[lbo-talk] coked-up currency

Michael Perelman michael at ecst.csuchico.edu
Mon Aug 17 15:45:40 PDT 2009


Intersection of cocaine and monetary economics is interesting. I understand that the Federal Reserve used to monitor the demand for hundred dollar bills as an indication of the cocaine trade. Later, as I recall, cocaine traces on $100 bill with use as evidence in a criminal trial is proof of the defendant's guilt. The defense attorney got a sample of hundred dollar bills and found traces on all of them. The case was dismissed.

Also, recall the recent studies of cocaine traces in the water.

Becker, Markus. 2005. "Mountains of Coke along the Rhine." Spiegel Online (11 November). <http://www.spiegel.de/international/0,1518,384456,00.html>

"Germans, it turns out, snort more coke than originally thought. That is the result of a new study which measured cocaine residue in the country's rivers. Eleven tons of pure cocaine per year -- and that's just in the Rhine River region."

"For two weeks, scientists tested the country's biggest rivers for chemical traces that indicate cocaine consumption."

"The analysis comes from the Institute for Biomedical and Pharmaceutical Research (IBMP) in Nuremberg. It shows that -- according to tests done near the western German city of D sseldorf -- the 38.5 million Germans who live in the Rhine River basin snort some 11 tons of pure cocaine each year. Day after day, the chemical traces of 30 kilograms of the white lady flow from the region's commodes and into the water treatment system. The street value of that much charlie is a whopping ?4.5 million per day -- or ?1.64 billion per year."

-- Michael Perelman Economics Department California State University Chico, CA 95929

Tel. 530-898-5321 E-Mail michael at ecst.csuchico.edu michaelperelman.wordpress.com



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