A little known but striking comment from the then executive director of the United Nations Office on Drugs and Crime on how illegal drug money was the only thing that kept the banks afloat during the 2008 crash.
Vienna-based UNODC [United Nations Office on Drugs and Crime] Executive Director Antonio Maria Costa said in an interview released by Austrian weekly Profil that drug money often became the only available capital when the crisis spiralled out of control last year.
“In many instances, drug money is currently the only liquid investment capital,” Costa was quoted as saying by Profil. “In the second half of 2008, liquidity was the banking system’s main problem and hence liquid capital became an important factor.”
The United Nations Office on Drugs and Crime had found evidence that “interbank loans were funded by money that originated from drug trade and other illegal activities,” Costa was quoted as saying. There were “signs that some banks were rescued in that way.”
Link to Reuters reporting of interview.
Mind Hacks 
Sounds more like unfounded conspiracy theory. First, the size of the entire world drugs industry is probably tiny compared to bank financial flows (most legal real world industries are too) and the proportion of this that’s in electronic financial titles tinier even. Besides, to help in liquidity crisis you’d need a massive jump in actual laudering (money previously laundered is already used up) and that sounds logistically unrealistic.
“First, the size of the entire world drugs industry is probably tiny compared to bank financial flows”
you need to double check your stats.
I remember seeing an article reporting the same idea last year.
My bookmark links to the (old?) NewsTrust site about a piece on AlterNet called *American Banks ‘High’ on drug money* from June 10 2011 by Clarence Walker
This makes sense. Last year I ran across an url for an article in the London Observer from the prior year. The article spelled out, in great detail, how the then Wachovia Bank office in Miami willingly served as a transit point for billions of dollars coming from Mexico, helping the owners launder the money.
The case had been broken by a London Wachovia compliance employee with a long prior career at Scotland Yard. Wachovia then made plain to this employee that he was not to bother himself with such things, though it was obviously part of his job. I don’t think he’s working there any more.
For all I know, this may be part of the reason Wachovia is now Wells Fargo. My computer crashed last month, so I no longer have the URL, but I’d assume that a “Wachovia London Observer” search would find the article.
Wachovia was sanctioned for failing to apply the proper anti-laundering strictures to the transfer of $378.4bn – a sum equivalent to one-third of Mexico’s gross national product – into dollar accounts from so-called casas de cambio (CDCs) in Mexico, currency exchange houses with which the bank did business.
I think drugs, politics and money are always together.
The global drugs business is in the billions of dollars. This is par for the course. Mexico is totally controlled by drug cartels that have infiltrated and control huge areas of the economy. It is now collapsing like Colombia into a narcodemocracy. Day late and dollar short as they say.
This does not surprise me in the least. As a drug and alcohol counselor working with teens, I can concur that keeping the banks afloat is much more important than the health our children, or so it seems.