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JFuller317
Joined: 10 Oct 2008
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 Posted: Wed Jan 27, 2010 4:59 am Post subject: Is the won weakening again? |
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| Pretty big drop in value relative to the dollar over the last few days. Is this a normal fluctuation, or the beginning of something worse? |
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bassexpander
Joined: 13 Sep 2007
Location: Someplace you'd rather be.
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| Posted: Wed Jan 27, 2010 5:01 am Post subject: |
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| It was kind of silly, because right next to the rate in the Korea Herald, there was an article stating that it should hit 1050 by summer. |
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GwangjuParents
Joined: 31 Oct 2008
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| Posted: Wed Jan 27, 2010 5:31 am Post subject: |
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A lot of people think we're heading into a 'double dip'.
If that happens, it'll be a flight out of currencies like the Won into the USD... just like last time. |
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bassexpander
Joined: 13 Sep 2007
Location: Someplace you'd rather be.
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| Posted: Wed Jan 27, 2010 5:45 am Post subject: |
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| GwangjuParents wrote: |
A lot of people think we're heading into a 'double dip'.
If that happens, it'll be a flight out of currencies like the Won into the USD... just like last time. |
If that happens, I'll be sending more money over here when the rate is at its worst! I made a nice little amount on it last time. |
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young_clinton
Joined: 09 Sep 2009
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| Posted: Wed Jan 27, 2010 9:24 am Post subject: |
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| GwangjuParents wrote: |
A lot of people think we're heading into a 'double dip'.
If that happens, it'll be a flight out of currencies like the Won into the USD... just like last time. |
There is a difference of opinion amoung the experts. Most experts say the Won is going to get stronger this year. Although one of the experts says like the above quote the won is headed into a double dip and will reach a low of 1190 in the second quarter. The same experts say it will start to drop around April, although it looks like its already starting now. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Wed Jan 27, 2010 11:02 am Post subject: |
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| The won will do whatever the BOK wants it to do. |
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T-J
Joined: 10 Oct 2008
Location: Seoul EunpyungGu Yeonsinnae
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| Posted: Wed Jan 27, 2010 4:37 pm Post subject: |
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| mises wrote: |
| The won will do whatever the BOK wants it to do. |
+1 |
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4 months left
Joined: 07 Feb 2003
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| Posted: Wed Jan 27, 2010 5:35 pm Post subject: |
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| mises wrote: |
| The won will do whatever the BOK wants it to do. |
Mises, love the handle, but Central Banks can only influence a currency only in the very short term and your statement goes against the Austrian philosophy.
The Won is influenced by the House of Cards that is China - empty commercial and residential real estate and factory overcapacity and they certainly are not ready to rely heavily on domestic consumption. Who is going to buy China's exports?? EU - a mess, Eastern Europe - a disaster, US - catastrophe, Japan - never ending disaster.
Korea reports unemployment around 3.4% but recent articles show the actual around 11-12% with real unemployment probably in the 18-20% range.
Currencies are all relative, you have to compare them to other countries. Korea's hyper consumer culture and ever increasing household debt and humungous housing bubble will all influence what happens to the won. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Wed Jan 27, 2010 8:55 pm Post subject: |
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In the likely event that China melts down, the won may actually strengthen as credit growth would weaken. Korea has huge room for deleveraging both in the household and corporate sectors.
http://paul.kedrosky.com/WindowsLiveWriter/DeleverageThisMyFriend_ABF6/delev-heat-map_2.png
If credit contracts the won will strengthen. Unless the BOK doesn't want it to do so, in which case they can call Helicopter Ben for some tips. The BOK can do whatever it wants to the won. It would have to behave in a very aggressive and sustained manner. If Samsung wants it, it will be done. |
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Hightop
Joined: 11 Jun 2003
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| Posted: Wed Jan 27, 2010 10:02 pm Post subject: |
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| mises wrote: |
| In the likely event that China melts down |
Melts down? Like Iceland? Like The USSR? You are dreaming. |
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Captain Corea
Joined: 28 Feb 2005
Location: Seoul
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| Posted: Wed Jan 27, 2010 10:07 pm Post subject: |
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For the last few years certain posters on this board have been saying that Korea (and the won) is going to collapse.
When is that going to happen again? |
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Crockpot2001
Joined: 01 Jul 2007
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| Posted: Wed Jan 27, 2010 10:35 pm Post subject: |
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| 4 months left wrote: |
| mises wrote: |
| The won will do whatever the BOK wants it to do. |
Korea reports unemployment around 3.4% but recent articles show the actual around 11-12% with real unemployment probably in the 18-20% range.
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I could single handedly destroy the entire ROK economy with one sweep. Literally. If someone ever brings in a wide push broom and shows them how it works, it's all over. The millions of workers shoveling snow, moving garbage and generally mulling about with the stupid green witch brooms will be immedialty replaced with about 9 guys with wide push brooms. To really crush them, those 9 guys could be replaced with about 2 Phillipino women. On the other hand Soju sales would bloom. |
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rickpidero
Joined: 03 Sep 2009
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placeshifter
Joined: 23 Jan 2010
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| Posted: Thu Jan 28, 2010 2:15 am Post subject: |
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The fact of the matter is, NO ONE really knows what will happen. The world has become far too complex for that.
If you did, you could make a fortune.
China could collapse. Or it may not.
The US may go into a debt crisis spiral and devalue the dollar. Or it may not.
The EU may break up. Or it may not.
South Korean won may remain weak to spur exports. Or it may not.
Nobody knows for sure.
Most of my money has been in junior gold miners for the last year. I was fearful of a weakening dollar and paper currency debasement.
I may sell out within the next few months because I now fear a total stock market crash which would drag down all companies in the short-term. |
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mises
Joined: 05 Nov 2007
Location: retired
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| Posted: Thu Jan 28, 2010 6:58 am Post subject: |
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| Hightop wrote: |
| mises wrote: |
| In the likely event that China melts down |
Melts down? Like Iceland? Like The USSR? You are dreaming. |
The property market, and as a result the banking sector, is prime for a nice crash. More along the lines of Japan's q4 1989 issues. |
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