Hey...had an interesting idea I've been discussing.
Actually, no way it's crypto but it's certainly markets/anarchy, so read on if you wish.
I'm thinking that that Drug Trafficking in the Golden Triangle might actually be a form of arbitrage.
Let me explain...
China pegs it's currency to US currency. With the dropping dollar, this means that there's going to be a larger and larger gap between 'reality' (as measured in the true cost of goods in a free market) and the pegged rate.
On Cypherpunks do I need to explain the idea that this difference will inevitably give rise to a big black market to exploit that difference? (I had a hard time explaining this to some younger Wall Street folks here.)
An interesting though I had last night was that the Drug trade in the Golden Triangle (Burma, China, Thailand, etc...) might exist for precisely this reason...in other words, as a form of arbitrage of sorts between the actual local cost of goods and services and manpower and exchange rates of the US dollar. Heroin is an ideal medium for arbitrage, as it's price is almost a pure function of supply and demand (as opposed to cost of material). It can fluctuate with the currency markets and as a result forms a sort of 'common denominator' for translating local wealth back into international, 'real' wealth.
In other words, the drug trade is a direct result of government intervention in the currency markets.
Of course, if May were here (may his soul roast in the hell of lesser lists) he'd say this was 'obvious'...
Is it?
-TD
-TD
