And the freefall continues … today the Korean won closed at 1395 to US$1, hitting a 10 -year low against the dollar.
According to the Korea Times, the won hasn’t been this weak since September 23, 1998. Which, some may recall, was the year after the Asian currency crisis when the won and many other Asian currencies cratered in value to the tune of 50% or more. Well, guess what, friends - we’re well on our way there. That year is still referred to by Koreans as IMF, after the heavy emergency loans the country had to take from that agency in order to stay afloat. You can still meet a lot of elderly guys working as night-shift security guards who will tell you about their (mis)fortunes during that period. Hint: any story with the line “And then I worked for a trading company …” never has a happy ending.
Typically for Korea, the media “experts” explain the won’s sudden descent into Kleenex territory by blaming the foreigners:
Foreign investors selling stocks, coupled with the current account deficit, is pulling the value of the Korean currency, which has dropped 208 won against the greenback in four days. Foreigners have sold $33 billion in stocks so far this year, and the trade account is recording a $14.2 billion deficit. Concern over an economic slump is adding to a pessimistic outlook on the won. The rattled global financial markets, despite the bailout packages by the United States, is causing demand for liquidity in dollars ― considered a safety asset….
The foreign exchange market is panicking at even the slightest news, such as a North Korean missile test. North Korea-related news didn’t have much impact on the market during the former President Roh Moo-hyun administration.
Meanwhile, the current president, Lee Myung-bak, is wading into the fray to warn institutions against hoarding dollars.
And there you have it. Anything good happening in Korea means Koreans are the genius race of the world; anything bad is due to Korea being pushed around by big bad white people.
Call me crazy, but if every Korean person in history had been this dumb, Japan would still own their country (and their collective ass) to this day. Meanwhile, I get to watch my savings and investments get on an express bus to southern parts unknown. Go Greyhound. (retch)
