It seems that President Lee does not see a weaker won as all good news (Reuters):
“Although there is more or less a positive effect, (the weaker won) becomes a threatening factor to corporate management, and especially, appears to cause a sharp rise in consumer prices,” Lee said.
Trying to keep the won weak against the dollar makes some sense if your main goal is to stimulate exports to the States, but a won that is weak against a weak dollar gives you a mega-weak won when trading with the rest of the planet. That is a ticket to inflation.
The question is how low is too low?
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Every single day that goes by, LMB gives us rational thinkers hope for the future of Korea. There is so much to like about his public musings, especially in comparison to the last guy.
True, so far — except for his Canal musings!
> The question is how low is too low?
THIS low is too low, dammit!
Yeah, nice. Smart time to cut some tariffs, and to use the threat of “inflation” as a justification. But he sounds pretty happy with 1000 USD/KRW.
Meanwhile, across the lake, as the dollar remains well over 1.50 EUR/USD and consumer as well as producer prices rise and the Chinese yuan rises and we find ourselves in the middle of a commodity super-cycle with peak oil as an angry sun god, Uncle Ben is bravely fighting DEFLATION of the past few weeks, evidenced SOLELY in the credit markets, mainly due to bad loans that everyone knew all along were bad loans. Oh, people say deflation is also showing up in the prices of gold and oil falling for a few days–LOL! But it’s not a joke, actual economists are talking like this.
The liquidity crunch reminds Poor Ben of the Great Depression, you see. They’re saying it’s time for QE — Quantitative Easing, throwing money out of helicopters and onto banks. I bet he’s adding midnight liquidity to his bedsheets, to dreams of angry i-bankers, and then sneaking downstairs to cry in front of his secret hoard of gold coins…
Make way for, as Stephen Jen of Morgan Stanley says, “The Great Monetary Easing of 2008.” I call that “a race to the bottom.”
http://www.bloomberg.com/apps/.....xknWmJGqnU
http://globaleconomicanalysis......-zone.html
http://www.morganstanley.com/views/gef/index.html