Posted on 12/02/2009 2:58:32 AM PST by TigerLikesRooster
N.Korea's Currency Reform 'a Bid to Cement Power'
The biggest motivation behind North Korea's sudden currency reform Tuesday appears to be Kim Jong-il's intention to throttle the emerging free market, which appears to hamper a smooth succession of power to his son Kim Jong-un, North Korea experts and South Korean government officials say. The North announced the won would be revalued at a rate of 100:1.
But some experts say the aim is wealth redistribution, while others believe the reform is aimed at containing inflation, which has skyrocketed since North Korea introduced rudiments of a market economy in 2002.
Kim, who suffered a stroke in August last year, seems determined to hand over power to his son in a third-generation dynastic succession. To do that, he needs to get an iron grip on the regime as the country disintegrates amid endemic poverty aggravated by international sanctions. But widespread corruption means North Korea's emergent wealthy class, which has grown since the mid-1990s, is not easily subdued by recent heavy-handed crackdowns on freedoms. "There are numerous cases of wealthy North Koreans paying off government officials and evading government steps to control them," a South Korean government official said.
In a recent bid to rein them in, the regime in January limited the types of goods people can sell in markets to only homegrown produce, meat (except beef) and clothing. Manufactured goods and imported products must theoretically be sold in state-run stores. The measure was tantamount to a closure of the street markets. But the orders were met with public outrage and failed.
Prof. Nam Ju-hong of Kyonggi University says Kim has "declared war against market forces" with the drastic currency reform, because his efforts to control trade had failed.
(Excerpt) Read more at english.chosun.com ...
Ping!
aniki
Big Kleptocrats have Little Kleptocrats
Upon their backs, to bite ‘em.
Little Kleptocrats have Lesser Kleptocrats,
And so Ad Infinitum.
And the great kleptocrats themselves,
in turn, have greater kleptocrats to go on,
While these again have greater still,
and greater still, and so on.
- With apologies to Jon. Swift
Big Kleptocrats have Little Kleptocrats
Upon their backs, to bite ‘em.
Little Kleptocrats have Lesser Kleptocrats,
And so Ad Infinitum.
And the great kleptocrats themselves,
in turn, have greater kleptocrats to go on,
While these again have greater still,
and greater still, and so on.
- With apologies to Jon. Swift
Good job.
Inflation is not at all affected by lopping zeros off the currency. You are just renaming it. If money is being published at a greater rate than the economy can absorb without prices rising then that is still going on if you rename the units or change the number of zeros.
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