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The wealth effect might be shrinking - Mar. 13, 2013 - 0 views

money.cnn.com/...index.html

wealth effect might

shared by bparksj28 on 13 Mar 13 - No Cached

Legalising marijuana: The view from Mexico | The Economist - 0 views

www.economist.com/...legalising-marijuana

marijuana view mexico economist

shared by bparksj28 on 06 Nov 12 - No Cached

AMERICAN elections are watched closely in Mexico, which sends most of its exports and about a tenth of its citizens north of the border.
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On the same day, voters in Colorado, Oregon and Washington will vote on whether to legalise marijuana—not just for medical use, but for fun and profit.
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he impact on Mexico could be profound. Between 40% and 70% of American pot is reckoned to be grown in Mexic
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the American marijuana business brings in about $2 billion a year to Mexico’s drug traffickers.
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That makes it almost as important to their business as the cocaine trade, which is worth about $2.4 billion.
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Many Mexicans therefore wonder if America might consider a new approach. Felipe Calderon, the president, has said that if Americans cannot bring themselves to stop buying drugs, they ought to consider “market alternatives”, by which he means legalisation. Vicente Fox and Ernesto Zedillo, the two previous presidents of Mexico, have reached the same conclusion.
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About 60,000 have been killed by organised crime during the past six years. Thousands more have disappeared.
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In Mexico relatively few people take drugs. But many are murdered as a result of the export business.
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Would Mexico’s bandits find themselves undercut by “El Cártel de Seattle”?
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Mexico’s traffickers would lose about $1.4 billion of their $2 billion revenues from marijuana.
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The cost of illegally transporting the drug adds about $500 per kilo for every thousand kilometres that the drug is hauled, it calculates, based on the fact that pot gets pricier the further you get from the Mexican border
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So smuggling legal Washington dope to New York, for instance, would add about $1,900 to the cost of a kilo, giving a total wholesale price not much below $4,000.
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That would make it more expensive than imported Mexican pot. But home-grown marijuana is much better quality than the Mexican sort. The content of tetrahydrocannabinol (THC), the part that gives you the giggles, is between 10% and 18%, whereas in Mexican pot it is only about 4% to 6%.
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Once you adjust for quality, Washington pot would be about half the price of the Mexican stuff, even after it had made its expensive illegal journey to New York.
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It calculates that the cost of growing marijuana legally is about $880 per kilo. Adding on a decent mark-up, plus the taxes that would be applied, it puts the wholesale price of Washington marijuana at just over $2,000 per kilo.
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the Sinaloa “cartel” would lose up to half its total income,
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. Exports of other drugs, from cocaine to methamphetamine, would become less competitive, as the traffickers’ fixed costs (from torturing rivals to bribing American and Mexican border officials) would remain unchanged, even as marijuana revenues fell.
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Legalisation could, in short, deal a blow to Mexico’s traffickers of a magnitude that no current policy has got close to achieving. The stoned and sober alike should bear that in mind when they cast their votes on Tuesday.
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