Opponent Wood

Another week passed, and the war raged on, intensifying with each passing day.

Lübeck, with the strength of a single city, was gradually gaining the upper hand against the entire Kingdom of Denmark. Of course, Hamburg had also contributed significantly to the cause. Lübeck's navy had clashed with Denmark's fleet twice, emerging victorious both times.

At this moment, Edward understood why the people of Europe in later centuries were so fond of watching football. Indeed, for ordinary folk, such noble wars resembled the spectacle of a football match. Wars did not disrupt the lives of the common people; medieval warfare was merely an interaction between aristocrats, a game for the elite. Unlike the brutal wars of Asia or the devastating world wars, the conflicts of this time had little bearing on the lives of ordinary citizens. Since it did not affect them, they watched the war unfold much as they would a football match.

The price of ammunition continued to rise steadily, spurred by the lucrative opportunity it presented, which gradually attracted the citizens of Lübeck to the securities exchange, eager to engage in speculative trading.

As for Edward, the risks on the two accounts he was managing had been completely neutralized, and now he could simply watch the spectacle unfold. With the exchange operating, he earned a 1% commission on every transaction made, and as long as the war continued, his wealth grew exponentially.

It was the traders who had to make the perilous leap. But now that Edward had established the exchange, he had transcended the role of a mere trader—he no longer needed to take such risks to profit.

Edward's life had become simple and orderly. Every day, he would visit the exchange and the newspaper office, and then attend various gatherings of the upper class.

By now, as the owner of the Lübeck Securities Exchange, Edward had gained recognition among the high society. Slowly but surely, he was being accepted into their inner circles—though still on the periphery. After all, the people of this time had yet to fully grasp the power of finance. In the eyes of the Hanseatic League's core members, only traders were considered the highest-ranking individuals, and everyone else existed to serve them.

Though Edward looked down upon these Hanseatic merchants, he could only silently endure and wait for the moment when his time would come.

...

Wood had now become a well-known Hanseatic merchant. In contrast to the more understated Uncle Muller and the largely ignored young Baron, Wood understood the importance of reputation.

Reputation, after all, was an intangible asset, one that could be leveraged to control the actions of others.

Ever since Muller had stockpiled ammunition and developed paper shells, Wood had been studying the nature of these paper shell contracts. In his pursuit of profit, he hired several scholars from the Church to assist in researching this new concept. They discovered a loophole in the paper shell system.

Muller's team had stockpiled all the ammunition for 230,000 gold coins, and now the price of ammunition had tripled. The market cap was approximately 690,000 gold coins. If Muller's team had already executed their high-leverage exit strategy, the ammunition would now be dispersed among the public and large merchants, and the circulating volume would be just 690,000 gold coins.

Wood devised a path to immense profit. With 690,000 gold coins, he could purchase all the paper contracts, driving the price of these paper shells upwards indefinitely.

Excitedly, Wood shared his findings at every high-level meeting, rallying others to join in. Soon, more than twenty Hanseatic merchants were gathered around him, all eagerly acquiring paper shell contracts for the potential of endless profits.

As long as they controlled the market, they could dictate the price.

More and more merchants and retail investors rallied around Wood.

The price of ammunition continued to climb.

...

Edward, however, found himself troubled. While the exchange was benefitting from rising prices, it did not favor such a rapid and one-sided increase. For the sake of the exchange's interests, more short positions were needed.

At first, having a market maker was a good thing, because a market maker, driven by profit, would eventually push prices up. And the exchange had to rely on rising asset prices to build trust. Both were partners in the same interest.

However, a one-sided price increase in such a short period was detrimental to the exchange.

For the exchange to profit, there needed to be disagreement between the bulls and bears, leading to transactions. If prices moved steadily upwards, a consensus expectation would form. No one would sell and traders would hold onto their positions, shrinking transaction volumes. Smaller volumes meant less profit for Edward.

Thus, Edward needed to act.

Using the pseudonym Soros, Edward wrote an article in the newspaper commenting on the market price. He used two pseudonyms—Buffett when being bullish, and Soros when being bearish. Since he owned the newspaper, he controlled the public narrative.

The article, "Currently, the price of ammunition is at an all-time high. Risks are imminent," claimed that the rise in ammunition prices was partly due to the ongoing war between the Kingdom of Denmark and Lübeck, and partly due to the invention of innovative financial instruments like the paper shell contract. The article predicted that, historically, ammunition had never been so valuable during any war, and that the bubble would inevitably collapse once the war ended.

Soros advised readers to sell their paper shells while the price was still high and to take profits. For the more aggressive, shorting was a viable option.

...

This article in the Lübeck Times led to a sharp drop in the price of paper shell contracts, much to Wood's dismay.

"Who is this Soros? How dare he oppose me!" Wood thought.

He knew that if the market lost faith, his control over it would slip. The shorts had used the newspaper to spread their views, and Wood knew he had to fight back by using the same medium to advance his own.

Determined, Wood set off to the Lübeck Times to publish a counter-article.

He arrived and approached the editor. "I need to publish an article."

Wood handed over his assistant's article, which was bullish on ammunition. The editor, seeing that it was from the well-known merchant Wood, hesitated to refuse.

"Your article will be reviewed by our editorial team," the editor said. "If it passes, it will be published in tomorrow's edition, and we will pay you a fee of five silver coins."

Wood nodded. "I do not need the silver coins. As a Hanseatic merchant, I do not lack such petty sums. I only wish to express my thoughts."

...

The next day, Wood's article appeared in the Lübeck Times, just below the K-line chart of ammunition prices. It read:

"Only Technical Analysis, Ammunition Will Keep Rising – Hanseatic Merchant Wood's Analysis."

...

Inside the exchange, Wood waited patiently for the market to open. He looked at the newspaper eagerly, seeing his article published, and smiled. "Today, let's buy aggressively! I want to see a big bull candle. Let's use my article to crush the shorts."

By the end of the day, the paper shell contracts had surged again, with Edward sitting in his office, a somber expression on his face.

Now, Edward knew he had to act. He could not let the pseudonym Soros appear again. The crash would come, but only after the war ended.

For now, he had to let Wood have his fun. After all, his time was running out.