[Issue Plus] Bitcoin, another report...IMF forecast S. Korea's economy to rise 2 percent next year

■ Host: Lee Yeo-jin, anchor Jang Won-seok
■ Starring: Lee In-cheol, Director of the Economic Research Institute,

* The text below may differ from the actual broadcast content, so please check the broadcast for more accurate information. Please specify [YTN News PLUS] when quoting.

[Anchor]
Bitcoin, the cryptocurrency giant, once broke new highs again, surpassing $97,000. On the other hand, the International Monetary Fund (IMF), has lowered both Korea's economic growth forecasts for this year and next year. The related information, Lee In-cheol's reference, is pointed out with the head of the Economic Research Institute. Welcome.

Bitcoin continues to rise to the point where it is almost frightening to go high, but it has still exceeded $97,000.

[Lee In-cheol]
That's right. The view is meaningless. After being elected, I talked about $80,000 within this year, but $80,000 has already passed.
$94,000, finally $97,000 today. The peak is 97,900 dollars. So I have about $2,000 left for $100,000. The U.S. is also trading at the 103.6 million mark, and the high price after former President Trump's election was that Powell said he would not rush to cut interest rates, and there was a period of adjustment below $88,000. However, it is breaking the high point again in two weeks, and Bitcoin has risen 40% in two weeks compared to before the presidential election.

There are about two reasons for breaking through the high point again today. First of all, the number of investment products investing in Bitcoin has increased in local time. In the meantime, if Bitcoin was a spot ETF, so it was a good thing to be able to buy and sell like a real stock that individuals invest in, linked to the index according to the ETF price, but from yesterday, from the 19th local time, an additional option product that follows the index was added. As option products are added, this option is invested by institutions that make leveraged investments and institutions with large amounts of money rather than individuals. As a result, the increase suddenly increases as institutions, which are quite large hands, flock to it. Another is the heightened anxiety of Russia-Ukraine geopolitics. This is also a factor in attracting money toward coins, which are digital safe assets.

[Anchor]
I understand things like gold and government bonds, but Bitcoin wasn't treated like this a few years ago.
How do you see it?

[Lee In-cheol]
You can say that Trump has changed the market dramatically. Of course, Bitcoin and Ethereum are already listed on the regular stock market. Since it is listed as an ETF and can be traded in kind and futures at the same time, virtual assets have been incorporated into the regular market to some extent, but the remaining thousands of stocks can't even count which new and disappeared overnight. Nevertheless, three years ago, former President Trump completely changed his position to be a Bitcoin scam. I will cut off the U.S. Securities and Exchange Secretary Gary Gensler, who has been tightening regulations while claiming to be the president of Bitcoin and virtual assets, and set up and operate a virtual asset team. Furthermore, Bitcoin will be included in the US strategic security assets. However, due to the nature of Bitcoin, the total amount is set at 21 million. More than 90% of them have been mined now. It's getting harder to mine one because of its half-life, but a bill has been proposed to accumulate 1 million within 5 years.

Then, although 1 million is a very limited quantity, it takes five to several years to lock in the United States. What is this from an investor's point of view? Since the U.S. is leading this market a lot, isn't it just me being eliminated from this market just because I'm so-called Foremer? Last week alone, you said you would go over 90,000 dollars, but it's over 94,000 and 7,000 dollars, so should you try it? This psychology is agitated.

[Anchor]
The price of Bitcoin has increased by about 40% since Trump's victory in the presidential election. What would be the impact if we actually had a dedicated virtual currency job that we're reviewing now?

[Lee In-cheol]
[Lee In-cheol]
I think we can actually create an organization because the Republican Party has taken control of both the House and Senate. However, it seems possible to create an organization and manage it directly to create a team that encompasses securities, derivatives, and virtual markets, but this can be controversial as to whether you can set up 1 million Bitcoin like gold and dollars as a strategic asset. Because of course, of course, because of the excessive debt every year, the U.S. debt is 35 trillion dollars, almost 5 trillion dollars.
is beyond the United States' defense budget. As a result, it seems clear that the U.S. intends to gain the upper hand in digital hegemony against China, which is challenging China's dollar hegemony, but the problem is that it is too volatile. The reason why we can't use Dogecoin while buying Elon Musk's Tesla car, for example, is that I bought it for a dollar right now, and it's volatile, so if the price fluctuates tomorrow, the price varies from person to person. So, it may be theoretically possible to accumulate this as a strategic U.S. asset, but the Fed, which is pushing for stability of the dollar, which has to manage and manage it, has no choice but to raise its voice of opposition.

As a result, he seems to be putting pressure on Fed Chairman Jerome Powell in advance by talking about his term, but if you see Trump's pledge now, I always say it.Ma is going to make a warm iced Americano. Even with three Michelin stars, this is impossible. But you can't keep prices down while you're spending money and cutting taxes. So what's the biggest mistake of policymakers? Prices are second to the economy. That's why the government has changed in all 70 national presidential elections held this year. The reason is because of the price. Perhaps even if this happens, President Trump will not give up the game. Tax cuts, money releases, and protectionism, so even if U.S. consumers spend at high prices, they say they will at least cut energy prices by selling more oil and shale gas that affect the most people. Through such a policy, we will probably try to get inflation under control a little bit, but this is only a matter of timing, and it will happen one day. That's why the asset market reacts first. The asset market is still growing in a bubble as they say they will release dollars once again before all the money released on the market is recovered. This fact is the same as the NIMBY phenomenon. He's been re-elected for four years. It doesn't just have to explode during his term in office. But you've already experienced it. The US experienced the worst prices in 40 years - 9.1% - so I don't think it's going to go to 9% within its own term, but it's just a matter of timing, and the bubble goes out.

[Anchor]
There are many good things about Bitcoin right now, but there were also geopolitical concerns that could be called bad news. You said the outlook was pointless, but would you like to keep going up?

[Lee In-cheol]
This is because there are more derivative financial products. You can give gifts with just one bitcoin. And then you can do ETFs. You can even do the options. It's the asset management company that actually makes these products. BlackRock, the world's largest asset manager, started trading options on the 19th, and what is this option transaction, betting on the price just at the price, will the price of Bitcoin fall or rise in a month? If you bet on falling, you bet on the put, and if you're going to go up, you bet on the call option, but it's very leveraged. However, when I received it on the first day, about 2.6 trillion won was collected, and 80% of them bet on buying it and going up in a month or three months. It's about 8:2 for institutions to actively buy Bitcoin. Because if an organization is created anyway and a bill to make 1 million units of strategic assets within 5 years is passed, you have to actually buy it. As a result, there are only two virtual asset managers in the regular market that smell money well now.

Bitcoin, the No. 1 coin, and Ethereum, the No. 2 coin, are included in the regular market. As a result, what kind of stories are already coming out now. Then, the third one is looking for a coin that will be included in the regular market. However, such events are already hitting a high point.

[Anchor]
The U.S. economy is doing well alone right now, and the rest of the world sees a rather gloomy future, isn't it? In particular, in Korea, the IMF has now lowered its economic growth forecast by 0.2 percentage points to 2%. How did you like it?

[Lee In-cheol]
This is why the IMF comes every quarter and has an annual meeting with our Ministry of Strategy and Finance. Actually, it's the Ministry of Strategy and Finance's inner workings. This is the growth rate this year, and there is a month left in December this year, but this year's growth rate has decreased by 0.3 percentage points. Next year, it's down 0.2%, so it's 2%. 2. The figure of zero is similar to Korea's potential growth rate. The potential growth rate is the best performance that can be achieved by investing all financial services without stimulating prices. So if we take stronger protectionism in the second period of the Trump administration here, we can go down to the middle of 1% below the potential growth rate. But if you look at our growth rate now, our growth rate is lower than that of prices from 2022. So people keep using negative bank accounts because of high prices and high interest rates. Who's going to be the one for the next 4 years? It's in Trump's hands. So exports have peaked since the second quarter and are now twisted, and as for semiconductors, as you know, Samsung is wandering now, and domestic consumption has been bad for two years now.

I travel abroad or shop abroad, but I don't think I'm spending money in Korea, and construction investment and investment are not good. As a result, in the case of the IMF, there are two main reasons for lowering the growth rate. Domestic demand has been stagnant for two years now, and construction investment is also shrinking. And externally, if you ask me to choose the countries that will suffer the most from Trump's second-term tariff policy next year, it can become a country with high dependence on exports to the U.S. and China, such as Korea and Taiwan. The truth is, what is the uncomfortable truth? This is a sign that the Ministry of Strategy and Finance and the Bank of Korea will soon lower their growth forecasts for this year and next year to a similar level.

[Anchor]
Then, at the last Monetary Policy Committee meeting of this year next week, will the Bank of Korea accept the IMF's recommendation and lower interest rates, how do you forecast it?

[Lee In-cheol]
That seems highly unlikely at all. The exchange rate actually hit 1,400 won. We don't feel like we're in a crisis right now. However, it is the fourth time that we have seen the KRW 1,400 exchange rate at the closing price except when the US raised interest rates a lot due to the IMF financial crisis, the global financial crisis in 2008, and the high interest rate shock in 2020. At the same time, Deputy Prime Minister for Economy Choi Sang-mok said that the won-dollar exchange rate has become a new normal and new standard. What is this talk about? In the past, during the foreign exchange crisis, we didn't really have foreign exchange, so if it was a crisis due to empty foreign exchange reserves and dollars, we have enough foreign exchange reserves now. Nevertheless, only the United States, I told you earlier. Only the U.S. is doing well. Likewise, if you look at the IMF, it's only good in the United States. Since the U.S. is the only country that is predicting a return to the strong dollar as the economy is booming, the Bank of Korea is likely to freeze it this time because it has to lower interest rates at the last Monetary Policy Committee of this year, but if it sees the exchange rate, it will rather fuel the rise of the exchange rate and encourage foreigners to leave.

[Anchor]
Amid growing expectations that only the U.S. economy will make a soft landing, Shinsegae Group Chairman Chung Yong-jin is on good terms with his eldest son, Trump Jr., who is the key heavyweight of Trump's second term, right?

[Lee In-cheol]
That's right. First of all, he said on social media that he was close to his eldest son and posted two pictures. In fact, is the U.S. that behind in this presidential election? I felt like the democratic system had retreated. That was the collusion between politics and business. No, a businessman pays a politician behind his back and raises important posts in return for the election, and he becomes the head of the efficiency committee, giving an advantage to the business he is running? This is something we can't even imagine in our country. But we have to find a breakthrough here. Chairman Chung Yong-jin said, "In fact, Shinsegae is distribution. It's mainly domestic, but there's nothing to benefit from exporting. Of course, I can introduce my cousin, Chairman Lee Jae-yong, to serve as a bridge. Nevertheless, when I see Elon Musk, the answer comes out.

First of all, Trump's connections are mainly businessmen. Because of our connections and deep exchanges with businessmen, what we are most anxious about now is exports and exchange rates in the second Trump period. It is already very professing to abolish the Chips Act and IRA. If this starts to go down, exports will be hit harder next year. As a result, our companies are now using these connections to strengthen lobbying and lending to Trump's staff and close companies, and so are we. It's been like this until now. It is Korea that created the most jobs in the U.S. for the third consecutive year, and Korea, which has created the most jobs in the U.S., but Trump doesn't work. Then what should I do? If you negotiate with a sweatshirt alone, you have to pay less for defense in Korea with very distorted data. You pay four times more for defense. What is the uncomfortable truth? Last year, Korea's trade surplus with the U.S. was the largest ever. It's $
440, but it's all broken through. Then you can't buy at least at a loss due to Trump's personality. Then, let's renegotiate the Korea-U.S. FTA again, as in the first phase. At that time, we gave up cars and steel in the first phase.

But this time, we can demand semiconductors, secondary batteries, electric vehicles, and other things in our main industries. So to do this leverage, rather than us going out alone, there are so many people here who are angry right now, in America First. You have to be an anti-Trump ally. All four of Big Four go in. It's going to Japan, it's going to Taiwan. I'm going into the European Union. Then we have to go out to the common front and negotiate together, and from below, Trump is a top-down. If you say what you said first and do it, we have to withdraw what you did in the existing Biden administration with really accurate data and evidence from the bottom, we are No. 1 in investment for three years in a row, but we cannot guarantee it. It's quite a factory that hasn't been built. Because, we promised 14 battery factories. If you don't build one, you can go to the outskirts. To an ally country. You can take a detour to Mexico or Canada next door. So we have to have the leverage of negotiations and we have to make concessions. Because, I had a $44.4 billion surplus. Even if we lost money, we would ask for something.
What should I ask for? What the U.S. does leftovers, crude oil, and then agricultural products. Perhaps if you touch rice, public sentiment can be very weak, so you can ask them to increase their income for the items they have left, such as corn, oranges, and beef. So we prioritize and make concessions, but we're too dependent on G2 again while reducing the trade surplus. Plan B should come out for this because it's the right aftermath because it hasn't diversified. It has to come out.

[Anchor]
I see. Hot Economic Issues, References Lee In-cheol was joined by the head of the Economic Research Institute. Thank you.