Thursday, 24 February 2011

Meanwhile, in South Korea

They say it's the shark you don't see which will get you.

Perhaps the same is true in economics. The eyes of the world are on the Maghreb: revolution and fleeing dictators in Tunisia and Egypt; civil war in Libya - will Gaddafi survive or not? At the time of writing he seems to be made of sterner stuff than Mubarak and Ben Ali.

But the real concern is contagion to Saudi Arabia, Bahrain and other oil-rich states. That prospect has driven Brent crude up past $110 a barrel and will be putting 5p on litre at a gas station near you within the next week or so (anecdotal reports indicate some retailers have jumped the gun and prices are already up.)

And when the media has finished with North Africa and the Middle East, they turn down under - earthquake in New Zealand.

But no one's looking at South Korea!

In the last week six banks have run out of money and closed their doors in South Korea. At the other banks customers are queuing to get their savings out. The root problem is that construction loans have turned bad and liquidity has crunched.

This would be world-wide news if it weren't for all the other world-wide news going on at the moment. Ironically this may save the Korean banking system, because banking is all about not losing confidence, and no-one is even noticing South Korea.

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