Slave to the Blog: Back in the Saddle Again, Pt. 1


You know you have been slacking off when it takes a two-parter to cover this material.

Marcus Noland (PIIE)



For the last couple months Steph and Kent have been carrying the load on this blog, but it’s time for me to start picking up some slack. I figured the easiest way to ease myself back in would be to take on a Slave to the Blog review of ongoing stories which they have not addressed. As usual, I start with the comparatively normal before veering off into the weird.

The big stories during my period of absence have been the fifth nuclear test and the flood disaster which KCNA in its usual understated style described as the “biggest cataclysm” since the country’s liberation in 1945. (General Eugene O’Donnell, who led the US bombing campaign in 1950-1, must be rolling over in his grave.) North Korea is seeking aid, and needless to say, the juxtaposition of the two events is a bit awkward diplomatically.

Steph and Kent addressed the immediate aid situation earlier, and the government has introduced price controls in an attempt to contain locally skyrocketing prices. But this was the North Korean equivalent of West Virginia, not Kansas, that flooded, and the long-term implications for food security are not obvious. North Korea is benefitting from the pronounced decline in food prices globally. This makes it easier for the country to import food to cover local shortfalls, and contributes to price stability more generally. The FAO is forecasting rice production of 2.4 MMT, which would be a slight mark down from the previous forecast of 2.6MMT, but would still be significantly higher than 1.8MMT ton average of the period 2011-13. All of this is consistent with the country’s reversion to a “new normal” after a string unusually strong harvests.

Financing those imports would be easier if the world did not regard the North Korean financial system as a giant money laundering operation. Back in May the North Koreans passed a new Anti-Money Laundering Law but the rest of the world was unimpressed. In June, the US named North Korea a primary money laundering concern and together with South Korea began ramping up international support through the Financial Action Task Force (FATF).  In July, the EU domino fell with the European Commission designating North Korea a “high risk” country requiring “enhanced due diligence measures” for transactions. North Korea was singled out as having “ongoing and substantial money laundering and terrorist financing risks, having repeatedly failed to address the identified deficiencies and which are identified by FATF Public Statement.” North Korea described these allegations as “unfair.” Now the issue is how far Treasury will go in using its enhanced powers to impose sanctions on entities, particularly Chinese banks, allegedly engaged in money laundering activities connected to North Korean military programs. Secretary Lew will be visiting PIIE later this week. Maybe we’ll find out. Given Treasury’s history of lassitude in these matters, I would not be holding my breath though. 

Dateline Ottawa:


Global Affairs Canada advises against all travel to North Korea (officially named the Democratic People’s Republic of Korea) due to the uncertain security situation caused by North Korea’s nuclear weapons development program and highly repressive regime.

There is no resident Canadian government office in the country. The ability of Canadian officials to provide consular assistance in North Korea is extremely limited.

‘Nuff said.

In 1970, two co-workers, Jim Rogers and George Soros, founded the Quantum Fund and over the next ten years made a gazillion dollars. Then they went their very separate ways. Rogers drives Steph crazy, recently announcing that “If we all bought North Korean currency, we'd all be rich someday.” He explains:

“There are 15 free trade zones there now. You can take bicycle tours of North Korea, if you want. You can take movie tours. I'm sure if [Kim Jong Un's] father were alive, he'd hang him. If his grandfather were alive, he'd torture him and then hang him, you know, for some of the things he's doing. I mean, you go to North Korea now, you see these astonishing restaurants with white tablecloths, cutlery, candles. I mean, this is North Korea we're talking about. Chefs. It's happening.”

Hmm.  The “white tablecloth” approach to investing. In the meantime, the same day that Rogers graced us with this analysis, his former partner, Soros, a refugee from fascist Hungary, announced that he was earmarking $500 million for investments “that specifically address the needs of migrants, refugees and host communities. I will invest in startups, established companies, social-impact initiatives and businesses founded by migrants and refugees themselves. Although my main concern is to help migrants and refugees arriving in Europe, I will be looking for good investment ideas that will benefit migrants all over the world.” If you know any North Korean refugees that need a leg up…

I found the shots of the Dear Respected Comrade and his entourage trooping around in lab jackets so absurd that the only appropriate response would be a lisping Catalan version of “Walk on the Wild Side”

Finally, a story that caught my eye: “Kim Jong Un Visits Syringe Factory.” You cannot make this up. I would like to include a photo of the Dear Respected Comrade at said factory, but the Nervous Nellies in our pubs department would insist that we pay Rodong Sinmun a royalty. My favorite quote: “He instructed ‘the factory to update it as required by the age of knowledge-based economic in order to increase the production of syringes systemically and produce various sizes of those products and needles for diverse uses as many as it wishes.’” At that point, the obvious joke would be to queue up Lou Reed doing “I’m Waiting for My Man.” But I found the shots of the Dear Respected Comrade and his entourage trooping around in lab jackets so absurd that the only appropriate response would be a lisping Catalan version of “Walk on the Wild Side”…. (It’s definitely worth skipping through the ad.)

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