With many symptoms similar to those of the United States’, South Korea and its exchange traded fund (ETF) have been exposed to many of the same problems stemming from the U.S. economic slowdown.
As a credit crisis lingers in the United States, it has sent a shudder through the South Korean market.
Kim Jae-Kyoung for Korea Times reports that with the financial market struggles coinciding with high inflation and an economic slowdown, concerns are growing that Korea may be experiencing a credit crisis stemming from a combination of asset deflation and rising interest rates. Korean banks have aggressively expanded and began to lend recklessly despite stagflationary pressures, making the economy very vulnerable to a credit crisis.
However, household debt in Korea may be the most troubling economic problem. The growth of household debt has risen even faster than that of our own. These debts in Korea have shot up more than 210% from 2001 to 2006, and is currently staring the repurcussions right in the eye.
Despite the threat of a credit crisis and this nation suffering from a weak currency, high fuel costs and an overly indebted consumer, President Lee has a vision and a plan for his country, according to Aaron Task for Yahoo’s Tech Ticker.