> 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
OK, please bear with me: What is 'seignorage'? Also, what do you mean by 'has something to do with'? Are you saying that somebody could argue that the US$ is (in part, of course) a global reserve currency because of its place in the 'cash economy', or that its place in the 'cash economy' is due to its status as a global reserve currency? I would love to hear the argument one way or another, even if you don't entirely buy it.
Meanwhile, I'm going to play like a journalist and try and track this Raymond Baker down. Here's his congressional testimony from '99, btw:
On Tue, 22 May 2001, Daniel Davies wrote:
> --- 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".
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