[South Korea] If you have the world's highest household debt, you don't have enough disposable income - If you don't spend money, it's just bad manners.
2022-06-20
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Private/government debt is ２５４%
In a statement distributed in advance of the conference, Professor Ham Joon-ho of Yonsei University Graduate School of International Studies, who served as a member of the Bank of Korea's Financial and Monetary Committee, stated, ``Korea's macro leverage (private and government debt) level has expanded to ２５４% of GDP. ” he pointed out.
Household debt is １０４.２% of GDP
The household debt balance has continued to expand for １６ years, reaching a record high of １,８５０.９ trillion won (approximately １７６.９８７１ trillion yen) in the April-June ２０２１ period. According to a study by the Institute of International Finance (IIF), Japan's GDP ratio was １０４.２%, the highest among ３７ major countries and regions. Incidentally, the countries other than South Korea are followed by Hong Kong (９２.０%), the UK (８９.４%), and the US (７９.２%).
Global trend of interest rate hikes
On the １５th, the Federal Reserve Board (FRB), the central bank of the United States, announced the first major interest rate hike in about ３０ years. The policy rate will be raised by ０.７５% to a range of １.５０ to １.７５%.
Prior to this, South Korea announced that it would raise its policy interest rate from １.５% to １.７５% in May. The rate was set at １.５% in April, making this the second consecutive month of interest rate hikes. This will also be a severe blow to those who are burdened with household debt.
South Korea's per capita GDP is approaching that of Japan. According to the ２０２１ IMF announcement, Japan's price is $３９,３４０ and South Korea's price is $３４,８０１. However, Japan's household debt is around ６６-７%.
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Economy of the Yi Dynasty Korea "Japan introduced a monetary economy" The central bank of the Korean Empire is Japan's No. 1 bank.
A monetary economy did not develop on the Korean Peninsula
Repeated inflation due to mass production of currency
If there is no money economy, there is no capitalism
Introduction of loans and Japanese banks managing customs
Japan bailed out the past two currency crises
In the early Joseon Dynasty, exchange was limited to salt, a proprietary product, and cloth, rice, and grains. After that, linen, cotton cloth, rice, etc. were traded as physical currency. Kozo coins were issued in 1401 to encourage currency, but they did not become widespread.
In 1423, a bronze coin called Joseon Tsubo was created, and in 1464, a coin was coined, but these were used for the purpose of collecting taxes for the state and were not distributed to the general public. In 1678, the Johei Tsuho coin was minted.
This coin was issued for about two centuries, but confusion occurred because each government office was allowed to mint it. In 1866, Daewongun minted 100 coins to rebuild finances and rebuild Gyeongbokgung Palace.
Rather than rebuilding finances, they were mass-produced, causing the value of the currency to plummet and its currency to be denominated in 1868. Although the Gosen was issued in 1883, its value quickly plummeted and its currency was banned in 1895. Cupronickel coins were issued in 1892, but they were used as supplementary coins during the gold standard system.
In other words, the economy of the Korean Peninsula is based on barter. Slaves were also sold in exchange for five slaves and one cow.
After the Sino-Japanese War, Japan introduced loans to overcome the financial difficulties on the Korean Peninsula. Customs belonged to the Daiichi Bank of Japan, and customs duties were collected in Japanese currency. The money consolidation project was financed by loans from Japan, and Japan's First Bank became the central bank of the Korean Empire.
Without a money economy, there can be no capitalist economy. Japan modernized the Korean Peninsula and developed the market, including the monetary economy and the circulation of capital. Even now, when South Korea conducts transactions with other countries, letters of credit for accounts payable are issued by Japanese private banks. Without this letter of credit, Korean companies cannot conduct international transactions.
Japan also provided relief during South Korea's currency crises in 1997 and 2008. The very currency that is the backbone of the Korean economy becomes something that Japan gives credit to. Although Japan no longer issues currency haphazardly and causes catastrophic inflation as it did during the Joseon Dynasty, no country has ever experienced a currency crisis twice in 10 years. In that sense, it can be said that Wong remains vulnerable. This is the history of currency on the Korean Peninsula up to the present day.
Decrease in disposable income due to mortgage loan
Housing loans are the largest component of household debt. The skyrocketing price of land in Seoul continues to skyrocket, forcing many to borrow large sums of money to purchase apartments. As a result, even if GDP and wages rise, most of the money goes toward repaying household debts, resulting in less disposable income. I don't have any money to spend.
Even after salaries are paid, the money goes straight through the tunnel and is returned to financial institutions, where it is returned to the market. This is the reality of GDP per capita in the Korean economy.
A traveler who just has bad manners
As the coronavirus pandemic begins to subside and overseas travel is gradually lifted, travel to Japan is expected to become a boom again in South Korea. It's not that they like Japan. The above reasons are largely responsible for why Japan is chosen as a nearby travel destination.
And just because you come to Japan doesn't mean you have to spend money. There are quite a few groups that find faults, point them out, and complain to each other. It is said that Korean tourists just have bad manners.
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Yun Seok - yue's manifesto aims to attract and circulate capital through a free economy.Will the National Assembly become a burden that hinders this?
South Korea is wavering between pro-China and pro-US
Original regime change through social policy
A country that thinks about what is better
Yin Seok-yue promotes free economy
Promoting free competition within the country and moving towards CPTPP
Legal development by the Diet is hopeless
Is South Korea wondering whether it should join China, which has achieved growth in recent years, or join the camp of free nations such as Japan, the United States, and Europe? I guess it's a question of which is better, but it seems like a very polarizing choice.
The Moon Jae-in administration completely abandoned its pride as a democratic country without hesitation and spent five years desperately trying to join China and North Korea, a country that violates human rights at its worst, but unfortunately there was no result. Ta.
The new president, Yun Seok-Yeol, has the exact opposite policy, aiming for Korea to be a member of the Japan-U.S. and liberal camp. This seems to be the composition of the right-wing and left-wing forces in South Korea.
The left tends to seek the enhancement of social institutions, while the right tends to seek free competition and liberal democracy. This is a question of the balance between social welfare and liberal economics, and a debate about competition versus distribution. This is an issue to be debated within a democratic country, and can be said to be a universal frame.
America's two-party system is very easy to understand. Republicans and Democrats can be broadly divided on the question of whether taxes should be primarily used for public welfare, or whether they should reduce taxes in the first place and increase competitiveness in a free economy. It is also expressed in the framework of big government and small government.
The choice of domestic social policy is not a question of which country will benefit you by following, but rather a matter of foreign policy. Prior to Japan's annexation of South Korea, there was intense conflict between pro-Russian and pro-Japanese factions on the Korean peninsula. Is nothing different from that era? Another characteristic of South Korea is that its foreign policy is also its domestic policy.
Looking at Yun Seok-Yue's manifesto from the perspective of economic policy, his economic policy is to bring back the capital that fled South Korea under the Moon Jae-in administration.
In particular, the focus is not on where to focus investment and foster industry, but rather the policy appears to be aimed at attracting investors by abolishing regulations and promoting a free economy and free competition.
It appears that the plan is to aim to join the CPTPP and other liberal nation frameworks based on this liberal economic frame, but in order to realize this, it will be necessary to obstruct the various free competitions that exist within Korea. Legislation must be put in place to abolish the regulations that apply.
This is the job of the National Diet, the legislative branch, but the opposition Democratic Party of Japan still holds nearly 60% of the seats. In other words, there are many hurdles for the time being in the economic policy advocated by Yun Seok-Yeol and cooperation with liberal countries. In other words, we will have to wait for the 2024 general election.
The exchange won rate has not stopped falling.The No Japan movement is a campaign to buy domestic products.Nothing will change under the chaebol economy.
South Korea's trade dependence on GDP is more than 70 percent, including the service sector.In other words, domestic demand is low and foreign exchange is directly affected.Even if foreign demand is received, it does not circulate at home and flows abroad.If the person who made the purchase contract increases the dollar by 5% at the time of payment, the payment will increase by 5%.The won-dollar exchange rate is 1,200 won, but it has been hovering around 1,200 won in recent days.
In order to maintain international competitiveness, chaebol companies such as SAMSUNG buy parts in bulk and produce them in bulk to reduce costs and sell them at low prices.In this case, large debts are always carried out and large payments are repeated, and problems arise when the value of the currency changes significantly during that period.This is the so-called default.Under these circumstances, the won's international credit rating has not increased, and South Korean companies can trade in dollars depending on the L/C of Japanese commercial banks.
South Korea experienced two foreign exchange crises in 1997 and 2008.No country will experience two foreign exchange crises in 10 years.In other words, South Korea's industrial form is vulnerable, and in short, it is trading beyond its currency capabilities.
Considering what Moon Jae In wants to do, the real intention is to socialize, control the currency, and stabilize the value of the won.Do you think the boycott is a campaign to buy domestic goods if it is reversed?
South Korea is listed by the FRB as a currency manipulator.
The reason why domestic demand is not expanding is the existence of chaebol companies.The role of chaebol companies in driving the Korean economy is important, but on the other hand, investment in chaebol companies is concentrated and other industries are not growing.In addition to the businesses run by chaebol companies, how can Korean companies grow globally?It can only be done with its own money without investment.
This structure will not change even if there is a boycott Japan.As a currency manipulator, even if it leaves the liberal economy, it will not change.It is necessary for the government to take the lead in fostering domestic demand and to attract investment in what industries to foster domestic small and medium-sized enterprises.The boycott Japan does not mean that South Korean domestic companies' sales will increase.
Moon Jae In's term of office is less than three months, and criticism from his country seems to be gathering.I think it's quite late from Japan view.
According to a Korean public opinion poll, the support rates for political parties are 42.4% for both opposition parties, and 39.6% for People's Power.The general election will be held this year.
According to a Korean Realmeter opinion poll conducted in the fourth and fifth weeks of March 2020, the party support rate was 44.6% for the Democratic Party of Korea, and 30.0% for the United Future Party, the predecessor of People's Power. The Realmeter survey results announced on the 15th of this month show that the Democratic Party is 42.4%, and the People's Power is 39.6%.Although the gap has narrowed, the Democratic Party's approval rating has fallen by only 2.2 points. do not have.
In the 2020 survey, 55.7% approved of Moon Jae-in, and in the current survey, 36.3% approved of President Yoon Seok-Yeol. Interpreting these figures literally, expectations for the power of the people in the legislature have increased, but the support rate for the Democratic Party has remained almost unchanged. Both parties are members of the Democratic Party, whose party is led by Lee Jae-myung, who miraculously survived the assassination that everyone thought was a farce and was discharged from the hospital after a long hospitalization. Lee Jae-myung is currently being indicted by prosecutors.
These Democratic Party supporters can be seen as a rock-solid support group that will continue to support any party leader no matter what. Are these people who make a living through trade with China, and whose livelihoods are directly connected to their support for China? South Korea's trade dependence is 81.9% of GDP. The pro-Japanese and pro-American and pro-China and pro-North Korean compositions were one of the themes brought to light by Moon Jae-in, who stirred up the No Japan movement, but the essential issue is the economy. How far has the withdrawal from China's economy progressed?
In the Facebook group of the author who co-authored ``Anti-Japanese Tribalism,'' it is clear that the number of posters and viewers has decreased dramatically since Yun Seok-yeo became president. Is it because the No Japan movement has subsided? In that case, would those people have been better off if the No Japan movement had disappeared? I wonder how many people out there just wish they could drink Japanese beer. In other words, were the pro-Japanese simply rebelling against the intense anti-Japanese movements that were taking place? At least what we can say is that the power of pro-China, pro-North Korean forces does not seem to be weakening.
If we go into the 2024 general election in this state, there is a high possibility that the Democratic Party will once again control the largest number of seats. If this is the case, the Yun Seok-Yue administration will be run in a twisted manner throughout his term. Anti-Japanese issues are also legal issues. South Korea is a country with no anti-Japanese convictions. Since the Democratic Party is the most powerful party in both countries, it is difficult to bring about social change through legislation, and there is a high possibility that an anti-Japanese leftist president will be elected again in the next presidential election.
The Korean won is falling.It exceeded 1,240 won. The reason that Japan must not make promises with the new Korean president prematurely .
The won fell to 1,243 won against the dollar.If the Fed raises interest rates in real terms, it will fall further.The main reason is that Russia's economic prospects are pessimistic. And Yoon Seok-yeol won the presidential election on March 9 and became president on May 10.Yoon called for strengthening the U.S.-South Korea alliance and mentioned the deployment of THAAD.China accounted for 24.8 percent of Korea's exports, twice as much as the U.S., the second largest exporter.When the Park Geun Hye administration decided to deploy THAAD, China imposed severe economic sanctions.China's economic sanctions are only pessimistic for investors, so Korean investment is likely to rise further and the won is likely to fall further.
Next time, South Korea will break its promise with China
South Korea has always opposed registration as a World Heritage Site. The meaning of culture is different from the rest of the world. People from all over the world come to Japan for a variety of reasons, including culture, history, anime and manga, cat cafes, maid cafes, traditional Japanese food, and other gourmet food. These are evaluated within the framework of culture. If we look at the definition of culture, we find that `culture is a system of ideas and value standards shared within a society, and a unique style possessed by a group.'
Cultural heritage must be something that has survived for a certain period of time, and can be thought of as something that has had a major impact on subsequent eras, and can be considered to be the "culture" of each country. It can be said that it exists within the range of value standards and definitions. Furthermore, Japan has registered 20 World Cultural Heritage Sites.
In this sense, South Korea is the only country to raise questions about Japan's registration as a World Cultural Heritage Site. This is not a historical issue, but simply a difference in the definition and framework of culture. Can they explain why Auschwitz in Germany and the Colosseum in Italy are world heritage sites? The Colosseum is an arena for killing each other.
If the common concept of ``culture'' in each country is the premise of world cultural heritage, then no Japanese person would object to the fact that Auschwitz and the Colosseum are cultural heritage sites. This is the Japanese way of thinking. In other words, it is different from Korea.
People visiting Japan come to see that there is almost no garbage left on the roads all over the country, and to see that the natural environment is still kept clean in one of the world's most developed countries, which is unique in the world. Although it can be said that this is Japanese culture that cannot be seen, there is no framework or precedent for considering such a culture that spreads throughout the nation as a cultural heritage.
Even if such a cultural framework were to match the world's definition, only South Korea would be opposed to it.
![[South Korea] If you have the world's highest household debt, you don't have enough disposable income - If you don't spend money, it's just bad manners.](./upfile/409-1.webp)
