UNDERNEWS

Undernews is the online report of the Progressive Review, edited by Sam Smith, who has covered Washington during all or part of one quarter of America's presidencies and edited alternative journals since 1964. The Review has been on the web since 1995. See main page for full contents

January 27, 2009

UN CRIME WATCHDOG SAYS DRUG MONEY HELPED IN FISCAL CRISIS

On a number of occasions we have noted the probable importance of drug and other illegal monies in the fiscal crisis. This is the first corporate media story we have seen that even mentions the topic

International Herald Tribune - The United Nations' crime and drug watchdog has indications that money made in illicit drug trade has been used to keep banks afloat in the global financial crisis. Vienna-based UNODC Executive Director Antonio Maria Costa said in an interview released by Austrian weekly Profil that drug money often became the only available capital when the crisis spiraled out of control last year.

"In many instances, drug money is currently the only liquid investment capital," Costa was quoted as saying by Profil. "In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor."

The United Nations Office on Drugs and Crime had found evidence that "interbank loans were funded by money that originated from drug trade and other illegal activities," Costa was quoted as saying. There were "signs that some banks were rescued in that way."

Profil said Costa declined to identify countries or banks which may have received drug money and gave no indication how much cash might be involved.

2 Comments:

Anonymous Anonymous said...

"In MANY INSTANCES, drug money is currently THE ONLY liquid investment capital..."

yikes, zounds, yowzers, whoa and woe!

January 27, 2009 11:58 AM  
Anonymous Anonymous said...

I'd say that is a huge argument for the decriminalization of Cannabis. It's the only illegal drug that will not cause huge social problems if allowed to help restart the economy.
A great deal of cannabis is grown domestically by smaller producers, so the money doesn't go to offshore banks, or propping up careless major banks and their toxic assets, but into local stores, and other local tax paying businesses. Decriminalizing cannabis would support rebuilding the economy from the ground up.

The hard drugs that need to be shipped from South America or SE Asia are the ones that these banks call the "liquid investment capital" they have been depending on. The drugs that cause real harm, and these banks or better yet the executives that made the decisions should be held culpable for the problems of their "liquid capital" source.

January 27, 2009 1:08 PM  

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