Re:Samsung to Permanently Discontinue Galaxy Note 7 Smartphone
by Kadin on Tuesday October 11, 2016 @04:06PM
(#12688071)
> Isn't that backwards? (ie. if Samsung failed, South Korea's economy would take a massive hit?)
They are both true. If Samsung faltered, the Korean economy would take a hit, but the government would almost certainly prop it up such that it wouldn't actually fail.
Presumably a bailout would take the form of an injection of liquidity sourced from sovereign debt denominated in KRW, much like the US bank bailout a few years ago. If it were large enough, it could depress the won against other global currencies. In the limiting case, the Koreans can always -- if they really need to -- print money until their exports get attractive again. People may not want to buy Samsung phones, but they'll certainly buy Samsung steel or Samsung heavy industrial equipment, if the price is right.
They are both true. If Samsung faltered, the Korean economy would take a hit, but the government would almost certainly prop it up such that it wouldn't actually fail.
Presumably a bailout would take the form of an injection of liquidity sourced from sovereign debt denominated in KRW, much like the US bank bailout a few years ago. If it were large enough, it could depress the won against other global currencies. In the limiting case, the Koreans can always -- if they really need to -- print money until their exports get attractive again. People may not want to buy Samsung phones, but they'll certainly buy Samsung steel or Samsung heavy industrial equipment, if the price is right.