The exchange rate exceeded KRW 1450. Naturally,

The exchange rate exceeded KRW 1450. Naturally, it was predicted. Perhaps those who invest a little in X considered the exchange rate rise to be a given.

An increase in the exchange rate is advantageous for exports, and import prices rise, resulting in inflation, it is learned from economics books. In other words, even if import prices rise, we can cover it with our export competitiveness.

So far, these functions have worked well. This is because Korean companies have expanded around the world and made huge exports.

But what is Korea's current export competitiveness? Samsung Electronics cannot produce the same operating profit as it did in the past, and Hyundai Motor cannot produce the same performance as it has recently. In particular, while the automobile industry is serious, Hyundai Motor and Vanderthals are entering into tightening management.

Secondary batteries, which were thought to be future food, are also losing their competitiveness and entering an emergency management system. Needless to say, steel and petrochemicals have already been eliminated from the competition.

Now the worst is unfolding. The exchange rate is rising, but exports are not, and only prices are rising. In this case, marginal borrowers with no disposable income among household loans accumulated so far will inevitably be unable to repay their loans. The recent rise in delinquency in the secondary financial sector is alarming, which is why the NPL market is booming.

In this situation, the Bank of Korea has two options.

The first is to raise interest rates to burst the real estate bubble and go the way of Japan. Japan is facing a lost N decade after the bubble that occurred after the Plaza Accord burst. It is similar to the current situation in the real estate market in Korea.

Second, lower interest rates to take the path of Venezuela, which suffers from inflation. It is to sharply widen the gap between the haves and have-nots by raising prices while maintaining the bubble in the real estate market.

Whichever you choose, hell will unfold. Perhaps due to the nature of Korean politicians, it is highly likely to go to No. 2. The gap between those who have built high-priced real estate or dollar assets and those who have not will widen.

If the gap widens too much, Korea's security, which was proud to be safe, could also crack, and political and economic conflicts are still serious but could become even more serious.

The way to overcome this situation now is for everyone to work hard, increase export competitiveness through R&D, reduce inflation by saving frugality, gradually reduce household loans, and reduce the fiscal deficit.

Yes, we are all doing the opposite. Currently, the nation is drunk on unemployment benefits and labor rights; finance-oriented financiers dominate large companies over R&D engineers; everyone is buying expensive luxury goods and cars on installment payments; and household loans are exploding and saving them with state money.

The faster the exchange rate rises, the more the country's system can falter. The IMF could have risen again because Korea, as a person, experienced a crisis as a youth, but Korea, which is now an old man, may not be able to rise again if it experiences such a crisis.