This is actually an old story (this article is from January), it's been out before, but it flew largely under the radar.
But now it's back, and it's got a little more traction. Why? Good question. The source is the same: The U.N.
Yes, that U.N.
Antonio Maria Costa, head of the UN Office on Drugs and Crime, said he has seen evidence that the proceeds of organised crime were “the only liquid investment capital” available to some banks on the brink of collapse last year. He said that a majority of the $352bn (£216bn) of drugs profits was absorbed into the economic system as a result….
Costa said evidence that illegal money was being absorbed into the financial system was first drawn to his attention by intelligence agencies and prosecutors around 18 months ago. “In many instances, the money from drugs was the only liquid investment capital. In the second half of 2008, liquidity was the banking system’s main problem and hence liquid capital became an important factor,” he said.
Some of the evidence put before his office indicated that gang money was used to save some banks from collapse when lending seized up, he said.
“Inter-bank loans were funded by money that originated from the drugs trade and other illegal activities… There were signs that some banks were rescued that way.” Costa declined to identify countries or banks that may have received any drugs money, saying that would be inappropriate because his office is supposed to address the problem, not apportion blame. But he said the money is now a part of the official system and had been effectively laundered.
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So why TARP? Why did we give hundreds of billions to the banks when the drug money was already keeping them afloat? Heck if I know
I mean, a dog licks its balls "because it can", right? Well in the waning days of the Bush administration, it was all about "Cash and Carry" which ironically was the name of the guy who was in charge of giving out the billions: Kashkari. One of those weird coincidences, and the guy has now escaped into the forests of Northern California.
Of course, the article states that the British Banker's Association, at least, is denying this claim:
The British Bankers Association, not surprisingly, took huffy exception to the report and said it was the central banks that saved the industry.
Well, of course they would say that. What else are they supposed to say?
But when they say drug money was "the only liquid invetsment capital" available at the time, well, it sure sounds like it was the drug trade that saved the banks and not the politicians and their billions in giveaways.