Friday, December 11, 2009

North Korea "Reforms" Its Currency

US media aren't much covering this story; what we're getting from the major outlets is that US envoy Stephen Bosworth was there and talks seem to have gone favorably. Here's the Washington Post, which completely ignores the much bigger story: they're changing the currency.

North Korea, for a very short time, allowed the rise of a few real markets; not the financial kind, the kind where people buy and sell stuff. Last summer, they started cracking down on the biggest one in Pyongyang and didn't allow foreigners in, as they had earlier.

Now the government is revaluing the currency and requiring that all the old currency be exchanged in less than a week. They are also limiting the amount of currency that can be exchanged by an individual, which means that many people's savings will be destroyed.

Less currency in circulation means less opportunity for those markets. It will also hit people who have been capitalistically making money from them.

North Koreans are reported to be frantically spending the money they won't be able to exchange. There are also reports of protests and violence, and a beefing-up of the security forces.

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