Drug money saved banks in global crisis, claims UN advisor (2009)

https://www.theguardian.com/global/2009/dec/13/drug-money-banks-saved-un-cfief-claims

by hippich • 8 years ago

91 30 8 years ago

zarriak• 8 years ago

Every time I read about this it makes me think back to the video of the cartel depositing perfectly sized boxes at a HSBC bank.

vfclists• 8 years ago

Wasn't that Wachovia bank, or was Wachovia a subsidiary of HSBC? The $352 billion seems quite close to the $400 billion laundered by Wachovia.

liftbigweights2• 8 years ago

Well HSBC ( Hongkong and Shanghai Banking Corporation ) was created by the british after the opium wars to launder opium money out of china to the west. If any bank is adept at procuring drug money, it's HSBC.

It's a shame how little we are taught about the opium wars in the US. It fundamentally changed the world. Some historians describe it as the greatest wealth transfer in human history. The capital extracted from china is what funded some of the largest banks in the world today, the industrial revolution in the US/britain and political dynasties well into the 20th century.

Of course it left china in shambles, but the opium trade was the true gold rush of the 19th century.

https://www.nytimes.com/1997/06/28/opinion/the-opium-war-s-s...

infinity02• 8 years ago

Can you put some numbers on that? How much money was transferred, in today's dollars?

booblik2• 8 years ago

Someone watched Ozark?

denzil_correa• 8 years ago

Ozark is a 2017 TV show while the article is dated to 2009.

ebullientocelot• 8 years ago

Yea but they mention this in Ozark, so parent might have meant someone saw the show and looked this up.

hippich• 8 years ago

yep :)

beamatronic• 8 years ago

Imagine if access to banking was a fundamental human right

eveningcoffee• 8 years ago

In a world moving away from the paper money, it should.

I suspect that banks should be also very strictly controlled about what they can do with the data they collect about the transactions.

fgheorghe• 8 years ago

Imagine if british banks would be prosecuted for all the crime they help finance.

marcosdumay• 8 years ago

Well, access to transactions is not the same as access to financing.

wallace_f• 8 years ago

Access to secure and just banking should probably be classified as a desirable positive (not to be confused with the more important negative rights) human right.

What I mean by secure and fair is what Krugman talks about here[1].

The idea would be similar to saying that people should have secure and fair access to water (in other words, not polluted, and not horded by nestle).

As it stands, our banking system is not secure (as the '08 fin crisis demonstrated) and it is certainly not fair (as banking execs, bureaucrats and plutocrats made out fine while taxpayers and money-holders were left on the hook for the fallout, bailout, and the bursen of 4+ trillion in what is basically free helicopter'd money for wall st).

1-https://www.nytimes.com/2009/04/10/opinion/10krugman.html?as...

dmix• 8 years ago

A good way to end up with 5 mega banks and zero competition from smaller firms.

Oh wait, that already exists and it's getting worse and worse every decade.

infinity02• 8 years ago

blockchain

cbluth• 8 years ago

I've been hearing that word a lot

https://i.imgur.com/hh0zNRT.jpg

nimbius• 8 years ago

my armchair finance question isnt whether this is good or bad, but is it going to work again during the 2018/2019 recession? Call me paranoid, but I fully subscribe to the inverted yield curve theory of recession.

A big question is cannabis earnings...With canada's legalization, and most of the worlds decriminalization of cannabis, the drug trade cant be operating at the levels of 2009 profit. heroin and harder drugs are not as popular as cannabis and i suspect the earnings curve is flat as is evidenced by the increased introduction of carfentanyl in the supplychain.

sonnyblarney2• 8 years ago

The article only makes sense with a certain, fixed view of money.

Money is a social contract, it's worth whatever we want it to be, and we can change the value of it at any time.

The credit crises is not a issue of money, it's an issue of confidence in the system. No confidence, no credit, no system.

During this time, any government can play magic with the balance sheet and do as they please. This is what TARP etc. was about. The issue is really just about 'who wins and who loses' in a centrally planned game of money magic.

The drug industry mightn't have been too affected, by the downturn, and 'confidence' in their economy just kept on trukin'.

But any 'crash' in a post financially literate age that is not due to a true existential shock (like an earthquake that destroys nations) ... then we should be able to handle it ourselves without the crunch. The real issue just comes down to how we're going to divide up the pie when we wave our magic money wand, and it more than likely ends up benefiting the bankers more than others.

simonh3• 8 years ago

The real issue just comes down to how we're going to divide up the pie when we wave our magic money wand, and it more than likely ends up benefiting the bankers more than others.

I suspect the problem is whatever strategy you use to manipulate the money system to avoid a downturn, it’s going to benefit somebody. The banks are just very well informed, and in a position to do pretty much anything anybody else might do, so however you carry out the intervention they will have the tools and resources to ensure they benefit from it somehow. So how do you manipulate the money supply without going through banks?

hndamien3• 8 years ago

Bitcoin.

pesmhey• 8 years ago

I agree with you whole-heartedly that money is a social contract. I did disagree with how you’ve formed your argument:

The credit crises is not a issue of money, it's an issue of confidence in the system.

Money is a social contract...

You wouldn’t enter into a contract with someone you had no confidence in that they would uphold their end.

Money is credit is debt is a social contract. I think that maybe you’ve gone slightly too far in the opposite direction of money being some fixed thing. It represents confidence, and we can’t just make it whatever we want, although we can bend it in a lot of ways.

Interestingly enough, with this view of money, it does make sense that at the pinnacle of failure of regulated, government-sanctioned contracts, you might find people (in aggregate) turning their confidence towards organized crime, with a proven record of organizing massive operations to move products.

sonnyblarney2• 8 years ago

We can make money whatever we want. Fixed currencies that are backed by gold, surely, we can't 'make' gold ... but that's an artificial limitation.

I'm not saying we should make it what we want, but we have to remember that's what's at stake.

Organized crime may have the advantage that contracts are ruthlessly enforced ... so you can't have the totally corrupt value chain as you had with housing, wherein there was fiction from the house buyer, to the lender, to the VP of mortgages, to the bundlers, to the buyers of said bundlers, and to all the people trading on top of that.

Also, there are no derivatives or complex financial instruments riding on top of the drug trade, so the 'house of cards' would have a lot less falling to do if it were to come apart.

But you can't build an economy of killing people who don't pay you or sell to your customer ...

Drug money saved banks in global crisis, claims UN advisor (2009)

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