It took two dead and a few weeks for Kim Jong Il to realize that using a currency exchange to cap wealth was probably a bad idea. Earlier this month, the North Korean leader announced a currency revaluation – without giving any warning. Paired with a currency exchange, citizens of the most isolated country on the planet would not be allowed to swap more than $40 of the old bills for the new. So, even the (relatively) wealthy would be left with $40 and piles of worthless paper.

The response was surprisingly negative. And, the fact that there was a response was surprising. Normally, the regime does a solid job of preventing any significant visible disagreement. This time around, the situation was different. The country, hit hard by famines, power shortages and profoundly depressed morale, voiced its displeasure with the decision. A riot broke out in one city, leaving two killed.

Ben Bernanke and the Federal Reserve have kept interest rates low for some time. Interest rates lie somewhere below a quarter point and a zero, giving people very little reason to save. Why should you save money when inflation could work against you and the money will not grow?

Low interest rates also work to reduce the cost of borrowing. This could help businesses that want to expand, or the federal government that has trillions of dollars of debt that it needs to finance.

The secondary effects of the subprime fiasco are rippling through the market. High among the losers are those firms living off the carry trade, borrowing currency from countries such as Japan at low interest rates and investing that money at higher interest rates elsewhere.

The foundation for the carry trade is a non-volatile currency market, since a sudden rise in the value of the yen against the dollar, for example, can more than wipe out the profits to be made via the interest rate difference. The recent market, however, has been anything but non-volatile; the dollar has dropped from 124 yen in late June to just 114.398 last Friday.

According to Bloomberg.com, among the big losers in the carry trade is J. W. Henry & Co, whose financial and metals portfolio took a $122 million hit in July. While any losses to the owner of the Boston Red Sox is good news to Indians fans like me, investors with J. W. Henry have seen the assets of the firm shrink by 75% since November. The hedge fund of Campbell & Co. also suffered over a 10% loss in July from its $9 billion portfolio.

A Goldman Sachs index of implied volatility on currency options has risen to 6.03% from a record low in November of 5.54%. With the forecast calling for turbulence in the currency exchange market, the carry trade does not seem like a safe harbor for the risk-adverse to wait out the storm.

A lot has been made about a pizza restaurant accepting the Mexican Peso as legal tender in it's stores. Yesterday Brandon Barker reported: Ay caramba: Pizza chain makes peso policy permanent. Some people feel it is a affront to U.S. sovereignty. Others feel like they are being personally invaded. Still others respond as if the restaurant was committing some sort of crime or letting a thief in through the back door,

This a fantastic opportunity for self reflection, discussion, and maybe education, and growth. My first thoughts on the matter included all of the above and the idea was very unappealing to me, and, I felt, detrimental to the United States. After a few minutes and reading a few comments I changed my mind.

Once upon a time there was a Cracker Jacks commercial that showed a kid at the counter paying for his treat. He could barely see over the counter, very Opey-like, and he only had nine cents for what was a ten-cent acquisition. High finance to a little kid. The fatherly shopkeeper shook his head slowly at the nine cents on the counter and raised his eyebrows, communicating that it was not sufficient. The child, thinking for a moment, reaches deep into his pockets and, with appropriate reservation and in a demure manner, offers up a marble to the shopkeeper --- not sure if this would be acceptable.

The shopkeeper takes the marble, holds it up to the light as if it was a fine jewel, feigning some special value upon it, and wanting to let the boy know that he understood it had significance. He pauses, looks at the boy, nods affirmatively, and the deal is struck. The boy leaves happy, the shopkeeper accepts a marble as barter in partial payment, and not a word was said. We, the audience to this beautiful scene, are left with a warm fuzzy feeling charmed by the kindness and wisdom of the shopkeeper and the pride and joy of the boy. From my perspective this television commercial is one of the finest moments in broadcast media and it is as good as any show ever made.

If the shopkeeper can accept a marble then a store can accept a peso.