Investment Biker

by Jim Rogers

  Most travelers have a vague understanding that the ups and downs of a currency are an indication of the health of a country, much the way the rise and fall of a stock price discloses the problems and strengths of a company. What they don’t realize is that in the same way company presidents and treasurers try to bull up the price of a stock, a country’s treasury secretary and finance ministers stay up nights doing the same thing. Smart finance ministers know that gimmicks, restrictions, and regulations won’t attract foreign capital to be invested in their country over the long run. They strive to inspire confidence by creating sound value. The dumb ones put on endless restrictions and can’t understand why no one wants their currencies.

  “I want to trade dollars,” I said to the runner, who was about sixteen, just a trainee.

  His limit was ten dollars, so I asked him to take me to his boss.

  Now I was on my guard. As you travel you hear stories of hustles by currency traders on the black market. But as usual, I felt better taking my chances with them than with the state bank, which I knew would rob me with its artificial exchange rates. If I kept my wits about me, at least with the black marketeers I had a chance for a fair deal.

  One favorite trick is the slight-of-hand shift. One traveler told me he had carefully counted the bills he was given, never allowed his new stash to leave his hand, and yet he had found he possessed a stack of carefully cut newspaper on his return to his hotel.

  Another trick is the engineered danger. “The police!” they cry as they disappear into the crowd with your side of the transaction, or you’re hurriedly handed a wad of bills that are mostly blank paper. Always agree on a price first, count what you are given next, make sure it doesn’t leave your hand, and only then fork over what’s due. After all, you’re buying merchandise, even if it is money, and you should examine your purchase before accepting it, a sensible custom that holds true worldwide. In fact, to prevent having counterfeit bills foisted on us, we often bought a few dollars’ worth of currency as samples from the state bank before we hiked over to the black market for the bulk of our purchases.

  If someone mutters, “police,” either hand back what you’re holding or coolly walk away with it. The black market is guaranteed to find you again.

  The yard boss was at the market’s entrance, keeping an eye on his runners. He was Turkic, about twenty-four. The black market is a young man’s game, to judge by the guys I’ve met on the front lines. But for all I knew, there was a middle-aged guy upstairs with an account in Switzerland. The pockets of the Turkic yard boss’s jacket were stuffed with big wads of Japanese yen, Chinese renminbi, and U.S. greenbacks. He pulled them out in a circumspect manner, as this was illegal. All this furtiveness reminded me of buying moonshine back in Alabama, another transaction in which vendors had to dodge the federals’ efforts to skim a share of the proceeds.

  “How many renminbi for a dollar?” I asked in sign language and primitive English. The demographers tell us half the world’s people speak some English, and from the evidence we accumulated on this trip, I’d say they’re right. He had no trouble understanding me.

  He offered me five, and I said no, because I’d heard I could get eight. The rate wasn’t as good as when I’d come through two years before, back when they had had all that inflation. Then I had received six for a dollar, when the official rate was four, a 50 percent premium. It told me that back then, the Chinese people were paying up for foreign currencies, wanting out of their own money because it was falling fast in value, as distrusted by the natives as the pound sterling and the lira were later in England and Italy. This time I got only a 35 percent premium.

  The only currencies the yard boss was interested in buying were dollars and yen. He wouldn’t take sterling or deutsche marks. After all, this was the middle of the Taklamakan Desert, thousands of miles from any trading center. I guessed he wanted these two because the dollar had been a reserve currency for a long time and Japan did a huge trade business with China.

  After horsing around we settled on seven to the dollar.

  He actually gave me too much for the dollar compared with the yen, so I was tempted to swap my dollars for yen. With my more up-to-date knowledge of the international currency markets, I could have made a nice little arbitrage profit because I knew what the market was and he didn’t. The Dow Jones ticker hadn’t arrived in Turpan.

  Give it another couple of years.

  On the road to Hami Tabitha developed a hole in her piston. This bike had done everything to us but lie down and die, and I had the feeling that that was near. It was a hole the size of a dime, and here we were in a country as large as the United States without a single dealer who sold BMW parts.

  We threw her bike into the back of a truck we flagged down, hauled it into Hami, and began asking endless questions. Finally we were lucky enough to find a mechanic, who stayed up till four-thirty in the morning welding the hole. It had to be done carefully, with Tabitha supervising the work, built up thin layer by thin layer so it wouldn’t blow out at a critical time. Here was where it really paid to have brought along a trained mechanic, someone who understood what she was doing. We didn’t know if it would work, but there was no way to get a spare BMW part into the middle of the Taklamakan Desert. This is the kind of repair you make in the backwoods of China, Africa, and South America. It would cause a factory-certified mechanic to shudder. God knew what it would do to the long-term health of the engine, but there was no way to get out of here but to try it.

  We poked around a little. Hami itself was still the isolated desert town I remembered, although it looked a bit more prosperous. I still dreaded the drive to Dunhuang, since last time it had taken me seventeen hours to cover the two hundred fifty miles.

  We set out, worried about the jury-rigged piston. Still leading, Tabitha had to watch for potholes and traffic and yet we couldn’t help but keep our ears tuned to every thump and rattle coming from her engine.

  We kept moving, one mile, five, twenty, forty. It was working! Maybe it would hold till we got to Japan.

  As we edged across the desert, afraid to strain the engine, what struck me was the vastness of western China, how strange it looked, how un-Chinese. Here was China, with more people than any other country in the world, and where were they?

  Imagine that the United States had five times its present population and that we all lived east of the Mississippi. China is that dramatic.

  Imagine what the eastern half of the United States would be like if it were eight times as populated as it is now. Imagine the living conditions, the social conditions, the markets, and the scramble for money, food, and space.

  That’s China. The crowded east, the deserted west.

  There are a thousand manmade underground rooms in the Buddhist caves in Dunhuang, and they are packed with extraordinary wall art, documents, carvings, and statues devoted to Buddha. Discovered by accident, by a guy chasing a sheep into a hole, they had been sealed for nine hundred years, till 1900, so they weren’t ravaged like older finds.

  On my last trip through here I had eaten at a restaurant owned by Mr. Ji. He treated me so well, I wanted to look him up again. We’d hit it off. Mr. Ji was a sunny forty-five-year-old with the Chinese air of agelessness. He was a man who knew his business because he had built it up from nothing. He had been a farmer who started out by selling food to the other farmers in a little breakfast shop. He expanded it into a full-fledged restaurant with an inn attached. He loved what he did, and despite the long hours, his workers liked working for him, where they could make more money than they could by working for the state.

  His place reminded me of an inn out of the American Old West or England three hundred years ago. He had six rooms, four beds to each, basically cots. Toilets were down the hall. This was the standard Chinese hotel, and it was everywhere. We tended not to stay in hotels like it, preferring the newer, more comfortable Friendship Hotels, which catered to foreign travelers.

  I wanted to see how the economy
had affected him, because here we were a year on the other side of the Tiananmen Square troubles. Before I had visited him in the crescendo of boom times, back when everyone had been buying everything they could, getting rid of their paper money, back before the government was forced to devalue the currency and tighten money.

  He remembered me and greeted me warmly, pleased I’d come back. Tabitha and I were the only foreigners who’d ever been in his place. We were welcome, exotic visitors, just as in the fifties back in Alabama we had regarded Chinese or Pakistani people as visitors from another planet.

  Seating us at a big table, he insisted that we eat as his guest. We were treated to a feast of chicken, goat, and wonderful cold noodles garnished with onions, garlic, scallions, and a host of vegetables that don’t have English names because they aren’t grown in English-speaking parts of the world. Here in the middle of the desert he even managed to serve us fish. Since the Chinese didn’t send meats and produce for any distance, this fish must have been raised locally, a tribute to Chinese ingenuity.

  Yes, he had noticed there had been a falling off in business a year or so before, but now things were picking up again. The economy was reviving.

  Like entrepreneurs the world over, Mr. Ji worked overtime—twelve hours a day, seven days a week—at building up his restaurant and getting rich. To him this was no burden, because he was having fun, as such people often do. He was living proof of what it took to make the real world work. Despite what Americans might think about what’s happened to the Chinese since Tiananmen Square, twelve hundred miles from Beijing Mr. Ji, left alone by meddling central planners to build up his own business, appeared to be one of the world’s happy men.

  As soon as we hit Jiayuguan, the historical dividing line between the deserted west and the crowded east, we had another accident.

  As she had for weeks, Tabitha led, maneuvering along the two-lane blacktop at thirty-five to forty miles an hour. Both sides of the road were packed with people. It was maddening in China the way trucks, bicycles, pedestrians, everyone pulled into the street without looking.

  I was somewhat used to it, but not Tabitha. An old man on a bicycle swerved in front of her, and she was suddenly boxed in—she had to hit someone, there were so many people on both sides and this bicycle was in front of her. She slammed on her brakes and blew her horn, but the old guy was deaf or ignored her, because in China the larger vehicle always has to move out of the way of the smaller. Having slowed but unable to stop, she hit him and his bike at five to ten miles an hour.

  A mob surrounded us. The police arrived. Tabitha was shattered and had a hard time talking. I took over. The old man didn’t seem badly hurt, but he had fainted. Under local law, Tabitha was automatically the guilty party even though I had seen that the accident wasn’t her fault. The old man was carted off to the hospital.

  The crowd muttered and shot us nasty looks. Afraid we would become the center of another disturbance, the head policeman insisted we move on out of town. In the States he might have taken us to the police station so he could find us when he wanted us, but he wasn’t worried about losing us. Out here we were rare birds. Two foreigners on foreign bikes on the region’s only road were ridiculously easy to run down.

  Upset, we cranked up and headed out as he instructed, awaiting his report.

  The policeman caught up with us later at the westernmost end of the Great Wall, crumbling here in the desert.

  “Well, you know,” he said, “we’ve really got to do something about this man and his family.”

  Relieved that he wasn’t arresting us, I said, “Okay, how much?”

  “Two hundred dollars.”

  Dollars! On the black market here in the wilds of China, two hundred dollars was the equivalent of a year’s pay or more.

  Whenever I figure I’m being held up by an official, I ask for a receipt. Half the time it makes him back down, because he doesn’t know to whom I’m liable to show it. He starts to think, Suppose he shows it to my boss and I’ve kept the money.…

  But this policeman was happy to give me one.

  I forked over the money and asked him to convey our concern to the injured man’s family. I would bet my net worth the poor old guy never saw a penny, that the policeman kept the entire amount.

  I’ve still got that receipt, in Chinese, of course, scrawled on a ragged scrap of paper. For all I know it says, “Stick it in your ear.”

  Gas was a constant worry, as it was hundreds of miles between public pumps. We always drove with one eye on our odometer, calculating when we might be able to fill up again.

  On one occasion our tanks were so low and we were so far from a town that we’d taken to coasting down inclines, striving to conserve every drop.

  We came across a fenced-in military outpost and drove up to the guardhouse. By using sign language—pointing at our gas tanks and pantomiming how empty they were—we persuaded the guards to escort us to a pump on the base. The attendant didn’t have the authority to sell us gas, so we were bumped up to the base commandant.

  In his bare office we showed Commander Lu our passports, maps, and permission papers. He frowned. In our usual pidgin of the local language, basic English, and sign language, with which we seemed to get along in any culture, we explained that we had run out of gas.

  Commander Lu was not only mystified that two Western motorcyclists were in the middle of his country, but astonished that we had penetrated his military security.

  Finally we told him he had “to arrest us as spies or sell us some gas.”

  Laughing, he instructed his people to give us gas, and nobody would take any money for it.

  A few hundred miles past Jiayuguan, we were again close to running out of gas when we saw dozens of guys in hillside dugouts and shacks by the side of the road with ten, fifteen, twenty liters of gasoline in plastic and tin containers. Once again the black market had come to our rescue.

  We learned many things in going around the world, and one of them is you don’t have to worry too much about running out of gas. In many places the black market will figure out where travelers are likely to run out and be there to sell it to you. In this case, hundreds of miles between Chinese cities these enterprising spirits had figured out how to get gas to the middle of nowhere and were delighted to sell it to us.

  We drove over the mountains, the highest pass at 10,500 feet, into Lanzhou—beautiful scenery, sculpted terraces, with coal-burning locomotives chugging in the distance.

  We visited the local market. It had expanded since I’d last been there, with better quality produce but higher prices. As it was early in the season and nobody trucked produce great distances in China, a small watermelon cost $2.70.

  I hunted up a teahouse, never easy for a foreigner to find. Ask the Chinese where to find one, and you won’t get a straight answer, as these places aren’t approved of. I suppose if a Russian or Chinese visitor to Chicago in 1926 had asked to be guided to a speakeasy, he’d have had a hard time, too.

  At the Culture Palace Tea House, rumpled old men dappled by the sunlight filtering through the thatched roof lounged around playing cards, dominoes, and mah-jongg. A sign said that no drunkenness, no fighting, and no bad language were allowed. A painfully thin middle-aged male singer, backed by a three-piece string combo, wailed a lament of the cruelties of love and life while being ignored by the crowd. These sprawling ne’er-do-wells, wreathed in cigarette smoke, had a lethargic, vegetative manner, laid-back and contemplative, as if they had seen life outside the teahouse and found it wanting.

  Glad to see us, they pushed tiny glasses of mao-tai on us, which I couldn’t get out of drinking. The Chinese speak of mao-tai with reverence, the way Southerners smack their lips over bourbon or the Scots revere Scotch. It’s a highly potent liquor, made in Guizhou province from sorghum and wheat yeast and aged five or six years, but it tastes so foul that nobody but the Chinese can stand to drink it. I begged off after one glass.

  From the waitress I bought a deck of
Chinese cards as well as two jackets made fashionable with embroidered English words that no one here realized were nonsense syllables. Even though the place housed a couple of drunks, I was struck by its serenity. It reminded me of men sitting around a store, barbershop, or pool hall back in Alabama, gossiping, drinking, gambling, having some place to go to get away from the women, just as many primitive tribes have a men’s lodge for the same purpose. Here there were constant cups of tea, some beer, a drop of mao-tai, a little gambling, and a lot of gossip and camaraderie. No signs said, WOMEN NOT ALLOWED, but you never saw women. This was a place my grandfather Brewer in Oklahoma would have appreciated. Late in the afternoon my grandmother would go looking for him, and she’d storm into all the domino parlors. It just infuriated her. When she’d find him at last, she’d always say, “Damn it, I told you not to play dominoes!” Back then Oklahoma was dry, but bottles in paper bags were behind the counter, snuck in by the bootleggers. And after all, Dutch Brewer was somebody in town. He not only owned its radio station, he also owned shares in the bank, had roomed in law school with the state’s future senator, and had been one of the most sought-after young lawyers of his class. I guess he was supposed to be helping at home or doing something anything, productive, but like a lot of guys, he preferred to be with his cronies.

  The Communists have been trying to shut down teahouses for forty years, just as our government back in Prohibition tried and failed to shut down speakeasies. Throughout history there have always been places for men to gather to do the things men like to do together. Places like this will always exist, no matter how politically incorrect. Men’s clubs in England, men’s lodges in African and Native American tribes, saloons out West, barber shops and pool halls in the South, and Chinese tea-houses, all have an apparent universal appeal. Naturally, we also constantly found places where only women gathered together.