Noh Capital Management LLC

Noh Capital Management LLC

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The real reason for the Korean won crash (10-17-09)

The won recently recovered from its steep decline and Business Week did a good job of uncovering the reason for decline. Read.

Uncertain territory of abundant paper money (3-7-09)

More than 70% of the U.S. GDP is consisted of consumer spending. The U.S. bases its economic growth by measuring the GDP. Now the consumers ran out money, which they had been withdrawn from their home ATM machine (equity loans during the housing bubble).

Last more than 10 years, the U.S. lived on debt, financed by foreign countries. In order to avoid the reality of recession or depression, the U.S. has been keep printing money, which will eventually become worthless paper and bring a huge inflation. This will eventually happen but nobody knows when, just like we know the housing bubble would burst but it took a while.

Because of the recent economic stimulus package, the day of reckoning may be delayed until 2010 but eventually it is coming. When it comes, it may last 5 to 10 years.

Never before the U.S. government printed so much money to boost the economy. Because of this heroin type of injection and cost cuttings of laying off people, corporations will report higher earnings. This will lift the stock market for a while. However, the high unemployment rate could not support the GDP and the economy will face a tough time later.

Inflation is coming to wreck the U.S. economy because of the ever losing U.S. dollar value from the printed money. The best ways to survive and make money is to invest in the countries with savings and production. You can bring back the strong foreign currency later back to the U.S. when the U.S. dollar loses most its value from the high inflation.

A tough time ahead (2-17-08)

The U.S. most likely to enter into a recession, if not we are already in, in the early part of 2008. Consumer spending makes up 70% of the U.S. GDP and they are running out of extra money to spend. They have been able to draw money from their home ATM via the home equity loan. However, with the subprime mess and the burst of housing market, no more money is available through this channel. Lately, they have been resorting to credit cards but this is also drying up. Consequently, the U.S. GDP will be suffered without the main support from consumers.

To fight the recession, the Federal Reserve is keep lowering the interest rates. This may help in the short term to spur the economy but, due to a lot of printed money available (just plain paper with the green ink) with the limited resources, the inflation will go up. In addition, smart people will dump the U.S. dollars and buy the safe money, gold. In addition, the U.S. citizen to spend more than they have will cause the foreign trade deficit to increase. Under these circumstances, the U.S. dollar will lose its value in the next few years.

The average housing value declined about 10% from its high. Initially, analysts believed the bottom would reach in the middle of 2008. However, due to unfavorable circumstances developing as mentioned at the above, analysts now believe the housing can further deflate another 20% to 25% in the next two to three years.

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For more information:
Noh Capital Management LLC
605 Broad Avenue, Suite 205
Ridgefield, NJ 07657

Tel: 201-289-1311
Fax: 201-313-0068