The One Condition Under Which The US Treasury Permits Korea To Manipulate Its Currency

Tyler Durden's picture

From the just released "Semiannual Report on International Economic and Exchange Rate Policies"

Korea’s current account surplus further increased to 6.1 percent of GDP in 2013 – the highest  since 1999 – compared to 4.2 percent in 2012. Korea is one of only a few surplus economies with a significantly larger external surplus now than before the crisis. Net exports accounted for over half of Korea’s growth in 2013, highlighting the economy’s continued dependence on external demand and the weakness of domestic demand. Although Korea does not publish data on its foreign exchange intervention, during the second half of 2013 the Korean authorities are believed to have intervened to limit the pace of won appreciation. Korea’s foreign exchange reserves rose from $315.6 billion at end-June 2013 to $335.6 billion at end-December and $341.0 billion at the end of February 2014. The Korean authorities also increased their net forward position by $4.9 billion to $50.5 billion over the second half of 2013. The magnitude of these changes is larger than can be reasonably expected from simple interest earnings on the existing stock of reserve assets or valuation changes. The Korean authorities should limit foreign exchange intervention to the exceptional circumstances of disorderly market conditions and increase the transparency of their interventions in foreign exchange.

On behalf of South Korea we would like to thank the US Treasury, whose debt issuance the Fed has montized for the past five years and kept the USD low - this permission is very generous of you.

On the other hand, China was not quite as lucky to get the permissive manipulation treatment:

Recent developments in the RMB exchange rate would raise particularly serious concerns if they presage renewed resistance to currency appreciation and a retreat from China’s announced policy of reducing intervention and allowing the exchange rate to reflect market forces. We will continue to monitor these issues closely going forward. In line with the practice of most other G-20 nations, China should disclose foreign exchange market intervention regularly to increase the credibility of its monetary policy framework and to promote exchange rate and financial market transparency.


China should refrain from intervention within the band and should allow market forces to permit the reference rate to adjust if market pressures push the exchange rate to the edge of the band.

Like, for example, buying up all 10 Year duration issued by its Treasury? One would almost be left with the impression that China is receiving less than fair (there's that word again) treatment by the US.

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surf0766's picture

PEAK BULLSHIT !!!!!!!!!!!!!!!!!!!!!!!!!!!!!

Say What Again's picture

When all of this central banksta shit begins to unwind, there will be NOWHERE to hide.

surf0766's picture

I think it is unwinding now.  Are people really this stupid not to understand or do they not want to understand...

Peace !

prains's picture

KUNG POW CHICKEN !!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

old naughty's picture

com'on, what have they done?

Being finger-pointed and then boat sunk with a loss of 300?

Troll Magnet's picture

Tomorrow's Headline: US Tells Korea Not to Blow Up Its Own Buildings and Use It as a Ploy to Enslave Its People and Wage Wars.

DoChenRollingBearing's picture

Korea can do whatever it wants.  If they want to keep their currency low, that's OK with us as Korean bearing importers into Peru.

q99x2's picture

I want a printing press damn it.

Max Keiser has one. I want one.

Bitcoin Last Price: 511.5000

And climbing.

Citxmech's picture

Talk to BTC-E and see what it takes to get "q99x2Coin" listed.

btw - BTC was at $360.00 two days ago.  It's kind of hilarious to read the comments bar on the side of BTC-E.  Sound's like a bunch of 22 year olds who just discovered the concept of momentum trading.

yogibear's picture

BRICS cause the US dollar to crash already.

The US Federal Reserve is touting it can control inflation and they desperately want it. Let the people of dump out of US dollars and kill the Petro-dollar.

Seems like the Fed is begging for hyperinflation.  The rest of the world should grant their wishes.

McMolotov's picture

This is why North Korea is best Korea.

chinoslims's picture

This sounds like the mafia granting operating license to a subsidiary. 

Bogdog's picture

"The Korean authorities should....increase their transparency" - that made me snork my coffee. HOLY FUCK, that's ballz!!!


tonyw's picture

don't froget this is the mostest transparent regime administration

jonjon831983's picture

"Gold: In search of a new standard"

"The London fix has been in place for almost a century but critics say the system needs reform"

Conveniently, offered free to view on FT.

Advertised with this synopsis:

"Is the gold market being rigged?

Unlike other commodities, gold is not traded on an exchange in London. Instead a price is fixed between five banks via conference call. The system has been criticised as being vulnerable to manipulation and is now under scrutiny from German financial regulators and US lawyers alike.

Image by Getty."

29.5 hours's picture



Another nice report from Treasury and other dark places of stinking imperial arrogance. So Japan gets a complete pass on "currency manipulation" but Korea is not to engage in any of that stuff except when their house is on fire.

The alliance continues to fray.




Son of Captain Nemo's picture

The Korean authorities should limit foreign exchange intervention to the exceptional circumstances of disorderly market conditions...

Except of course when the U.S. decides to do the very same thing?

Hey didn't Shiv'me Abe of Japan get a pep talk like this from Uncle Sam the end of last year?!!!

Wait What's picture

this is why people around the world hate America. double standards and hypocracy at their expense, that is, only the favored few get to manipulate and intervene all they want. America has no friends, only creditors and protectorates. once they realize America has been playing them for years, even the latter will turn and walk away, leaving this country to drown in a cesspool of its own making. we should thank the political parasites who have been running the country for this state of affairs.

earleflorida's picture

samsung, hyundai/kia, and merchant/ commerce shipping manufacturer [lng/natgas], SHIC [SANY Heavy Equipment Manufacturing Plants... just to mention a few no-no's that aapl, msft, gm, f, cat, and of coarse china's dislike of the 38th parallel-- their faux buffer`end-zone?

laomei's picture

Bad China, BAD! How dare you attempt to defend your own currency or have policies which in any way shape or form conflict with ours!