Tuesday, June 8, 2010

Heroin: the dark side of supply











Recently we all have been hearing about the drug wars in mexico on the news, the violence, the immigration issues, the spilling over of the problem into border states such as Texas or Arizona. But has anyone dared ask the questions "how did it start?" or "What are the ramifications within the drug market?" Sadly Ive not the time to go into significant detail but a good coverall is the heroin market and whats been going on there recently.




Heroin was originally introduced to the US in the 1970's from the middle and far East but since then times have changed. South American producers have now taken over as the main provider of heroin to the US and have improoved production, they are now able to make a far purer (purity is a measurement of how much of what you buy is actually heroin not just fillers like sugar or dried milk) product than the orientals ever could by improoving how the poppy plants are processed yielding a product that is consistantly 50-80% pure. This makes the drug all the more potent allowing more and easier ways to take the drug with desired results as well as increasing the danger of overdose and addiction. Another reason for the rise in heroin supply is the scarcity of cocaine and meth, two substitute products that are becoming less common thus allowing heroin to step into their place.




To put it in fun economic terms the "supply curve" of heroin is shifting out and the demand for it is rising. New technology and easy access to willing buyers fosters growth and higher outputs for the producers and sellers. The decrease in demand and supply for two of it's substitute products allows for even greater expansion. The last big help in the equation is its quality. A dealer can sell the product for low prices and still get large returns because after one or two sells at $10 each you will have a VERY loyal customer who is very happy to have the euphoric product which he/she can choose how to take and get a deadly powerful high, and besides once theyre hooked you can jack up prices because the product just became inelastic. However if the product is so pure that your customers easily OD ou wont have any demand for the product and so the maryj. and coke guys start comin into your turf. On the flip side though, because of all the violence goin on down there i'd imagine it to have a detrimental effect on the heroin market because the product is more dangerous to make and transport.

There you have it, the supply side of heroin and all the wonderful things that come with and effect it.
Dam it feels good to be a gangsta




































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