Rockmonster I'm on EST now (on vacation in NYC). Fucking beautiful day today in the city.
Back to supply and demand and some stuff I cited. TommyBoy uses gold as an anology and made a good point. I like to use petroleum as a relevant analogy. A substance our social and economic system can't do without=that we are hopelessly dependent on.
We found out in 74' I believe during the OPEC crisis how vulnerable our supply of this good is. I remmeber waiting in gas lines in the late 70s (I think I might have posted this in this thread." Anyway, the oil producing (mostly Middle Eastern Nations in resposne to the USAs support of Israel in the Yom Kipur war imposed oil embargos on the USA that severly effected the economy and led to inflation.
In 1979, after the revolution in Iran, their was the second energy crises. People had to wait in Gas lines. Green flag met gas, yellow ment emergency vehicles only, red ment no gas. I remember that as a kid. Was there some people getting Gas, yes of course, connected or wealthy.
Now when there are Cartels, like the Medelin Cartel,Cali Cartel, ect...like Petroleum Cartels, the stronger the monopoly and ability to control the price, the greater the ability to fix and artificially inflate the price. Competition and free market capatalism tend to be a consumers or end user's best friend. Inspite of the Cartels ability to produce economies of scale and have finacial and political capital to increase production, make shipping more efficient, buy off higher level officials...things that competing groups can take advatage of when cartels are dismanteled...why the war on drugs is an excercise in futility overall over time. One would guess so after 100 years of failure.
In time new sources were discovered, more oil started comming from North America and new soureces steped in to fill the void as profitability caused incentives for new exploration, ect... then prices dropped through the 80s...and the USAs dependence on the Middle Eastern oil Producers was diminished.
The USA lainched a war against the Cartels, other oraganizarions took their place. Opium production, despite Plan Colombia and US aid to the Colombian government began reputedly by an associate of the Cali Cartels (reputedly a man named Ivan Urdinola-Grajales, maybe to make up lost coke revenues and the potential the Eastern Seaboard markets possed for heroin revenues.) Expert chemist were imported to make a proper product capatilizating on this groups ability to invests heavily in capital resources. The DEA ended up shutting them down.
Now Other organizations, the North Coastal Cartel, Norte de Valle Cartel, got involved- probably most likely utilizing existing infrastructure. Paramilitary groups also got in on the racket both right and lefy wing (AUC, ect...) prices fell, quality improved and when Plan Colombia was having a noticeable effect on Coca production in Colombia, more Coca production started shifting to Peru and Bolivia (the latter who kicked the DEA out of their country.) Anyway, more interdiction, more competition, lower prices and greater product.
Now with respect to Mexico, they decriminalized drugs I think Aug of 09' of simple defined possession. Calderone also declared a war against drug Cartels. The dirty secret is a.) corruption is systemic in Mexico, and B.) Calderone is selectively prosecuting the drug war- hence the Sinaloa Cartel or whoever is reposnsible for getting that fire tar to Arizona, Ohio, ect
The other dirty secret- refering to my other post- the narcoswine, prisons, and other vested interests have a reason to see the flow of drugs come in, addicts to save, panic in the suburbs, amid painful budget cuts they are protecting their agency, prison, ect...funded. Plus the market for substitute medication, NIDA budgets, treatment programs needing slots filled.
Now Europe was getting its heroin from Afghanistan primarily. The Bush administration didn't give a fuck about the heroin problem in Europe. and installed Karzai- a corrupt dude. Also made alliances with warlords. Now ironically he might not have been good for Europe and was well hated over there, much as I hate to be the one to say it, in my unexpert analysis, his administration was a boon for Europe's heroin market's. Obama on the other hand has collaborated with NATO, especially, the UK, instituted crop eradication programs in collaboration with the UK, Germany, and crop substitution programs, restructured the war and put more of an emphasis on Nation building (not as much as Patreus, McCrystal, and others wanted because of the cost)- this last thing is the silver linning for Europe's addicts, but other NATO nations seem to have taken this resposinibility partly upon themselves (anyway markets always bounce back eventually- like I said an excercise in futility. I suggest the book Obama's wars by Bob Woodword for background info and alittle more research and draw your own conclusions.
So like the OPEC analogy, who will fill the holes? Colombia would be my first choice if i was to venture a guess- already have established routes. Maybe Burma but YaBa is an easier product from a logistical standpoint and still prety profitable- hence a poorer candidate. If Colombia was to devert supplies the East Coast would see a significant drop in supply and price in the short term in my estimation unless the shortfall was made up by mexicans and tar.
In this scenario the USA (but not Canada) would probably see a drought, atleast in the short term. Then our Brothers and Sisters across the pond can come and gloat on this board, say that those of us using dont have game, ect...Just glad I'm outta the game so i don't have to worry about supply shocks for stuff.
As for the politics, I didn't vote for Bush, McCain or Obama, my support for 2012 is Ron Paul, who would not only pull the US out of most wars but the War on Drugs as well.%)
I see this gentleman as the only hope left for America and in the unlikely event he was elected, would be of benefit internationally.
The link posted a few days ago- the report on the drought is a good document to read for background info- the intel,/ analysis, ect...seem sound.
As easy-easy pointed out the SE has a drought of heroin, in this case because there are Pharmaceutical substitutes that cause a dissincentive to establish a significant market- not that there isn't one- its just not booming- a draught in effect on US soil related to other factors- vested interests- Pharmaceutical comapnies with big pocket lobbyists in Congress and in those statesto keep their profits going. If the whole Pain Clinic thing was outlawed I would bet there would be a huge surge in heroin supplies on the streets- we've seen this to an extent in California over the last 10 years and other parts of the country.
Bottom line...perpetuating the Drug war probably pays more in the USA than the UK and a huge market supplied by one country or entity is at great risk for supply disruptions- leasons learned from the petroleum crises in the 70s. My amatuer economic and narco-geopolitical analysis.
