Invest in North Korea? Don’t let Jim Rogers talk you into prison.
For a few years now, I’ve heard that hedge fund investor, TV provocateur, and crackpot Jim Rogers has been urging his audiences to invest in North Korea. A few years ago, that advice might not have done much worse than condemn your soul to eternal damnation and bankrupt you, the way it bankrupted (or nearly bankrupted) Orascom Telecom and any number of other investors who preceded it.
Since at least March, however, Rogers’s advice has been malpractice on a whole new level. Following the passage of a new U.S. sanctions law, the Treasury Department explicitly banned new investment in North Korea. It has also done much to jeopardize existing ones by imposing sectoral sanctions on North Korea’s banking, transportation, and mining industries. Perhaps, then, it’s time for Mr. Rogers to find a new way to attract attention. After all, the bans on investment are punishable as violations of the International Emergency Economic Powers Act, with 20 years in prison term and a $1 million fine.
“If we all bought North Korean currency, we’d all be rich someday,” Rogers said. [Business Insider]
No, Jim, you won’t be rich. You might get three square meals a day, courtesy of the taxpayers. Also, you might be warm. After North Korea redenominated its currency in 2009, North Koreans burned piles of the stuff. Even the North Korean government prefers the dollar to its own currency. North Korean market traders prefer dollars and Renminbi.
In short, Rogers is seeing the controversial country open up, which he says makes it a good bet.
Umm, no it isn’t.
Here’s the relevant excerpt from the Q&A explaining why:
“Well, North Korea today is where China was in 1981. Deng Xiaoping started opening up in ’78. Most of us, including me, either weren’t aware of it or if we were aware of it. We ignored it, didn’t pay any attention. North Korea is doing that now.
He added:
“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.”
No, Jim, it’s not happening. For the love of Zeus, don’t you even read the papers? It’s not even happening at that colossal new bridge to nowhere over the Yalu River.
Rogers noted that Chinese and Russian investors are pouring in to the country and said that he almost became an investor in a Chinese group that had a bank in North Korea.
No, investors are not pouring into North Korea. Even the existing ones now have to worry about having their assets frozen by the Chinese government under U.S. pressure.
He added that his lawyer told him he couldn’t invest.
So we eventually come to the fact that Rogers’s own lawyer told him of the investment ban. I’ve previously described North Korea as the Trump University of foreign investment, and you’d think that on so many levels — financial, moral, and legal — no responsible advisor would point an investor there. Maybe Rogers’s next question for his lawyer should be about the penalty for solicitation of a felony.
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Update: The only solicitation offense I see in title 18 is for soliciting a crime of violence. So I guess it’s Rogers’s viewers who bear all of the risk by taking his advice.