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jim_we
Joined: 06 May 2004
Location: Korea
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 Posted: Mon Apr 28, 2008 5:14 pm Post subject: Staying in Korea: Surviving the Next Korean Economic Crunch |
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Surviving the Next Korean Economic Crunch
I�m starting this thread in response to a thread posted earlier on Dave�s from people who were in Korea during the 1997 Asian crash. Personally, I was in Taiwan at the time, which didn�t take too bad of a hit on its currency. I figure, maybe 15-20%. At the time, I knew nothing about economics and the market and couldn�t have cared less. I expect another crash soon, and the direction I�d like to take this thread is strategies not only to survive but to possibly profit in the long run from a crash.
The market is different this time around, in 1997; Asian currencies fell against a strong US dollar. Now however, the US dollar is weak, and the price of gold (silver and other precious metals) and oil are sky high as a result. This is leading to high inflation in food and transportation. In the original thread, some people mentioned buying stocks that were low in price and rebounded as the Korean economy came out of the recession. A few mentioned that they simply kept their money in the bank and made money as the exchange ratio returned to �normal.�
So far, my strategy has been rather unsophisticated. I�ve been buying gold and silver coins. For reasons of simplicity and recognition, I have been mostly buying (or exchanging gold I have bought for) Krugerrands and buying silver in the form of old 90% and new American Silver Eagle coins. I have a nice little nest egg started, but I�d like to have some plans on investing the right way and earning more from the precious metal stash I have now. As stated before, the economic environment of this crash will be different from 1997, so different strategies may be called for.
Some ideas I had were owning gold or silver, buying stock in fertilizer (and farming related) companies such as POT (Potash Corp), base metals (copper, for example), a few value stocks in China while the currency is rising. Buying foreign currency denominated government bonds in raw materials exporting countries (such as Aussie $, Canada $, even Swiss Franc). Some gold or junior mining stocks (USA, Aussie or Canada) may be good investments as well.
But with the exception of a few of the industries above, I don't see investment opportunities/strategies (in world markets) will be very plentiful. What I�d like to do is focus specifically on Korea. With that, I�d like to start this thread. Ideas or comments, please?
Original thread on Dave�s ESL Caf�:
Who Else Was Here During the Collapse of '97?
http://forums.eslcafe.com/korea/viewtopic.php?t=105373&highlight=
Wikipedia Article: �1997 Asian Financial Crisis�
http://en.wikipedia.org/wiki/Asian_financial_crisis#South_Korea |
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Underwaterbob
Joined: 08 Jan 2005
Location: In Cognito
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| Posted: Mon Apr 28, 2008 5:23 pm Post subject: |
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| When I perfect my alchemical process to turn simple lead into gold and silver you are doomed!! DOOMED I tell you! WahHAHAhahaaa!! |
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ryouga013
Joined: 14 Sep 2007
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| Posted: Mon Apr 28, 2008 5:45 pm Post subject: |
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| Underwaterbob wrote: |
| When I perfect my alchemical process to turn simple lead into gold and silver you are doomed!! DOOMED I tell you! WahHAHAhahaaa!! |
hopefully you'll have the money to find the lead...  |
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GoldMember
Joined: 24 Oct 2006
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| Posted: Mon Apr 28, 2008 5:45 pm Post subject: |
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How dare you suggest that Korea will have an economic crunch. You Korea hater you!
By the way if you are thinking about buying gold or silver in Korea DON'T.
Samsung who are into every type of business there is in Korea are also surprise surprise, in the Bullion business. The government here however whacks on an additional 10% sales tax!.
Do the math on $10,000 grand there's $1000 in tax. You can instead spend that money on a great holiday in Hong Kong, and buy your bullion there.
So much for Korea's plan to become a gold trading HUB! |
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michael5799042
Joined: 16 Jan 2008
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| Posted: Mon Apr 28, 2008 6:21 pm Post subject: |
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The new president is going to let the sale of KEB go ahead. This should improve international investor confidence in the Korean stock market.
Also, investing in gold mining companies can be a good alternative to buying gold coins. |
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jim_we
Joined: 06 May 2004
Location: Korea
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| Posted: Mon Apr 28, 2008 6:23 pm Post subject: |
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| GoldMember wrote: |
How dare you suggest that Korea will have an economic crunch. You Korea hater you!
By the way if you are thinking about buying gold or silver in Korea DON'T.
Samsung who are into every type of business there is in Korea are also surprise surprise, in the Bullion business. The government here however whacks on an additional 10% sales tax!.
Do the math on $10,000 grand there's $1000 in tax. You can instead spend that money on a great holiday in Hong Kong, and buy your bullion there.
So much for Korea's plan to become a gold trading HUB! |
Actually, I've bought lots of gold here recently. Up until last fall, I would not have. Since at least 2006, a "geum don (gold money)" 37.5 g square of gold (think pat of butter) was overpriced at W800k, when gold was hovering in the $600/oz range. But since gold broke $900/oz, the jeweler has actually been charging less than world ask value for gold. I've been loading up on it.
I expect gold to hover in the mid-$800/oz range for most of the summer, barring war in the ME or something. So, I'll start buying gold in the form of Krugs online from Apmex.com. It's called "cost averaging." I expect the economic dung to hit the propeller later in the year and gold will skyrocket later this year or next. As I see it, it'll last about 1 1/2 (maybe more) giving a time range of 2011-12 for recovery. But I'd like to get a battle plan to invest in Korea in some way so as to make a profit as some like some did in the original thread about the 1997 crash. |
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samd
Joined: 03 Jan 2007
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| Posted: Mon Apr 28, 2008 6:26 pm Post subject: |
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| Why do you expect another crash soon? (Serious question) |
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Suwoner10
Joined: 10 Dec 2007
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| Posted: Mon Apr 28, 2008 6:51 pm Post subject: |
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I chuckle whenever I see one of these advice posts about buying gold at $900 oz. (among the highest it's ever been in the history of the world).
Just buy Swiss Franks or another currency. What's with all you buying blocks of (maybe, if you don't get ripped off) gold instead of currency--or stock? Are you guys from the 1850's or something? |
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spliff
Joined: 19 Jan 2004
Location: Khon Kaen, Thailand
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Ut videam
Joined: 07 Dec 2007
Location: Pocheon-si, Gyeonggi-do
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| Posted: Mon Apr 28, 2008 6:58 pm Post subject: |
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| Suwoner10 wrote: |
| Just buy Swiss Franks or another currency. What's with all you buying blocks of (maybe, if you don't get ripped off) gold instead of currency--or stock? Are you guys from the 1850's or something? |
Because central banks can't print more gold to finance wars or bail out their buddies who made a lot of bad loans, y'dig? |
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htrain
Joined: 24 May 2007
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| Posted: Mon Apr 28, 2008 7:05 pm Post subject: |
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Just buy the stock GLD if you want to get into gold. I had a ton of gold coins that I always worried about before. They can become a real burden and I always worrie dsomeone was going to steal them.
To the OP:
Where do you live? And more specifically.. what's your address/working hours? ^^ |
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jim_we
Joined: 06 May 2004
Location: Korea
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| Posted: Mon Apr 28, 2008 7:48 pm Post subject: |
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A caveat. This last year alone, several of these "buy from us, we'll store it for you" places have been found to be lying. Basically, they were charging people to buy/store gold for them and putting the money in the bank or something. There's an old saying among gold bugs, "If you don't hold it, you don't own it!" I have most of my PM's stored with trusted relatives for me back home, but I'd rather have some on hand, too.
For the person who wanted to know where I live, I live about 1 1/2 hour west of Seoul. I work public middle school hours (8-5). I think mid-$800's is the best we'll see this summer and it will definately go up this fall. By 2011, you'll be kicking yourself that you didn't buy at these prices when gold is in the mid-four digit range. And yes, I do believe we're in for at least a 1997 type crash, if not worse late 2008-early 2009. |
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jvalmer
Joined: 06 Jun 2003
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| Posted: Mon Apr 28, 2008 8:23 pm Post subject: |
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| You think just Korea? Or most of Asia/world will take a hit? I don't think Korea would be isolated in the event of a crash, unless of course, Korean War 2 started. |
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RJjr
Joined: 17 Aug 2006
Location: Turning on a Lamp
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| Posted: Mon Apr 28, 2008 8:27 pm Post subject: |
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| Suwoner10 wrote: |
I chuckle whenever I see one of these advice posts about buying gold at $900 oz. (among the highest it's ever been in the history of the world).
Just buy Swiss Franks or another currency. What's with all you buying blocks of (maybe, if you don't get ripped off) gold instead of currency--or stock? Are you guys from the 1850's or something? |
People laughed at metals investors a fews years ago when the price of gold was $250 and silver was $4, pointing out how poorly gold had done versus stocks the previous twenty years. And gold being high in nominal figures in 2008 doesn't mean that it's anywhere near its 1981 prices when you adjust for real inflation.
This article articulates the inflationary issues better than I can: http://www.financialsense.com/fsu/editorials/schiff/2007/0427.html but it's a year old. Since then, the Dow has dropped and the prices of oil, metals, and especially food have gone WAY up.
I agree with the OP that metals are the best investment. In addition, I like the Merk Asian Currency fund.
Even though it sounds lame, buying two big bags of rice of different varieties at the start of your contract is an underrated investment, especially if you make it a staple food so you don't eat out so much. This saves a LOT of money in food costs and makes you relatively immune to food price inflation. |
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jim_we
Joined: 06 May 2004
Location: Korea
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| Posted: Mon Apr 28, 2008 8:28 pm Post subject: |
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| jvalmer wrote: |
| You think just Korea? Or most of Asia/world will take a hit? I don't think Korea would be isolated in the event of a crash, unless of course, Korean War 2 started. |
All of Asia will be affected. But this time won't be like the last time in many ways. The last time, the US economy was strong and gold/oil was cheap.
But the original statement in the thread was if you're going to stay in Korea for the duration of the slump, what would your strategy be to make money? |
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