On the streets of South Korea in November 1997, many people walked to the roof of the securities building, including bosses, shareholders, and civilians. The reason is not so complicated, it is that there is no money, and their money has become waste paper overnight. The only thing they can do at the moment is to lash out at the South Korean authorities and the United States for not being able to do anything before jumping. In just two weeks, half of South Korea's chaebols declared bankruptcy, only 10 foreign exchange banks survived from 26 banks, millions of citizens lost their jobs, and more than 10,000 people committed suicide. What exactly happened to cause South Korea to suffer such a heavy blow? Who's behind this?
This video will take you to see how South Korea went bankrupt and sold out under the Asian financial crisis.
In the early 1970s, under the leadership of South Korean President Park Chung-hee, South Korea gradually opened its markets, implemented an economic policy that dominated exports, and attracted a large amount of foreign investment into the country, hoping to promote the economic development of the entire country. It is also under these policies that South Korea has become a well-known backward country in the world in less than 20 years. South Korea's per capita GDP rose from $106 in 1965 to $1,745 in 1979, when the average GDP of Chinese was only 417 yuan. Compared with the two, the gap is shameful.
What surprises the world even more is that south Korea's data is still growing at a rate of 8.9% per year. The South Korean people believe that this is a miracle of the Han River, and it will not be long before South Korea becomes a great power like the United States. They may never have imagined that in the eyes of capital, the rapid growth of the Korean economy, like a crazy long-meat pig, waited until it was fat enough to use the knife.
In 1997, South Korea ranked 32nd in the world with a per capita GDP of $10,000, a figure that far exceeded most countries in Asia at the time. At this time in South Korea, electronics, steel and other fields are ranked first in the world, Samsung, SK and other chaebol groups have made a lot of money, and various types of small businesses have also mushroomed. There is even a scene where the manager hands red envelopes to the newcomers in order to rob the employees. At that time, more than 80% of Korean companies were foreign companies, and they did not realize that if these foreign companies withdrew their investment and ran away, the whole country of South Korea would fall into chaos. South Koreans, obsessed with economic take-off, do not perceive the danger coming. In the shadow of the rapid economic development, hidden is the excessive mortgage of the US bank, and the south Korean foreign exchange reserves that rely on the US dollar are seriously insufficient.
Just then, the troublemaker George Soros, a world-renowned currency speculator whose value was already comparable to the annual GDP of some European countries, appeared. Soros made a direct attack on the pound sterling and the Mexican peso in 1992 and 1994, which led directly to the collapse of the Bank of England and Mexico, and he himself profited more than $1 billion. Of course, the Asian financial crisis of 1997 was also the handiwork of Soros.
George Soros (Founder of Quantum Fund)
At the end of the 90s, the four Asian tigers were reveling in the world of capital, but in Soros's eyes, these were four fat sheep. As long as he can bring down the economy, he can make at least $10 billion.
In July 1997, under the quantum fund venture founded by Soros, the Thai stock market collapsed in an instant, and the exchange rate of the Thai baht fell by 17%, followed by the chaos of the Thai economy and the financial storm that swept across Asia. Soros then attacked the Philippines, Malaysia and other developed countries, and in a month's time, the entire economy of Southeast Asia was destroyed, and none of them were spared.
The South Korean authorities, which are already vigilant, are well placed to avoid the crisis, and as long as they restrict foreign investment and control the stock market, they can avoid the disaster. But at that time, South Korea was full of money, and felt that its relationship with the United States was so good that people would not attack themselves. The conceited South Korean authorities are about to face a fatal blow from the United States.
At the end of October 1997, someone had already revealed to foreign companies in South Korea that they were ready to run away with money. On November 6, Soros officially launched an impact on the South Korean economy, and all South Korean foreign companies collectively changed their minds and withdrew their investments to leave South Korea. This move directly led to the collapse of the South Korean stock market, like a building, losing its most critical load-bearing wall. The stocks that the South Korean people bought with their hard-earned money suddenly became waste paper, and at the same time, many small businesses were dying. Most of these small businesses use collateral to borrow money from banks to maintain their daily routines, but the loans are only received as bills of exchange and no cash. This has led to a huge hidden danger, once the capital chain is broken, the South Korean economy collapses. Then, these bills of exchange will also be worthless. These hidden dangers were actually raised by economists as early as 1980, but no one cared about them at that time.
Soros saw the loophole in South Korea's finance and succeeded in one fell swoop. Small businesses began turning to the government for help, hoping that it would allocate funds to help them through the crisis. However, in order to keep large enterprises, the South Korean government not only refused to help, but even released all foreign exchange in order to achieve the role of stabilizing the won. The South Korean government's actions were nothing more than a moth to a fire, and south Korea's foreign exchange at that time was only $15 billion, while Soros had hundreds of billions of dollars in capital. The two sides exchanged fire, and in less than 10 days South Korea lost, the government ran out of money, and the won began to depreciate, falling by nearly 18.7% on the first day.
In this case, South Korea decided to turn to Japan for help, and Japan understood that if South Korea fell, it should be its turn next. When Japan decided to use $50 billion to help South Korea, the U.S. Treasury Secretary made it clear to Japan that if Japan did not close in time and watch from the sidelines, then the Quantum Fund would stop its attack on South Korea and attack Japan with all its might. Japan simply could not afford the impact of hundreds of billions of dollars, and South Korea, which had lost hope, could only watch the south Korean won depreciate, and the currency depreciation was followed by inflation.
The money in the hands of the people has gradually turned into waste paper, small businesses have collapsed, the stock market has collapsed, and investment projects are stillborn. Loans became the last straw that crushed the camel's back, and even if people mortgaged their properties, they were far from enough, and they had no choice but to die. Small businesses have finished calves, large and medium-sized enterprises have also followed in the footsteps, even if the South Korean government tries its best to retain, South Korea's top 100 companies have nearly 60 bankruptcies.
The financial turmoil has thrown South Korea into chaos, and the depreciation of the Korean won has encountered new problems, and the foreign exchange banks have decided not to trade in Won and use the US dollar. The use of dollars means that Koreans can spend millions of won on a dish, and they also have to return billions of bank loans, which is not a way for people to live.
Premeditated currency speculators exchanged all their won into dollars long before the financial crisis, and when the financial storm came, the value of these people took off directly. With enough capital, they began to buy real estate from the Korean people, gold, and squeezed capital to the end. Since someone has made a start, South Korea's big chaebol Samsung and others have also begun to join the queue of crazy leek cutting, and buy value-preserving products at low prices.
According to incomplete statistics, the financial turmoil has caused at least 1.3 million people in South Korea to lose their jobs, and one in every 500 people has chosen to commit suicide, while Soros's quantum fund has made more than $10 billion in South Korea.
Eventually, South Korea bowed to the U.S. government and found a $55 billion IMF loan from the United States. On November 16, the two sides signed an agreement that requires South Korea to thoroughly open up foreign companies and give them the greatest dividend. Perhaps many people do not understand, in fact, behind the agreement is that South Korea sold itself to capital and agreed that capital can do anything in South Korea.
In just two weeks, South Korea's decades of wealth and technology have been seized by U.S. capital, making it the country hardest hit by the Asian financial crisis. In fact, before South Korea, Hong Kong, China, became the second region after Thailand to be swept up by the financial turmoil, but fortunately, the Chinese government and capital fought hard to the end, and finally preserved the exchange rate of Hong Kong, so that Soros returned home.
That's it for the 1997 financial crisis in South Korea.
What do you think of Soros's actions and the inaction of the South Korean government?
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