Government Uses Excess Tax Revenue for Budget, Not National Debt Repayment

A fiscal planning aide explained that repaying national debt when tax revenues increase would create a vicious cycle of supply and demand, thus arguing for the consistent issuance of national debt.

This analysis suggests it can be seen as the government's indirect policy wording to boost the stock market.

The precise budget guidelines are expected to be finalized and announced around November.

A significant number of people in their 20s and 30s are currently participating in the stock market, analyzed as a strong tendency to grow assets through investment due to rising inflation and housing cost burdens. Concerns are also raised that if the stock market declines in the future, the government may face accountability for its active intervention and leadership in the market.

It is highly likely that next year will be the peak of the stock market boost, and a warning was issued that since liquidity supply always creates bubbles, severe after-effects will follow at its end.

This fund aims for strategic investments in industrial sectors, not just inflation suppression or simple consumption promotion. As a separate budget, it is expected to be a key driver for strengthening domestic industrial competitiveness.

Particularly for U.S. investments, a process of securing justification through consultation with the government seems necessary.

It is known that the heads of Samsung Electronics and SK Hynix have had many meetings at the Blue House during this administration. This suggests the government's strong will to initiate large-scale investments within its term. It is analyzed that there is a tug-of-war between the corporate heads' U.S. investment plans and the government's efforts to attract domestic investment.

Particularly for Samsung Electronics, there is even a possibility of achieving results surpassing Nvidia's operating profit, raising market expectations.

The government's policy change regarding single-stock leveraged ETFs was pointed out as a clear mistake. While the policy led to an explosive increase in trading volume, it also caused excessive volatility, resulting in a mass exodus of individual investors. Consequently, an estimated 12.5 trillion won in trading volume was leaked from the market.

The Korean stock market has returned to a pre-overheated state, with much-reduced volatility. Operating profits for Samsung Electronics and SK Hynix continue to increase, and the won-dollar exchange rate remains stable. This environment is analyzed as creating positive conditions for foreign investors to enter the Korean market.

Currently, there are high expectations for interest rate cuts in the U.S., while in Korea, additional interest rate hikes are considered more likely this year. Although the overall investment environment has improved, foreign investors are observing these policy factors before making final investment decisions.

The market expresses skepticism about such a significant short-term increase prediction despite the current sluggish situation.

Experts view 2027 as the peak of the stock market and warned that the time to prepare for a bubble collapse will come as early as the first half, or at the latest, the second half of next year.

Advice was given to definitely exit the stock market next year. Specifically, for the second half of next year, reducing stock holdings, switching to a bearish position, or moving assets to U.S. stocks was recommended. It was analyzed that Samsung Electronics and SK Hynix might mark the final finale of the stock market.

Next year, the stock market is likely to rise due to the combination of the government's boosting efforts and foreign investors' buying spree. Exchange rates and interest rate movements are expected to be key indicators for foreign investment inflow. However, a warning was issued that after this upward trend, a massive crash and severe economic after-effects could occur.