Tuesday, March 30, 2010

And I Thought New Zealanders Were Tough on Their Central Bankers

From NPR we learn the North Koreans show no mercy to central bankers:
If media reports in South Korea are accurate, earlier this month, North Korea hauled its equivalent of Alan Greenspan[,Pak Nam Gi,] in front of a firing squad.


Many analysts believe Pak was made a scapegoat for the currency reform.

So what went wrong? It seems that the currency "reform" was more of a currency debasing:

The currency reforms were meant to confiscate merchants' wealth and give it to farmers, workers and soldiers in the state sector. Many state-owned firms have fallen idle, and their workers have gradually migrated to the free markets to survive.

The plan worked, at least for a while, says Kim Yun-tae, secretary general of the Network for North Korean Democracy and Human Rights, a Seoul-based group that gets information from a network of informants in North Korea.

"The government printed money and distributed it to farmers and the lower classes," Kim says. "People loved it at first. But when the working class spent all that money, it was eaten up by inflation, and their lives got even harder."

Another needless tragedy for North Korea and another needless disruption to the welfare of North Koreans.

1 comment:

  1. Inflation is the least of their worries... As I understand, they don't really use the price mechanism much at all. They're too busy starving.