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Strategies & Market Trends : Asia Forum
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To: Rational who wrote (138)12/25/1997 4:10:00 PM
From: Zeev Hed   of 9980
 
Sankar: Maybe you can clarify something for us here in "asian ingnoramus land", I understand that Korea has implemented a "true name" policy in their banking system aimed at bringing to the fore a large portion of an undeground unreporting (and untaxed) economic activity. The new regulation has supposedly caused some $70 to $80 billion to go underground (and no longer depositited in flase name bank accounts). Are these reports correct? Does the sudden soaking of $70 Billion from the Korean economy have anything to do with the current shortage of foreign exchange in Korea and thus the rapid colapse of the won? And last are there similar sizeable underground economies in other asian countries?

By the way, I can accept most of the tenets of your scenario, except the weakness in the dollar, if it comes it will be much later (maybe a year or so) after financial stability has returned to the rim. The weakness in the US dolar that ended about a year and half ago (when we hit 80 yean to the dollar) was IMHO the tail end of our own bank fiasco and the S&L debacle, which we solved by forcing massive closing of weak banks and S&L and writting off the losses. Once we did that, the table was clean for healthy economic development and the associated strenght of the dollar. Until the rim once again regain its economic footing (which I have no doubt it will), I think the dollar will further strengthen (to the dismay of our international corporations) and I actually see about 140 yen to the dollar before the middle of next year.

TIA

Zeev
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