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Object Lesson: War on Cash Backfires on India’s Economy


Site Mgr
Sr Site Supporter
Mar 28, 2010
Planet Earth
Back to the drawing board....

Object Lesson: War on Cash Backfires on India’s Economy
by: Clint Siegner

Money Metals News Service

September 5th, 2017

Indian Prime Minister Narendra Modi launched a surprise attack on cash in late 2016. He gave Indians a few days to convert the two largest denomination bills then circulating to bank deposits, after which point any undeposited notes would become worthless. The move was intensely controversial. Transactions completed using cash represented the vast majority of economic activity in the country.

In order to sell the program Modi employed a familiar strategy. He vilified the users of cash as tax cheats and criminals. He promised the measure would punish black marketeers, boost the Indian economy, and increase tax revenues. The latter may be true – forcing transactions onto the grid is good for nosy bureaucrats trying to impose taxes and controls.

But it now appears Modi’s claims about the amount of criminal activity tied to cash and promises of economic growth were nonsense.

The official argument was that cash is an indispensable tool for black marketeers. The reform would catch many of these “criminals” with piles of cash they would be unwilling to declare and deposit. That argument fell apart last week when the Indian central bank reported that 99% of the outlawed bills were converted to deposits. Turns out very few “criminals” were punished.

Meanwhile the Indian economy is paying the price. Growth has slowed significantly and some estimate as many as 5 million jobs have been destroyed by the demonetization of cash. More and more Indians are angry.

They didn’t enjoy the upside promised by Modi. Instead, they suffered massive economic disruption and loss of privacy. Perhaps India’s experience will provide an object lesson elsewhere in the world where bankers and the political elite are waging a similar war on cash.


Gold Member
Gold Chaser
Apr 13, 2011
but the bodies haven't piled up in the streets yet so there's no need to worry and that leaves the digital transactions that need to be carried out in place of passing these notes

All merchants would need to be tied into the grid along with their reportable transactions but how would the "non-reportable" transactions continue to occur? Two chickens for a good used tire?

I understood India still circulated some smaller paper notes, if so, that would help.

I don't agree that demonetization was a wise move by anyone but digital, all reportable, etc, is NEVER going to go away
In fact, it's only going to get more intrusive as time goes on

Maybe THAT leads us to Star Trek, IDK

I want one of those replicators where I can put my garbage in and get ...what?
Everyone would have silver, gold, fiat, disney memorabilia,
oh yeah

Tea, Earl Grey, Hot



Gold Member
Gold Chaser
Apr 1, 2010
What government, at any time, anywhere on earth has EVER stopped a black market? Nazi's couldn't do it. Soviets and other commie countries couldn't do it. China couldn't do it. Nowhere in Europe or in all of Africa has it ever been done. The middle east remains a failure even with all it's Muslim domination. PEOPLE WILL HAVE MARKETS AND COMMERCE with and without governments, regardless of government laws and policies, and with or without their bankster butt-buddies currency. In fact, when governments move to limit or eliminate ANY markets or attempt to control the means of exchange, black markets spring up like weeds. Doesn't matter if it's in America, India, Sulawesi, Japan, London or anywhere people are under any form of government.

Today, as yesterday, it is in fact governments supplying the illegal goods and services into black markets. China's opium crisis, American CIA opium trade, Fast & Furious running guns into Mexico, America supplying ISIS, and on and on it goes.

People a simply too gullible and/or too stupid to realize that it is in fact government that is THE SOURCE of the greatest amount of evil, hypocrisy, lies, corruption throughout any and all countries on the face of this earth. So either get honest and embrace the evil or get armed and eliminate the menace of government.