US to Deal with North Korea’s Dollar $100 bill Counterfeiting

A counterfeiter meets another counterfeiter: North Koreans printing unauthorized US $100 dollar bills

From Business.time.com (hat tip lew rockwell blog)

U.S. negotiators are heading into a second day of what have been dubbed “serious and substantial” talks with North Korean officials. Yet amidst all the discussion of how the U.S. will attempt to work with Kim Jong Un, there has been little (open) speculation as to whether Dear Leader Junior might crank up production of $100 and $50 bills. No, not North Korean 100- or 50-won banknotes, worth about as much as old tissues. I’m talking about fake greenbacks — or, as the U.S. Secret Service has dubbed them, “superdollars.”

These ultra-counterfeits are light years beyond the weak facsimiles produced by most forgers, who use desktop printers. As an anti-counterfeiting investigator with Europol once put it: “Superdollars are just U.S. dollars not made by the U.S. government.” With few exceptions, only Federal Reserve banks equipped with the fanciest detection gear can identify these fakes…

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 100-fold, 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.

So part of the reason why the North Korean government counterfeits the US 100 Benjamin Franklin bills has been to put up a façade or a veneer on its rampant inflationism.

But counterfeiting is a twofold process. According to the great Murray N. Rothbard such process involves first, an increase of the total supply of money, thereby driving up the prices of goods and services and driving down the purchasing power of the money-unit; and second, the changing of the distribution of income and wealth, by putting disproportionately more money into the hands of the counterfeiters.

In short, counterfeiting is the finagling of the public’s wealth into the pockets of politicians or the counterfeiters who run the printing press. This essentially makes the US government, via the fiat money standard running on central banking operations, no different than typical counterfeiters except that US central bank operations are reckoned as legitimated.

And besides, North Koreans need not “undercut U.S. global power” because the US has already been working on path towards self inflicted perdition, through US dollar debasement policies.

Yet the US government disdains competition and will likely act to curtail them.

Again Professor Rothbard,

Whereas the government may take a benign view of all other torts and crimes, including mugging, robbery, and murder, and it may worry about the "deprived youth" of the criminal and treat him tenderly, there is one group of criminals whom no government ever coddles: the counterfeiters. The counterfeiter is hunted down seriously and efficiently, and he is salted away for a very long time; for he is committing a crime that the government takes very seriously: he is interfering with the government's revenue: specifically, the monopoly power to print money enjoyed by the Federal Reserve.

So will the counter-counterfeiting of the North Korean government serve as justification for war hungry US politicians to open a new front in the imperial theater of war?