Funny money

I’ve got wazoos of old bookmarks that I just have to toss away every day, but wanted to mention in passing the several articles I saw on the supposed 19 to 29 billion (thousand million) U.S. dollars supposedly laundered in Mexico by narcotics exporters.

These figures are wildly at odds with the United Nations Office on Drugs and Crime, “Addiction, Crime and Insurgency: The transnational threat of Afghan opium” (Vienna, Austria: October 2009), p. 7.(2009)

“Of the US$ 65 billion turnover of the global market for opiates, only 5-10 per cent (US$ 3-5 billion) are estimated to be laundered by informal banking systems. The rest is laundered through legal trade activities (including smuggling of legal goods into Afghanistan) and the banking system.”

Since supposedly some figure less than fifty percent (usually reported at 75 to 90 percent) isn’t banked, we’re talking about somewhere between 9.5 billion (thousand million) and 26.1 billion (thousand million) dollars in unaccounted-for cash.  That’s not only much, much higher than the international estimate for opiates.  Unless Mexican marijuana is much, much, much more valuable than the international opiate trade (and the Mexican figures include opiate, or Mexican gangsters are somehow different than other gangsters in their investment strategies, the figures make no sense.

Mexicans are different — at least from people in the United States — in that most prefer not to use banks.  People pay for even large purchases like houses and cars in cash. And often in dollars.

But, as Aurora Berdejo wrote in her 4 June 2010 El Sol column, Vanguardía Política,  it’s a bit rich that the United States — doing nothing to stop arms trafficking, or violence against Mexican immigrants, or responding to other Mexican requests — now is making demands that Mexicans be inconvenienced.  Besides, if there are all those “dirty dollars” floating around among the criminal classes, the criminals are going to find a way to use them.

The so called Binational Study of illicit goods”, jointly developed by both countries, was presented by John T. Morton, Deputy Secretary of Homeland Security’s U.S. Immigration and Customs Enforcement… accompanied by Carlos Pascual, U.S. ambassador in Mexico, who explained that 90 percent of illicit resources from drug trafficking into Mexico in cash: “75 percent of economic transactions that take place in Mexico are with cash, hence we can see why it will be important to have restrictions on using cash or require large purchases to be accompanied by notarial certificates and reported to the Secretariat of Hacienda.

This… is rather an imposition. In a previous column, I stressed that … restricting dollars was likely to result in a currency black market, opening another opportunity for organized crime to profit.