How the U.S. Could Pressure North Korea Tomorrow: Quit the $100 Bill

  • Share
  • Read Later
Photo-Illustration by TIME

U.S. negotiators are heading into a second day of what have been dubbed “serious and substantial” talks with North Korean officials. Yet amid 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 anticounterfeiting 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.

Yet as unpatriotic as this may sound, perhaps America would be better off if Kim Jong Un were to try and enrich himself with DIY Benjamins. Let me explain, by way of a little background about superdollars.

(MORE: Can a Second Bailout Save Greece?)

The “super” moniker does not stem from any particular talent on the part of the North Koreans. It’s a matter of equipment. The regime apparently possesses the same kind of intaglio printing press (or presses) used by the U.S. Bureau of Engraving and Printing. A leading theory is that in 1989, just before the collapse of the Berlin Wall, the machines made their way to North Korea from a clandestine facility in East Germany, where they were used to make fake passports and other secret documents. The high-tech paper is just about the same as what’s used to make authentic dollars, and the North Koreans buy their ink from the same Swiss firm that supplies the U.S. government with ink for greenbacks.

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 of 2007 film The Counterfeiters, which won an 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 the 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 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 another country’s more stable currency looks downright humanitarian.

(MORE: TIME Interview with Warren Buffett)

The superdollar affair has a certain comic-book quality: copying the currency of evil capitalists so you can buy cognac and missiles. But Washington isn’t laughing. At the end of December, Ireland’s high court rejected a U.S. request to extradite former Workers Party president and IRA veteran Sean Garland for his alleged involvement with the superdollar plot. There is also the question of what exactly the North Koreans hope to procure with all this “money.” According to the U.S. House Task Force on Terrorism and Unconventional Warfare, superdollars may be part of the regime’s effort to acquire materials for nuclear weapons.

Since the superdollars were first detected about a decade ago, the regime has been pocketing an estimated $15 million to $25 million a year from them. (Other estimates are much higher — up to several hundred million dollars’ worth.) That sounds like a lot of money, but compared to the $1 trillion in cash circulating in the great ocean of commerce, a few hundred million is chump change. Although costly for small-business owners who unknowingly accept a bunch of forgeries, counterfeits probably won’t bring about a crisis of faith in our paper money anytime soon.

Yet taking the long view, maybe a rash of new superdollars from the hermetic regime of Kim Jong Un would be beneficial. How so? Because counterfeits have a way of reminding people of what material money is and how it functions, and that could lead to a discussion of its pros and cons. Cash is, and always has been, such an uncontested part of everyday life that we rarely stop to consider its toll on society as the currency of crime, to say nothing of the heaping expense of printing, transporting, securing, inspecting, shredding, redesigning, reprinting, reinspecting and redistributing it ad nauseam, plus the broader costs of prosecuting and incarcerating the thousands, if not millions, of people who commit cash-related crimes. That’s not to suggest we could get rid of paper money tomorrow; we still don’t have a substitute that’s equally convenient, universally accepted and adequately secure. But that day may be closer than you think. (Coins, however, we could — and should — do away with. As in, right now.)

(MORE: Google Takes Another Experimental Step Toward Delivering TV)

Superdollars and the untold billions of (electronic) dollars spent combating them could be the wake-up call that finally forces us to think more clearly about the costs of physical money. If killing all cash strikes you as too radical, consider for a moment what it would mean to get rid of high-denomination banknotes. Who would be most inconvenienced if Washington were to outlaw $100 and $50 bills tomorrow? Cartel bosses in Juárez, Mexico, jump to mind. So do human traffickers in China and Africa, aspiring terrorists in Afghanistan, wildlife poachers, arms dealers, tax evaders and everyday crooks who hold up mom-and-pop groceries. And, of course, North Korean government officials.

So then. At the risk of infuriating cash-hoarding militia members, anonymity-obsessed ACLUers, the U.S. Treasury, Russian mobsters, Laundromat owners and just about every person who has ever hid a purchase from a spouse or income from the government, I would say this to Kim Jong Un and his posse of counterfeiters: Bring it.

Wolman is a contributing editor at Wired and the author of The End of Money: Counterfeiters, Preachers, Techies, Dreamers—and the Coming Cashless Society, out this month from Da Capo Press. Follow him on Twitter: @davidwolman.

[Correction: This piece originally said the "won was devalued by 100 percent, which meant 1,000 won suddenly had the purchasing power of 10 won." It has been corrected to read, "The won was devalued 100-fold."]

16 comments
laurabilley060
laurabilley060

HOW I GOT MY LOAN FROM A RELIABLE AND GENUINE LOAN COMPANY


Hello everyone,


My name is Laura Billey from Texas USA, 37 years of age , I want to inform you all about the goodness of the lord for finally leading me to a really and genuine loan lender named Mr Mason Diego, the managing director of Diego Loan Company after been scammed by other fake lenders, i was hopeless and didn't know who to trust while he came and put a great smile on my face at my greatest surprise. Anyone of you that have also be a victim of scam, you should bother no more cos, i have bring you good news and the only lender you can trust, just contact them now via: diegoloancompany@yahoo.com for more info on how to get your loan.  And once again..... Thanks Be To Mr Mason Diego of diegoloancompany@yahoo.com  for giving me a loan of 96,000.00USD.

Rosco1776
Rosco1776

(Coins, however, we could — and should — do away with. As in, right now.)
So gold and silver are not money anymore? So thousands of years as money and stability that will never be worth nothing like a fiat currency eventually will, whether a fiat becomes a digital currency or not, it's still a fiat currency. Let them counterfeit a coin, a little bit harder I think if people are smart enough to weigh and test them.

I'll stick with my pm's. ;)

JoeBrennanBooks
JoeBrennanBooks

My book "Superdollar", although a work of fiction gives an insight just what did go on at the hieght of this operation.

aCapitalistInNorthKorea
aCapitalistInNorthKorea

“PEOPLE WILL BELIEVE (AND REPORT) ANYTHING ABOUT NORTH KOREA. THE WACKIER THE BETTER, AS IT SELLS MORE PAPERS.”

This recent tweet by Daniel R. Tudor, The Economist's Seoul-based editor is certainly true for this wacky article, but is there something even more sinister behind it? Let’s have a look:

US$ super notes are a sophisticated "high-tech" product which requires special printing machines, not available on the open market. The machines are sold only to authorized money printing central banks. Most machines are manufactured in Switzerland and its federal police tracks the machines around the globe which isn’t too difficult given the very small population of such machines. The super notes alsorequire special “hi-tech” paper and special ink made only by a tiny number of producers. Like the machines it’s nearly impossible for non-authorized people to get these products.

The author of the article, obviously a conspiracy theorist doesn’t provide any evidence and instead talks about a “theory that the machines made their way to North Korea from a clandestine facility in communist East Germany, where they were used to make fake passports and other secret documents”. He adds: “The high-tech paper is just about the same as what’s used to make authentic dollars, and the North Koreans buy their ink from the same Swiss firm that supplies the U.S. government with ink for greenbacks.”

The claim about the ink is totally absurd, and understandably, doesn’t come with evidence, either. Which manager in his right mind would ever be interested in having a minuscule business with a rogue customer at the expense of his immensely important main customer and risk a long prison sentence for that?

In short, as long as there is no solid proof the claim that North Korea is counterfeiting US$ super notes is just as true as the claim that Saddam Hussein was stockpiling weapons of mass destruction (WMD). Yet unproven accusations against Saddam that later turned out to be lies were good enough to launch a war. Counterfeiting the currency of an enemy can be considered as an act of war. In times when even the budgets for the powerful military-industrial complex are cut, we should expect to see more lobbying for a new Korean war. It could save jobs and profits and new weapons systems could be tested and marketed. With only a small contingent of less than 30.000 troops stationed in South Korea the risk of casualties for the U.S. is minimal as it could make war on North Korea from a safe distance far from the Korean peninsula.The North Korean population would bear the brunt and dozens of millions of South Koreans, within the reach of the North Korean artillery would also have to fear for their lives. The Iraqis and the rest of the world didn’t perhaps closely follow the debate about Iraq’s alleged WMDs and were therefore surprised with the outcome. People on the Korean peninsula had better watch this time where the counterfeiting debate is heading…

Felix Abt, author of the book "A Capitalist in North Korea: My Seven Years in the Hermit Kingdom"

bexaminer
bexaminer

Something just occurred to me.  I don't doubt for a second that North Korea is counterfeiting our currency, some respondents here do.  But what I'm wondering about is this.  What is the point or justification for the government to spend all the money that they do on investigating, tracking down, arresting, taking to court and ultimately incarcerating individual crooks who counterfeit very small amounts of cash relative to what Korea is doing?  I mean why should we the tax payers have to pay for all of that if the opinion is that it's immaterial to us?  If it is important then I think we have every right to do whatever we need to locate and destroy those presses in North Korea. 

If you were to ask some authority at the treasury why it's so important to stop people from counterfeiting they would say that the  reason is that counterfeit bills undermine the faith of our money.  So again, wouldn't North Korea deserve to be stopped?  Going after them makes much more sense to me than either of the two wars we are or have been involved in for the last 10 years. 

bexaminer
bexaminer

If the few hundred millions that North Korea is counterfeiting is chump change, I could use a bit of it.  I would think that a nation or government that counterfeits another nation's currency is committing an act of war.  I take this sort of thing seriously even if the author doesn't.  Besides, who is he to say how much money the North Korean's have or are making?  He doesn't know. 

At the very least I think we should make an effort to farrot out the location of these presses and lay some serous ordinance on them.  Who (besides the Koreans) would really fault us for doing that?  No one.  In fact this is one issue that I think the people could get behind.  Blow the crap out of those jerks.

matthew.simmons
matthew.simmons

This doesn't seem to be a well thought out article at all. How do you plan to remove $100 bills from the economy when millions of people hold that currency in private safes and bank deposit boxes? 

Also, the United States Government prints new money all the time.  If N. Korea prints $200 million worth of passable currency then we can just print that much less on our own presses and save the cost. No?



therjparker
therjparker

Another "progressive" idea at trying to increase the power of government to "keep us safe" - How about just get rid of the federal monopoly on currency? Why is it illegal to trade in gold and silver for commerce?  Probably because that commerce is harder to trace and tax.  Any law banning higher denomination bills would just encourage commerce to be done in precious metals, foreign currency, digital currency or bitcoin.  Innovation and technology is advancing so fast that it is exposing the ineffectiveness of large-scale government.

thebardingreen
thebardingreen

You know who else would be impacted?  Me, a private, law abiding citizen trying to live as off the grid and independent of banks as possible.  Because eff the banks.  I have no bank accounts, no credit cards I deal entirely in cash (I even talked my employer into paying me in cash) and I like it that way.

eckert_ryan1
eckert_ryan1

Guys - they are selling personal opinion as a truth.  

Read the article - they offer absolutely no proof  whatsoever to their ridicilous conterefeit claims.

GeraldFundy
GeraldFundy

These guys totally seem to know whats going on down there. I know That mnakes a lot of sense dude.


www.AnonGlobal.tk

sverry7
sverry7

So what happens to totally cashless societies, where all transactions would be carried out on computers, when and if major cyber warfare errupts?  

bexaminer
bexaminer

@matthew.simmons Not exactly Matthew.  The money that is printed by the government presses goes to the fed which in turn provides loans to member banks.

gavhudson
gavhudson

@matthew.simmons Easy, just stop printing them. They burn millions of notes each year and replace them with new ones. They gradually ease out of circulation.

Europe did the same thing with the 500 Euro note.

therjparker
therjparker

@sverry7 people get back to trading precious metals and bartering goods and services with one another.