Korea’s Golden Moments

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This little post deals with Korea, gold, ripping people off and getting ripped off.

 

Let’s start with the 1988 summer Olympics. In this instance it was the Koreans doing the ripping off and future pound for pound boxing great Roy Jones Jr. getting ripped off. After Jones beat the crap out of Korean Park Si-hun for four rounds, the judges gave the gold medal to Park, and Jones went home a loser.

http://www.youtube.com/watch?v=cJYBV9BXQNY&feature=related

 

Fairness aside, and seeing that Roy Jones has done alright since, it’s hard not to be impressed with the audacity of South Korea during that time.

 

This little post deals with Korea, gold, ripping people off and getting ripped off.

 

Let’s start with the 1988 summer Olympics. In this instance it was the Koreans doing the ripping off and future pound for pound boxing great Roy Jones Jr. getting ripped off. After Jones beat the crap out of Korean Park Si-hun for four rounds, the judges gave the gold medal to Park, and Jones went home a loser.

http://www.youtube.com/watch?v=cJYBV9BXQNY&feature=related

 

Fairness aside, and seeing that Roy Jones has done alright since, it’s hard not to be impressed with the audacity of South Korea during that time.

 

About ten years later another big gold rip-off took place in the land of the morning calm and this time it was the Koreans getting fleeced. During the IMF crisis South Koreans were in desperate need of foreign currency reserves. To deal with this the government organized a gold collection campaign so they could sell the gold in exchange for foreign currency. Families lined up to sell gold that had been in their families for generations. All in all, the gold collection campaign netted 2000 tons of gold which was in turn sold for 20 billion dollars worth of foreign exchange. The gold collection campaign is still heralded as an example of how Koreans can come together as a nation to overcome great difficulties. The downside is seen if you look at the gold price in late 1997/98 which was roughly $300 USD per ounce. Now, 11 years later the price is well over $900 an ounce with many analysts expecting the price to move to $2000 an ounce over the next few years. So that 20 billion dollars in gold that was sold would now be valued in the area of 60+ billion. I don’t suspect Roy Jones knows much about this but if he read about it might make him feel better especially if he’s still harboring some resentment about the gold medal.

 

Now to the present, as of late May, the Bank of Korea had only 14.3 tons of gold, just a little more than Cyprus. Check out national gold reserve statistics here. http://en.wikipedia.org/wiki/Gold_reserves

 

On July 4th the Dong-A Ilbo reported the following, http://english.donga.com/srv/service.php3?biid=2009070411578

Chang Min, the head of the Korea Institute of Finance’s macroeconomic research division who worked at the central bank until late last year, said, “The central bank has long considered several alternatives such as buying gold to diversify its foreign exchange reserve portfolio, which is heavily focused on dollars. It needs to secure more gold to diversify its investment.”

Kwon Sun-woo, the head of macroeconomic research at Samsung Economic Research Institute, said, “The Bank of Korea`s gold reserves are far less than enough. It should have bought more gold. Given the instability of the greenback, it needs to buy more gold.”

 

The article also said,


The bank has said nothing officially, simply saying, “We have made no decision on the purchase of gold and cannot say if we have considered it.” It will finalize by November its plan to manage foreign exchange reserves for 2010, but experts forecast that the bank will have no choice but to buy gold soon.”

 

 I think it’s safe to assume that the paper/electronic currencies of today, particularly the US dollar are expected to start unraveling. It also seems that most countries are going to try to get more gold as secretly as they can, not wanting to cause a ‘rush for the exit’ from the US dollar. And when it comes time to reset the financial system any country wanting to be a player in the new financial order is going to need gold, lots of gold.

 

On this last note, I hope that South Korea can use its audacity and its people’s ability to rally around a cause to get some of that gold back, securing themselves for the coming financial chaos.

 

 

 

 



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