Today’s piece should be seen as a bit of a followup to yesterday’s post, India’s Demonetization Debacle Highlights the Dangers of Monetary Monopoly. While yesterday’s piece was more philosophical/strategic in nature, today’s zeroes in on some of the devastating real world impacts of Narendra Modi’s insane and inhumane cash ban. It’s hard to overstate the damage this policy has done to India’s economy. Modi is quickly solidifying his place as one of monetary history’s biggest idiots.
First, let’s take a look at the destructive impact the move has had on India’s massive small businesses community. The Washington Post reports:
India intends to construct the world’s tallest statue . The massive construct is meant to honor a medieval King named Shivaji. Once completed, the gigantic structure is expected to be twice the size of the Statue of Liberty and will sit on land reclaimed from the Arabian Sea off the coast of Mumbai. However, there is also a great deal of controversy saying that the tax-money set for the statue could be better used.
Chhatrapati Shivaji Maharaj: Founder of Maratha Empire in India
Shivaji Maharaj is widely remembered as a medieval Hindu ruler in the western state of Maharashtra who fought the Muslim Mughal dynasty and carved out his own kingdom. He was born in 1627 AD (or 1630 AD) at Shivneri, a hill fort near Puna.
H/t reader kevin a.
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In the past five months more than 6,000 people, mostly young men, have been injured by shotgun pellets, including hundreds blinded in one or both eyes.
SRINAGAR, India — Indian authorities call the shotgun shells filled with hundreds of small metal pellets a “non-lethal” weapon for crowd control, but that does not make them harmless. They’ve inflicted a permanent toll on hundreds of Kashmiris hit by them.
Their faces are scarred. Their eyes are damaged or simply gone, replaced with prosthetics. And their psychological wounds run deeper still.
Global financial repression picks up steam, led by India. After declaring large denomination notes illegal, India now targets gold.
It’s not just gold bars or bullion. The government has raided houses, no questions asked, confiscating jewelry.
For background to this article, please see my November 27 article Cash Chaos in India, 86% of Money in Circulation Withdrawn; Cash Still King in Japan.
Large denomination means 500-rupee ($7.30) and 1,000-rupee notes ($14.60), which account for more than 85 percent of the money supply. They are no longer legal tender, effective immediately.
As one might imagine, chaos ensued. And it continues.
India Confiscates Gold
Bankers attacked and locked up by angry mobs as Indian government teeters on the brink of collapse after citizens revolt against draconian anti-cash laws that have thrown the country into chaos
Millions of protestors in India are rising up against a ruling class determined to take away their rights. There is anarchy in the streets as the Indian government continue to lean on mainstream media to suppress the scale of events and cover up the chaos caused by their draconian ban on cash.
Millions of Indians – the world’s second most populous country – are revolting against new anti-cash laws that are designed to protect and enrich the top tier of the wealthy global elite at the expense of ordinary people. The country is in chaos as hundreds of millions of ordinary people are unable to access their savings. In a country where 98% of transactions are performed using cash, the sudden ban on cash transactions, and the withdrawal of cash from circulation, has created outrage.
Well who could have seen this coming? Just as we noted, the slippery slope towards full government control in a cash-less society is where Indian PM Modi is heading following his chaos-creating demonetization efforts of the last two weeks. While massive opposition protests are planned tomorrow, Modi remains indignant, as Reuters reports, “we can gradually move from a less-cash society to a cashless society…this is the chance for you to enter the digital world.”
Indian Prime Minister Narendra Modi on Sunday urged the nation’s small traders and daily wage earners to embrace digital payment channels, as a cash crunch following the government’s surprise ban on high-value bank notes drags on.
Thousands of girls and women in India are sold into marriage and often face a lifetime of abuse and hardship.
The first time Muklesha was sold, she was just 12 years old. Her buyer was a man in his 70s.
Marriage and a baby quickly followed. But, three years later, the man died and Muklesha was again put up for sale.
This time, her buyer was a horrific abuser.
It appears the social unrest, economic collapse, and currency crisis sparked by Indian PM Modi’s decision to demonetize “corrupt” high-denomination bank-notes was not enough.
As the Rupee crashed to a record low overnight, officials announced a suspension of the exchange of ‘old notes’ as of tomorrow to, in their words, “encourage people to deposit old notes in their bank accounts.” With as much 60% of banknotes still un-exchanged, we suspect chaos will be the operative word for the immediate future.
Those with old notes will still be allowed to deposit them into their bank accounts until Dec. 31, but not permitted to do outright exchanges.
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H/T reader squodgy:
“Three days. Not a lot.
Get the ammo dry.”
From the article:
“It’s been said that the average person abandons his moral inhibitions after three days without food. After this time, an otherwise morally responsible man is literally prepared to kill his neighbour for a loaf of bread.”
And just ten days more and humans turn into cannibals.
We began writing on the War on Cash some time ago, when it was still just a theoretical ploy that we believed banks and governments were likely to employ as their economic adventurism continued to unravel.
But, in the last year, several countries have, as a part of the War on Cash, begun removing larger bank notes from circulation in order to force people to perform all economic transactions through the banking system, ensuring that the banks would gain total control over the movement of money.
And that is nothing compared to what will happen when the greatest financial/economic collapse in world history is taking place.
Continue to prepare for collapse.
Amid scenes of panic across India, following PM Modi’s shock decision to withdraw high-value bills in the middle of the sowing and wedding season, Reuters reports the move, aimed at cracking down on the shadow economy, has brought India’s cash economy to a virtual standstill. With over 90% of all transactions done in cash, money flows in and out of the black-and-white system… until now, as Devangshu Datta exclaims, “The system works because everybody believes that those pieces of paper will be accepted by everybody else… This move has shaken that trust.”
Farmers have been left stranded as traders have no cash to pay for their produce, while millions of Indians lined up outside banks and post offices for the ninth day to exchange old banknotes or withdraw rationed money from their accounts.
Many of India’s 260 million farmers have no bank accounts and depend on local money lenders to fund sowing, which means those that have to borrow to sow winter crops like wheat or rapeseed could face debt trouble without a good harvest.
And so India’s government on Thursday announced immediate steps to ease a cash crunch for farmers amid widespread criticism. In the latest in a series of ad hoc steps, Modi allowed farmers to withdraw up to 25,000 rupees ($368) a week against their crop loans to ensure that sowing of winter crops “takes place properly”, a senior finance ministry official said.
The Indian government took unprecedented action last week when it eliminated 500 and 1,000 rupee paper notes from its financial system. The change occurred essentially overnight.
Indian Prime Minister Narendra Modi initiated the policy on Nov. 8th and has actively defended his position since. The announcement was made under the guise of cracking down on corruption and black money, but the surprise caused bank closures across the country.
Got physical gold and silver?
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The search query “how to convert black money into white money?” is trending on Indian Google after Prime Minister Narendra Modi withdrew 500 and 1,000 (about $15) rupee notes, turning 86 percent of cash in the country to paper.
According to Bloomberg, the most searches came from Modi’s home state of Gujarat, known for its small traders, jewelers and other small businesses.
The government decided to get rid of the notes because of tax evasion and corruption in India. The term ‘black money’ is used to describe cash stashed to avoid paying taxes.
H/t reader quodgy:
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