Chapter 144: Smoked Herring (2)
Foreign exchange crisis.
To interpret it literally, it means there’s a shortage of foreign currency—namely, dollars—coming from outside (the U.S.).
People often think the dollar is the world’s key currency, and that’s why problems arise when there’s a dollar shortage... but this isn’t a simple issue.
When Koreans think about the 1997 foreign exchange crisis—commonly referred to as the IMF crisis—what kind of images come to mind?
Collapsed companies, rising unemployment, and the national humiliation of having handed over economic sovereignty to external forces...
Of course, that’s understandable. Those are the things most people directly experienced. And when you frame it as the 1997 East Asian financial crisis, that image generally fits.
But there’s something important missing from that picture.
It doesn’t explain why the dollars disappeared—or how that was even possible, or what the root causes were.
Outrageous claims like “the people’s overspending caused it”—and the fact that some accepted that so casually—stem from this gap in understanding.
Basically, people assumed that the crisis happened because Koreans were splurging abroad and tossing dollars around like confetti, draining the nation’s reserves.
– Clack.
“So then, take a guess. What am I going to do?”