Monday, February 16, 2009

Perhaps One Nice Benefit of Drug Prohibition

It turns out that maybe, just maybe, drug prohibition is good for the world. I, of course, don't mean that it is good at keeping people from drugs but rather it is good because it just might be the largest source of liquid capital keeping many banks afloat right now.

From Reuters:
The United Nations' crime and drug watchdog has indications that money made in illicit drug trade has been used to keep banks afloat in the global financial crisis, its head was quoted as saying on Sunday.

Vienna-based UNODC Executive Director Antonio Maria Costa said in an interview released by Austrian weekly Profil that drug money often became the only available capital when the crisis spiralled out of control last year.

"In many instances, drug money is currently the only liquid investment capital," Costa was quoted as saying by Profil. "In the second half of 2008, liquidity was the banking system's main problem and hence liquid capital became an important factor."

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