I think it also helps explain why drug money was the only liquid capital in banks that maintained the economy. Which explains why banks are having a free for all, partnering with drug cartels, and laundering money with impunity, and without severe inflation.
“Meanwhile, finance and real estate sectors in Mexico and the United States are awash with cartel profits, with one United Nations analyst arguing that drug money was the “only liquid investment capital” that kept the international economy from completely” imploding in 2008
http://m.thenation.com/article/180587-how-mexican-drug-trade-thrives-free-trade
Money is truly the root of all evil.
“I think it also helps explain why drug money was the only liquid capital in banks that maintained the economy.”
Well, it’s the only capital that governments hasn’t regulated to death, so it’s the only capital that is still fully functional.
For example, say I have a few million dollars to play with. If I want to open a factory, or a restaurant, or buy a farm, I have to jump through hoop after hoop, getting licenses, fees, environmental waivers, paying taxes, minimum wages, mandatory health care for employees, consulting with lawyers, etc. By the time I am up and running, I may need my business to run for 10 years before I recoup the wasted investments due to government regulations.
If I instead just set up a pot farm, I am up and running by year end, with a product that I can sell tax-free for a predictable profit, and by the end of year one I will have recouped my investments and will be making a profit. Sure, there is the risk of jail time, but until they catch me, my capital will be working (and helping the economy) at full efficiency.