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North Korea's High-Tech Counterfeit $100 Bills
ESRB writes "North Korea is apparently able to produce high-quality counterfeits of U.S. dollars — specifically $100 and $50 bills. It's suspected that they possess similar printing technologies as the U.S. and buy ink from the same Swedish firm. 'Since the superdollars were first detected about a decade ago, the regime has been pocketing an estimated $15 to $25 million a year from them. (Other estimates are much higher — up to several hundred million dollars' worth.)' The article also advocates a move to all-digital payment/transfers by pointing out both forms are only representations of value and noting it would cripple criminal operations such as drug cartels, human traffickers, and so forth."
The ink is made by a Swiss, not a Swedish company. What the hell is it with Americans that they confuse these all the time.
Why does cash still exist in widespread usage? It clears at par.
If someone wants to pay you $10, and they give you cash or a check, you get $10. If they want to pay with anything else, be it Paypal, Square, some other mechanism, etc, the payment processor changes some ridiculous fee that will range from $.10 to $.50 or who knows what higher.
"Clearing at par" is why cash and checks still exist, and until electronic transactions are not only convenient and easy, but ALSO clear at par, there will still be a huge role for cash and checks.
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We better move you all to traceable, trackable, revokable electronic money.
You thought your privacy hit the fan before? Wait til your every pfennig is nothing but a shifting index in the Federal Reserve database.
"Flyin' in just a sweet place,
Never been known to fail..."
Furthermore, how would you not riot over your government doing something like that to you?
Man, you really don't know anything about NK, do you?
Anyone trying would be shot. There's no press. Very little outside observation, almost none allowed in or out.
On top of that many of the people are very literally brainwashed to adore the countries leadership and accept blindly anything they say or do.
"There is more worth loving than we have strength to love." - Brian Jay Stanley
The GP actually has it right. He's not describing the Treasury Department or Stimulus Bill bailouts, he's just describing one of the mechanisms by which money is put into circulation. The problem with your analysis is that you are talking like debt can be conjured out of thin air. It can't be. Debt is the result of a *trans*action, which has two sides; if there is income on one end, there's expense on the other; if there's debt incurred on one side, there's assets acquired on the other. The Fed cannot add to the economy's *total* debt by the mechanism the GP describes because a debt and an equal asset are conjured into existence *together*.
The "growing debt" you are talking about simply reflects this intrinsic double-sidedness of transactions. Suppose the economy doubles in size. If you want stable prices, the amount of dollars in circulation has to double. Because of the double-sidedness of transactions, that means the amount of debt on the Fed's books has to double; logically it amounts to the very same thing. There's no way to get more money into circulation without creating a corresponding debt on the central bank's books, unless you want to *give* it away. If you simply give money away when you need the money supply to contract, you have no choice but to *take money away* from people. The system of loans is sensible in that the disbursement and collection of money are built-in.
So what about that interest paid back to the Fed? Is that a problem? Well it is true that the interest paid back to the Fed *does* take dollars out of the economy, but that's the easiest problem in the world for a central bank to fix. It simply lends them right out again. But the numbers keep getting bigger. Isn't that heading for disaster? No, because the numbers keep getting bigger only if the amount of money in circulation grows, and that should only be done when the economy grows. If dollars are only traded for things of value, then ultimately those dollars have to make their way into the hands of people who've created new value. So what if the economy contracts instead of expands? Even easier. That interest payment takes currency out of the economy, which is just what you want.
This all seems a bit "through the looking-glass, but keep in mind that money has no *intrinsic* value; it's just a token we use to making trading things with *real* value convenient and flexible. I was advising a friend recently to sell a small factory he owns but has no immediate use for. In fact tying up his capital in this asset is slowing down his business growth. "Put the extra 6000 sq ft of facility in a more productive investment; when you've grown the business enough to need it, take that space out again."
It makes no sense to talk about "under" or "over-valuing" goods in terms of *currency*; it only makes sense to value *one* kind of good against *another*. In other words it makes no difference if your magic sword costs ten rupees or a hundred so long as everything else in the game is proportionately scaled. The only reason you want stable prices so that *future* goods are not undervalued (inflation) or overvalued (deflation) relative to things you could buy today.
The only way to ensure stable prices is to manipulate the money supply to parallel economic growth. Is the process of manipulating the money supply subject to abuse and fraud? HELL YES. So is *every other* power we grant the government, from passing laws or maintaining national defense.
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