The New York Times Sunday Magazine publishes a long and detailed view of the North Korean counterfeiting operations, which have long plaugued the United States Treasury, and which have generated hundreds of millions of dollars in foreign exchange. As the article notes, Kim Jong—il continued and improved the practice of his father, and has used the notes to fund overseas activities of the regime and to buy luxuries to distribute among hte North Korean elite, effectively bvuying their support with automobiles, overseas trips for children, cognac, wine, and (no doubt) those blonde prostitutes from Scandinavia he is known to favor.

Kim has even kept up with the latest anti—counterfeiting technology of optically variable  ink, and actually exceeding the quality of the genuine article:

Like the earlier generation of supernotes, the big—head imitations show an ever—growing attention to detail. 'They would certainly fool me,' said Glaser, who points out that the 'defects' of the supernote are arguably improvements. He recalled looking at the back of a $100 supernote under a magnifying glass and noticing that the hands on the clock tower of Independence Hall were sharper on the counterfeit than on the genuine.

From all accounts, superb quality is a feature of much North Korean contraband: methamphetamine of extraordinarily high purity; counterfeit Viagra rumored to exceed the bona fide product in its potency; supernotes. It's an impressive product line for a regime that can barely feed its people.

Koreans are capable of excellent work, obviously. It is equally obvious that the system of political economy in North Korea is keeping the North Korean people from enjoying the just fruits of their abilities.

The US government is focusing on interdicting distribution, and recently put a Macau bank believed to be serving as a distribution conduit for North Korea virtually out of international finance.

Hat tip: Rosslyn Smith

Thomas Lifson   7 23 06