Bumped ~ North Korea revalues currency, destroying personal savings Wednesday, December 2, 2009
TOKYO -- Chaos reportedly erupted in North Korea on Tuesday after the government of Kim Jong Il revalued the country's currency, sharply restricting the amount of old bills that could be traded for new and wiping out personal savings. The revaluation and exchange limits triggered panic and anger, particularly among market traders with substantial hoards of old North Korean won -- much of which has apparently become worthless, according to news agency reports from South Korea and China and from groups with contacts in North Korea.
The sudden currency move appeared to be part of a continuing effort by the government to crack down on private markets, which have become an essential part of the food-supply system in chronically hungry North Korea. In recent years, some market traders have stashed away substantial amounts of cash, while establishing themselves in profitable businesses that the government struggles to control. But under the rules of the new currency system, the wealth of these traders has largely disappeared, unless it is held in euros, dollars or Chinese yuan.
The revaluation (Lop) replaces 1,000-won notes with 10-won notes but strictly limits the amount of old currency that can be exchanged, news reports said. According to two Web-based groups with sources in the North, that limit was set Monday at 100,000 won, which at current black-market rates amounts to just $40. All North Korean currency that individuals possess in excess of that amount becomes worthless under the revaluation. Amid widespread protests, the limit was raised to 150,000 won in cash and 300,000 won in bank savings, according to DailyNK, an online news organization that has informants in the North.
"I worked like a dog for two months for the winter, but the money became useless paper overnight," a resident of Sinuiju, a city that borders China, was quoted as saying on the Web site of Good Friends, a South Korea-based aid organization with informants in the North
China's official New China News Agency said in a report from Pyongyang, North Korea, that state-run shops were closed Tuesday as sales staff posted new prices on goods. The exchange of old currency for new began Monday and will end Sunday, the Chinese news agency said, adding that the government did not explain why the revaluation had occurred. In the past year, North Korea has put increasing pressure on local markets, closing several and limiting the range of goods that can be sold in them.
The government has also criminalized everyday market behavior while creating a new kind of gulag for those it deems economic criminals, according to a report released this fall by the East-West Center, a research organization established by Congress to promote understanding of Asia. The report says security forces in North Korea have broad discretion to detain without trial nearly anyone who buys or sells in the local markets. But if traders can pay bribes, security officials will often leave them alone, the report says.
If the currency move substantially cripples the operation of local markets in the North, the consequences could be severe for the millions who now depend on them for food. U.N. officials have estimated that as much as half the calories consumed by North Koreans come from food bought in markets. South Korean officials said last month that North Korea appears to be on the brink of another severe food crisis, with stocks of food likely to run short by March.
also ~ another article ~
North Korea Sharply Revalues Currency: Report 2
and ... for comparison ~
Iraq ~
We know, as fact, that Iraq is a very wealthy nation, unlike N. Korea and other poor countries who choose to lop their currencies. Iraq's prosperity will increase with reconstruction. Oil revenues will continue to increase and jobs will continue to increase along with manufacturing, agriculture, etc... Iraq's economy is poised for resurgence.
Iraq is changing and the demand for all types of goods and services is growing fast. The focus is on reconstruction as the government rebuilds essential infrastructure, from power and water utilities and transport infrastructure to residential housing. At the same time, the government is investing in the essential economic infrastructure; including oil fields and the mid- and downstream pipelines, petrochemical, and fuel distribution sectors. Also, other areas in telecommunication, electricity, health, housing and construction, industry and manufacturing, banking and finance will continue to grow.
As far as Iraq's monetary system and it's currency is concerned, we can look forward to Iraq having one of the strongest currencies in the world. With or without Iraq joining the GCC, Iraq will have a very strong dinar. Also, when and if Iraq joins the GCC, we will see a monetary bloc worth Trillions.
In the near future we can look forward to the GCC being included in a basket of currencies which will possibly include an Asian currency along with the Dollar and Euro.
Link ~ to GCC ~ strength of currency ~
Gulf Unified Currency will be one of Top Five ... Sept. 2008 ~
As far as Lopping the Iraqi Dinar, that has not been the plan. Gradual elimination of the larger notes has been the plan. Unlike Korea (communist country) Iraq has promised to its people a return to currency with the purchasing power of pre-war times. Remember, when the new currency was introduced, Iraqis lost all of their savings and purchasing power. It would only be fair to return the losses back to the people. Iraqis became poor overnight and they just may become wealthy overnight... sounds fair.
older article ~ FACTS ABOUT THE IRAQI DINAR AND ITS HISTORY
On another note, IMO, Iraq has been the lynchpin for multiple currency revaluations. And, on one hand, until Iraq makes the first move, others may have to wait. Or, on the other hand, it is possible that all countries need to be in agreement before we see a move in currencies. On another important subject involving world currencies, currency swaps have taken place since 2008 and stopped on February 1st. This, IMO, is an important event that could help save the global economy. below are links that explain why I believe this. Not an expert and it's just my opinion.
CURRENCY SWAPS 2008-2009-2010 LINKS ~
Also, remember Iraq and CBI's Shabibi ~
MARCH 23 -24- 2010 - UNITED NATIONS "THE MONTERREY CONSENSUS AND DOHA DECLARATION"
Central Bank of Iraq's Governor, Sinan Shabibi and the United Nations - UN Meeting ...March 23-24-2010
*** IRAQ PLANNING CURRENCY REDENOMINATION ...
