[IAC#RG] Know your enemy

LESSONS FROM THE SOUK

Early in the 1950s, officials in the treasury of the Arabian Kingdom of Yemen noticed something funny happening to their country's currency. The main unit of money, a solid silver coin called the Rial, was disappearing from circulation. They traced the disappearing coins south to the trading port of Aden, then a British colony and military bastion commanding the entrance to the Red Sea and southern approaches to the Suez Canal. Inquiries found that an Indian clerk named Dhirubhai Ambani, then barely into his twenties, had an open order out in the souk (marketplace) of Aden for as many Rials as were available. Ambani had noted that the value of the Rial's silver content was higher than its exchange value against the British pound and other foreign currencies. So he began buying Rials, melting them down, and selling the silver ingots to bullion dealers in London. 'he margins were small, but it was money for jam, Dhirubhai later reminisced, "After three months it was stopped, but I made a few lakhs of rupees. I don't believe in not taking opportunities".

- "The Polyester Prince - the rise of Dhirubhai Ambani - Hamish Macdonald"