An Exchange Rate Story That Started at the Convenience Store Shelf: The 1,400 Won Korean Currency and My Economic Exploration

Looking at Chocolate Price Tags

Every month, or whenever prices change, headquarters sends us new price tags for the convenience store. And I've been feeling my hand getting heavier each time I attach them to products. Especially chocolates and flour-based products. Over the past decade, these items have risen in price at a noticeably different pace than other goods. Customers notice too. When I see children sighing and putting chocolate bars back on the shelf saying "it went up again," I viscerally feel just how dramatically prices have climbed.

I opened my exchange rate app: 1,400+ won per dollar. I was slightly taken aback when I first saw this number. "How long will this last?" I wondered, but it's lasted longer than I expected. Throughout 2025, it's been maintaining levels between 1,400 and 1,470 won. As a convenience store operator, exchange rate fluctuations don't directly impact my sales. But for products with high import dependency—chocolates, flour, coffee—it's definitely different. The numbers on price tags go up, but the wages I pay my staff and my profit margins stay the same. Only the sales numbers get bigger.

This is a currency value problem, I realized.

A Question Posed by a YouTube Video

One day, I came across a video by journalist Park Jong-hoon on YouTube. The title immediately caught my eye: "8 Reasons Why the Korean Won Is Becoming Worthless." As I watched, I had this odd feeling that the dissonance I'd been experiencing at the store shelf was finally being explained. I realized that exchange rates aren't just numbers—they're a massive puzzle connected to my daily life: chocolate prices, flour costs, customers' sighs.

After watching the video, my curiosity snowballed. Is this just a Korean problem? How would Trump's second administration view this situation? So I started a conversation with AI Grok. Not just for fact-checking, but because I wanted to dig into the 'roots' of this phenomenon. And that conversation took me much deeper than I'd anticipated.

The Exchange Rate Paradox and Eight Root Causes

It used to be simple. When the KOSPI rose, the won strengthened. Export companies would earn dollars and convert them, naturally increasing demand for won and lowering the exchange rate. But in 2025, this formula broke down. The KOSPI broke through 2,600, riding the semiconductor boom, while the exchange rate remained stuck in the 1,400s. Why this paradox?

When I dissected the eight causes Park Jong-hoon identified, I realized this wasn't just short-term volatility but a 'structural problem.' Like chocolate prices on convenience store shelves—once they go up, they're hard to bring back down.

First, the Bank of Korea's ultra-low interest rate policy. The Korea-US interest rate inversion has reached 2.0 percentage points and has persisted for 41 months. Naturally, when companies prefer dollar deposits over won deposits, demand for won decreases.

Second, money supply explosion. Since 2022, M2 growth rate has hit 20.4%—seven times that of the US. When you print too much money, its value drops—that's page one of any economics textbook.

Third, export companies hoarding dollars. Giants like Samsung and Hyundai are stockpiling their overseas earnings in dollars due to interest rate differentials and investment pressures. Previously, this money would be converted, strengthening the won, but that link has been severed.

Fourth, National Pension Service dollar purchases. Overseas asset allocation has surpassed 57%. With pension premiums increasing, dollar demand is expected to explode.

Fifth, weakened exchange rate intervention capacity. US Treasury scrutiny over 'currency manipulation' has limited Korea's currency swaps. We can't intervene as freely as before.

Sixth, fiscal deficit expansion. The 2025 budget deficit is around 100 trillion won. Government bond yields rising to 3.2-3.3% are encouraging dollar outflows.

Seventh, US investment burden. With $20 billion in overseas investment annually, foreign exchange reserves are stagnating.

Eighth, yen linkage effect. As the won synchronizes with the Japanese yen instead of the Chinese yuan, yen weakness (USD/JPY at 141) is dragging the won down too.

Looking at these eight factors, I thought: This isn't just 'market whim'—it's 'systemic inertia' built up over time. Like chocolate on convenience store shelves, once prices rise, structural reasons make them hard to bring back down.

Conversation with Grok and the Global Mirror

I asked Grok, "Is this just Korea's problem?" The answer was interesting. No, it said. In 2025, major central banks—the European Central Bank (2.5-3%), Bank of Japan (0.5%), People's Bank of China (1.5-2%)—have already stimulated their economies with low rates and quantitative easing (QE), but they're experiencing the aftereffects: debt increases and currency weakness.

Korea's 20% M2 growth rate is high, but compared to the global average (5-8%), the pattern is similar. The difference is the severity of the 'Korea-US interest rate inversion.' Europe and China have it relatively easier. For example, the euro is strong at 1.19-1.22, and the yen, while weak, is holding up with export strength. Only the Korean won at 1,390 clearly displays the 'KOSPI-exchange rate paradox.'

Comparing with Japan made it clearer. After Abenomics, Japan used QE to weaponize yen weakness for exports, but wage stagnation weakened domestic demand. China maintains yuan weakness with 8-10% M2 growth, but the real estate crisis is holding them back. Meanwhile, the US? During Biden's term (2021-2025), the Dollar Index (DXY) surged 27% from 89 to 114, maintaining a 'strong dollar stance.' The Fed's high interest rates (5.5% peak) tamed inflation, creating the backdrop for Korea's won weakness.

So essentially, if you just slightly twist the phrase 'interdependence,' it becomes 'a game where winners and losers are decided.' When the US gains the upper hand with a strong dollar, export-dependent countries like Korea must endure weakness. This is how the economy works, I realized.

Trump's Surprisingly Solid Theory

As the conversation with Grok continued, it naturally shifted to Trump's second term. Honestly, I'd always thought of Trump as 'impulsive'—announcing policies via tweet, imposing tariffs emotionally. But the biggest surprise in this analysis was that the Trump 2.0 administration's economic theory is more robust than I thought.

The strong dollar from Biden's era was a substantial gift to Trump. From 2021 to 2025, the Fed's high interest rate policy strengthened the dollar and tamed inflation. Trump inherited this legacy and, with Fed rate cuts in the first half of 2025 (currently 3.75-4%), declared 'late quantitative easing (QE).' He's promising a "$20 trillion liquidity wave" while embracing cryptocurrency as 'digital gold.'

Why is 'late QE' advantageous for the US? Reserve currency privilege. When other countries experience currency weakness through QE first, the US follows late while dominating global liquidity. When QE pumps money, bank lending becomes easier, corporate investment increases, lifting GDP by 1-2 percentage points. In the US case, since the dollar accounts for 88% of global trade, foreign capital automatically flows in. They're converting Europe and Asia's 'losses' into America's 'gains.'

Looking at the eight 'advantageous cards' Grok outlined for the US, I realized this wasn't simple improvisation but calculated strategy:

Reserve currency status: Even with QE-induced dollar weakness, it attracts capital as a 'safe asset.' Despite BRICS de-dollarization attempts, it maintains 59% reserve currency share.
Financial system strength: Wall Street's stability absorbed QE crises in 2008 and 2020.
Technology dominance: AI and semiconductor monopoly offsets QE inflation with asset appreciation.
Energy independence: The shale revolution stabilized energy prices—contrasting with Europe's crisis.
Consumer base: With 70% of GDP from consumption, QE liquidity directly drives growth.
Geopolitical influence: Alliances like NATO hedge global instability.
Tariff weapon: Imposing 34% tariffs on China collects $44 billion annually while reviving manufacturing.
Emerging assets (cryptocurrency): Strategic bitcoin reserves hedge inflation; GENIUS Act relaxes stablecoin regulations.

Trump is concentrating these cards on cryptocurrency, stocks, real estate, and manufacturing. For example, the 'tariff dividend' policy plans to give households $1,300-2,000, expected to explode consumption. The crypto market has already responded—Bitcoin rallied to $103K. For real estate, crypto-backed mortgages secure liquidity; for manufacturing, tariffs incentivize domestic relocation.

Of course, risks aren't trivial. Tariffs could reignite inflation (expected around 3%), and trade wars could slow global growth (2.5-3.2% possible). But I learned that Trump's seemingly impulsive moves might actually be a calculated strategy operating on the 'strong dollar foundation' Biden built. This was my biggest discovery.

Government Shutdown and Variables

There was one more interesting variable: the US government shutdown. Starting October 1, 2025, this shutdown set the record for longest ever, reaching 41 days. Trump's approval dropped due to SNAP support cuts, aviation chaos, and unpaid federal employees, but on November 10, a funding package passed the Senate. Only House approval and Trump's signature remain.

When the shutdown ends? $150-200 billion in liquidity gets injected, and with CR (continuing resolution) extension, Trump's card play becomes freer. Tariff dividend payments, crypto EO strengthening, QE resumption will accelerate. The market is already anticipating—S&P 500 is on a record march.

From Korea's perspective, this 'late QE' could further fuel won weakness. If Trump's tariffs hit Korean exports (semiconductors, automobiles), the exchange rate could re-enter the 1,400s dangerously. But conversely, if US cards (tech, energy) drive global growth, it could be positive for the KOSPI.

Back at the Convenience Store Shelf

When I returned to the convenience store after my conversation with Grok, the chocolate price tag looked different. This tiny number contains the Bank of Korea's interest rate policy, National Pension's dollar purchases, Trump's tariff strategy, and the ripple effects of global QE.

As a convenience store operator and investor, the dilemma I feel ultimately comes down to 'currency value.' The wages I pay staff and my profits stay the same, but sales figures go up. Numbers grew, but actual value stayed the same or possibly decreased. Prices just went up. This is inflation, the reality of won weakness.

So how should we respond? As journalist Park advises, split dollar conversion below 1,370 won, or diversified investment in cryptocurrency and tech stocks are realistic choices. Long-term, the 2026 Fed rate-cutting cycle and Korean export boom might bring won recovery (to the 1,200s).

But my conclusion after this long exploration is slightly different. This isn't simply a question of 'where to invest money.' It's about understanding how the world we live in works—that even a single chocolate price tag contains the massive currents of the global economy.

The economy is unpredictable. But information is a weapon. And surprisingly, that information can be felt in very close places—convenience store shelves, exchange rate apps, YouTube videos.

My Prediction and Your Experience

This article is my prediction. Trump 2.0's 'late QE' will give the US a 'late peak' effect, but add uncertainty to the global economy. Korea, as an export nation, should minimize damage while turning attention to dollar assets and new technologies.

My economic exploration that started at the convenience store shelf ends here. A question posed by a single chocolate price tag ultimately led me to the essence of the global exchange rate game. Take a look around yourself too. Coffee prices, flour costs, numbers on your exchange rate app. Within them, massive stories of the world economy are hiding.

And someday, when you open your exchange rate app and see the 1,200s, we can smile remembering this long journey.

References

Park Jong-hoon "8 Reasons Why the Korean Won Is Becoming Worthless" video
US government shutdown latest developments: Reuters, NPR
Trump policies (tariff dividends & cryptocurrency): Yahoo Finance, CoinDesk
DXY trends: Visual Capitalist, Macrotrends
QE benefits & reserve currency: Investopedia, CFR
Won weakness cause comparisons: EBC, CurrencyTransfer

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