Friday, September 5, 2008

Korean Economy Shows Signs of Confidence

The lead story today in the Korea Herald (the leading English newspaper in South Korea) says, "Fears of a financial crisis began to subside yesterday... [and] that the government had resumed intervention to halt the won's further slide." That's good. To be honest, I didn't really know there were fears of a financial crisis, but check out what the won has done against the dollar in the last four months.

This basically the period between when we decided to move to Korea and when we started getting paid. That's like a 15% hit on our salaries! Thankfully, it doesn't really matter what the exchage rate is until we transfer money back to the US, which we're still several months away from. And what really matters is the rate a year from now. Here's a five year graph of the exchange rate, showing the point at which I arrived and departed last time I was here.

Will I be so lucky again this time around? Only time will tell. Then again, if you happen to be a currency speculator, feel free to leave your speculations ;).


Andrew said...

where money and economic cycles are concerned, it's highly unlikely that anyone can be lucky on a regular basis. money has a way of balancing itself out.

Alice said...

Do you think the currency situation will change once Bush is out of office? I would think any new president would have an impact - Obama or McCain. I don't know about currency speculators, are there people that invest in curreny, then buy and sell as it rises and falls?

Andrew said...

I think trading currency is huge in the world of speculators. A new administration, especially if it's the democrats, will, I think, have a huge positive impact.

Michael Levy said...
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Michael Levy said...

So I don't really understand this, but I think I want the dollar to weaken. Then I can buy dollars at a cheaper price with my won. Think I should vote for McCain? Ha!

I don't think it's as simple as strong/weak though. I know governments will sometimes intentionally keep their currency weak in order to bolster exports.