gold-quoteCorruption has skyrocketed. So has gold.
People are now converting whatever they can into gold, & silver which are trading at huge premiums. Money is also moving out of the country. Gold has shot up to as much as $2,800 per ounce, if you can find it.

This is Cyprus ten times over – they just haven’t realized it yet…

 

Submitted by Jayant Bhandari:

The following guest post was written by Jayant Bhandari in two parts. Part 1 was first published by Jayant on November 9. Part 2 was first published by Jayant on November 16. Parts 1 and 2 were originally published on the ‘Acting-Man.com’ website as “Gold Price Skyrockets in India after Currency Ban” and “Gold Price Skyrockets in India after Currency Ban – Part II“, and are also linked on Jayant Bhandari’s website http://jayantbhandari.com.

India’s Government Makes Banknotes Worthless by Decree Overnight

As I write this in the morning of 9th November 2016, there are huge lines forming outside gold shops in India — and gold traded heavily until late into the night yesterday. Depending on who you ask, the retail price of gold has gone up between 15% and 20% within the last 10 hours.

gold-quote
Gold quotes in India – gold traded for as much as Rs 49,000 per 10 grams or US$ 2,294 per ounce

At some places, it was sold for as much as US$ 2,294 per ounce. That is, if you can actually find physical gold — gold inventories at stores are rapidly depleting. All of this happened well before the international price started to move up because of the election results coming out of the US.

Last night (8th November 2016), India’s government banned the use of Rs 500 (~$7.50) and Rs 1,000 ($15) banknotes. This pretty much made most currency-in-use illegal. Banks and ATMs are closed today. The government believes that doing this will help eradicate corruption and push counterfeit money out of circulation. According to the Indian government, the counterfeit money tends to come from Pakistan and helps finance terrorism.

My first instinct when I heard the news was that people would be on the streets this morning. There would be riots and the Indian Prime Minister, Narendra Modi, would be unceremoniously thrown out. Despite being a huge critic of him, I thought he at least had the spine to take bold action, however erroneous it might have been.

I am sometimes too optimistic about India and expect too much goodness from Indians. And I was wrong.

In the morning no opposition against the government was in sight. But there was some animosity detectable between people. Forgetful that they had lined up until late into the night yesterday trying to get cash out of ATMs before midnight, had fought at gas-stations to get their gas tanks filled, and had suddenly been trapped with unusable currency, people exchanged congratulations on what Modi had done.

Indian prime minister Narendra Modi - Photo via news18.com
Indian prime minister Narendra Modi – Photo via news18.com

What Modi had done — contrary to what I initially thought — wasn’t a bold move. It was a populist move, designed to please the 98% who do not save. While they are really driven by envy, these 98% are putting on a brave face, celebrating the alleged defeat of corruption. To them the fights of yesterday — at gas stations and elsewhere — and the loss of trust in their fellow citizens is merely collateral damage.

Fresh Avenues for Corruption Immediately Open Up

Those who find themselves stuck with high denomination bills today, must accept  as little as Rs 700 in usable currency for every Rs 1000 of banned currency.

At least theoretically, people can still use the otherwise banned bills at hospitals, gas stations, pharmaceutical shops, and train stations. As one would expect in India, these places have been converted into corrupt currency-exchange shops as of today. Some well-connected people are prepaying for their medical treatment.

But for most legitimate uses, none of these organizations are accepting the otherwise banned instruments. Why should they, when they can force customers to pay in the still-legal currency and then buy the banned instruments for Rs 700 for every Rs 1000 in face value, making a neat 43% extra profit without doing anything?

In India, a country not driven by morals or reason, almost everyone will exploit an opportunity to make an extra buck, however unethical it might be.

Those who look deeper, understand that corruption in public life comes from ingrained corruption in India’s society and culture. If one had to make an effort to remove corruption this is where one should start.

1,000 rupee banknotes – worth 700 rupees each today, available from the newest entrants into the money-changer business. Unfortunately, their business model is fraudulent; it sure seems a strange way to “fight corruption”.

1,000 rupee banknotes – worth 700 rupees each today, available from the newest entrants into the money-changer business. Unfortunately, their business model is fraudulent; it sure seems a strange way to “fight corruption”. Photo credit: Reuters

Today, there is utter chaos in the market, with only the spontaneously erupted black market available to bypass the ban — most people simply don’t have anything else but the banned currency bills.

Some are booking train tickets for  future rides and are subsequently canceling them  — they can use the banned currency to buy the tickets and can then get legal currency back after ticket-cancellation charges. This is costing people a lot of time, but it is the only way they can stay afloat and buy food. Others are taking different measures, equally desperate.

By any sane person’s reckoning, corruption has skyrocketed for the moment. So has gold. Those who run businesses have lost whatever remnant of trust in the government they still had. In recent months several businessmen have confessed to me that they are closing down, because the state has become increasingly heavy-handed and bureaucratic. Contrary to what the World Bank and IMF are saying, India is suffering economically. Its institutions are crumbling. And India is on the path to becoming another banana republic.

Within a few days, assuming this issue is handled appropriately — which it won’t be — most people with a certain amount of banned currency will be able to deposit it at banks, although tied to withdrawal limits. The banking system will stay partly frozen. After the banks open tomorrow, I expect to see riot-like scenes outside bank branch offices for a few weeks.

Huge chaos in the Indian economy should be expected to continue — as India’s government is simply incapable of bringing liquidity back any time soon. Businessmen will waste their time dealing with this nonsensical event, instead of investing and creating wealth. India simply continues to do more and more of what makes it an uneconomical and wasteful place to invest in.

Civil servants are already finding ways around the cash shortage problem… Cartoon by Ross
Civil servants are already finding ways around the cash shortage problem…Cartoon by Ross

Will the Plan Succeed in Reducing Corruption?

But will this eventually lead to a reduction in corruption?  Let us use the gold market as an example to understand how the Indian economy operates.  Any import of gold is subject to a cumulative tax of about 11%. The retail price of gold should be around 111% of the international price. Ironically, it mostly sells for 105% of the international price. Putting it simply, any law-abiding businessman must lose this 6% differential, ensuring his bankruptcy.

In reality most of the gold entering India is brought in by smugglers. These smugglers are happy to pass on almost half of their profit to consumers, while at the same time paying bribes to the Indian army, customs officials, other bureaucrats and politicians. If one wants to run a gold business, one must use smuggled gold if one wants to be competitive.

A shop selling gold jewelry in India - Photo via thehindubusinessline
A shop selling gold jewelry in India – Photo via the Hindu Businessline

Virtually all businesses in India have to be run this way. Without paying bribes, no business has a hope of succeeding in India. Corruption is in the blood of India and is not easy to get rid of, even if by sheer luck India finds good political leaders one day.

Corruption is so omnipresent in India that you don’t really have to look for it. It is always there. What Modi is doing is merely political theater to fool the gullible. His decision to ban cash currency is actually proof that he has utterly failed to achieve any meaningful change in India.

I have yet to meet a public servant in India who does not ask for a bribe. During Modi’s reign, not only corruption has gone up, the state has become extremely heavy-handed. As what is happening today shows that the government’s anti-corruption measures themselves are ironically leading to a huge increase in corruption.

PUnsuccessful Google search in India… - Cartoon by Thommy

Unsuccessful Google search in India… – Cartoon by Thommy

Conclusion – Part 1

Unfortunately, India’s degradation will not stop. Indians have become extremely nationalistic over the last two decades. They are now very easy to herd around. Under the color of nationalism they can be made to accept anything –  of course, only as long as the victim is someone else. The currency issue of today affects maybe 2% of the entrepreneurial population of India, so the remaining 98% can claim higher moral ground for themselves. The reality is that without these 2%, India could rapidly become a carbon copy of Idi Amin’s Uganda.

What India needs is not a focus on the removal of corruption, but the removal of regulations and restrictions on wealth-creation. For now the state is doing exactly the opposite, as it has in the past. Most importantly, this poison of totalitarianism comes from the extremely irrational society of India – in which corruption is entrenched.

There is no escape for the Indian economy. And in the negative-yielding economy, those who save have no choice but to buy gold, even at $2,294 per ounce.

 

PART 2

Chaos in the Wake of the Ban

Part 1 above covered what happened in the first two days after India’s government made Rs 500 (~$7.50) and Rs 1,000 (~$15) banknotes illegal. They can now only be converted to Rs 100 (~$1.50) or lower denomination notes, at bank branches or post offices. Banks were closed the first day after the decision.

What follows is the crux of what has happened over the subsequent four days.

India’s prime minister Nahendra Modi, author of the recent overnight currency ban Photo credit: Indiatimes.com
India’s prime minister Nahendra Modi, author of the recent overnight currency ban
Photo credit: Indiatimes.com

Today India is on the verge of a major social-political crisis, unless either the government backs off from the decision of banning the currency or some real magic happens. There is chaos in the streets and daily life is slowly but surely coming to a full halt.

What Modi did was not only heavy-handed, hugely arrogant, and of no value, it has been very badly implemented to boot — as everything in India always is — and carries the real potential of escalating and snowballing into something horrific. They could have seen that this was not going to end well by simply using primary school math.

Modi, Nationalism, and the Public School-Indoctrinated Middle Class

India today is like a cult under the influence of Narendra Modi — in which unlike in the past, not the poorest or uneducated citizens, but mostly members of the so-called educated middle class participate. Over the last two decades, people have been exposed to mass education, TV and nationalistic propaganda without being taught an iota of critical thinking skills.

In a society in which the concept of reason does not exist, this has made these people receptive to any kind of propaganda with a nationalistic or Hindutva bent. (Hindutva = fanatical Hinduism, which is rapidly metastasizing).

To aggrandize his position, Modi ordered a lot of military-hardware that India cannot afford, escalated tensions with Pakistan, and conducted what was very likely a fake surgical strike inside Pakistan. This united Indians under the flag.

Now, the demonetization of the Rs 500 and Rs 1000 banknotes was tagged with nationalism, anti-corruption, and anti-terrorism. Simple-minded, slogan-susceptible persons were hardwired to accept an erroneous causality. Those who did not go along were made to be afraid of being called pro-terrorist elements.

Those in the middle class have taken what they deem to be the higher moral ground, for they have mostly avoided suffering from the demonetization. Lacking moral instincts — which is unfortunately the case with much of Indian society, given its deep-rooted irrationality and superstitions — they cannot see or feel the pain of those who are suffering, even if that suffering stares into their faces.

But events are in motion that will likely very soon lead to these salaried members of the middle class starting to feel the pain as well. Their instinctive trust in Modi is likely within weeks of coming crashing down, not because of reasoned argument, but because they will be facing similar problems as the ones the common man is now facing.

Conversion to the New Currency

I went to convert my banned banknotes into new ones. The largest amount one can have converted is Rs 4,000 ($60), until further notice. There was a huge rush of people at the bank. Arguments were erupting, as people refused to stand in queues and the banks gave no explanation of what needed to be done. Fights were breaking out.

Amid the chaos I finally learned that there were three queues I had to go through in a sequence. I had to get a form from one counter, which I had  to fill in with my name and address, my ID card details, the serial numbers of all the bills I wanted to exchange, and my cell-phone number.

At the second counter, I then had to present the completed form along with a photocopy of my ID card. I had to sign on the photocopy which an official then stamped. With my banknotes, the form and the photocopy of my ID card, I then went to the next queue to get my currency converted at a third counter. The whole process took about two hours. For most people in the busier parts of the cities, it took much longer.

Day 1 of the banks opening. Poor, desperate people, whom the government treats like slaves or perhaps insects. Somehow these people have been brainwashed into thinking they live in a free country. My granddad kept photographs of British royalty on the walls of his office until his final days, for he had realized that the British had treated him much better.

Anyone who thinks that a country which wastes two hours of every citizen’s life to convert his own $60 can ever hope to be an economic power is drinking too much Kool-Aid and cannot do primary level math. Forget any possibility of removing unaccounted for money or reducing corruption, what Modi is doing is a recipe for the destruction of whatever legitimate economy there is.

That same afternoon, I went to the post office with a friend who wanted to get his money converted. After waiting a long time there, we found out that the post office had run out of cash. Since then most ATMs have had limited amounts of cash available and banks keep running out of cash as well.

The queues have continued to grow. People start lining up late into the night waiting for banks to open and still have to go back home with no cash. What started with two hours of queuing is becoming an endless slog now.

An endless queue to convert Rs 4,000 (USD 60). Will they actually go home with their new cash?

The Problems Go Much Deeper

Half of India’s citizens do not have a bank account and around 25% do not even have an ID card. These are the country’s poorest people, who have no way of converting their money – even if they learn how to do it, which is already a nigh insurmountable hurdle. Also, those who are old, disabled or sick have no choice but to suffer, for without personally visiting a bank branch office, one cannot convert one’s banknotes.

An old disabled woman struggling to get her money converted. One has to be utterly heartless not to feel angry about the situation.
An old disabled woman struggling to get her money converted. One has to be utterly heartless not to feel angry about the situation.

97% of the Indian economy is cash-based. With 88% of all outstanding currency no longer usable, the economy is coming to a standstill. The daily-wage laborer, who leads a hand-to-mouth existence in a country with GDP per capita of a mere $1,600, no longer has work, as his employer has no cash to pay his wages. His life is in utter chaos. He is not as smart as Modi –  despite the fact that Modi has no real life experience except as a bully and perhaps in his early days as a tea-seller at a train-station. He has no clue where his life is headed from here.

These people are going hungry, and some have begun to raid food shops. People are dying for lack of treatment at hospitals. Old people are dying in the endless queues. Some are killing themselves, as they are unable to comprehend the situation and simply don’t know what to do. There are now hundreds of such stories in the media.

Small businesses are in shambles, and many will probably never recover. The Hindu wedding season has just started and people are left with unusable banknotes. Their personal and family lives are now an utter disaster.

Desperate people raiding a supermarket

Lacking moral and rational anchors, and hence compassion, members of the salaried middle class are unperturbed. Their salaries get taxed and most of the bribes they are getting end up in gold or property investments. In their minds, poor people and small businesses don’t matter. In the hypocritical culture of India, as long as the middle class is not suffering – for the time being — they prefer to take what they believe to be the higher moral ground.

Why This Problem Will Get Much Worse

Let us do a few simple numbers… What has been made illegal comprises 88% of the monetary value of all currency notes in circulation. In an economy based primarily on cash, the liquidity of cash is the lifeline of the economy. This requires that 88% of the new currency be rapidly dispersed into the market.

The Indian government has absolutely no history of being able to entertain a project of this type or magnitude ever and after the British left, India’s institutions have continued to deteriorate, so hope is not an option. If they fail to issue enough new bills, the very limited supply of Rs 100 notes will disappear within a few days.

As any rational person has a tendency to store good money while using bad money in transactions, people will hide all newly released currency as well as Rs 100 banknotes until full liquidity is restored. The rich and the well-connected have already done what was needed.

A reminder of Gresham’s law for Modi:  “Bad money drives out good money.”

Those who have no need to convert their money as all their cash is already in the banking system (as is the case with the salaried middle class), which they think is making them look like a heroes in the eyes of Modi and is giving them a sense of moral superiority –  they are nothing but turkeys being groomed.

Banks are giving out a mere Rs 20,000 ($300) a week at best. Their lives will suffer and for all intents and purposes, their accounts are frozen. This is Cyprus ten times over –  they just haven’t realized it yet.

Whichever way one looks at the above numbers, India’s economy is going to start suffocating, within weeks, if not within days. And a serious political and social crisis will take place, which will eventually acquire a life of its own. That is when the as of yet unperturbed salaried middle class wakes up with pain.

As in any irrational system, it is not reason and morality that will have convinced them to scuttle their hypocrisy and limited vision, but the violence and pain that they themselves will suffer.

Corruption

Politicians and bureaucrats of course cannot be seen queuing at the banks. Many bank branches apparently had their cash secretly replaced by the now-illegal bills before the first day of reopening. While no more than two bills of Rs 2000 each should have been collected, those better connected apparently haven’t had a problem with this and have been shown showing off packets of the new currency they have. All this cash will do nothing but end up under mattresses, as it has in the past.

Politicians with too much corrupt money (now unusable currency notes), who could not convert it beforehand, are distributing it to villagers as loans. Villagers will take the risk with the tax department, including having to hand over a large portion of it as bribes.
Politicians with too much corrupt money (now unusable currency notes), who could not convert it beforehand, are distributing it to villagers as loans. Villagers will take the risk with the tax department, including having to hand over a large portion of it as bribes.

As I walk around, corruption is everywhere and has grown exponentially, not only in financial terms but worst of all, in terms of the humiliation and degradation Indians are suffering. And I don’t know how a humiliated, soulless person can be anything but corrupt.

In village after village people have stopped working, even if they had work, as they can now join the queues at the banks to convert other people’s banknotes for a commission. For many young people, this is a wise entrepreneurial decision, as they are making many times the money they would have otherwise made for now.

But they are being trained to make money from non-productive activities — not from wealth-creation, but from unnecessary problems created by the government. Are they being groomed for a corruption-free society? One has to be naive to respond affirmatively.

Sell your now illegal currency for a 20% discount, which young kids can then convert into legal money at the bank
Sell your now illegal currency for a 20% discount, which young kids can then convert into legal money at the bank

Fear of the tax authorities means that the level of bribes being offered has gone up. Random people can now impersonate tax officers and collect bribes. People are in the grip of a fear psychosis. Many are emptying their bank deposit boxes, which means that crime will inevitably increase in coming days.

People are constantly worrying about what Modi’s next knee-jerk act might be and how to protect themselves against it.  A police state is knocking at the doors.

A receptive environment has been created in which all kinds of rumors are taking wing. Today, salt is selling for Rs 400 ($6) per kilogram, as rumors have been  making the rounds that it is about to disappear. This of course creates a situation in which it will actually disappear. The same is happening with sugar. The largely irrational masses are eagerly devouring a great many random rumors.

Lesson for Modi: Never, ever destabilize a society that works through conventions rather than reason, for it has no way to return to a normal state of affairs without a huge amount of pain and violence. Simply look at neighboring countries in order to understand this.

Chronic fear is slowly overtaking the mood of Indians, particularly those who run businesses. They have not only completely lost their trust in the government, but the tax department has been raiding people’s premises to scare those who are trying to salvage what they have.

They have stopped worrying about creating value. Everyone is talking about what to do with the banned banknotes, for even if they are fully accounted for, people fear that the increasingly rapacious tax authorities will make trouble anyway.

Uncertainty has gripped the populace. Not everyone is capable of grasping the situation and dealing with it.

People are now converting whatever they can into gold, silver, and mostly for the first time into the US dollar and other foreign currencies as well, all of which are trading at huge premiums. Money is also moving out of the country. Gold has shot up to as much as $2,800 per ounce, if you can find it.

Lesson for Modi: The reason people trust Switzerland is because it has hundreds of years of history of protecting private property. Singapore has done an equally good job, but it still lags behind Switzerland, because trust requires a very, very long history of institutional honesty and integrity. India is back to level zero for now. When future generations look back, they will see the current demonetization as the worst event in the history of post-colonial India.

Finally, the new bills have actually worsened the counterfeiting problem they were supposed to solve. People do not have any experience with what the new banknotes look like. Within a mere three days, counterfeits are already in circulation. Contrary to the government’s claims, the new bills are not any more sophisticated than the old ones and are made of simple paper.

A mere three days after the first release of the new banknotes, fake currency is already in circulation
A mere three days after the first release of the new banknotes, fake currency is already in circulation

Why Has the Government Miscalculated?

The most productive job Modi ever had was running a tea-shop at a railway station, which he then gave up to become a bully. He is a complete stranger to complex thought. He is simplistic in his thinking and does not understand the second-order consequences of his actions.

First he increased Hindu fanaticism, then he participated in collectivizing people using nationalism, then he created problems with Kashmir through his heavy-handedness.

He completely failed to liberalize the economy or remove corruption from public life, which is an almost impossible job. Quite ironically, Modi is making it possible for public servants to escape scrutiny, the very people who are the fountainhead of all corruption.

A simplistic mind is also arrogant. Such a mind — unable to conceive the possibility of unintended consequences — thinks all that has to be done is to issue orders and everything will fall in place. Alas, this may work when shooting innocent people in Kashmir and in other destructive ventures, but when it comes to institutionalizing social progress, a more complex and intelligent approach is needed.

All of India’s institutions have continued to deteriorate since the British have left. They are rotting away and are in shambles. India had some breathing space over the past three decades because of the free gifts of the internet and cheap telephony which it got from the West.

This has merely made Indian governments more rapacious and so-called educated Indians more arrogant. They collectively lack the capacity to improve India’s institutions after having destroyed them. Demonetization may well be the straw that will break the camel’s back by accelerating the deterioration of India’s institutions toward the point of breakdown, perhaps in weeks if not already in coming days.

Conclusion – What Can One Do?

As Indian, be a speculator – even if the government does not like it and will blame you for all ills. Try to keep as much of your money in cash, in Rs 100 notes. Rs 2,000 notes have no value when you go shopping for groceries. Keep a supply of water and dried food sufficient for a few months’ needs.

Cash is disappearing and even before that the economy was stumbling. It might take just one more small domino — more strain on liquidity — to bring about systemic problems in the economy that could bring crucial transactions, businesses and supply lines to a halt.

If systemic violence spreads, everything will be complicated further. Think of Zimbabwe. It pays to be prepared, particularly when we are ruled by zombies.

Image captions by PT. Photos and videos by courtesy of Jayant Bhandari.

Jayant Bhandari grew up in India. He advises institutional investors on investing in the junior mining industry. He writes on political, economic and cultural issues for several publications. He is a contributing editor of the Liberty magazine. He runs a yearly seminar in Vancouver titled Capitalism & Morality.

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  1. This is a huge salvo against the poorest 1,000,000,000 people in the world.  Modi is a scum sucking whore slut pig.  And guess who ooooozed on the scene just before Modi ordered the currency smash

    Yeah, your favorite NWO oligarch wanna be Bill Gates.  This slime ball has had his tentacles in India for over 15 years, first with his Monsanto connections and then with  vaccines sold by huge pharma companies. This infestation done by Gates who has billions invested in Monsanto and Big Pharma but if you call in the next 10 minutes we’ll give you two scum bag infestations for the price of one

    The newest and latest devices that Silicon Valley and its uber wealthy billionaires is called FINTECH  FINTECH is the full retard digitalization of money/ long green/folding money and jack in your jeans.  These f*******s have found that they can create portals that strip off 15 basis points for every dollar that you spend through Crapple Pay  FINTECH is like Big Pharma for your cash wallet  It doesn’t kill you it just takes your money and life force one tiny piece at a time

    The Indian cash trade is easily 80-90% of the economy.  Of this I am certain. Gates put Modi up to this, tell him that he’ll make Yuge profits by skimming pennies off dollars.  Modi is a dumb ass and bought into this. Modi was a former tea seller working in the train stations.  No resume Obama was more qualified than this Vishnu gazing douche bag.

    So Modi fu***** the economy into the ground while sucking Bill’s balls with an 8 armed Kali reach around for good measure.  To add insult to injury now the government requires the gold merchants and  jewelers to keep all financial sale and buy records to make sure no one is cheating on their taxes

    On a different topic, ZH had an article about IRS taking legal action against Coin Base to get their entire transaction records for all BIT COINS  from 2013 to 2015

    If you used Bitcoin thru coin base and had a capital gain, the IRS wants to look you up, hook you use and fu*** you up   The IRS got the swiss bankers to scream like sissy girls when the gummint was chasing down evil tax dodgers.  Coin Base will give it up faster than the new guy pederast  fish in the Pelican Bay Super Max.  Puckering the pink won’t stop Bubba from the IRS having his way with Coin Base owners, many of who are the same scum sucking Silly putty Silicon valley elites

    rant off

    • A lot of people aren’t aware that there are capital gains/losses to claim with Bitcoin as well as Bitgold. Too much record keeping for me, how much you bought, how much you sold and for what prices. US Gov’t considers Bitcoin a commodity not a currency. Bitgold is undisputed commodity in CDN Gov’ts eyes, not money. LOL. Bankrupt countries start collecting revenue from where ever they can. Except Reno I guess.

      I see a lot of whiners here about gold/silver not doin the moon shot or staying in a upward trajectory. Things can change quickly just over the weekend or night and you’ll be running around like a chicken with it’s head cut off lookin for PM coins, where hundreds of other people will be lined up.

      If people bought an investment and now can’t make ends meet, then they weren’t planning ahead. Too hot in the kitchen, exit.

    • @Justin Case

       

      Good point on the capital gains angle for Bit(ch)coins.  I see no attraction for yet another fiat currency and using digital “money” is about as dumb as a bag of hammers, IMO.  The banksters and their hired politicians WANT us to go all-digital so they can loot and pillage us more easily… all in the name of fighting crime or some other dumbs**t reason.  This is not a reason, however.  It’s just another excuse… and a pretty lame one at that.

      As to the whiners… yes, they seem to need to hang out here for some unknown and inexplicable reason that even they probably do not know.  Maybe it is their need for sympathy for the mistakes they have made and now want to blame on others?  Who knows?  IMO, some culling of this type of SD reader seems in order.  I am all for legitimate discussion and reasoned arguments but continuous bitching and whining about PMs should be done elsewhere.  I care not where, just not HERE.  That would improve a number of aspects of this site.

       

      @AGXIIK

      Have a little pity for these poor little rich elites, Bro.  Things have not been going all that well for them lately and the odds are looking good that this trend will continue for a while.  BrExit seems to have been the BIG surprise and then that was followed up by Hellery’s political debacle.  Other problems are pending in the EU, which is showing signs of coming completely unraveled.

      Saw an interview on CNBC yesterday with Marine Le Pen.  She seems like my kind of gal and could well become the next president of France.  If so, then she will likely remove that country from the EU and return to the franc instead of the euro dollar.  Other countries likely will pluck up their courage and do the same.  I can see the UK and France becoming closer and both of them becoming closer to the USA if this happens, which will drive a wedge deep into the EU in terms of trade and finance.  Good on ’em, says I.  🙂

      I would hate to see Germany move closer to Russia but it is a fact that they seem to have more in common these days than Germany does with the US.  Of course, nationalism is rising there as well, thanks to the Merkel stance on immigrants and all the hell they have been raising in Germany.  The German people are fed up with this crap and see very little upside to this policy.  It very well may be that Merkel’s CDU party is well on the way to condemning itself to insignificance.  The Dems in the US should be able to relate to this.

       

    • “No resume Obama was more qualified than this Vishnu gazing douche bag.”

      Bwahahahaha…thanks for the laugh. Pretty much covered it all, AGXIIK.  No-neck Modi is “with the Agenda”: reduce the population, in his case, starve the peasants and foment war with Pakistan, while Gates injects them with his poisonous “vaccines.” The vaccine angle is a long-documented ploy…by the “usual suspects.”

      BTW: I was once in a museum where no photos were allowed…do you know, “Vishnu” was called “”Pinoy” in some S.E. Asian countries? If not familiar, ask someone from the P.I. what “Pinoy” means.

      He is a late “invention” by the “Storytellers”…the “usual suspects.”

  2. I used May 1998 (Pakistan-India Nuclear tests)+ 18.6 year cycle to come to this point..recall the real gold bull started in May 1998 + 3.5 year cycle (9/11) so a major short squeeze is not in too distant future. I buy physical and have nothing to do with this corrupt government, Comex or banking system. August 1998  (Recall Monica)  +18.6  well my cycles are pretty deadly accurate and I do not miss stock crash is nearby

  3. Speaking for many from the West who have invested in legitimate Indian industries and helped create millions of good paying jobs, we have learned that when government, however well meaning, tries to achieve its goals through heavy handed methods, the unintended negative consequences swamp the positive outcomes. This occurs with such regularity that it has become a well know cliché.  Hence, while we applaud PM Modi’s goal to reduce corruption, the negatives of his myopic and naïve implementations continue to be most destructive. The government has acted to kill off legitimate, “underground” economic activities with a single sword stroke because the government isn’t getting “its share” of the revenues. This would be like the USA killing its financial sector because that sector had devised tax loopholes. When the government devastates one legitimate, albeit “underground”, business, it hurts the whole economy and, hence, all business.
    Similarly, the government war on gold is most destructive to India. The early 2016 tariff on gold that drove many legitimate gold dealers out of business for months was unfairly punitive and hurtful to all. India’s love of gold has been one of its greatest assets. For far more than a hundred years, India acquired gold at around a global value of $35/oz. At current prices, that represents an increase in value by a factor of approximately 34. The net increase in value to India versus keeping wealth in paper money is about a trillion dollars. The myopic government view is that the gold is not doing the government any good so war on gold should be declared. Instead, the government should focus on how to use that huge amount of stable wealth to grow the economy. A system should be devised such that gold in all individuals’ hands can be used as the basis for credit – even if not deposited in banks (as long as that credit is restrained to be used productively, e.g., farm equipment – be creative, not destructive). It was credit based on individual’s (fragile) paper money that drove the economies of the West. How much sounder to build a credit system based on gold! India’s war on gold comes, per usual, at just about the worst possible time – just as the paper money systems of the West are teetering under excessive debt and the value of paper currencies is being undermined. The government itself would be well advised to be buying gold. India’s common man has far more common sense than its leader.
    The current government needs to show that it has learned its lesson about needing intelligent implementation, preferably by rolling back its ill-conceived initiatives, or a new government is needed quickly. 
     
     

  4. Thinking about the effect on India of a gold import ban, I’ll add a few comments. This, of course, will wipe out the 6% of the import economy depending on gold imports. It will also greatly impact 7% on the export side (jewelry). Employees adversely affected in those areas will, of course, spend less and adversely affect a large part of the rest of the economy. In addition, the ban will greatly reduce the price of gold, thus adversely affecting the wealth of those holding gold. This sudden loss of wealth (based on the report, approximately half a trillion dollars) will have an affect not unlike the sudden shock of the 1929 stock market crash in the West which ushered in the Great Depression. Also, the ban would be reminiscent of Prohibition in the US when alcohol was banned. That ban created the greatest growth in crime and corruption in the US – there actually are great similarities between the ban on alcohol and the ban on gold. Having a Great Depression and an epic rise in crime and corruption will feed on each other. Just letting you know, we’ve been there and done that and it’s not good. Incidentally, the ban would also have a significant negative effect on the rest of the world’s now fragile economy which would in turn have further negative effects on India.

  5. It’s one big circle-jerk….as I see it.

    The only downside I see is that none of these poor wogs have any guns and ammo!

    Some of our red brothers once said: “Let us have some guns so that we might die as  warriors  among men”.

    This “may” be the next domino of the great unraveling – please stand by.

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