North Korea Changes Currency

Re:North Korea Changes Currency by DrJokepu on Wednesday December 02, 2009 @11:38AM (#972339)

Very different. This is capping, not just devaluating. If you're devaluating, let's say, by 10%, if you had $10 you will have $9 (it will be still $10 but it will be only worth $9), if you had $100 you will have $90, if you had $1000 you will have $900, etc.

In this case, they're capping as well at $40. If you had $10 you will still have only $9, but if you had $100 (or $1000 or a million) you will only have $40. That's it. That's not just taxing wealth, it's taking all the wealth away.

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Re:North Korea Changes Currency by Retric on Wednesday December 02, 2009 @11:59AM (#972397)

At the same time there was no physical destruction of physical stuff, so it was wealth transfer not wealth destruction. In theory the country should be approximately as wealthy after this action as it was before it.

PS: Ignoring the intangibles.

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Re:North Korea Changes Currency by gaius on Wednesday December 02, 2009 @01:02PM (#972513)

it's taking all the wealth away

It's taking the liquidity away. People can no longer trade amongst themselves; they can only "trade" with the government.

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Re:North Korea Changes Currency by CWuestefeld on Wednesday December 02, 2009 @12:51PM (#972491)

So it's like devaluation, but with a "progressive" twist?

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Re:North Korea Changes Currency by DrJokepu on Wednesday December 02, 2009 @12:56PM (#972500)

Well, yeah, infinitely progressive. It's like if the tax rate above a range was 100%.

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