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Eastern Europe

Eastern Europe

February 16. 2017

Chapter 85 in the exclusive series for Dynamic Commodities- becoming a commodities trader

London is a gray place for most of the year and the environment had a creeping impact on my mood. I decided that I needed to travel to build the business and get away from the problems in the office. When I was on the road, no one could bother me.

Chris Frith and I set off on some visits to Eastern European hubs. In the capital cities of Hungry, Czechoslovakia, Russia, Poland, Yugoslavia, Albania, East Germany, and Romania the business in gold was much easier than in the Western countries. Those governments needed Philipp Brothers much more than we needed them. All of the Eastern European nations were undergoing political change and all of them were broke. However, all had one thing in common. They all had gold reserves.

Chris Frith had amazing connections in that part of the world and he made Philipp Brothers the go-to bullion dealing house when it came to buying and selling and lending gold reserves. With Martin Lambert on our side, we were able to grant credit to many of these countries that competitors stayed away from in the late 1980s. When it came to Russia, Marty Kaufman wanted us to be extra aggressive.

My first trip to Moscow with Chris was unbelievable. It took me two hours to stand in line for a Coke. There was no toilet paper in the hotel room and no shower, only a bath tub with no plug. After a night of heavy vodka consumption with the traders from the central bank, we went out for a walk in the freezing February air. We were so drunk that we needed to sober up and the only thing that could do that was the subzero Fahrenheit temperatures. As we walked around the massive block where our hotel was a black sedan followed us. As we ventured further from the hotel the car pulled up, the window rolled down and two Russians told us to get in, addressing us by our names.

We were too drunk to be shocked and too cold not to listen. There was a man and a woman in the car, they reminded me of Boris and Natasha from the Rocky and Bullwinkle Show I watched as a kid. They identified themselves as KGB assigned to make sure we were safe in their city. The car rolled back to the hotel and we were admonished to stay inside at night.

We recounted the story to the traders at the central bank of Russia the next morning and they laughed. Then they started pouring shots of vodka at 9 AM. We stayed in the hotel the next night. We went to the bar but the Cuban cigar smoke, ex-pats and hookers were overwhelming. While it was very entertaining, I was so hung over that I convinced Chris to go back to our room. We switched on the TV and found that one station was a live view of the bar. We could sit in our room and watch the hookers hit on all of the ex-pats. What a wild place Moscow was in those days. I could not wait to get back to London.

Any city in Eastern Europe was an adventure. In Warsaw, I slept in a hotel room with my shoes on because there was a rat running around on the floor. I thought that people in London drank a lot; compared to those countries the British were tame.

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Post Series: Origin Of A Commodities Trader

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