headhonchoII wrote:Well illustrated SW regarding the history of South Korea's boom, bust and boom again. An extraordinary story and quite unpredictable actually. They were bailed out by the IMF and they even collected citizen's gold to stop needing IMF support which came with restrictions. The devaluation would have wiped out many people but obviously allowed debt to be written down/paid off and then they came roaring back within a few years.
The thing with South Korea is this: yes, the currency devalued by 95%, but exactly 10 years later ( check the chart) the currency was right back to pre-Asian Crisis levels at 950 won per USD. Now that's impressive! Is the Korean economy stronger now than in 1998? Absolutely. Were huge numbers of manufacturing jobs created during that decade? Yes. Can the US use currency depreciation to grow its dying manufacturing sector? I sure as hell hope so. There are other factors to consider, like the reserve status of the USD, but if managed adequately could bring the US back onto a sustainable job-creation path.
Regarding the gold collection from Korean citizens; I'm sure in retrospect those individuals are a little pissed they had to give up their gold, which was trading around USD300 per oz at the time, but could have increased their wealth 6 fold in only 13 years had they not freely exchanged it for fiat currency.