The Enigma Broker

Quip nodded thoughtfully as Wolfgang and Otto briefed him on their findings.

Wolfgang commented, “I don’t understand the copper commodities anomaly which started me looking into this area of finance. It flared up, begged to be noticed, and then resumed normal trading. Most peculiar activity. Almost like a misbehaving child who just had their parent correct an improper behavior.”

Otto and his longtime associate, Wolfgang, were the oldest colleagues of the family business with Quip being the third core member. The business had been founded after a rather frantic escape by their families from Poland at the beginning of World War II. They had made good on their government’s promise to deliver the Enigma machine, captured from the Germans, but had copied it before delivery to the British.

Their acquisition of the Enigma machine had become the basis for the financial protection and restitution they began as a service to friends and family in Europe. The family business, coined internally as the R-Group, had been long diversified with banking, portfolio management, real estate, shares in various thriving businesses, and, the most relevant these days, the cyber security and information division. The closely held family business had customers everywhere on the globe but still maintained the lowest profile of any company. Discretion was a key operational goal for their organization. Without a reference from someone they knew, you didn’t find them, they found you.

Quip, the more colorful individual of the three, was well-educated in the field of computer design and machine intelligence. Quip had spent most of his youth and early adult life with education, earning his doctorate at a very young age and creating computing inroads when he wasn’t into some kind of mischief.

Until recently falling in love with a well-educated communication specialist named Eilla-Zan, he had only focused on building the technological capabilities of the R-Group. Quip was the brilliant creator of the core computing resource of the R-Group functionality known as ICABOD, translated as the Immersive Collaborative Associative Binary Override Deterministic system. Over the years, Quip had expanded the capabilities of ICABOD and was constantly increasing its computer power and artificial intelligence capabilities.

 He and Jacob, grandson to Wolfgang, had both added programs and routines that allowed ICABOD to consume and analyze huge amounts of data that helped to expand the artificial intelligence limits of ICABOD. From time to time it was difficult to remember that ICABOD was a computer and not a human being who had just dialed into a conference call. The heavy ethical grounding and the humor tutorials that Quip had been administering had pushed ICABOD’s capability to the point that he was a critical member of the team, with insights built from the enormous amounts of information gathered.

The R-Group business was controlled by the family members with voting conducted to accept or reject potentially too high profile or risky work orders. The fundamental mission of the R-Group began with fighting the Nazis in WWII. In the decades since that war, the team had learned that there was always someone or something that would step up into the role of the next adversary. Quip liked to say they had taken the Robin Hood operating parameters and added digital content to keep the wealth intact for those who actually earned it. R-Group assignments supported individuals’ and even governments’ fights against human injustice as well as helped maintain a level of balance between powers.

The services provided over the years to its discreet customers had allowed the wealth of the R-Group to grow. As such, no one in the group needed to work, but their ethics and conscience compelled them to stay at it and remain vigilant against the world’s cyber enemies. Sometimes they walked a very fine line in fighting the evils they encountered, yet remained ethical to a fault. Over the years the team had increased their financial prowess, exhibited insightfulness of people overall, and thus were adept at staying farther ahead of the technology curve than any entity, including well-funded governments.

Otto paused for a few minutes, then asked, “Wolfgang, I’ve known you a long time, and I sense you are going to add more observations that will convey your annoyance at this situation.”

Wolfgang chose his words carefully before he answered, “Someone or something is driving commodity prices down to the breaking point. At this rate, world order will be irrevocably changed in six months.

“Otto, you and I have discussed this already. However, we needed to bring Quip up to speed and add any new information to what we currently know.”

Otto asked, “Do we know who yet? Any new development since we spoke last?”

Wolfgang cautiously continued, “We only know what is happening, not who is driving it.

“What we are seeing, Quip, is a very old, yet very simplistic, business model called predatory pricing. A company or a group of like-minded companies band together and offer goods at a lower price that market leaders can’t match. The incumbent begins to lose market share if they hold their price, or they match the predatory pricing, thus causing them to bleed red ink on their income statements. The initial market leader either exits that market or they implode against the onslaught.

“Television sets, stereo equipment, and computer chips all have these types of business casualties covered in text books. It took a lot to get western governments to see the problem for what it was, and then pass legislation to help safeguard their home industries.

“The predatory pricing model looks like it has been dusted off, freshened up a bit, and is now being used in the commodity markets. The difference today being whole populations and nations appear to be the targets. In several cases, the issue is affecting multiple countries or even all in waves. The commodity building blocks of our civilization are being destabilized to the benefit of the consumers yet the detriment of the producers. The world depends upon orderly markets behaving in a predictable manner. At present, I am seeing just the opposite.”

Quip again nodded then questioned, “But, Wolfgang, isn’t a lower commodity price a good thing? Doesn’t cheaper commodity pricing lower the per-unit cost of the outputted item, which means you and I pay less for finished products?”

Otto interjected, “Yes, it does … for a while. When the producing entities can’t match the unprofitable price that the commodity is being traded for, they are forced to exit the business or sell to their former competitors, now market leaders, at greatly reduced prices. In time, the market-makers for the commodity become oligopolies or monopolies that are capable of commodity price extortion to the buyers, then ultimately you and me.”

Wolfgang agreed but added, “While Otto is correct in his statement, it actually goes farther than that. Dropping a commodity price to a very attractive level also puts financial pressure on competing technologies that could be used instead.