Saturday, January 9, 2010

Nobody Could Have Seen This Coming

. Saturday, January 9, 2010

Remember that currency revaluation in North Korea? Yeah, that's not going so well:

North Korea’s currency reform has apparently failed to tame inflation. The state has paid the first salaries since the shock currency reform late last year, with the State Security Department and the Ministry of Public Security, the frontline agencies dedicated to protection of the regime, paying soldiers 6,000 won each — 3,000 won in average monthly pay plus a 3,000 won bonus.

Soldiers usually received about 3,000 won in the old currency. That this effectively doubled means the currency reform, which exchanged old won for new at a rate of 100:1, has not been able to stop inflation. ...

But commodity prices skyrocketed. Inflation is soaring as market traders are hoarding goods, anticipating that the real value of the new currency will plummet. According to a North Korean source, 1 kg of rice cost about 30 won right after the currency reform but is now closing in on 1,000 won. The U.S. dollar was exchanged at the rate of 75 won to the greenback right after the currency reform but soared to 400 won in late December. There is speculation that it is now only a matter of time before the rate will reach 3,000 won, the same as the unofficial exchange rate of the old won.

Market traders are angry as they have realized that they were robbed of nearly everything they earned. A former senior North Korean official said, “The latest currency reform is more cruel than the previous reform in 1992. It’s tantamount to the state confiscating 99 percent of people’s money.”

It's about time for North Korea to test-fire another missile, eh? That always seems to distract from domestic turmoil.


Nobody Could Have Seen This Coming
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