The 21st century Opium War

Like in the 19th century, the perpetrators are the bankers, but this time, the target is the USA

This is yet another story corroborating the idea that the USA is the central battlefield in the Global Total War, waged by the banking cabal against the whole rest of humanity.

Epidemic of overdose deaths

Last week, clueless CNBC reported that New York City Health Commissioner Ashwin Vasan announced that the city was suffering an unprecedented crisis of overdose deaths. One New Yorker is dying from an overdose every three hours. Dr. Vasan warned New Yorkers that, "No one is spared, even if you think otherwise. If you use drugs, know someone who is using drugs, or might be around drug use, there are simple steps we can take. First, everyone should carry Naloxone, get trained to use it and to recognize the signs of overdose." 

There's a lot to unpack in Vasan's statement, which included a lot of emotional button-pushing and familiar-sounding soundbytes like, "this is a question of equity," and "we're all in this together." Vasan may have half a point in saying that "no one is spared." According to Gallup figures from 2019, the effects of substance abuse are felt by about half of all American families. In the last four years, things only got much worse. In the workforce, half of American firms' HR departments reported that the opioid epidemic has impacted their workforce. 

US troops patrolling tulip poppy fields in Afghanistan

How do you know that a politician is lying?

However, Vasan's call for everyone to carry the overdose antidote Naloxone, since "we" are all in this together, I suppose, is probably flawed. Namely, the cheap drug of choice that's been flooding the streets of American cities, dubbed the "poor man's Cocaine," and "zombie drug," is a mix of fentanyl and veterinary tranquilizer xylazine, also commonly known as tranq. It is going for as low as $3 per pill and it is even deadlier than fentanyl because Naloxone does not reverse the overdose effects of this novel concoction.

21st century Opium War

I'll risk being unkind and conspiratorial, but I'll suggest that Vasan's recommendation could be very good for the sales of Naloxone, while it won't do much for the overdose victims. Probably, this is only another one of our leaders' well-intentioned mistakes, which invariably precede the "lessons learned" confessions and mea culpas. How could Vasan possibly know these things, he's only New York's Health Commissioner.

It’s them bankers, again…

But the curious aspect of this crisis is that there is a rather simple expedient that would quickly end it. That expedient, for some reason, is never, ever discussed by any public officials. We are experiencing something akin to the British Empire's Opium Wars and today, as then, it is the global banking institutions that are the leading culprits behind the crisis. This is not by mistake but by design. Here's how the magnitude of this crisis has absolutely exploded over the recent years:

I do appreciate that my blaming the bankers requires an explanation. Well, here it goes. In 2008, General Barry McCaffrey, who was the drugs czar in Bill Clinton's administration visited Mexico on a fact-finding mission and submitted a report which, among other things, revealed that Mexican drug cartels were earning over $460 million per week on their drugs trade. That’s more than $25 billion/year, but according to the US Treasury Department, the total drugs trade industry in the US was estimated at $64 billion/year in 2017. 

The cartels’ money problems

According to McCaffrey the cartels physically repatriated over $10 billion/year in bulk cash from the US into Mexico. This alone poses a number of tremendous problems for the cartels.

This is a big problem.

Namely, the cash must be counted, stockpiled, and guarded in secure warehouses. As such, it can be confiscated in law enforcement raids, or stolen by rival gangs or those charged with guarding it. Furthermore, using banknotes severely limits the cartels' purchasing options: there are only so many houses, luxury cars, or prostitutes you can buy and only so much champagne and caviar you can consume before the stuff gets old. There's also the question of weapons: you can buy some guns with cash, but as McCaffrey found, Mexican cartels field veritable armies, capable of outgunning Mexico's military and police. They have:

"platoon-sized units employing night vision goggles, electronic intercept collection, encrypted communications, fairly sophisticated information operations, sea-going submersibles, helicopters and modern transport aviation, automatic weapons, RPGs, Anti-Tank 66 mm rockets, mines and booby traps, heavy machine guns, 50 cal sniper rifles, massive use of military hand grenades, and the most modern models of 40mm grenade machine guns."

You can't pay for helicopters and submarines with cash on pallets - for that you’ll need bank accounts with clean balances, and legitimate-looking front, which is where money laundering service comes into play. The ability to bring large amounts of cash to a bank, get clean bank deposits, or even obtain credit is extremely valuable for the mob. It is also very profitable for the banks.

But there's more... 

Mobs are banksters’ bitches

Accepting and laundering illegally earned money gives banks power over the mob. The mobsters can't well call the police or file lawsuits to complain about high fees and extortionate commissions. They might try to intimidate the bank executives they deal with, but these are relatively low-level employees who don't call the shots. Their bosses are hidden high up in the hierarchy, sitting in their offices in places like London, New York, Paris or Zurich. Even if the mobsters killed their account managers, nothing at all would happen to the bank, which has a number of options to retaliate if the mobsters get uppity.

Banks can also easily replace any incapacitated executives without ever exposing the top of the pyramid. In effect, this puts the mob in subordinate position to the bankers and it can only be the bankers who call the shots in the relationship. The bankers are even in the position to demand special favors from the mob, including arms smuggling, beatings, kidnappings or political assassinations - favors that could be hard for the mob to decline.

Banks: the real godfathers of organized crime

Money laundering bankers almost certainly anoint and protect the heads of organized crime groups. They do this in cooperation with intelligence agencies like the CIA and MI6. Let's think back to those huge piles of cash the cartels haul from the US back to Mexico. That cash could be taken by whoever can wrest physical access to it.

Suppose, some El Chapo Guzman assigned one of his officers to guard his cash stash. That man might be able to convince his gang that they don't need to work for El Chapo for peanuts. Instead, they could simply take the cash and run their own show. El Chapo would be perpetually vulnerable to palace coups by any ambitious rival, or tipoffs to rival gangs, military units or law enforcement. An offer of a bribe, lenience or protection could get many lower-level mobsters to turn on their bosses.

By contrast, if the money is clean in a bank account where only El Chapo or his CFO are authorized signatories, they have full control over the money, payrolls and any transfers or purchasing decisions. Without the bank's protection, El Chapo's organization might easily splinter into a dozen rival gangs that would quickly turn on each other. The whole cartel structure would collapse and become easy pickings for law enforcement.

In fact, it isn't far-fetched to believe that it is the bankers who even take part in the set up of drug cartels, working with intel agencies like MI6 or the CIA (or the DEA).

Many cases suggesting this possibility have been unearthed and investigative reports are already on US Congressional record. In the 1980s, CIA's chief William Casey worked closely with Agha Hasan Abedi, the head of the BCCI (Bank of Credit and Commerce International), as it facilitated the financing and trade of weapons and trafficking of heroin from Pakistan and Afghanistan. In the late 1990s, we also learned about the tight connection between the Bush family and the drug cartel kingpin Raul Salinas de Gortari.

Since those days, many large banks (usually the Global Systemically Important Banks, or GSIBs) like Deutsche Bank, UBS, Citigroup, ING, Danske Bank, Credit Suisse, Wells Fargo and Societe Generale all got caught red-handed working with organized crime and laundering hundreds of billions of dollars for terrorist organizations and drug traffickers (links lead to case stories). All of the cases linked above show that the banking institutions in fact operate as organized crime.

We shouldn't forget HSBC which has perfected management of Opium Wars since their beginning in China in the early 1840s. The Bank’s role in laundering cash for the Mexican cartels and funding terrorist organizations was superbly exposed in John Titus' documentary "All the Plenary's Men" based on the Congressional investigation report of the case. The documentary also showed, beyond all doubt, that HSBC had power over the US Presidency and could operate above the law with impunity (their fine amounted to a parking ticket for PR purposes).

Turning Mexico into a cartel haven

Mexico became a drug cartel haven after the sweeping economic reforms and privatizations implemented by president Carlos Salinas de Gortari (brother of the cartel kingpin Raul Salinas de Gortari). The reforms were dictated by the IMF (who else?) and it led, predictably to a deep economic crisis in Mexico. The crisis culminated with the 1994 banking crisis and Mexico's loss of sovereign control over their central bank. In 1997, the Opium Wars veteran bank HSBC moved into Mexico, buying up a bunch of Mexican banking institutions. From that time, the Mexican drug cartels displaced Colombian drug cartels as one of the main suppliers of drugs to the US market.

The Afghan supply

The other key supplier was Afghanistan after it was ‘liberated’ from the Taliban in 2001. While the country was under military control of the US and its NATO allies (including Ukraine), Afghan heroin production exploded: in 2001, Afghanistan had 8,000 hectares under poppy crops; in 2016, they had 200,000 hectares - a 25-fold increase. This increase had a direct impact on heroin addiction in the US: in 2000, there were 189,000 Heroin addicts in the US; in 2016, there were 4.5 million - a 24-fold increase (these figures were cited by MEP Ivan Pernar in an EU Parliament speech on 12 April 2017).

Clearly, the main target of this 21st century Opium War is the United States. According to a report by the International Narcotics Control Board, the USA is now the worst affected country in the world for abuse of opiates. The European Drug Report for 2014 provided some figures for perspective. Among European nations, the country with most overdose deaths was Estonia with 103 deaths per one million inhabitants, followed by Sweden with 100 per million. The EU average was 21 per million and on the lower end of the scale were Italy (8), France (7) and Portugal (6 deaths per million).

In the US, drug induced deaths were 185 per million (even this number is almost certainly too conservative). The statistics are tricky to interpret since some of the opioid drugs (including fentanyl) are categorized as pain relief medications, which, in the US, are prescribed far more frequently than anywhere else in the world. Either way, the magnitude of the crisis has more than doubled since 2014 (see the FT chart above).

Money laundering is the mother of all crimes

Going back to the crisis of overdose deaths experienced in the US today, rather than everybody buying Naloxone, it would suffice if the Justice Department and the FBI actually enforced the existing anti money-laundering laws and treated the offending banks in the same way they treat, say, January 6, 2020 “insurrectionists.”

While extensive and onerous anti-money laundering regulations are scrupulously enforced against ordinary citizens and businesses, large banking institutions can count on impunity. On rare occasions when they do get caught, they’re invariably slapped with symbolic fines that are usually never even paid. If law enforcement agencies actually cracked down on money laundering, this would instantly pull the rug from under the drug cartels and they would rapidly splinter into gangs of small-time drug pushers who would deliver most of the due justice amongst themselves.

Stamping out money laundering would be many orders of magnitude more effective than all the difficult, dangerous and hard work done by law enforcement across the cities of the United States and Europe. That risky work only nets lower-level operatives who are easily replaced by the cartels and their money laundering service providers. This is why money laundering is tagged as The Mother of All Crimes. It is also the reason why it is almost never discussed since the same oligarchy that controls the global GSIB cartel also controls the media.

Alex Krainer – @NakedHedgie is the creator of I-System Trend Following and publisher of daily TrendCompass investor reports which cover over 200 financial and commodities markets. One-month test drive is always free of charge, no jumping through hoops to cancel. To start your trial subscription, drop us an email at TrendCompass@ISystem-TF.com

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