Tuesday, 4 October 2011

Is south Korea the next debt domino in the world capitalist financial crisis

Earlier we posted an article about the dependent nature of the south Korean economy . We used a figure of $370 billion debt which was taken from "official" or "mainstream" sources. This is probably an underestimate . A DPRK publication stated ". The debt of the puppet regime amounts to US $ 1 448.6 billions, that of businesses US $ 1 155 billions and that of households US $ 700 billions.". SK 's debts are staggering. In 1998 they had to be bailed out by the IMF , at the time it was the biggest bailout in the IMF's history.
Now there are some hints emerging that SK might be the Asian victim of the crisis that has afflicted several Eurozone countries. Firstly,the cost of insuring SK against a debt default has increased. Secondly, many souuth Korean savings banks are in trouble and 7 had been shut down by the government. A banking bailout in south Korea would be alarming . Probably end up with Lee Myung Bak phoning Obama and saying "More dollars please, boss" .
Western pundits like to malign the DPRK but it goes without saying that the independent socialist self-reliant independent national economy is unaffected by south Korea's woes.

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