Korea needs to brace itself for much higher interest rates in the coming years, driven by surging inflation and monetary expansion. The nearly thirty years of declining interest rates globally are near its final stages and, in the next few years, probabilities are quite high for rapidly rising interest rates. Korea faces enormous interest rate risk for the real estate sector, not just because that sector is so highly leveraged but also because so much of the real estate debt is short-term and floating-rate based. Korea needs to reduce its dependence on floating-rate interest payments, especially household loans, of which nearly 90 percent are currently represented by floating rates. Will Korea control its debt or will debt control Korea? This is a question that is yet to be settled and an ongoing question that will remain central in Korea's efforts to spearhead the country out of this global economic crisis.