North Korea devaluation aimed at confiscating private wealthDecember 2nd, 2009 by Adamu |
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Interesting move by NK to crack down on the burgeoning market activity in their country:
North Korea revalued its currency for the first time in 50 years and strictly limited how much old money could be traded for new, moves that appear designed to confiscate much of the cash people earned in market activities the country’s authoritarian government doesn’t like.The action triggered chaos, according to news outlets in South Korea that specialize in obtaining information from the North, as people rushed to banks and offices of the ruling Workers Party to get information, make exchanges or trade existing North Korean won for euros and U.S. dollars.
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Initial reports indicated the government would allow only 100,000 old won to be exchanged for new. That would potentially wipe out the holdings of people who have earned and saved in won from market activities for years. Those who have saved in foreign currencies—which, though not illegal, is difficult for ordinary North Koreans—would appear unaffected.According to an account by NKNet, a Seoul-based Web service focused on North Korea, people in Pyongyang on Monday night pressed party officials to allow more money to be exchanged. In response, according to the report, the officials lifted the exchangeable amount to 150,000 won in cash and 300,000 won in savings accounts.
While the revaluation could simply be aimed at inflation – Vietnam recently devalued as well – the really low per-person limit seems all but certain to wipe out most private wealth. Because in Stalinist North Korea money spends you!