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Counterfeiting money is clearly a difficult thing for individuals, but surely a country should have no problems counterfeiting another country's currency. Why don't countries do it? For example, for the US to exert pressure on North Korea (or vice versa), it could conceivably print lots of North Korean Won and use that to cause hyperinflation in North Korea. Similarly for Greece to dig itself out of its debt crisis it could just print USD or any other major currency, and convert that into Euros.

My best guess is that this isn't done because it's an act of war, but countries are apparently willing to sling cyberweapons at each other, in which case I don't understand why they don't also do this, at least on a small scale.

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    $\begingroup$ Note that US currency would be pretty hard to counterfeit without being detected by relatively mundane tests. And it would be awfully hard to "fence" a large amount of any western currency without arousing suspicion. $\endgroup$
    – Hot Licks
    Commented Dec 20, 2017 at 2:09
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    $\begingroup$ I'm voting to close this question as off-topic because not about economics but law and international relations. $\endgroup$
    – user18
    Commented Feb 5, 2020 at 7:13

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Why assuming that it isn't done in the first place? Turns out, it was actually done by Nazis in WWII

https://en.wikipedia.org/wiki/Operation_Bernhard

Also, suppose that somebody actually made dollars that are indistinguishable from genuine, Fed-printed dollars. How would you find out in the first place? How sure are you that nobody is doing it? :)

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  • $\begingroup$ If you are right to point out that it has been done/tried before, the OP specifically mention trying to provoke an hyperinflation. And there are none in the USA in the last year. And surely, the gain/costs ratio isn't that great for just a few hundreds of thousands of dollars.... for a capable country. $\endgroup$
    – clem steredenn
    Commented Dec 20, 2017 at 9:58
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Although one should never speculate, this may actually be happening on a small scale of sorts. The reference to this is from here:

https://en.wikipedia.org/wiki/Superdollar

A superdollar (also known as a superbill or supernote) is a very high quality counterfeit United States one hundred-dollar bill, alleged by the U.S. Government to have been made by unknown organizations or governments.

Also, it doesn't have to be another country printing fake currency. It is arguable that criminals have greater incentive to print fake money then another country would.

Going back to your extremely hypothetical scenario of the US attempting hyperinflation by printing NK Won, we must keep in mind the following:

  • NK is a closed economy
  • That means currency and other controls are tightly regulated

If the US wanted to cause hyperinflation of the NK Won, their only (realistic) option would be to fly over NK territory and dump the money over cities. The act of flying over another countries sovereign territory would be considered an act of war, so it would be pointless to do such an action just for hyperinflation.

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    $\begingroup$ IIRC, the two Koreas have used balloons to drop leaflets on each other for decades. $\endgroup$
    – Hot Licks
    Commented Dec 22, 2017 at 1:41
  • $\begingroup$ You're not technically wrong, but whether a geopolitical action is an "act of war" or not is highly subjective and rests primarily on the credulity of the accusing state's capacity to follow through with what that accusation implies. Or in short - the US contravenes the Geneva convention (commits "acts of war") all the time. $\endgroup$
    – heh
    Commented Feb 4, 2020 at 15:44
  • $\begingroup$ Talk about helicopter money! $\endgroup$
    – Andrew Grimm
    Commented Jul 22, 2020 at 3:33
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If we are talking about a government indulging in printing their own US currency then there are two issues with it:

  • For any large scale purchase or buying, they use marked currency of a certain series. Say, a country wanted to buy a few fighter jets or crude oil worth a few hundred millions then the recipient country would not only ask for marked currency but also verify the series to corroborate it with Fed to ensure copies of it are not in circulation.

  • Secondly, if a country wishes to sabotage another's economy then they would have to infuse it from Fed Reserve to banks. That's how new printed money is distributed. A foreign country can't make large scale disruption as it won't be able to infuse it to banks from the Reserve.

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  • $\begingroup$ Why don't you think the counterfeit currency would eventually make its way to banks? $\endgroup$
    – Criticizing Israel not allowed
    Commented Feb 4, 2020 at 13:07

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