Thursday, August 13, 2009

Supernotes

There's an interesting article in Vanity Fair about North Korean counterfeiters. Specifically, about how the production of so-called supernotes remains unchecked, despite efforts to shut down the counterfeiters.

The fact that the US dollar is considered the currency of global trade makes it a prime candidate for counterfeiters, but I think there's another compelling reason. Take a look at a US $100 bill. Now take a look at some Euro notes. It doesn't take much to see that the Euro looks a lot more difficult to forge. Indeed, while the number of counterfeit Euros in circulation is increasing, they're typically of far lower quality and far easier to detect than the North Korean supernotes.

So why doesn't the US completely redesign our paper money? We could add holograms, clear plastic windows, more watermarks and security strips, and change the notes' material to the plasticy stuff that Australian money is already made out of. If, as the VF article suggests, actively pursuing the North Korean counterfeiters was too politically sensitive, a full overhaul of our currency would still accomplish the goal of stemming the flow of fake money. Plus, by cutting off the DPK's source of hard currency, it just may tip the negotiations to our favor.


Addendum: A colleague of mine based in Hong Kong relayed an interesting point that the article just barely mentions: the Macao connection. Macao, while not fully integrated with the PRC, is still controlled by China. It is very unlikely that North Korea would be able to operate a bank in Macao for the sole purpose of laundering supernotes without the Chinese being aware of and, potentially, complicit in the operation. Perhaps greater political pressures came into play.

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