Housing-Debt Timebomb

● Housing-Debt Timebomb

Real Estate and Domestic Demand Slump, Tariff Bomb Scenario, The Reality of a Potential Growth Rate in the 1% Range and AI Solutions Recap

This article covers the direct link between house prices and birth rates, the hidden causes behind soaring pre-sale prices, the real numbers behind national debt statistics, the industry-specific impacts of a tariff scenario ranging from 25% to 100%, and practical AI solutions to boost potential growth rates.
The key points overlooked by other media are summarized in a news format for rapid understanding, distilling only the data points necessary for investment and policy decision-making on inflation, interest rates, exchange rates, economic downturns, and real estate.

The Root of Domestic Demand Weakness: A Domestic Downturn Created by the Interplay of House Prices, Policies, and Taxes

The primary trigger for the slump in domestic demand is house prices, which simultaneously freeze birth rates and consumption.
Policy changes such as the 52-hour workweek, the Yellow Envelope Act, and the revised Commercial Act (which strengthens the responsibilities of directors and executives) have concurrently caused construction delays and reduced corporate investments.
In practical terms, construction periods have increased by an average of 1.5 times, pre-sale prices have soared, and the accumulation of unsold properties in provincial areas has led to a steep cooling of the construction market, which in turn will result in reduced future supply.
During the COVID-19 period, low interest rates and ample liquidity spurred demand for a “smart property,” concentrating demand in the capital region and Seoul, and exacerbating polarization.
Increases in taxes and the burden of the four major social insurances have eroded disposable income, undermining private consumption and entrenching the prolonged weakness in domestic demand.

The Structure of a 1% Potential Growth Rate: Simultaneous Declines in Labor and Capital

According to KDI, the potential growth rate is estimated to be in the high 1% range, with projections suggesting it could drop to the low 1% in the 2030s and possibly to 0% in the 2040s.
On the labor front, the working-age population peaked in 2019 and has been declining, with an increasing share of those aged 65 and above and a decreasing participation rate eroding the growth potential.
From the capital perspective, risks related to the Commercial Act and labor regulations are curtailing “high-risk, high-return” projects, thereby weakening domestic capital formation.
Companies are responding with automation and offshoring, and the domestic investment gap is further contributing to a reduction in the potential growth rate.

The Direct Mechanism Between Real Estate and Birth Rates: Without Lowering Housing Costs, Birth Policies are Futile

Data indicates that rising house prices act as the most powerful trigger for declining birth rates.
If housing costs are not eased, the effect of cash-based birth policies remains limited.
In provincial areas, soaring pre-sale prices have curtailed demand, and in the capital region, concerns over reduced supply have increased downward price rigidity.
Despite short-term disruptions and costs, a unification scenario could serve as a long-term lever to alleviate demographic challenges.

Fiscal Policy and Debt: Changing the Numbers Can Alter the Landscape

National debt figures differ between international standards (D2, D3) and domestic reports, and the perceived burden varies significantly depending on whether non-financial public enterprises and public institutions are included.
Based on the D2 standard, it is already in the mid-50% range, and some conservative assessments, including the Bank of Korea’s monetary stabilization securities, suggest it could exceed 60%.
Historical research (Linehart–Logoff) has noted that a debt ratio of 60% is a warning zone and 90% is a crisis zone, with interest burdens eroding growth capacity.
With plans to increase debt by 600 trillion won over the next five years and through the intensification of protectionism, fiscal capacity to respond to economic downturns may be further constrained.
As seen in the Japanese example, once half of the budget is fixed for principal and interest repayments, growth-oriented investments can become structurally constrained.

Trade and Tariff Risks: 25% May Not Be the Limit

U.S.-initiated tariffs could escalate from a baseline of 25% to scenarios as high as 70–100%, potentially sending chain shocks through the supply chains of automobiles, steel, intermediate goods, and big tech.
While Japan has effectively “bought time” with a memorandum of understanding, South Korea faces heightened negotiation difficulties due to cash burdens and political scheduling issues.
In the context of U.S.–China bloc formation, gray-area strategies are no longer effective, with demands for clear alignment intensifying.
In the short term, companies are coping through price pass-throughs, cost reductions, and currency hedging, while in the medium to long term they aim to mitigate risks by localizing operations in North America; however, during investment gaps, performance volatility increases.

2025 Economic Outlook: Managing Downside Risks is More Critical Than the Numbers

The IMF and OECD continue to project a “low growth trap” scenario with global growth rates around 3%.
South Korea’s growth is expected to be in the high 0% to low 1% range this year and between 1.6% and 2.2% next year, but incorporating protectionist measures and currency volatility would increase downside risks.
It is reasonable to assume that inflation will ease gradually, driven by energy, tariff, and wage factors, and that interest rates will follow a “slowly declining” path.
The possibility of re-entering a strong-dollar phase in exchange rates cannot be ruled out, making currency risk management essential for both export and import companies.

Investment and Survival Strategies: A Practical Checklist for Individuals and Companies

Individual Investors

Real Estate: Steer clear of high pre-sale price and unsold inventory risks in provincial areas, and in the capital region, consider site location, supply reduction factors, and interest rate sensitivity.
Loans: Increase the proportion of fixed-rate loans over variable-rate loans, and manage your total debt service ratio to remain below 30–35%.
Asset Allocation: Hedge risks with dollars and gold, and defend against recessionary phases with a portfolio focused on dividends and cash flow.
Stocks: Increase exposure to beneficiaries of reshoring (localization in North America), automation & robotics, AI infrastructure (servers, HPC, cooling, power), and energy security (gas, transmission & distribution).

Corporate Decision-Making

Trade: Secure tariff relief potential by fostering joint statements and negotiating local investments in partnership with North American clients as key allies.
Supply Chain: Build dual sourcing strategies, insource core components, and establish a North American last-mile assembly hub.
Finance: Manage currency risk through natural hedging in domestic and foreign currencies, and set volatility caps for raw materials and freight through options and long-term contracts.
Pricing: Implement price pass-throughs in smaller increments of frequency and range, and simultaneously shift the product mix to minimize customer attrition.

Solutions Opened by AI Trends: A Path to Boost Potential Growth Rates by 0.3–0.5 Percentage Points

Construction & Real Estate: With AI+BIM and precast optimization shortening construction periods by 20–30%, pre-sale price pressures can be lowered and supply bottlenecks alleviated.
Regional demand forecasting models can preempt unsold inventory risks and precisely target land and floor area policies.
Manufacturing & Services: Agent-based RPA and AI copilots can simultaneously boost productivity for white-collar and blue-collar workforces, compensating for reduced labor input.
Increasing facility operating rates by 3–7 percentage points through predictive maintenance and yield optimization creates a buffer to absorb tariff and wage increases.
Export & Data Centers: Demand for AI semiconductors and servers serves as a pillar of South Korean exports, while localizing North American data center EPC, cooling, and power equipment minimizes tariff risks.
Diversification of GPU and HPC supply chains and energy efficiency solutions becomes a reliable cash cow, resilient to economic and exchange rate cycles.

Policy Proposals

Loosen the adoption of AI remote work and shift systems using regulatory sandboxes, and incorporate an “AI Productivity Index” into government procurement to accelerate its diffusion.
Mitigate the vicious cycle of “house prices and birth rates” by prioritizing birth policies coupled with housing cost relief.

Key Points (Only the Parts Rarely Reported in the Media)

If house prices are the key trigger for birth rates, then birth policies without housing cost relief are ineffective.
The decline in potential growth rates is being driven more sharply by a reduction in capital investment than labor, with risks related to the Commercial Act and labor altering investment pricing.
National debt, when considered alongside D2 and central bank securities rather than domestic figures, is already nearing critical warning levels—cautioning against illusions of fiscal capacity.
Tariff negotiations are constrained by the U.S. political calendar, and without securing industry allies, unilateral government negotiations could be costly.
The spread of AI-driven productivity has the potential to boost the potential growth rate by 0.3–0.5 percentage points annually, with the greatest ripple effects if applied initially in construction, manufacturing, and the public sector.

Action Checklist for Immediate Implementation

Set quantitative targets for the primary defense line in exchange rates and the natural hedging ratio of cash dollars and export receivables.
Overlay maps of pre-sale prices/unsold inventory with household debt repayment schedules to initially exclude “areas to avoid.”
Establish target ratios for local assembly of North American sales, and begin relocating tariff-sensitive products.
Diversify maturities in anticipation of interest rate declines, and complete stress tests with a mix of variable and fixed rates.
Link AI adoption to cost-reduction KPIs, and report productivity metrics every three months as the basis for company-wide expansion.

< Summary >House prices are the switch for both birth rates and domestic demand, and surging pre-sale prices together with unsold inventories in provincial areas create downward pressure on the economy.
The potential growth rate is on track to slip into the 1% range, and the contraction in capital investment—as well as in labor—is a major concern.
When measured by international standards, national debt is already nearing warning levels, and illusions about fiscal capacity are dangerous.
Tariff risks extend beyond 25%, and without a strategy for North American localization and securing key allies, negotiating power diminishes.
AI can immediately boost productivity in construction, manufacturing, and the public sector, contributing to the defense of the potential growth rate.

[Related Articles…]

*Source: [ Jun’s economy lab ]

– 부동산 진짜 문제가 곧 터질 겁니다 (ft. 김경원 교수 4부)

● Quantum Gold Rush, Cloud and Supply Chain Winners

AI’s Next Cycle: A Comprehensive Summary of the Quantum Computer’s Industry Map and Investment Checkpoints

After an overheated stock market driven by AI, this article covers what could be the next growth momentum, including the timeline for the commercialization of quantum computers and early use cases that deliver real value.
It explains why Google’s latest research has shifted from demonstrating “quantum supremacy” to addressing scientific and industrial problems, and summarizes which companies and supply chains could benefit amid macro factors such as interest rates, inflation, and a strong dollar.
It also discusses why the “early winners” might not be hardware companies but rather those in cloud services, software stacks, and component supply chains—an aspect rarely covered by other news sources.

[Breaking Summary] What Google’s Nature Announcement Implies About the Quantum Shift

Google has reported that it directly observed quantum phenomena, previously unsimulatable by conventional supercomputers, using its next-generation quantum chip.
The key point is that it has evolved from the 2019 demonstration of “quantum supremacy” via random circuit sampling to a stage of verifying actual physical phenomena.
The research involved an experiment with a “time-reversal” characteristic that gathers the diffused quantum information back to a single point, validating quantum interference in a laboratory.
By combining the calculation of molecular structures (bond distances and dihedral angles) with nuclear magnetic resonance, the study demonstrated potential applications in new drug and novel material research.
While large-scale, commercially viable quantum computers might not emerge within 5–10 years, cloud-based quantum services and hybrid (HPC+AI+QPU) workflows are already spreading in research and industrial pilot stages.

Understanding Quantum Computers in One Page: Principles, Challenges, and Directions

Summary of Operating Principle
While classical bits are either 0 or 1, qubits can hold both 0 and 1 simultaneously due to superposition and entanglement.
This allows parallel searches and exponential speed improvements for certain problems.
The 3 Major Implementation Approaches and Their Representatives
Superconducting Qubits: Utilize Josephson junctions at extremely low temperatures. They offer fast computation and compatibility with semiconductor processes, with Google, IBM, and Rigetti at the forefront.
Ion Traps: Trap ions using electric fields and control them through lasers. They offer high precision and long coherence times, though scalability and equipment complexity remain challenges, with IonQ and Quantinuum leading.
Topological (Topology) Approach: Utilizes topological protection via Majorana quasi-particles to expect lower error rates. This is currently under experimental verification, with Microsoft taking on the challenge.
Additionally, the photonic approach, which can be integrated with semiconductor processes, is gaining attention for its potential for large-scale deployment, represented by PsiQuantum.
The Biggest Technical Hurdle
Error rates and error correction.
For practical chemical simulations or cryptographic-level decryption, hundreds to thousands of “logical qubits” are needed, corresponding to tens of thousands to millions of physical qubits.
In the short term, strategies focusing on error mitigation and shallow (low-depth) circuit algorithms to find useful tasks are prevailing.

What the Google Case Signifies: From Demo to Tool

What Has Changed
The focus has shifted from using random circuits merely to boast speed to proving scientific utility through the validation of physical phenomena and molecular calculations.
This signals the practical viability of using quantum chips as scientific experimental platforms.
Industrial Implications
New Drug Discovery: Improved accuracy in estimating binding energies and reaction pathways is expected to reduce time and costs in candidate screening.
Novel Materials: Early reduction of failures in battery electrolytes, high-temperature superconductors, and catalyst design.
Security: Quantum Random Number Generation (QRNG) and Quantum Key Distribution (QKD) have already entered early commercialization, and in the long run, transitioning from current public-key cryptography to Post-Quantum Cryptography (PQC) will be essential.

Timeline and Reality Check: NISQ → Hybrid → Error Correction

1–2 Years
Access QPUs via the cloud for pilot research.
Experimental adoption of quantum-classical hybrid algorithms (VQE, QAOA).
Limited applications of quantum random and quantum-inspired optimization in finance and logistics.
3–5 Years
An increase in reports of “quantum utility” in specific chemical and material domains.
Standardization of toolchains (Qiskit, Cirq, Braket SDK) and automation of workflows.
Full-scale migration to PQC by nation-states and large corporations.
5–10 Years
Demonstrations of tens to hundreds of logical qubits with error correction.
Emergence of early general quantum advantages in narrow applications.
Decrypting RSA-2048 remains likely as a “next step.”

Investment Perspective: What to Look For

Listed Companies and Big Tech Map
Hardware: Google (Alphabet), IBM, Microsoft, IonQ, Rigetti, Quantinuum (unlisted), PsiQuantum (unlisted).
Cloud Orchestration: AWS Braket, Azure Quantum, Google Cloud.
Software and Middleware: Qiskit, Cirq, PennyLane, Zapata, QC Ware.
Components and Supply Chain: Cryogenic systems (Bluefors, Oxford Instruments), lasers and optics, vacuum equipment, RF and instrumentation (Keysight, Zurich Instruments), power and data center infrastructure.
Why Revenue Comes First from ‘Stack and Supply Chain’ Rather Than Hardware
Large-scale commercial QPU revenue will take time to develop.
In contrast, cloud API, development tools, education and consulting, and CAPEX components like cryogenics and lasers already face robust demand.
The expansion of AI data centers also drives additional demand for power and cooling infrastructure.
Macro Factors and Valuation
If high interest rates persist, long-term cash flow stocks (hyper-growth, pure-quantum plays) are bound to face volatility.
Inflation and a strong dollar increase the cost of imported equipment and components.
In periods of economic downturn, government R&D and national security budgets can serve as relative shields.

Security, Regulation, and Standards: Actions Needed Right Away

PQC Transition Roadmap
Preparation for the adoption of post-quantum cryptography standards chosen by NIST.
Assess current asset status (inventory of cryptography dependencies), ensure crypto agility, and gradually phase out high-risk workflows.
Public, financial, and healthcare data require proactive migration.
Ethics and Security
Enhance experimental validation protocols in areas such as new drug discovery when combining quantum and AI.
Verify the integrity of research data and enforce access controls.
Comply with intellectual property and export control regulations.

Real Use Cases: Areas to Experience Within 12–24 Months

Acceleration in Chemical and Material R&D
Cloud quantum simulations, in parallel with classical HPC, reduce the pool of candidate molecules, cutting down experimental iterations.
Applications include battery electrolytes, hydrogen catalysts, and exploration of protein interactions in pharmaceuticals.
The ‘Quantum-Inspired’ Approach to Optimization Problems
Quantum-inspired algorithms offer partial improvements in large-scale combinatorial optimization.
Pilot operations are underway in logistics routing, portfolio rebalancing, and semiconductor equipment scheduling.
Security and Random Number Generation
QRNG-based key generation enhances entropy quality in financial and governmental networks.
Although QKD is constrained by network and distance limitations, its adoption is expanding in specialized segments.

Company-Specific Strategic Points Map

Google
Advancing the superconducting roadmap and expanding direct applications to physical and chemical problems.
Strength in its ecosystem with tools such as Cirq and TensorFlow Quantum.
IBM
Strengths include Qiskit, an open ecosystem, roadmap transparency, and consistency in error correction research.
Works with numerous industry partners.
Microsoft
Long-term bet on topological qubits and a multi-backend strategy through Azure Quantum.
Flexible integration with classical HPC and AI.
IonQ
Strength in precise control of ion traps and expanding cloud access.
Challenges include scalability and optimizing CAPEX for equipment.
Rigetti
Provides integrated manufacturing and services based on superconducting technology.
Key factors include performance mapping and securing customer pilots.
AWS
Offers multi-hardware access via Braket, with strong developer onboarding.
Appealing aspects include workflow orchestration and integration with data governance.

Quantifying the Reality of Error Correction (Concept Guide)

To create one logical qubit, hundreds to thousands of physical qubits might be needed.
For practical chemical problems, tens to hundreds of logical qubits, with circuit depths in the tens of thousands, are discussed.
Achieving an error rate below approximately 10^-3 and ensuring stable coherence times are crucial.
For the short term, problem-specific algorithms without full error correction remain key.

A Less Discussed Core Factor: Cash Flow and Early Winners

Candidates for Early Winners
Cloud service providers: Can monetize QPU access through standard APIs.
Middleware and tools: Early revenue generation through circuit optimization, error mitigation, and hybrid scheduling solutions.
Component supply chain: Immediate demand exists for cryogenics, lasers, RF instrumentation, and vacuum systems.
Power and cooling infrastructure: Benefit from shared infrastructure with AI data centers.
Investor Checklist
Assess the defensibility of the roadmap (physical scaling paths and manufacturing capabilities).
Evaluate cloud partnerships (whether onboarded on Braket, Azure, GCP).
Clarity in the ‘problem definition’ of customer pilots (both scientific and business KPIs).
Consider sensitivity to cash runway and interest rate environments.
Look at the proportion and renewal rates of government and defense R&D contracts.
Risks
Actual usage might fall short of overhyped expectations.
Stock price volatility may increase amid high interest rates and a strong dollar.
Delays in standard transitions and regulatory uncertainties.

Execution Guide: What to Prepare Right Now

Corporate R&D
Classify the portfolio of problems and scan for quantum suitability (in chemistry, optimization, and machine learning).
Initiate pilot projects in the cloud and quickly validate failure hypotheses.
Incorporate data governance and security requirements into quantum workflows proactively.
Security and IT
Conduct an asset inventory and develop a PQC migration plan.
Redesign architectures for easier replacement of cryptographic modules (crypto agility).
Phase the transition starting from high-risk data.
Individual Investors
Manage exposure in pure-plays with caution and adopt an event-driven approach.
Monitor big tech, cloud services, and component supply chains as a “complete car–platform–components” triangle.
In economic downturns, prioritize players with strong cash flows and high proportions of government contracts.

One-Line Briefing

Google’s latest research shows that quantum computers are shifting from mere “fast toys” to practical scientific and industrial tools.
While commercialization may progress slowly, revenues will initially come from software, cloud, and supply chains.
Given the volatility driven by interest rates, inflation, and a strong dollar, selection should be based on roadmaps and partnerships.

< Summary >

Google’s announcement implies that quantum computing is entering a phase of solving real physical and chemical problems.
Short-term value is generated in hybrid workflows, error mitigation, cloud APIs, and component supply chains.
“Quantum utility” cases are expected to increase within 3–5 years, and preparations for PQC transition should begin immediately.
From an investment perspective, focus on platforms, infrastructure, and government contracts rather than hardware.
Macro factors (interest rates, inflation, strong dollar, economic downturns) are key drivers of valuation volatility.