ROK Drop

Avatar of GI KoreaBy on February 25th, 2012 at 6:49 am

How To Retaliate Against the North Korean Counterfeiting of US Currency

» by in: North Korea

The counterfeiting activities of the North Koreans has been an issue that I have long covered here on the ROK Drop.  The below article from TIME’s David Wolman offers a pretty good idea on what to do about it:

Forging $100 bills obviously gels with the regime’s febrile anti-Americanism and its aim to undercut U.S. global power, in this case by sowing doubts about our currency. State level counterfeiting is a kind of slow-motion violence committed against an enemy, and it has been tried many times before. During the Revolutionary War, the British printed fake “Continentals” to undermine the fragile colonial currency. Napoleon counterfeited Russian notes during the Napoleonic Wars, and during World War II the Germans forced a handful of artists and printing experts in Block 19 of the Sachsenhausen concentration camp to produce fake U.S. dollars and British pounds sterling. (Their story is the basis for the 2007 film “The Counterfeiters,” winner of the 2007 Oscar for Best Foreign Language Film.)

Superdollars can be viewed as an act of economic warfare, but Pyongyang’s motive is probably more mundane: The regime is broke. The 2009 attempt to raise funds by devaluing its already pathetic currency revealed not only the country’s fiscal desperation, but also the abuse Dear Leader was willing to inflict on his people. The won was devalued by 100 percent, which meant 1,000 won suddenly had the purchasing power of 10 won. (Imagine waking up to a learn that a slice of pizza costs $250.) Officials set a tight limit on how much old money could be exchanged for new, so whatever value existed within people’s paltry savings evaporated overnight. Compared to devaluation, generating quick cash by counterfeiting some other country’s more stable currency looks downright humanitarian.

The superdollar affair has a certain comic-book quality: copying the currency of the evil capitalists so you can buy cognac and missiles.  (…………………)

Superdollars, and the untold billions of (electronic) dollars spent combating them could be the wake-up call that finally forces us to think more clearly about the costs of physical money. If killing all cash strikes you as a little too radical, consider for a moment what it would mean to get rid of high-denomination banknotes. Who would be most inconvenienced if Washington were to outlaw $100 and $50 bills tomorrow? Cartel bosses in Juarez, Mexico jump to mind. So do human traffickers in China and Africa, aspiring terrorists in Afghanistan, wildlife poachers, arms dealers, tax evaders, and everyday crooks who hold up mom and pop groceries. And, or course, North Korean government officials.  [TIME]

It is believed that North Korea was conterfeiting up to $250 million US dollars a year and then laundering the money through casinos around the world to include Las Vegas.  It was there that members of an Asian criminal syndicate were arrested in Operation Smoking Dragon laundering money through Vegas casinos.  The Secret Service has undercover tape of members of this syndicate explaining how the counterfeit money was brought into China and distributed through the Russian embassy in Beijing.  Prior reporting on North Korean counterfeiting also showed how the North Korean Supernotes were being openly distributed in China.  Even the inter-Korean project the Geumgang Resort was being used to launder money.  Another place these Asian criminal syndicates were laundering money was in Macau.  It was here that the Treasury Department 4 years ago had $25 million in dirty money frozen in a small bank called Banco Delta Asia.  It was estimated that just putting BDA off limits cost the Kim regime 40% of its foreign exchange.  However, after North Korea’s 2006 nuclear test President George Bush agreed to unfreeze the money and do away with the financial sanctions after vehement North Korean objections to them.

The US government desperate to cut a deal with Kim Jong-il bent over backwards to return the regime’s ill gotten money, but no banks wanted to do business with North Korea; that is how dirty his money is. The US government was so desperate they asked the US Wachovia bank to launder North Korea’s money for him. Unsurprisingly Wachovia declined. So the US government was left to use the US Federal Reserve to launder his money through a Russia based bank. Even with the Federal Reserve laundering the money the Russian bank was still very hesitant about accepting the deal. Incredibly the US government went through all this hassle to launder money for Kim Jong-il and circumvent US counterfeiting laws in order to meet a demand by North Korea that was not even in the original deal. Even more incredible is the fact that the US government agreed to these demands due to a vague promise from North Korea to use the money to buy humanitarian aid.  Of course they never did and instead ultimately revalued their currency to wipe out the life savings of North Koreans in order to prop up the financial health of the regime.

With the lack of a US commitment to financial sanctions and the Chinese actively allowing North Korea to distribute and transfer money through China I think Woman’s idea is actually a pretty good work around.  Taking $100 and $50 notes out of circulation in the US does seem like a great way to limit the damage done by counterfeiters that would have a limited impact on the average American.  Think about it, when was the last time you had $50 and $100 bills in your wallet?  I can even think of the last time I had notes that big in my wallet because I use my ATM and credit card so much.  Does anyone else have any better ideas on how to respond to North Korean counterfeiting?

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  • Confucius
    4:37 pm on February 25th, 2012 1

    I have a good idea for retaliation. The US should copy every denomination of North Korean currency and then mint tons of counterfeit bills, then fly at high altitude between the DMZ and Yalu River while MAKING IT RAIN. This would punish and destabilize the Pyongyang regime and hopefully facilitate an internal revolution that ultimately results in reunification.

  • Angus
    5:28 pm on February 25th, 2012 2

    “Another place these Asian criminal syndicates were laundering money was in Macau.”

    Which is also the home turf of the wayward Kim Jong-nam…a coincidence some would say?

  • Denny
    6:36 pm on February 25th, 2012 3

    Why would China care when they counterfeit American goods.

  • Teadrinker
    8:57 pm on February 25th, 2012 4

    “Forging $100 bills obviously gels with the regime’s febrile anti-Americanism and its aim to undercut U.S. global power, in this case by sowing doubts about our currency. ”

    Well, that and the fact that the North Korean government is an organized crime family.

  • Teadrinker
    9:04 pm on February 25th, 2012 5

    ” Does anyone else have any better ideas on how to respond to North Korean counterfeiting?”

    Easy: switch to polymer banknotes.

  • Charles
    4:14 am on February 26th, 2012 6

    I see things haven’t changed much in the 50 odd years since I’ve been there. Black market U.S. currency was at a premium.

  • Kid Bop
    6:30 am on February 26th, 2012 7

    Don’t be blinded by this article-especially as it relates to the Time mag article. It is another step down the road to a cashless society. Total one world government control and the fulfillment of Bible prophesy. No one will be able to buy or sell with out a number. Get to know the Jesus of the Bible-not the one portrayed by the media-left or right wing. You might be quite surprised by how He really is1

  • BC
    5:32 am on February 27th, 2012 8

    I agree with the comment above about counterfeiting North Korean currency and blanketing the country with it.

  • setnaffa
    7:49 am on February 27th, 2012 9

    Since counterfeiting another country’s currency is an act of war, the idea is a non-starter. It gives the Norks an excuse. And their allies (like China Iran, Venezuela, and Putin’s USSRRussia).

    I would recommend suspending aid to the country. It might seem heartless at first; but the people will finally have a reason to effect their own “regime change” without any external pressure (except maybe China).

    BTW, was the rumor about KJU assassination true or false?

  • Kagura
    11:57 pm on March 2nd, 2012 10

    @5 Polymer banknotes don’t stop hostile sovereign states from counterfeiting your notes into super currency. It just stops basement counterfeiters, and in Canada’s case it was chosen as a big departure from “normal money” in order to rebuild the public’s confidence in their $100 bills. Previously the Canadian public was wary about receiving and using them due to a rash of counterfeit incidents.

  • Glans
    12:12 am on March 3rd, 2012 11

    To heck with stupid fifties and hundreds. Who needs them? Yes, we should stop printing them.

    Note how GI Korea says the US government laundered money for North Korea. He doesn’t say who was president at the time. But we all know, don’t we? It was George W Bush, a Republican.

  • Unknown Soldier
    11:33 am on May 31st, 2012 12

    I have some suggestions to this N. Korean conterfieting issue:

    1) Stop negotiating with the N. Koreans! Why negotiate when we hold ALL the cards?!?

    2) If the U.S. Government (notice I didn’t say WE THE PEOPLE) want to feed the starving masses of the world, let’s First start HERE in our country where we have REAL people struggling to eat and survive.

    3) Put economic pressure on Communist China to reign in their Communist neighbor to the North by demanding that they change their ways or WE stop shopping at WALMART !

    4) Last of all target the capital city of North Korea with a covertly delivered aerially dropped EMP which would cripple their Military Elite society and equalize THEIR living standards to those of the oppressed North Korean population. Call it a “Shot over the bow” warning to their criminal regime.


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