Saturday, May 31, 2008

The US Dollar, price of cocaine, and price of oil

The DEA recently sent out a news release touting a recent rise in the price of cocaine and claiming that it demonstrates success of their interdiction efforts.

Among others, Mother Jones points out that the rise in the price of cocaine has more to do with the value of the dollar than to actual supply restrictions.

While true that there is less drug smuggling into the US recently, it's mostly because the value of the dollar has fallen while the value of the Euro has risen, making it much more profitable to smuggle into Europe.

So I guess if you're a drug warrior that's one of the good things resulting from the Iraq War -- it's caused a reduction in the local supply of cocaine.

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