Drug money saved banks in global crisis, claims UN advisor

Drug money saved banks in global crisis, claims UN advisor

www.guardian.co.uk

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.

(visit the link for the full news article)

The UN drug czar seems to imply that some banks get most of their cash flow from illicit drug sale proceeds.

Also, its interesting that the one and only completely unregulated industry was one of the fittest to save the banks during the crisis. The drug industry is the most regulated industry, but the regulations are simply ignored by producers of the recreational mind-altering class of drugs.

Very few people take out loans to buy drugs, so the cash inflows just kept flowing as always I imagine. On the other a lot of industries financed by debt paper are apparently almost as much as a house of cards as the banks that finance them... without a continuous government lifeline they would immediately keel over and die.

I would have welcomed such an event, allowing unprofitable companies to finally die. I'm sure people would have been more panicky about companies dropping like flies but at least the leech companies, especially "zombie banks", would finally stop leeching off our economy and we could move on.

My interpretation of this article is that the powers that be view drug money and therefore illegal drug trafficing as a good thing because it helps out the banks.

www.guardian.co.uk
(visit the link for the full news article)

Edited for clarity.

[edit on 14-12-2009 by truthquest]

HI, I posted another thread a while back about Wachovia, and Wells Fargo .laundering drug money.
I believe that this latest posting is further confirmation of the role the banks play in the drug business...
When one realises that the cartels literally have semi loads of cash stashed, It becomes obvious that the laundering of such huge amounts of money requires the services of not one, but several banks.
If the war on drugs were a real war, then you can be sure we would be taking down the cartels through this vulnerability.
Banks must keep records, and this is the way to catch the flow of cash from the cartels as it is slid into the economies of countries through the participation of large financial institutions.
We could in fact impoverish the cartels with a concerted audit of such banks,(and i am sure we have a good idea who they are...)

This is important on several levels.

On the one hand, it shows the importance of "cold hard cash". No matter how many obscure financial products that banks create to buy and sell, the bottom line is that, at the end of the day, they still need real tangible money.

Where is there plenty real, cold hard cash? That's right, in the hands of organized criminal groups.

Now, the questions that should be answered is, "what kind of relationship exists between those groups labeled as "criminal", and those labeled as "legitimate"?"

If one is to take into account the previous occurrences of these exact same types of exchanges, along with the notion that the intelligence agencies of the world depend on illicit activities to finance operations that they do not want brought to light, I truly believe that the line between organized crime and the highest positions of political power are not only blurred, but intertwined!

Definitely a story to keep an eye on... I just hope it doesn't get moved to less popular forum simply because it mentions the drug trade. Because, this is not a story about drugs at all, but one dealing with the close relationship between government agencies, the world of high finance and organized crime... if there is any difference between the them at all!

the Billmeister

drug money has always been part of the funding for banks and governments, why do you think they're illegal, because legal drugs mean no income for the global thieves.

Yep! Mission accomplished in Afghanistan, after those pesky Taliban chappies practically eradicated opium production, it's back to record levels again. Purely coincidental of course!

The police, DEA etc, will send in multi-agency SWAT teams to bust some poor Joe for selling a bit of weed and proclaim a victory. If lucky, the "perp" might get through it without being shot (family pets my fare worse though).
So, if that's what a small time dealer can expect, you'd think they'd send in the Marines to bust the huge money laundering operations... wouldn't you?

The banks who launder the money have government issued "get of jail free" cards, in the form of "deferred prosecution agreements". In short, it allows them to get off with a big fine (but dwarfed by the profits they made), without ever having to admit wrongdoing and nobody goes to jail and nobody even has to go to court. How nice for them! It does show though the level of corruption goes all the way to the top.

As a bonus, the "war on drugs" also helps feed the private prison industry, keeping it well stocked with new inmates to be exploited and put to work for pennies making stuff for big corporations.

Back in the '70s the Feds figured out that a lot of coc aine was coming into Miami because they Miami branch of the FED was the only one in the country had revenue coming in, all the other FEDs would loan money to banks and get little in return. They figured out that because of the coc aine trade there was a lot of cash going through Miami. Drug money saving banks is nothing new.