"Dirty Money" Foundation of U.S. Growth and Empire

[Daniel Davies]

--- Doug Henwood <dhenwood at panix.com> wrote: > DMJ wrote:
> 
> Coupla things. The numbers do seem very big - and since the official 
> U.S. numbers on balance of payments and suchlike pretty much add up, 
> it's hard to see where all this money's going. Maybe the inflow of 
> dirty money more or less matches the outflow (capital inflows from 
> bigtime narcotics merchants to offset the outflows of cocaine and 
> heroin buyers?). Also, while most lefties would be skeptical about 
> the claims of cops and bankers on many other matters, why this 
> eagerness to believe them on this?

Speaking as both a lefty (of sorts) and a banker, the figure of U$500-1000bn is
one I have seen before, but probably refers to turnover rather than the actual
profits of the narco industry -- since you'd expect about four or five
transfers in the "wash cycle", a figure of $250m for USA might be more
reasonable.  The OECD estimate of worldwide money laundering is about U$1500bn,
and a 16% market share for the US seems ballpark to me -- maybe a bit low.

It isn't hard to see where the money's going; it's going to the same places
that all other capital flows go, because once dirty money has been laundered,
it's clean money (as far as the statisticians can tell).  But the narconews
article is likely to significantly overestimate the macroeconomic importance of
the dirty money, as I seriously doubt that it is all invested in the USA. 
Although, obviously, the seignorage revenue earned on the >50% of U$ cash held
outside the USA is part of the picture, and you can make a defensible case that
the status of the greenback as a global reserve currency has something to do
with its importance for the global "cash economy".

dd

=====
... in countries which do not enjoy Mediterranean sunshine idleness is more difficult, and a great public propaganda will be required to inaugurate it.  -- Bertrand Russell

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