Three fallacies in your argument:
1) Remittances are not loans. They are gifts.
2) It's a stretch to use Income statements and Balance Sheets to track remittances. Money comes in, debit cash. What do you credit? Prepaid Living Expenses?
I don't contest the theory of the long-term impact of the dilution of the money supply drug cash or remittances cause. But doesn't accrued debt of gubmint do the same thing? Of course it does. And I would argue worse because of the interest accrued...a liability...continually offsetting the asset created (unless future favors leveraged through a bought-off judge, politician or bureaucrat is worth more than the accrued interest payable GL account.)
We aren't talking currency creation through debt instruments created by the CB or banks. However, drug $$$ and remittances deposited at financial institutions can be used for additional monetary creation in proportion to that institution's mandated Reserve Requirement.
3) I would suspect that the vast majority of remittances are NOT used to make capital purchases (goods with a life more than 3 years.) They are used to meet living expenses or increase the standard of living. Drug money is an entirely different animal. Much DOES go into the asset base (drug cash comes in: debit cash, credit capital asset (cars, real estate, business creation, etc.)
Interesting conversation with a knowledgeable Dominican very recently. You know what is becoming a favorite money laundering technique? Creation of and loans/direct investment in smaller financieras. They are plentiful and most are off the "formal economy" radar screen. There is a TON of dirty money just looking for these financieras.
Oklahoma, Alabama, Arkansas... all the same.
But seriously, I agree with some of what you said. Gifts vs Loan is subjective from an audit standpoint. Interestingly enough though, the vocabulary and style you use above is seemingly an improvement. I think you and Pichardo are in on this together.
And, no, I am not a "Doctor".
