiting the ability of ordinary citizens to exchange foreign currency. Foreign investors in Kolo must first exchange Kolo shillings through the MoF and obtain a foreign exchange quota before applying for foreign exchange.
This is because Kolo is a small country with a relatively underdeveloped economy—a common practice in most African countries, which have suffered losses from this. This policy is necessary to prevent foreign investors from shorting the foreign exchange market, a necessity for countries with limited financial resources.
Kolo aims to become a financial hub in West Africa, making the liberalization of its financial sector essential.
Maintaining a certain level of gold and foreign exchange reserves is essential for financial security, as otherwise the Kolo shilling would be vulnerable to short selling.
First, with international oil prices currently exceeding $108 per barrel, Kolo Oil, which has been aggressively increasing its offshore production, has generated significant revenue for the Kolo government.
Using this revenue, the Kolo government, through the Financial Authority, purchased over 15 million ounces of gold bars, equivalent to over 425 tons, from the BFT (British Fortune) Fund at a price of $1,000 per ounce, with a total value exceeding $15 billion!
This effectively helped the BFT Fund cash out a significant portion of its previously purchased gold bars. The initial purchase price for the gold was around $770 per ounce, and the average price has not exceeded $800 per ounce.
This transaction has netted the BFT Fund a 25% profit!
The current price is almost at its highest point in nearly a year and a half. Starting next month, the international gold price will continue to decline due to the subprime mortgage crisis, falling below $700 per ounce by the end of October.
Gold prices wouldn't reach $1,000 per ounce again until early October 2009.
However, the opposition Kolo Socialist Party had no objections to Jammeh's move. After all, Thomas Kaboré was no fool; he knew who was behind the BFT Fund.
Kolo's political landscape had only been stable for a few years. Before the new Kolo regime, the military government had often seen political figures die in "accidents."
Therefore, Thomas understood that while he could publicly criticize Jammeh to his heart's content, silence was the wisest course of action when it came to the powerful figures behind the scenes.
Furthermore, while the Kolo government would incur significant losses in the short term by purchasing gold at $1,000 per ounce, they weren't investing in it to make money; they were holding it for the long term as a national reserve. Therefore, from this perspective, the transaction still held significant potential for profit.
Furthermore, the BFT Fund's gold is stored in the underground vault of the United Bank of West Africa's headquarters, which will also serve as the safekeeping location for the Kolo Monetary Authority's gold reserves. Therefore, after this transaction is completed, the gold will not even need to be relocated...
By increasing its gold and foreign exchange reserves, the Kolo government will be able to maintain the Kolo shilling's exchange rate.
Next, they will encourage public participation in economic activity.
The Kolo government will allocate a special fund of 100 billion Kolo shillings through the United Bank of West Africa to provide interest-free or low-interest loans to eligible Kolo residents to help them start businesses and start businesses. Individuals can receive interest-free loans up to 100,000 Kolo shillings for a 10-year term,
while low-interest loans can reach up to 1 million Kolo shillings. This measure is intended to stimulate the domestic economy, as the Kolo shilling itself is issued by the United Bank of West Africa with the approval of the Monetary Authority.
After the Kolo government generated funds from oil production, they chose to provide interest-free and low-interest loans to help residents start businesses and increase their incomes, rather than disbursing the funds directly to individuals.
After all, given the Kolo people's disposition, individuals would likely spend the money directly.
Loans, on the other hand, encourage them to invest diligently.
Of course, many will likely ultimately be unable to repay their loans, but this is also a way to "screen" the population. Hardworking and capable citizens will naturally not only repay their loans but also become wealthy.
Kolo will continue to provide strong support to these individuals.
As for those who are lazy and only want to spend their money,
they will naturally face restrictions in various areas due to their bank loans, ultimately achieving a natural elimination process.
"
Your Highness, the current international oil price has entered the 'default window' for our purchase orders, but for now, the oil companies haven't yet filed for default..."
Hearing the words of BFT Fund CEO Duran Hurst, Barron smiled and said,
"I believe they've already started discussing this. If oil prices continue to rise, default would be the best option for them."
Since November of last year, BFT Fund CEO Duran Hurst has been approaching oil companies in Russia, Southeast Asia, and Africa, offering them massive orders totaling $60 billion.
This was extremely tempting for the oil companies, who were already considering "high oil prices" at the time. After all, BFT Fund was willing to pay a 50% margin upfront, a whopping $30 billion!
The agreements signed with these eight major oil companies required them to provide BFT Fund with spot crude oil at a fixed price of $90 per barrel, totaling $60 billion, for a period of six months, from March to September of this year.
In international transactions, large spot oil orders typically come with fixed prices for a fixed period of time, not adjusted in real time based on oil prices.
So what happens if oil prices fluctuate after the order is signed?
These orders always come with a penalty, often around 20%.
If oil prices suddenly soar, the seller will consider paying the penalty more cost-effective and will immediately cancel the contract.
If oil prices suddenly plummet, the buyer will make the same assessment.
Currently, with oil prices exceeding $108 per barrel, the BFT Fund has reached the "default window" in its agreements with these oil companies.
In other words, if prices continue to rise, it would be more cost-effective for these oil companies to default and pay the BFT Fund a 20% penalty than to continue executing the contract.