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Weigookin74
Joined: 26 Oct 2009
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 Posted: Wed Oct 01, 2014 8:49 pm Post subject: |
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| GENO123 wrote: |
| Weigookin74 wrote: |
| GENO123 wrote: |
The answer is how much do you think the yen will drop? I dont think anyone on this board appriciates the extent of what is gkoing to happpen soon
I know one thing Korea will not just stand there when eveything in Japan is one third the price of anything Korean. It would wipe out Korea as we know it.
It is not about the us recovering it is about what is going to happen in Japan. |
I assume Korean interest rates are already low. So, I don't know if they could cut them anymore to bring down the currency. Any attempts by the Korean government to intervene in the markets by using up currency reserves will only have a short term effect. (Historicaally, it's effects have never had a lasting effect beyond a few days.)
If the US and other countries raise their rates and Korea keeps theirs low, then perhaps the Won could stay down. But interest rate hike by most governments are at least a year away. The Korean Won has traditionally been high, but two events drove it down. One was the 1997 crash. The other was the 2008 crash. The first one was deeper but recovery more quick. This one not as severe but longer lasting.
When the recession first hit in 2008 and the Won started sinking some expats went to Japan because the Yen had risen. So, I think historical norms are slowly coming back. There's not a whole lot Korea can do about much larger neighbors. Canada gets into similiar situations with regards to US markets. |
Korea could and will have to print money . As I said this time is different. There will be no return to historical norms. |
Well, let's not run around in a circle doing our best chicken little impersonation just yet. Printing money will definately lower a currencies value and, in the long run, in spite of what the pundits say or what 'official statistics' say, does fuel inflation.
Inflation is the silent robber and betrayer of the poor and the middle class. It's been bad enough here for the last several years, but has been far worse in western countries. But, honestly, I don't know enough of Korea's specific central bank or economic policies to comment on what they have or haven't done here. |
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GENO123
Joined: 28 Jan 2010
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| Posted: Thu Oct 02, 2014 11:08 pm Post subject: |
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One can do their own research about what is going to happen with the Japanese Yen. I wonder how Korea is going to like it when all Japanese products are way cheaper than anything in Korea.
How does it turn out any other way? |
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