“Cocaine is God’s way of telling you, you are making too much money.”
~ Robin Williams
Written by Bryan Lutz, Editor at Dollarcollapse.com:
Crack is about as addictive as fiat money.
There is however, one important difference.
When more fiat money gets printed its value decreases, but…
when more cocaine becomes available, prices stabilize.
From 2011 to 2022 more cocaine became available in the EU.
Purity went up, and prices stabilized.
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(source: EUDA 2023)
That’s because the unregulated free(black) market creates competition among producers…
And addicts, naturally seeking the most pleasure possible sniff out the highest bang for their buck – they buy the highest purity cocaine they can find.
Then they leave the poorly produced product to the dust from which it came.
So, that’s the thing. In the drug market, everyone’s in it to profit.
Addiction drives the market in a very capitalist way. Users go for the best product they can find, and sellers attempt to earn the highest profits.
And as it turns out, cocaine has the highest margins.
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(source: Financial Times, 2014)
Since cocaine has the highest margins, you’d expect there to be more competition, varying prices, and cutthroat turf wars affecting supply and demand.
However, there is not.
Prices stabilize because competition seeks to meet consumer demand. So, producers strive to make the best, and most pure cocaine available, which creates a “standard for exchange.”
Drugs almost become close to money – they store value, can be used for exchange, and you can count it by the gram.
In fact, when we started to feel the effects of inflation in 2022 talk about what was, and wasn’t an inflation hedge circulated the finance world.
The Financial Times reported in 2022:
The inflation-proof economics of drug dealing
“Want an inflation hedge? Try drugs.
Even historically high rates of inflation affecting Europe’s formal economy won’t necessarily lead to steeper prices for illegal substances like MDMA, cocaine and heroin.
That’s according to Teodora Groshkova, principal scientific analyst at the European Monitoring Centre for Drugs and Drug Addiction, who says street prices for most drugs “largely remain stable over time.”
The same thing works with money.
The more pure the money, the more prices will stabilize over time…Much like gold…
If you look at a picture of a gold brick, or a smaller piece of bullion, you’ll see something interesting written on it.
“99.99% fine gold”
Because when it comes to money, like cocaine, buyers and sellers want purity.
The seller wants to know their product has the highest value for its price, and the buyer wants to know they’re going to get what they pay for.
However, since 1971, when Nixon terminated the Bretton-Woods agreement and took the US dollar off the gold standard, the dollar’s purity has slowly become more toxic.
Below is the price of every major currency in sound money (gold).
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You can see less gold is needed to purchase more dollars, euros, pounds, and yen.
And more of every currency is needed to purchase an ounce of gold. The rate of decay is about 99% for the pound…
A little more for the USD and Euro.
Whereas in a sound money(gold), free market world, you don’t have decay.
You have steady, consistent, pure money, buyers and sellers can execute a fair trade… For as long as it’s available.
And that’s the crack dealer’s guide to sound money.
Purity at all costs makes for stable markets.
