Japanese investors

Chapter 231 Resolved
Ishihara Masao waved to Park Yelin to sit next to him, and said casually: "Continue talking."

Park Junyong said eloquently: "South Korea is a country dominated by an export-oriented economy. Although foreign trade is fundamental, the large number of foreign investment remaining in South Korea is a variable.

The Federal Reserve's continuous interest rate hikes have also caused the U.S. dollar to return to the United States, triggering a new round of U.S. dollar cycle trends.

If the Bank of Korea does not continue to raise interest rates in line with the Federal Reserve, a large part of South Korea's domestic foreign capital will flow directly to the United States.Capital has a profit-seeking nature, and it will go to whoever offers the highest interest rate.

The massive exodus of foreign capital will inevitably cause a sharp decline in South Korea's economy, reduce foreign exchange reserves, increase financing costs, and negatively impact the real economy... resulting in severe unemployment.

Even if South Korea is not a country that relies heavily on foreign investment, it still cannot handle the exodus of a large amount of foreign investment.The cruel fact facing the Bank of Korea is that it has no choice but to continue to raise interest rates.

This time, the sharp decline in Korean real estate is regarded as the Korean version of the subprime mortgage crisis, which makes sense.First of all, the deposit paid by full-rent tenants is not all their own money.

More than 90% of this was obtained through bank-related loans.The landlord invested the full rental deposit into either real estate or virtual currency.

Otherwise, it is invested in financial markets such as stocks.It is almost impossible for the landlord to deposit the deposit in the bank and only earn interest.Both the landlord and the tenant are burdened with a lot of debt.

In addition, there are another large number of citizens who are in urgent need of buying houses with mortgages, credit card debtors, etc., who are all burdened with more or less loans.In South Korea, loan interest rates are floating rates.

Once the Bank of Korea raises interest rates, commercial banks will also adjust interest rates accordingly.Not only will deposit rates be raised, but loan rates will also be raised.

For this reason, people who are burdened with loans will inevitably have to pay more loan interest than in the past as interest rates continue to rise one after another, and this will directly push up their original income. Some debt pressure.

Once it is not enough, it means that the capital chain is broken.The most direct impact this time is reflected on the Korean real estate market. "

Masao Ishihara saw that his son's analysis was clear and logical, and he understood that he had done his homework beforehand and said: "In your opinion, will the Bank of Korea raise interest rates in the future?"

Park Junyong replied categorically: "Definitely. Although inflation in the United States has been suppressed to a certain extent, it is still high.

From this point of view, the Federal Reserve will also suppress its domestic inflation through a new round of interest rate hikes, thereby returning it to the ideal range.

This will inevitably cause the Bank of Korea to follow the Fed and continue to raise interest rates.The recent easing of relations between South Korea and Japan is also a result of the harsh reality of South Korea's poor domestic economy.

This is a difficult decision before the South Korean government whether to have backbone or bones.If you choose the former, the bones will be broken.

The seriousness of the consequences is probably no less than the huge impact of the Asian financial crisis on South Korea in 1997.Once you choose the latter and want bones, you will naturally lose your spine.

Although the face is lost and lost, the bones can be saved.If South Korea does not take the initiative to bow its head this time, it will cause more serious domestic economic problems.

South Korea's foreign trade exports to China have also turned from a long-term trade surplus in the past to a trade deficit.China is South Korea’s largest trading partner.Japan is South Korea's third largest trading partner.In particular, South Korea still has to rely on imports from Japan for some of its key high-precision materials.

Without those things, many goods in South Korea would not be produced at all, and there would be no way to export them and earn no foreign exchange.If the factory cannot start or operate at full capacity, it will cause the company to lay off employees.

Unemployment is an extremely scary thing for ordinary people.Especially for people with mortgage debt, credit card debt, etc., it is even more devastating. "

Pu Yilin suddenly smiled and said: "Junlong, you're right. You see, our son is indeed a talent!"

Ishihara Masao didn't even smile, and he didn't say even if he didn't smile: "Otherwise, you will make up for the losses for Junlong? You must know that the credibility of the financial industry is a very important foundation, and personal performance is the most beneficial support. .

If Junlong cannot make up for this failure in time, it will greatly negatively affect his future personal career and development in the financial industry. "

Park Yelin didn't hesitate for a moment and kicked the ball he kicked to him back to him and said: "You are Junlong's biological father, so naturally you have to think of a solution."

Masao Ishihara had already made arrangements: "It is not a very wise strategy to directly inject capital into Junlong's fund.

Junlong, just package the investments that caused the losses and sell them to Karuizawa Commercial Bank.Karuizawa Commercial Bank then packages various financial derivatives and sells them.

To put it bluntly, this is CDO structured derivatives, one of the main causes of the US subprime crisis in 2008.Of course, you can't call it by this name directly.

Otherwise, no one would buy it.As for the specific name, it doesn't matter.It's just a makeover. "

Park Ye-rim burst out laughing and said: "What you probably mean is that the leeks will ultimately have to pay for the 2000 billion won in losses caused by Junlong."

Masao Ishihara said calmly: "If you understand it this way, it's not impossible. Even if you buy these financial products, it doesn't mean you will definitely lose money.

If the Fed does not raise interest rates but instead cuts them, asset prices will inevitably rise.Doesn’t this allow people who buy related financial products to make money?The more you buy, the more you earn.

Besides, when investing, it is normal to make profits and lose money.What's more, Koreans are also very fond of gambling.Even in the face of high-risk investments, we will not hesitate to pursue high profits. "

Park Yelin's smile did not change and she said: "Even you said it yourself, just in case. There is a high probability that people who buy these financial management products will lose money."

Ishihara Masao said half seriously, half jokingly: "Since you are kind-hearted, then you can take the initiative to buy more when the time comes! If you buy more, others will buy less."

Park Ye-rim said bluntly: "I know the inside story, but I still want to get involved, that would be stupid. I'm not stupid, I will never buy it."

(End of this chapter)