Chapter 32: Chapter 30: The System has gone Mad (Recommendations Please!)_1 November 3. Lunar calendar, September 21. A good day for traveling. Yesterday afternoon. While waiting for news at the restaurant. Tang Qing had already contacted this month’s system recommended customer. As with Zhang Dongqing, as soon as they heard about Tang Qing’s ultra-low interest rates and favorable terms, they immediately agreed to meet today. As for what the other party did for a living, Tang Qing didn’t ask much. He would find out in due time. The content of this task was almost the same as last time, but the venue had changed to his own restaurant. Li Jianguo now knew that Tang Qing was also running other loan businesses. His own restaurant had become a negotiation venue. The shrewd Li Jianguo thought, this was tantamount to having regular customers. Even though Tang Qing was just one individual, most of those in need of loans were bosses. People of this kind often had a lot of friends. They also frequently consumed a lot. Their networks were complex. With Tang Qing at the centre, this web was going to expand, and the number of people would increase. Thinking of this, Li Jianguo had already approached Tang Qing, asking him to make a pitch to others, to bring more business to the restaurant in the future. Li Jianguo believed that within a year, the business would surely reach a higher level, not just one step, and by then he could expand and strengthen it and open bigger stores... earn more money... The logic was sound. It was practically perfect. Upon seeing Tang Qing in his school uniform, the other party almost thought they had encountered a swindler, but seeing the suitcase full of cash and the professionally drafted contract dispelled their doubts. The same old routine. Sign the contract, verify the funds, write the receipt. Then the necessary information investigation. Now Tang Qing was an expert at doing these things, it didn’t take long before they were done. Combined with the other party’s anxiety, they quickly finished lunch, paid, and left. After signing the contract, Tang Qing didn’t rush back to school. Instead, he began to write a risk assessment report. He really wanted to see immediately what changes were in the Level 2 system. With the experience from before, it only took Tang Qing ten minutes to finish this time. After the report was handed over to the system, Tang Qing immediately felt a warmth in his body, just like when he previously received Origin Qi points. But this time it lasted about twenty seconds. Tang Qing closed his eyes and mentally called up his personal information: Host Name: Tang Qing Level: Level 2 Experience: 0/200 Monthly Loan Quota: 300,000/500,000 Personal Monthly Quota: 200,000/200,000 (Overdrafted until the end of December.) Withdrawable Assets: 210,000 Spirit: 51+40 Physical Fitness: 49+40 Origin Qi Value: 40 Available Foreign Currency: US Dollar. There were quite a few changes in the system. Besides the reward of twenty Origin Qi points and twenty thousand RMB, there was the option to exchange foreign currency. That was all. From his personal information, he could not see any major changes in the Level 2 system. "Are there any new features going to Level 2?" "The Level 2 personal account has opened the currency exchange function for personal accounts, allowing for the withdrawal and recycling of US dollars." The system simply replied. "I understand the withdrawal and recycling of US dollars, but what does ’currency exchange’ mean?" Tang Qing asked. "The system’s personal account settlement unit is the national currency and will not change. In the future, no matter what currency the system recovers, it will automatically be converted to the local currency. The exchange rate will be rounded to the nearest whole number according to the current international exchange rate." Upon hearing this, Tang Qing began to understand a little. No matter what money goes into the account, it will automatically be converted to the local currency. However, when withdrawn, the account holder could choose to withdraw in any available currency. As for the rounding of the exchange rate, that was also easy to understand. Tang Qing, who was accustomed to the system’s rounding ability, didn’t think there was anything amiss. In general, Level 2 had opened the recycling and exchange functions for specific foreign currencies. Tang Qing, who had hoped for a powerful new feature, was somewhat disappointed. "I thought there would be a surprise. This feature... it doesn’t... wait a sec..." It seemed like Tang Qing had realized something. He immediately stood up from the chair, a shocked expression written on his face. What’s the use of this feature? Of course, it’s useful. Rounding. It’s rounding the exchange rate. Isn’t that a means for risk-free arbitrage? Risk-free arbitrage, as the name implies, is bagging profits without any risk. Here’s a simple example. Suppose the loan interest rate in the United States is three percent, and in China, it’s six percent. Why not borrow from the United States and lend to Chinese enterprises, making a three percent arbitrage profit in the process? There’s essentially no risk. Of course, this is just an assumption for the sake of explanation. In real operation, there’d be many transaction costs and other complexities involved; the profits wouldn’t be as high. But what transaction costs does the system have? None at all. And complex procedures in the system? None either. The system could instantly complete the currency exchange internally. Struggling to contain his excitement, Tang Qing wanted to confirm once more. This couldn’t be left ambiguous: "System, you mean, I can freely exchange at the rounded exchange rate?" "Yes, but the number of exchanges per day shouldn’t exceed ten, with no cap on the amount," replied the System. Receiving affirmation from the System, Tang Qing’s mind eased. He was worried he had misunderstood earlier and gotten his hopes up for nothing. Regarding the limit of ten times, Tang Qing automatically ignored it. The interests involved were too enormous. For instance, Let’s say, in reality, one US dollar could be exchanged for 8.51 RMB. However, within the System, rounding up would allow for an exchange of nine RMB. If he then withdrew his nine RMB and went to a bank, he could directly exchange them for one US dollar at a rate of 8.51. He’d net a clean 0.49. It may seem like 0.49 isn’t much. But what if this number was multiplied by ten million? That’s a net profit of 4.9 million RMB with a risk-free profit of nearly five percent. How insane is that? And this is considering a large exchange ratio between the RMB and the US dollar. What if it was 1.51? Then for each transaction, he can net a profit of a quarter. That’s 2.5 million USD. Moreover, the time taken by this transaction can be reduced to mere seconds within the account. In just a few seconds, the money makes a round within the account and nets a profit of a quarter, which is a 25% profit. If calculated by ten times of compound interest- ---triple the profit. Thinking about it, Tang Qing swallowed hard. This news was just too stunning. The System was simply crazy. If the exchange rate was 1:8.49, he could just reverse the process to ensure there was always room for arbitrage. "System, you’re not making a joke, right? I don’t want to fail the level-ten test," Tang Qing stammered. This was like a money printer without any strings attached. It was just too unbelievable. "This sort of risk-free arbitrage within the System is one of the core supplemental functions and a variant of inter-bank risk-free arbitrage, the only difference being the subjects of the arbitrage. It is also one of the benefits of the System. The System does not put any limits on the number of times or the amount of domestic currency withdrawals and deposits. However, for foreign currencies, there are restrictions on the number of times they can be deposited or withdrawn, but no limit on the amount. Regardless of deposit or withdrawal, the limit is set at ten times per day, with a refresh every twenty-four hours." Upon hearing this, Tang Qing understood what the System meant. No matter how he was to engage in such risk-free arbitrage transactions, he ultimately couldn’t bypass the need to exchange foreign currencies with the System. As long as the System kept the number of times under control, this behavior could then be kept under control. It made sense. In this Information Age, there would be no restrictions if transactions could be made within milliseconds. A single transaction could earn a 5% profit, and in just one day, he could become the richest man in the world. In a few days, all the wealth in the world would be his. That was impossible. There couldn’t be such a glaring loophole. From this point onwards, he planned to thoroughly study the rules of currency exchange in the real world. He wanted to know whether there was a method that could be used to make large-scale transactions without attracting attention. His work in his previous life was that of a runner; he didn’t understand much about financial trading rules. At most, he knew a little about stocks and futures. But that didn’t help much. Although it may not come in useful in the short run, yet in the future, this feature could play a big role. Just considering the growth of his assets, once more currencies were unlocked, there might be a significant price difference between them. Combining two price differences. Tsk, tsk. Insane. He could even run an investment fund, absorbing billions of capital from others to carry out arbitrage transactions. Yet it was better to be cautious now. Such activities were certainly risky. In the big data era, any unusual transaction account would probably be immediately flagged as a key surveillance target. He needed to carefully consider how to proceed. At present, it was still too early; no one would believe him and lend him money. Moreover, he wasn’t keen on using other people’s money to make money for himself. Although the System’s functionality was a bit crazy, he liked it. It felt a bit like a banker’s job. But hold on- What does ’taking the higher rounding price’ mean? So, Tang Qing asked this question. The System provided the answer. ’Taking the higher rounding price’ means whichever currency has a higher value, the System will set its exchange rate as one, and the value of the lower currency will be displayed proportionately. For example, for the exchange rate between the US dollar and RMB, The System will display it in a 1:8 format. At the moment, Tang Qing was not sure about the current US dollar exchange rate. Judging from the System’s ratio, it would certainly be below 8.5. The System picks the round figure of eight considering the relatively lower value of RMB. Otherwise, if it was reversed to 1:0.125, it would round up to 1:0. And that wouldn’t be possible. By the System’s algorithm, Tang Qing realized that if the difference between the rounded number and the RMB was too great, he basically wouldn’t make a profit. For instance, the Korean Won, One yuan is worth a hundred, and the hundreds digit column can be rounded and the ratio it occupies is just too small. It can be completely disregarded. Unlike the US dollar, rounding off instantly provides a profit of at least one percent. The closer the currency is to RMB, the higher the value of arbitrage. So to him, the likes of Korean Won and Yen were worthless. They had no value for arbitrage at all. "By the way, how are Hong Kong Dollar and Taiwan Dollar calculated?" Suddenly Tan Qing thought of another question, these two currencies were not the same as the RMB, yet they were part of the same country. "A sovereign nation only has one form of currency in the System. The Hong Kong Dollar and Taiwan Dollar are considered as subsidiary currencies belonging to the country’s own currency. They are subject to collection services only and are not made available for withdrawal and transfer services." Tang Qing nodded his head. In short, these two currencies were only allowed in, but not out. Even though this stipulation was a bit inconvenient, or rather strange, he didn’t put much thought into it. He was too lazy to ask about the reason. His mind was already in a mess now, who would care about anything else? Inside the Box, Tang Qing’s heart couldn’t calm down for a long time. Though it seemed like it couldn’t generate much profit for now, but one must always look ahead. The era of setting up an international account for arbitrage among various currencies to pick up money wasn’t far off.