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thepeel
Joined: 08 Aug 2004
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 Posted: Tue Oct 10, 2006 6:47 pm Post subject: |
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| Hollywoodaction wrote: |
| huffdaddy wrote: |
| BJWD wrote: |
| huffdaddy wrote: |
| semphoon wrote: |
Anyone know how much of a depreciation there has been in the Won compared to the Dollar since Friday? |
A bit over 1%. It was around 948/USD. Now it's around 960/USD. Not a big deal. |
It is not a big deal if you have a few thou in the bank. For the worlds 12th largest economy, it is a very big deal. That 1% can cause quite a bit of problems. 1% of a trillion dollar economy is a crapload of money. |
Oh please. A 1% move is nothing to get worked up about. Especially considering that the won is still pretty close to its post-meltdown high (using USD/Won). Not to mention the fact that a weaker won benefits Korean exporters. |
Bingo!
Kosdaq is climbing, slowly but surely. |
The initial shock was FXtraders capitalizing on the situation. The long term health of the won depends on the reactions of kim, G.W.B and Hu. And a 1% decline, if it held, doean't make that big of a deal for exporters, but it does represent a big loss in wealth. For those Hakwon cowboys who are able to use minimal math, what is 1% of the Korean economy in USD? How much Kimbap can you buy with that? Who will loose out? |
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Thunndarr
Joined: 30 Sep 2003
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| Posted: Tue Oct 10, 2006 7:42 pm Post subject: |
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| BJWD wrote: |
| Hollywoodaction wrote: |
| huffdaddy wrote: |
| BJWD wrote: |
| huffdaddy wrote: |
| semphoon wrote: |
Anyone know how much of a depreciation there has been in the Won compared to the Dollar since Friday? |
A bit over 1%. It was around 948/USD. Now it's around 960/USD. Not a big deal. |
It is not a big deal if you have a few thou in the bank. For the worlds 12th largest economy, it is a very big deal. That 1% can cause quite a bit of problems. 1% of a trillion dollar economy is a crapload of money. |
Oh please. A 1% move is nothing to get worked up about. Especially considering that the won is still pretty close to its post-meltdown high (using USD/Won). Not to mention the fact that a weaker won benefits Korean exporters. |
Bingo!
Kosdaq is climbing, slowly but surely. |
The initial shock was FXtraders capitalizing on the situation. The long term health of the won depends on the reactions of kim, G.W.B and Hu. And a 1% decline, if it held, doean't make that big of a deal for exporters, but it does represent a big loss in wealth. For those Hakwon cowboys who are able to use minimal math, what is 1% of the Korean economy in USD? How much Kimbap can you buy with that? Who will loose out? |
Given that the exchange rate was 1300 won to the dollar a few years ago, I'm having a difficult time getting worked up about this right now. (And, incidentally, wouldn't going from 1300 to 960-ish represent a huge gain in wealth?) |
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thepeel
Joined: 08 Aug 2004
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| Posted: Tue Oct 10, 2006 8:04 pm Post subject: |
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Don't get worked up about it. At all. Just don't keep your savings in a currency that has a very real chance of getting beat down. This isn't exactly a controversial statement. If you have savings, your best best for stability is a fund that uses a 'basket of currencies'.
The 1300-960'ish represents an increase in won strength due to the relative decline in the strength of the $ (billions of $ has been printed yet is not adequately reflected in the money supply -- China has it under her mattress -- , which is helping cause a gradual pulling-down of the dollar). A different situation as that reflected insecurity in the greenback, this situation, however, reflects insecurity in the won. No?
My only point is that the whole world is waiting for the reaction. FXmarkets included. The best outcome is stability and the worst is the won being unhinged. In a few months you could all being saying "wow, that was really overblown" or "wow, i have 70% of the savings I started with". The chance of instability has increased. That is all. |
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Thunndarr
Joined: 30 Sep 2003
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| Posted: Tue Oct 10, 2006 10:04 pm Post subject: |
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| BJWD wrote: |
| Don't get worked up about it. At all. Just don't keep your savings in a currency that has a very real chance of getting beat down. This isn't exactly a controversial statement. If you have savings, your best best for stability is a fund that uses a 'basket of currencies'. |
Who's arguing against that? But that's not what you started off with in this thread.
| BJWD wrote: |
| The 1300-960'ish represents an increase in won strength due to the relative decline in the strength of the $ (billions of $ has been printed yet is not adequately reflected in the money supply -- China has it under her mattress -- , which is helping cause a gradual pulling-down of the dollar). A different situation as that reflected insecurity in the greenback, this situation, however, reflects insecurity in the won. No? |
Semantics. You argued that a loss v. the dollar represented a loss of wealth. By that logic, a gain v. the dollar represents a gain in wealth.
| BJWD wrote: |
| My only point is that the whole world is waiting for the reaction. FXmarkets included. The best outcome is stability and the worst is the won being unhinged. In a few months you could all being saying "wow, that was really overblown" or "wow, i have 70% of the savings I started with". The chance of instability has increased. That is all. |
That wasn't your only point. You've said it (the 1% drop in exchange v. the dollar) is bad for the economy and also that it's not a big deal if you have a few thousand in the bank. And you've negelected the third option of those who cash out of the won now and find in a few months or a year that the won is trading at 700 to the dollar and they've lost potential income. |
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Neil
Joined: 02 Jan 2004
Location: Tokyo
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| Posted: Tue Oct 10, 2006 11:16 pm Post subject: |
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| Gopher wrote: |
| bucheon bum wrote: |
| Adventurer wrote: |
| If the U.S. troops were not here, Kim Jung Il would possibly invade. |
uh yeah sure. and why would he do that? |
Why did North Korea originally invade the South? |
Stalin told them to. |
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thepeel
Joined: 08 Aug 2004
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| Posted: Wed Oct 11, 2006 2:15 am Post subject: |
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You think it will get stronger? If it is 700 in a few months I'll eat my shoe.
But your initial point that 1300-960 being an overall gain in wealth is true, as long as the other markets are not moving with the won at the same rates. My position is that that was more about the dollar loosing value and not so much the won rising. This time, we saw the dollar stay more or less stable and the won decrease in value. Eh. |
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TheUrbanMyth
Joined: 28 Jan 2003
Location: Retired
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| Posted: Wed Oct 11, 2006 3:39 am Post subject: |
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| The only people who should be trading dollars for won are those who should be leaving soon. Unless of course you do your shopping at a place which accepts U.S. dollars and is priced in U.S. dollars. |
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huffdaddy
Joined: 25 Nov 2005
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| Posted: Wed Oct 11, 2006 4:09 am Post subject: |
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| TheUrbanMyth wrote: |
| The only people who should be trading dollars for won are those who should be leaving soon. Unless of course you do your shopping at a place which accepts U.S. dollars and is priced in U.S. dollars. |
Don't you mean "trading won for dollars"?
Why wouldn't I want to keep my currency exposure under control? If the won gets weaker, I'm partially protected because I've already converted over half of my savings to USD. If the won gets stronger, I get 2,000,000 more of them every month anyways. It's a win-win for me. |
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