Korean Vacations on Sale!

I don't know a lot about the Korean economy. However, I do know it's struggling. I also know that one U.S. dollar buys you 1,440 Korean won. (Won is the name of their currency.) A year ago, $1 bought you around 900 Korean won.

Central Bank Rate Cut
Earlier this evening, the Bank of Korea (their central bank) cut its target short-term interest rate by 75 basis points (or .75%) to 4.25%. Rate cuts are intended to help boost the economy by making it cheaper to borrow money. However, rate cuts also tend to lead to inflation and a weaker currency. Inflation data comes at a lag. Currencies trade on a 24/7 market, and it looks like the won is taking a hit tonight.

Bring in the Foreign Buyers
The won has had a rough year, falling over 37% against the U.S. dollar. It's almost like the Korean government is kicking the won while it's down. Perhaps they are trying to boost the economy solely through exports. You see, a weak domestic currency makes local products cheaper to foreign buyers.

In fact, exports are the main reason the U.S. economy has had positive GDP growth in the last several quarters. If you've noticed, we've had a pretty weak dollar for a while. (That's been changing recently.)

Anyways, if you're like me and you're investments are down 40%, take a vacation to Korea where everything is now 37% off for U.S. tourists.