Wednesday, December 02, 2009

North Korea short changes its citizens.....literally

Here is how they do it in N. Korea - declare the old currency worthless and allow each person to change a limited amount of money, 150000 won (=US$50 on black market) to the new currency. Overnight they wiped out all the savings of its citizens and completely eliminated a miniscule middle class that was emerging. After flattening everyone else by confiscating their wealth, dictator Kim and his cronies will probably get to eat more beef and drink more wine every night. That is what you get when you put dictators in charge of a fiat money system. They are making Bernanke's quantitive easing (printing money) look so kindergarden. I hope those enterprising Singaporeans who went all the way to N. Korea to start a fast food joint [Link] didn't lose their shirt and pants.

Anger over North Korea's shock currency change
SEOUL, SOUTH KOREA (AFP) - North Korea's shock currency revaluation has sparked anger and frustration in the isolated communist state as citizens see much of their savings wiped out, reports and observers said Wednesday.

They said the North had tightened security against possible agitation following Monday's redenomination, with a curfew reportedly imposed in a border region and shops closed across the country during the change-over.
Media reports and embassies in Pyongyang said people had been given a week to exchange 100 old won for one new won, but the amount they can change was strictly restricted.
While the move has yet to be announced by official media, analysts said itappeared aimed at curbing inflation and clamping down on burgeoning free markets in an attempt to reassert the regime's control. South Korea's Chosun Ilbo newspaper said the main motivation "appears to be Kim Jong-Il's intention to throttle the emerging free market" before an eventual handover of power by the Korean leader to his youngest son Jong-Un. The regime has already taken steps to curb free markets. These sprang up after the state food distribution system collapsed during famines in the 1990s, but are now seen as threatening the state's grip.
Professor Nam Ju-Hong of Kyonggi University told the paper Kim had "declared war against market forces" because his efforts to control trade had failed. Analysts said authorities initially limited the total sum that an individual can exchange for new currency to 100,000 won. Because of widespread protests, the limit was raised to 150,000 won in cash and 300,000 won in bank savings, according to DailyNK, an online newspaper with informants in the North.
The official exchange rate is 135 won to the dollar but the black market rate is between 2,000 and 3,000. "Hardest hit were the emerging middle-class who had earned big wealth from the jangmadang (markets)," said Lee Seung-Yong of Good Friends, a Seoul welfare group with contacts in North Korea. "They were angry and frustrated since most of their wealth based on the previous banknotes has been chipped away," he told AFP. But Lee said he expected no organised protests given the state's tight control over society. "The main goal is to crack down on the private markets that had stoked capitalism and to place socialism back in control," Lee said. Good Friends said in its newsletter that authorities were using loudspeakers installed in towns, farms and homes to spread news of the currency change. It said major cities including the capital Pyongyang and Sinuiju on the border with China were quiet, with shops, public bathhouses and restaurants mostly closed and long-distance buses not operating. The sudden revaluation angered market vendors and others. "I worked like a dog for two months for the winter, but the money became useless paper overnight," Good Friends quoted a Sinuiju resident as saying. DailyNK said security forces mounted extra street patrols and imposed a curfew in North Hamkyung province in the northeast. "After 10:00 pm all movement is prohibited. Offenders must be strictly regulated," it quoted the curfew notice as saying. All shops, markets and stores remained closed due to a temporary ban on trading during the week-long exchange of bills, it added. Any activities requiring monetary payments were being suspended until new currency is legally circulated, Good Friends reported. "The purpose of the currency revaluation is to crush private commercial activities, considered to promote anti-socialism," said Good Friends. "Kim Jong-Il must have wanted to bring the money out of the private safes and by doing so must have also hoped to ease public dissatisfaction resulting from growing social stratification," the Korea Herald said in an editorial. "Yet, such a drastic measure amounts to confiscation and could backfire even under the ruthlessly controlled system of the North."


Anonymous said...

Mugabe printed zillion $ note, US has the printing press 24/7, now
N. Korea minus 2 zeros, and I don't expect to see my cpf money again.

What's new? Take care of your family. Be prepared.

Anonymous said...

Hey just a quick question.Am I right to say that our fiat money is under the dictatorship of Singapore government aka reserves?

runroad said...

Fate dealt those poor swindled N. Koreans a terrible hand with only two choices: to run or to die under a merciless Stalinist tyranny. After 50 years, for Kim Jong-Il only the Romanian solution is now possible. The Romanian dictator Nicolae Ceausescu ruled for about 25 years from 1965 with a ruthlessness to match Kim's until a military coup put him and his wife in front of a firing squad. Otherwise, I'm afraid the Korean peasant is doomed to be a beast of burden for the rest of his short, brutish life.

But even though sinkies have (for now) some small say in the direction of their lives, isn't it endlessly fascinating that they keep voting in a despised incumbent even when they have the chance to make their displeasure felt? Only the terminally naive would be stupid enough to give ANYONE a blank cheque to do as they please in the hope that they'll be altruistic enough to put your interest before their own. So why can't we see that?

Is it fear of the unknown - better the devil you know than the devil you don't, perhaps? Greed - the punter's fatal belief that he can predict the exact moment of disaster and can get out with max profit 1 second before the axe falls? Fatalism - do we truly feel that nothing we can do would ever make the slightest difference to the status quo? Selfishness - I'm not my brother's keeper, I'm OK, you die your own business? What?

Will we also wake up one day to find that like the poor North Koreans and Burmese, we are caught between the devil and the deep blue sea, nowhere to run, nowhere to hide?

Anonymous said...

Despite these North Korea will still have political stability. Even if social peace is disrupted, it will be restored.

China had TianAnMen incident in 1989 but eventually also restored peace and even prosperity, and still under the Communist Party.

Anonymous said...

As long as a country has peace and stability, it does not matter who suffers or has their wealth confiscated. Peace and stability are the most important things.

Anonymous said...

whoever trades his liberty for a little gain will in the end have neither.

Anonymous said...

"Peace and stability are the most important things.

3/12/09 09:19"

i agree, but that's only becos i'm in a comfortable (not very) position now.

i always wonder why the north koreans don't simply stage a revolution, then i look around at fellow singaporean and i understand.

there are people who behave like frogs placed in hot water. suits me, at least for the time being.

Anonymous said...

I saw somewhere in a magazine that there was a joint Singapore fast food venture in N Korea after their officials (akin to the PAP dogs) visited Singapore sometimes back.

Mr Lee, being buddy with Myannmar military dictatorship, must have thought they can play it easy with N Korea like the way they did with Myannmar.

Hope these dictator idiots (including Mr Lee) get their retribution.

Anonymous said...

lesson to be learned : dont just keep all your money in one currency.

lim said...

anon 3/12/09 09:19,

Do you think peace and stability can be sustained if the general population suffers?

Read the history of china, ever wonder why dynasties fall? People suffers, get desperate, and rebels..

Anonymous said...

Dear Anon 3/12/09 09:19,

1) R u saying what you have said from a 3rd party point of view? If so, that's quite irresponsible.

2) But if you truly have said this while putting yourself in the shoes of the unfortunate. This blog is not your place, i assume you will vote for the PAP.

If you don't mind yourself being bullied, pls dun encourage others to be bullied too.