novelraw Chapter 617: Harvesting South Korea, Investing in Samsung, and Positioning for Korean Starlets
Chapter 617: Harvesting South Korea, Investing in Samsung, and Positioning for Korean Starlets
[Chapter 617: Harvesting South Korea, Investing in Samsung, and Positioning for Korean Starlets]
Mid-November.
After the Japanese financial market was completely captured.
The Wall Street investment banks, led by Soros, set their sights on South Korea, opening a new battlefield.
In fact, according to the investigative data previously gathered by Richard and Willix, South Korea's financial defense capabilities were not even on the same level as Japan's.
One could even say that in the eyes of financial bandits, it was a fragrant beauty completely left undefended.
There were loopholes everywhere.
As everyone knows, before the 70s, South Korea was a very ordinary and backward country.
Due to the need to counter Japan and suppress China, in the Late Stage 70s, it received key support from America, which even transferred many high-end industries from Japan to South Korea.
Such as the semiconductor industry, the steel industry, the shipbuilding industry, and so on.
After receiving strong support from America, South Korea utilized its port location advantages, combined with the dividend advantages of a small land area and a large population, to achieve rapid economic development.
By the 90s, its economy was unprecedentedly prosperous, and it had accumulated a massive amount of wealth; in the eyes of its master, America, this pig had been fattened up, and it was time for the slaughter.
Its financial market was also influenced by America and was almost completely liberalized; the foreign exchange market, stock market, and futures market were all fully open to foreign capital, allowing financial bandits to come and go as they pleased.
More importantly, South Koreans had been blinded by the rapid economic development of recent years, and the financial market had fallen into a state of deformed prosperity.
Generally speaking, for a healthy and rapidly developing country, its domestic credit scale compared to its GDP should be around 50% to be considered normal.
However, after entering the 90s, South Korea's domestic credit market expanded without restraint; last year, the ratio of total credit to GDP was as high as 183%, far exceeding the healthy red line.
Not only that, in recent years, the deformed development of South Korean banks has been terrifying.
Since South Korea implements a Chaebol model, every Chaebol has its own bank; Daewoo, Samsung, and Hyundai all followed this pattern.
Because of the rapid economic development, South Korea was filled with an atmosphere of blind arrogance from top to bottom, and the South Korean government even shouted the slogan of the Universe Country.
The major Chaebols began blind expansions, and to support their own businesses, the banks often relaxed their auditing; risk control management became a mere formality, leading to excessive expansion of bank credit and unbelievably large amounts of non-performing assets or bad debts.
According to the data investigated by Richard, in the first half of this year, the non-performing assets, bad debts, and delinquent accounts of South Korean banks accounted for 36% of the domestic GDP.
What does this concept mean?
Generally speaking, if a country's total non-performing bank assets exceed 5% of its GDP, it is already very dangerous.
The well-known 2008 American subprime mortgage crisis was the root cause of the global financial crisis.
Even during the 2008 American subprime mortgage crisis, the proportion of non-performing assets, bad debts, and delinquent accounts of all banks to America's domestic GDP did not exceed 25%.
Simply put, the current South Korea has accumulated a huge amount of wealth and its financial market is completely undefended, while it has also accumulated extremely high risks.
In the eyes of the Wall Street investment banks led by Soros, it was like a beautiful woman in the wilderness with all her clothes stripped off; with just a light touch... they could devour her alive.
Consequently, Soros and the Five Major Wall Street Investment Banks continued to harvest Japan while diverting part of their funds to quietly flood into the South Korean foreign exchange market and begin shorting the korean won.
This change was naturally noticed by Richard and Willix immediately.
According to their analysis, the South Korean financial market was too fragile and was unlikely to put up any tenacious resistance.
So after observing for two days, on the third day, which was November 15th, they happened to close out all their short positions in the Japanese foreign exchange market.
Willix decisively invested $2 billion into the foreign exchange market with 30x leverage to short the korean won.
In fact, the South Korean financial market was even more fragile than imagined.
The South Korean government could hardly organize any decent resistance; in just a few short days, the South Korean financial defense suffered a complete collapse.
Starting from November 17th, the exchange rate of the korean won against the US Dollar plummeted relentlessly.
On this day, the korean won's exchange rate against the US Dollar fell from 923:1 to a record 1008:1, a drop of as much as 9.2%.
It wasn't that the South Korean government was unwilling to resist, but that their foundation was too poor and they were powerless.
The South Korean government's foreign exchange reserves were not large to begin with, totaling only over $30 billion, and they were completely exhausted in just a few days.
They even organized the public to donate their gold; it must be said that ordinary South Koreans had a strong sense of the national interest, knowing that if the country couldn't hold out, everyone would suffer, and they donated the gold from their homes one after another.
However, it was only a drop in the bucket and could not stop the international financial bandits led by Soros and the Five Major Wall Street Investment Banks.
Soon, South Korea's already extremely fragile financial System collapsed, and numerous banks went bankrupt.
This subsequently triggered the collapse of even more small and medium-sized enterprises; not only that, but even the major Chaebol giants suffered heavy losses.
The most serious case was the Daewoo Group.
As South Korea's largest Chaebol, it was naturally massive, with business operations including finance, foreign trade, shipbuilding, automobiles, heavy equipment, electronics, communications, construction, chemicals, and more.
It had over 40 subsidiaries and over 30 overseas branches, with as many as 300,000 employees.
Before the financial crisis broke out, it was prestigious, incredibly powerful, and full of glory.
However, just a few days after the South Korean financial crisis erupted, the Daewoo Group's high debt ratio created a massive debt burden, and its banks went bankrupt under the financial shock due to excessive bad debts.
The entire Chaebol's already tight capital chain broke completely, and the stock prices of all its listed companies plummeted.
Despite the Chaebol taking a series of reduction measures, the Daewoo Group was still powerless to save the situation, and the myth of 'Too Big to Fail' finally shattered.
The entire group was teetering on the brink of bankruptcy.
Other major Chaebols like Samsung and Hyundai also suffered heavy blows.
After trying every possible means, the South Korean government could only watch helplessly as the financial market was captured by a group of international financial bandits.
On this day, whether it was Soros and the Five Major Wall Street Investment Banks, Skycrest Capital, or other international speculators shorting the korean won, everyone made a fortune.
At the same time, everyone knew that South Korea's situation was hopeless and it had laid down its arms; they could now harvest it boldly and recklessly.
Everyone invested more capital and increased their shorting of the korean won.
On November 18th, it fell another 3.2%.
On November 19th, it fell another 3.7%... by November 23rd, the exchange rate of the korean won against the US Dollar had fallen to a record 1213:1.
On this day, the South Korean Department of the Treasury held a press conference and announced: "We are unable to reverse the economic decline and have decided to seek aid from the World Bank and the International Monetary Fund."
In reality, it was an unconditional surrender to their master, America.
However, by December 1st, the delivery day for South Korean stock index futures arrived; on this day, the KOSPI Index on the stock market fell to a record 376 points, a 35% drop compared to when Willix shorted the index futures at the end of August.
In this financial robbery of South Korea, Skycrest Capital once again made a huge profit, with total earnings exceeding $8.5 billion.
Meanwhile, South Korea's total losses were at least over $800 billion; it could be said that decades of hard work had returned them to pre-liberation status overnight.
It was also on this day that the World Bank and the International Monetary Fund simultaneously released announcements accepting the South Korean government's invitation, sending negotiating representatives into South Korea that same day.
A few days later, the World Bank and the International Monetary Fund respectively signed a package of rescue plans with the South Korean government.
The main contents were:
The World Bank and the International Monetary Fund would provide the South Korean government with loans totaling $57 billion.
But attached were extremely harsh conditions, which were actually further carving the meat from South Korea and dismembering its financial order, mainly including the following three points.
First, the South Korean government was required to immediately close those commercial banks that had inextricable links with the Chaebols.
Everyone knows that South Korea is a nation built on Chaebols, and commercial banks are the lifeblood of these Chaebols; closing these commercial banks under the Chaebols meant cutting off their right to borrow recklessly from them, which would inevitably have a huge impact on the Chaebols' recovery.
Second, South Korea was required to raise bank interest rates to 28%.
On the surface, it seemed like it could attract more foreign capital into South Korea, but forcing banks to implement high interest rates would inevitably greatly increase the financing costs for enterprises, causing many companies to go completely bankrupt.
Third, the financial market was to be completely opened to foreign investors.
This meant that American capital could achieve full ownership of South Korean domestic banks, directly controlling the South Korean financial market and completely turning it into a battlefield undefended against international financial bandits, making it easier for the next harvest.
The South Korean government also knew this was a poisonous prescription, but they had no choice; at the moment of life-and-death crisis, they had to swallow it through tears.
Subsequently, the American Department of Commerce also organized a trade delegation composed of the World Bank, the International Monetary Fund, Wall Street financial capital, and some physical enterprises, which came to South Korea under the guise of economic and trade exchanges to help Japan overcome its difficulties.
This time, Linton had Winnie join this delegation.
With the intervention of the World Bank and the International Monetary Fund, the South Korean financial crisis was temporarily brought under control, but all the South Korean Chaebols suffered massive losses and were either invested in or acquired by Wall Street investment institutions.
The most serious was the original largest Chaebol, Daewoo Group, which was nearly declared bankrupt, losing 90% of its assets, with the remaining enterprises barely surviving.
Even the Samsung Group, which had now become the largest Chaebol, had 60% of its equity controlled by American capital.
Winnie also managed to acquire a 10% stake in the Samsung Group for only $600 million, which was dirt-cheap.
To give some perspective, the Samsung Group had a turnover of $85 billion and profits exceeding $7 billion in 1996, and its 1997 turnover was as high as $96.1 billion.
But there was no other way; once the financial crisis hit, the deteriorating economic situation and severe financial pressure almost bankrupted the Samsung Group.
Under these circumstances, it was no surprise that this fragrant piece of meat, the Samsung Group, was forcibly invested in by American financial bandits.
Linton had Winnie invest in Samsung partly because he valued the development potential of this Chaebol.
More importantly, in his memories of his past life, after this financial crisis, the South Korean government would launch a 'Cultural Nation' development strategy and issue a series of supporting policy laws, leading to the rapid rise of the South Korean domestic entertainment industry.
Subsequently, South Korea would produce a large number of beautiful starlets who would become famous across Asia and even have a certain influence worldwide, such as: Jun Ji-hyun, Han Ga-in, Han Hyo-joo, Son Ye-jin, Kim Hyun-ah, as well as Girls' Generation, T-ara, and so on.
And CJ Entertainment, under the Samsung Group, would become South Korea's largest entertainment media company; through it, Linton could legitimately establish connections with these female stars.
*****
https://www.patreon.com/Sayonara816.