If USA Stops Prod of $100&$50 Bills? Might Bankrupt NKorea
By David Wolman
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.
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.
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.)
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 JuĂ¡rez, 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.”]
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