Banking system hooked on drug money

(9 am. – promoted by ek hornbeck)

  The mayor of Kabul was back at his desk the day after was sentenced to four years for corruption. Afghanistan is awash in only one kind of money these days – drug money.

  One of the poorest nations on Earth exports $10 million every day in drug money, most of it right out of Kabul airport, and the world’s bankers are hooked on it like junkies. In fact, this drug money probably did more to save the world’s banking system than all the government bailouts.

 Drugs money worth billions of dollars kept the financial system afloat at the height of the global crisis, the United Nations’ drugs and crime tsar has told the Observer.

  Antonio Maria Costa, head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organised crime were “the only liquid investment capital” available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result.

  Remember that only a few years ago these were the same banks that were insisting that they didn’t need to be regulated. Did some of this drug money wind up being used to lobby Congress in their successful efforts to gut regulation? It’s impossible to know for certain after it had been laundered so many times.

 “Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities… There were signs that some banks were rescued that way.” Costa declined to identify countries or banks that may have received any drugs money, saying that would be inappropriate because his office is supposed to address the problem, not apportion blame. But he said the money is now a part of the official system and had been effectively laundered.

 The question is: how do we plan on treating a banking system with a drug (money) problem?

16 comments

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    • gjohnsit on December 14, 2009 at 4:03 am
      Author

    Can a brother score a lid?

  1. It was just this last August when it was reported that 90% of US currency had traces of cocaine on it.

    What was funny was Washington DC had the largest percentage of cocaine residue.  

  2. If drugs were legalized, then they’d be controlled and taxed by governments and the profits would fall. With the money being so good for the establishment with drugs being outlawed, it is no wonder that they fight legalization even when it makes the most sense.

    • justCal on December 14, 2009 at 6:02 am

    …who said “You want to win the war on drugs? Easy,just hang a few bankers every weekend”.

    Plus according to this study hanging bankers might even be a profitable enterprise.  

  3. A nice big stake to buy out all of this year’s Afghan crop.

    No wonder Timmy won’t tell us where the money went.  So long as the banks use their drug profits to pay back the principle this year, nobody need be the wiser.

    • Wom Bat on December 14, 2009 at 5:00 pm

    and later by airplane), I think my successors could have kept more savory company than the damn banksters. Or maybe nowadays they’re just more serious about the money than we were. I was living in Aspen, wanted to ski and chase girls and not waste time punching somebody’s clock.  

  4. banks, and the AG in 2008 actually said that Criminals were targeting the…financial markets..:

    “…Attorney General Michael Mukasey warned Wednesday that organized criminal networks have penetrated portions of the international energy market and tried to control energy resources…

    In a speech at the Center for Strategic and International Studies in Washington, he said similar efforts have targeted the international financial system…

    …the International Organized Crime Threat Assessment identified eight general strategic threats from international organized criminals:” (Including)

    The exploitation of the U.S. and international financial system to move illegal profits and funds, including sending billions in illicit funds through the U.S. financial system each year. To continue this practice, they seek to corrupt financial service providers globally

    The successful corruption of public officials around the world…

    …when this govt. is well aware of the problem, the scope of the problem, and the consequences–yet doesn’t do much about it, then, one must begin to wonder whether it’s not just the Afghanistan govt. that is corrupt.

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