Cool idea for the day: drug futures
Governments like to keep track of illegal drug prices as a measure of effectiveness of the Drug War and to brag about the street value of seizures. These indices can also be used as the basis for a drug futures market.
Futures contracts on illegal drugs wouldn’t necessarily be illegal themselves. Futures don’t need to deliver the underlying commodity or security; they can be settled in cash as the difference between the agreed price and the underlying. Thus it is possible to trade drug prices speculatively (or to hedge) without the need to deliver or receive actual drugs.
This would be good for the usual reasons futures markets are good: hedging, liquidity, and price discovery. It would also provide some very interesting incentives for governments, drug users, and drug sellers.
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