Lee Jae-myung's Ultra-Low-Interest Loan of 6 Trillion Won to Samsung and SK in January: A Psychological Warfare Against the Public to Create a Real Estate Enemy
President Lee Jae-myung has intensified his psychological warfare against the public by using a "real estate loan blocking" strategy to funnel 6 trillion won of ultra-low-interest funds to Samsung and SK in January, creating a real estate enemy.
American media outlets have pointed out that the stock market is a wealth-concentrating economic system where the lower-tier stockholders are inflated to push up the upper-tier, concentrating wealth in the hands of a tiny minority.
Bank of Korea statistics show that the outstanding currency balance surged 9.1% last year to 210.6956 trillion won, up from 193.1519 trillion won the previous year.
The annual growth rate was 4.4% in 2022 and 3.6% in 2023, but it soared to 9.1% last year as the Lee Jae-myung administration injected cash into the market to stimulate consumer spending. This stimulated the real estate and stock markets. President Lee appears to have engaged in a psychological warfare campaign on social media since early this year, targeting real estate funds for stock market investment.
Samsung Electronics and SK Hynix, the two largest beneficiaries of the Lee Jae-myung administration's stock market boom strategy, which holds an absolute control of over 60% of the market, have monopolized 3.6 trillion won and 1 trillion won in loans, respectively, last year. Last year, they monopolized low-interest semiconductor loans, offering interest rates 1% lower than the 3% annual interest rates offered by other large corporations. They also attempted a KOSPI 5000 strategy by boosting semiconductor stock prices.
The two companies recently recorded 20 trillion won in operating profits in the fourth quarter of last year. However, in reality, Samsung Electronics and SK Hynix borrowed over 6.5 trillion won from financial institutions at a 2% interest rate in January alone, which immediately led to a stock market surge.
President Lee appears to have attempted a real estate grab strategy to further inject ultra-low-interest loans into the two companies.
On the 3rd, at a Cabinet meeting, President Lee approved the Semiconductor Special Act (Special Act on Strengthening and Supporting the Competitiveness of the Semiconductor Industry) to support the semiconductor industry. He went on to say, "Stock prices are beneficial to corporate activities. Furthermore, no one is harmed by rising stock prices." He added, "When housing prices rise, investment assets are tied to housing and real estate, preventing them from being used in productive areas, distorting the socioeconomic structure."
Prior to the vote, President Lee spent over a week in a psychological warfare campaign to create a real estate investment hurdle by promoting the heavy taxation policy for multiple homeowners. He urged them to "sell quickly and reduce losses." He personally calculated the losses from home sales, amplifying the threat posed by a small number of multiple homeowners to the entire nation.
JP Morgan, the US investment bank with the most extensive information network in Korea, sharply raised its target price to 6,000 in its "Korea Stock Strategy" report on the 2nd, with a bullish scenario of 7,500.
Under Lee Jae-myung's administration, JP Morgan raised its KOSPI target to 5,000 in October of last year, with a bullish scenario of 6,000, leading to a surge in the Korean stock market. The JP Morgan report on the 2nd stated, "Samsung Electronics and SK Hynix have driven approximately 60% of the gains since September of last year," adding, "The semiconductor industry is improving and earnings estimates are continuing to be revised upward."
JP Morgan cited two reasons for the surge in the Korean stock market: "semiconductor spot prices are exceeding contract prices" and "the potential for additional capital inflows."
JP Morgan projected that Samsung and SK's 2026 earnings per share (EPS) could exceed the current consensus by up to 40%.
JP Morgan, like Goldman Sachs, which achieved high profits in Korea as an advisor during the Kim Dae-jung administration during the IMF foreign exchange crisis, has established a robust information system in Korea. It was also the main player in the Korean stock market's decline, previously driving Samsung Electronics' stock price to record lows due to persistent stock price reports stemming from accumulated inventory.
President Lee stated at a Cabinet meeting that day, "The real estate problem in Korea has become a truly cancerous problem that hinders social development. The desire for real estate is so intense that even the smallest gap can quickly escalate, causing a dam to collapse." President Lee continued, "Some people ask, 'Why are we trying to suppress housing prices while trying to raise stock prices?'" He added, "Stock prices are beneficial to business operations. Furthermore, no one is harmed by rising stock prices." He added, "When housing prices rise, investment assets are tied to housing and real estate, preventing them from being used in productive sectors, distorting the socioeconomic structure."
He continued, "Furthermore, if housing prices rise unfairly, the homeless suffer greatly. This further distorts resource allocation. It's understandable to think that way if you don't know, but it's truly wrong for those in leadership positions to speak out or instigate such things."
President Lee, through daily social media posts, imitated the Park Chung-hee regime, which established the Yushin regime by implementing a command economy and market economy system in the real estate market. He also transformed light industry from heavy industry to a developmental dictatorship, establishing a triangle of administrative dictatorship, capitalist dictatorship, and management dictatorship.
President Lee defined "market decisions through the exercise of power" and unilaterally announced specific "losses from policy criticism" in response, returning to a command economy and a controlled economy, a mobilization system based on "the president's decision to lose."
On the 1st, President Lee stated, "Why are you siding with speculation when you've seen the country ruined by real estate speculation?" Regarding the heavy tax on multiple homeowners, he stated, "Don't try to unfairly defeat the government by talking about a bolt from the blue. Instead, I urge you to take advantage of the opportunity for tax relief provided by our society. There are still 100 days left." He displayed the command economy of the emergency decree.
President Lee, particularly late on the night of the 31st, stated, "If you oppose a government that has legitimate and just policy tools supported by the majority of the people and the will to exercise that authority, both individuals and society will suffer." He added, "I'm afraid that the statement 'no government can beat the market, and no market can beat the government' could be misconstrued as a contradiction. The market and government exist in a relationship of conflict and cooperation, and ultimately, the direction and pace of change in the market are determined by the rationality and extent of the authority exercised." He further elaborated on "power dominates the market."
He continued, "If government policies are rational and just, supported by the people, and have a legal basis, resistance from some based on self-interest cannot succeed and will ultimately result in losses. Unfortunately, this is a long-winded statement because you don't understand the fundamental context and meaning of the language. In conclusion, the government has both the will and the means, so don't suffer losses by opposing government policies. Don't miss the opportunity to take advantage of tax breaks and resolve the issue of multiple housing." This is a classic example of command-based psychological warfare, pointing out the "losses" in government domination of the market.
The Associated Press (AP) reported on December 2nd of last year that "the K-economy, which drives the rise of wealth at the top by squeezing the bottom, is unsustainable," and that "many economists worry that an economy driven primarily by the wealthy is unsustainable. Advertising revenue, which powers companies like Google and Facebook parent company Meta, typically plummets during recessions, and this cycle could force the Mag 7 to pull back on AI investments and push the economy into recession."
Peter Atwater, an economics professor at the College of William & Mary in Virginia, told the AP, "If layoffs become severe and unemployment rises, low- and middle-income Americans could sharply cut back on spending. Sales at companies like Apple and Amazon would decline, effectively dragging the bottom of the K-economy down."
Fueled by the strong performance of the "Big Seven" companies—Google, Amazon, Nvidia, and Microsoft—the stock market rose nearly 15% last year. The South Korean stock market, fueled by expectations of interest rate cuts in the US, was subordinated to the rise in the US stock market. Meanwhile, the publicity surrounding Trump's talks with North Korea fueled a surge in the market.
Conversely, according to Federal Reserve data, the wealthiest 10% of Americans own approximately 87% of the stock market, while the poorest 50% own only 1.1%, further exacerbating the K-shape of the economy.
Lee Jae-myung's stock market is increasingly being pushed aside by the volatility of US technology stocks, driven by interest rate leverage. This has led to greater volatility due to exchange rate fluctuations. With expectations of interest rate cuts under the Trump administration fading, the sharp volatility of the South Korean stock market is expected to exacerbate losses for small and medium-sized enterprises, erode the middle class, and widen the wealth gap due to high inflation and expensive apartments.
The Associated Press reported that "references to the 'K-shaped economy' are rapidly spreading, from corporate executives to Wall Street analysts and Federal Reserve officials," adding that "one big reason the term is popping up so often is because it helps describe an unusually turbulent and complex period for the U.S. economy."
This year's economic challenges have been particularly pronounced for low-income Americans, with inflation-adjusted wage growth weakening and employment declining.
According to the Minneapolis Fed, wage growth for low-income earners has plummeted to an annualized 1.5%, below the 2.4% rate seen in the peak quarter.
On the 31st, President Lee stated in X, "Valley maintenance and achieving a stock price of 5,000 seemed impossible and difficult enough to be the butt of public ridicule, but we achieved them with all our might." He added, "Could stabilizing housing prices be more difficult than that?" Later that night, he repeated, "There are those who don't understand what I'm saying, like kindergarteners learning to speak." He wrote a national address, adding, "Rehabilitation of illegal valley facilities, so difficult that no one has succeeded since liberation, and achieving a stock price of 5,000 points, so difficult that most people dismissed it as nonsense and laughed at, have achieved such difficult things."
Lee Jae-myung's stock market regime is relying on Black Rock, a dominant player in the stock market, for foreign currency loans. This has led to the failure of Trump's 350 billion won investment strategy in the US, and the blocking of access to North Korea, which has led to pressure in the foreign exchange market, rapidly increasing the economic dependence of the Samsung and SK conglomerates. In a report released on February 24, 2023, JP Morgan's chief US economist (former Federal Reserve researcher) participated and stated, "There is a growing awareness that the Fed will likely have to raise interest rates much higher than previously expected," and "Samsung Electronics' first-quarter profit forecast was a sharp 83% drop year-on-year," leading to continued net selling by foreign investors and a sharp drop in the stock price to the low 60,000 won range again.
Contrary to President Lee's repeated official announcement that the economy would recover quickly, people's consumption plummeted, retail sales in November of last year fell 3.3% compared to the previous month, and industrial production in the fourth quarter plummeted -0.3%, but stocks rose sharply.
The sharp drop in consumption rose 3.6% compared to the previous month in October of last year, right after the Lee Jae-myung regime distributed funds directly to the people, claiming that consumer stimulation was a priority, and the decline in consumption plunged by -3.3% in November, the largest drop in 21 months, after February of last year (-3.5%).
Retail sales rose slightly from -2.4% in August to -0.1% in September due to the Lee Jae-myung administration's consumer stimulus, then rose sharply to 3.6% in October and then fell sharply in November, but President Lee changed the tone to 'economic recovery' in a press conference and stocks rose.
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<Samsung Electronics Profit Forecast Plummets 83% After Mid-U.S. Recession, February 28, 2023>
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<K Economy: Scraping the Bottom and Pushing the Top, Stock-Driven Wealth Growth>
<Lee Jae-myung's Command Economy: "Power Dominates the Market, Government Determines Losses", February 1, 2026>
<US Federal Reserve Chairman Washington's Foreign Media Criticizes Korean Media, AI Relies on Interest Rate Cuts for Growth, February 1, 2026>
<Lee Jae-myung's Pledge to Restore Park Chung-hee-style Command Economy, KOSPI Surges to 5,000, January 3, 2022>
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