Let me drop a controversial take: the Bank of Korea might go bankrupt, becoming the next epicenter of a financial storm.

Right now, Korean people are borrowing money from the central bank and using all of it to lever and “all-in” on the Korean stock market. After they all get liquidated and wiped out, the Korean public has no money left, the central bank has no money left either, and it also can’t use financial instruments anymore. Credit effectively goes bankrupt.

The United States will become the biggest winner, easily taking control of Samsung’s Hynix.

If Korean people’s leverage in the stock market is completely annihilated, a more realistic macro evolution path is:

Massive wealth transfer and destruction: the middle class’s liquidity is fully drained, and the consumer market freezes.

Sharp KRW drop and liquidity spillover: the Bank of Korea is forced to massively expand its balance sheet to rescue commercial banks, causing the KRW to plunge. Domestic funds, seeking safety, will wildly exchange into USD, or rush into hard assets with global consensus like gold and Bitcoin, as well as decentralized liquidity pools.

IMF intervention: if foreign exchange reserves run out, South Korea may again seek help from the International Monetary Fund (IMF), and be forced to accept humiliating austerity conditions.