This article was written by Michael Krieger and originally published at his Liberty Blitzkrieg site.
Editor’s Comment:“Let me issue and control a nation’s money and I care not who writes the laws.” – Mayer Amschel Rothschild (1744-1812)
It seems that the monetary powers are wrestling with public policy to work out how quickly they can bring millions, or even billions, of people to their knees. A reckoning may soon be coming to other nations as well, and America, too, may see economic devastation at home.
Venezuela’s economic crisis has worn very hard on the people, and the currency very much plays into what socialist President Maduro has called an economic war with the West – with oil prices having kicked off the turmoil.
Now India is imposing strict cash controls for no particular reason, other than to merge bank account data with a billion biometric scans on people who live rural, poor lives. It is creating dire consequences for the middle and lower class economies, and yet it seems that the government has little regard for the pain that it is causing the people it is ruling over. Which country will clamp down next on its population with cash controls that amount to domestic economic sanctions?
India’s Prime Minister Has Singlehandedly Crushed the Economy with His Reckless Cash Ban
by Michael Krieger
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:
NOIDA, India — Over the past two years, this suburb of New Delhi mushroomed into a flourishing enclave of small cellphone manufacturers, attracting tens of thousands of workers from the countryside. Noida, known as the “handset hub,” was touted as a showcase for Prime Minister Narendra Modi’s pet “Make in India” initiative.
Then on Nov. 8, Modi’s government took a step that has jolted the bustling industrial quarter. It scrapped high-denomination currency, with a view, officials said, to curbing illicit wealth and the financing of terrorism. But the cash shortage triggered by the move has also curbed legitimate small enterprises. Many of Noida’s manufacturing units have slashed production by nearly half, and more than a quarter of the workers have gone back to their villages.
“It was a booming sunrise industry before November 8th. Not now,” said Vipin Malhan, president of the Noida Entrepreneurs Association, who also runs a business that makes cellphone accessories here. “Many small factories and assembling units, which used to work round-the-clock, with three shifts, have scaled down to just a single shift. We are all in shock now. One word that businesses dread is ‘uncertainty.’ The government has thrown that at us.”
Several small- and medium-scale industrial clusters, employing a total of more than 80 million people across India, are reporting declining sales, production slowdowns and layoffs since bills worth 500 and 1,000 Indian rupees were invalidated (500 Indian rupees is worth about $7.40). Towns famous for weavers, lockmakers, power looms, bicycle-parts manufacturers, ready-made garments and handicrafts face rising inventories of unsold goods.
Even large car manufacturers have halted production in some of their factories for several days because of a sharp dip in consumer spending. And in a reflection of the belt-tightening that has accompanied the general sense of uncertainty, credit card companies have posted a decline in the total value of transactions, even as the cash shortage is forcing people to use their cards more.
“We started hearing murmurs that there were no fresh orders from the market. That our raw material was stuck because we could not pay. Stocks were piling up,” said Sudhir Ramphool Singh, 33, who lost his job at a cellphone assembly unit in Noida and returned to his Dharavu village in northern India this month. He is the sole breadwinner for his family of seven. “Production slowed. The unit was shut down for 10 days. When it reopened, many of us were asked to go.”
With the large bellwether state of Uttar Pradesh slated to hold elections early next year, the business slump — and the lines at the banks — have become campaign issues.
“Forget about creating new jobs. Modi’s decision is taking away people’s jobs,” the opposition Congress party leader, Rahul Gandhi, said at a public meeting this month.
Modi has urged people to adopt digital payment methods and bear some pain to support the long-term goal of rooting out corruption.
Mishra’s office is conducting 50 training sessions every day in small industrial hubs to help residents transition to cashless transactions. But many business owners in these clusters say it is not easy to change because daily wage laborers do not accept checks and do not have smartphones with Internet.
Well done Modi.
Last week, about 200 business executives in Ludhiana staged a sit-in against the cash-swap decision, calling it “ill-conceived.” They even formed a “stick brigade” and are threatening to beat tax officers who show up to “scrutinize our books needlessly and harass us.”
In the country’s largest textile town, Bhiwandi, in western India, more than 2 million power looms used to operate round-the-clock. Countless machines are silent now.
“The cash shortage has come as the latest blow to the industry that was already hit by global competition. Fifty to 60 percent of power looms have shut down, and more than 150,000 workers have gone back to their villages,” said Rashid Tahir Momin, whose family owns about 400 power looms.
Naturally, this is just the tip of the iceberg. The Indian diamond market has also been thrown into total chaos.
As Reuters reports:
The global diamond industry is facing disruption that could stretch through the first few months of next year, including Valentine’s Day in February, as a result of Indian Prime Minister Narendra Modi’s radical move to abolish most of the nation’s cash overnight.
In the western Indian city of Surat craftsmen usually spend 10-12 hours a day in small mills or grimy sheds cutting and polishing 80 percent of the world’s diamonds but the business is based on cash and the demonetization of the high-value banknotes from Nov. 8 has prevented many from operating. Thousands of diamond brokers in the area’s narrow lanes are also doing little business.
In India, jewelry demand typically climbs in the winter months’ wedding season. But this year sales are plunging as nearly two-thirds of jewelry is usually purchased with cash, which is in short-supply.
Ishu Datwani, owner of Mumbai-based Anmol Jewellers, says his sales are down nearly 70 percent since the government scrapped the high-value notes.
The demand is unlikely to revive any time soon as India struggles to dispense enough new notes, industry officials say.
Let this be a lesson to all of us regarding the dangers of centralized power. There’s no reason we should ever allow ourselves to be in a position where the foolish, capricious actions of one man can have such a devastating impact on an economy of more than one billion. This is precisely why we need to move toward a more decentralized way of living and discard many of the archaic, unnecessary and harmful institutions of the past.
If you enjoyed this post, and want to contribute to genuine, independent media, consider visiting our Support Page.
This article was written by Michael Krieger and originally published at his Liberty Blitzkrieg site.
Let use see what happens. My idea is that the Nation of India will have to change their name.
ZOMBIELAND OF INDIA!
India has been through worse and the people are a resourceful lot. Modi is into building statues as well. He is a Hindu nationalist but certainly considered a pretty sharp guy. Agree, let’s see what happens!
I hope you are right! Ono of my doctors is from India, and he is Great Guy. India has made Lemonade out of lemons before. I hope the pull thought it.
Hurry up and do it here, so we can start arresting the murderous genocidal psychopaths controlling the treasonous criminal US Government, and we can then start arresting all boot licking cowards supporting the psychopath monsters and their murderous reign of Domestic Terror on the dumbed down disease ridden obese dying toxic dump American Holocaust victims!!!!!!!!
There are still people in India? I thought they were all in San Jose, Cal.
“Last week, about 200 business executives in Ludhiana staged a sit-in against the cash-swap decision, calling it “ill-conceived.” They even formed a “stick brigade” and are threatening to beat tax officers who show up to “scrutinize our books needlessly and harass us.”
Reminds me of a modern version of what set off the Revolutionary War. Complaint to King George included:
“He has plundered our seas, ravaged our Coasts, burnt our towns, and destroyed the lives of our people…Our repeated Petitions have been answered only by repeated injury…He has erected a multitude of New Offices, and sent hither swarms of Officers to harass our people, and eat out their substance.”
All the above being done now by Modi, except using economic policy rather than redcoats. Sad, really. I thought Modi’s election was positive, as I originally did with Merkel. Both of these have turned out to almost as historically bad – almost as Obungler, though no one could approach the nadir of his incompetence.
No, Him… half are actually in Toronto. Just sayin’
” They even formed a “stick brigade” and are threatening to beat tax officers who show up to “scrutinize our books needlessly and harass us.”
Nice!!! … Beat those moneychangers ass’s & beat ’em good! ツ
Since we are now doing illegal immigrants under Obama, I am proposing to start a business where I send cattle barges over to India and the Middle East, and just ship over people en mass, by the hundreds of millions. I figure I can get George Soros to pay me a billion to do so, and Obama will welcome everyone, even ISIS terrorists. Upon landing, they would be processed with driver’s licenses and automatic registration into the Democrat Fascist Party of the US. Muslims would be given their own town (I suggest Hollywierd or San Francisco – where I was born – to implement Sharia law. I’m sure the radical gays will appreciate that). Mosques and Hindu temples for Kali (the goddess of destruction) would be built using YOUR tax dollars (just as a way to give a back-handed slap to conservative America, and to give Alinsky one final smile from his perch in Hell).
I will get half the money from George Soros, then the other half from Goldmun Suchs. I still need to work out some other scam invoking faux global warming though. Maybe I’ll use solar powered cattle barges to bring over the refugees? That way, I can give carbon billionaire Al Gore a cut. Maybe I’ll use Solyndra for the panels, or else Nancy Pelosi crony solar company Tonopah Energy… or maybe the Bundy property that Dirty Harry Reid is taking by force for his son’s gig with the Chinese.
Just some thoughts. In this crony world of Obungler, one has to be creative, y’know! The goal in business now is NOT to provide value, but to scam they system, play the came, glom on to politically correct shenanigans, etc.
U.S. needs to watch and learn. Do they need to go cashless so bad that they screw up the country. they may get results they don’t want to deal with.
CHRISTMAS (OR LACK THEREOF) VENEZUELAN SOCIALISM STYLE:
Ain’t socialism caring! (Cf Dr. Arthur Brooks’ book, Who Really Cares, as reference)
“Decked out in black to mourn her murdered son, 40-year-old Dileida Palacios told her daughter that, this year, “everything is tough and Santa Claus isn’t coming.” Who can afford toys when a few food staples can absorb much of the $20 average monthly salary? Hyperinflation caused by runaway deficit spending has made the nation’s currency, the Bolivar, worth less than one U.S. penny, and inflation is expected to climb to 2,000 percent in 2017…Reuters reports that “three local councils and four national welfare groups all confirmed an increase in parents handing children over to the state, charities or friends and family… Parents simply cannot afford life’s necessities since Maduro — who insists that the nation’s economic woes are part of a conspiracy to topple him, and hence the people’s revolution, from power — imposed strict price controls on food and medicine. Shelves immediately cleared out and have only been restocked in areas where he lifted artificial price ceilings. But there are few goods and is even less investment in a market beset, as the World Bank delicately puts it, with “distortions.”
Article also notes “Friedrich Engels, the more obscure co-author of The Communist Manifesto, wrote in his 1884 book The Origin of the Family that Communism sought to transform raising children “into a social industry. The care and education of the children becomes a public affair; society looks after all children alike.” Statists of all descriptions must necessarily seek to undermine the family, and any pre-political or intermediary institution that competes for its loyalty.
Oh yeah. To divert the people’s attention, this month Venezuelan authorities seized 3.8 million toys from the nation’s leading toy manufacturer, Kreisel, on the grounds that the company conspired to sell them for more than the state-mandated price. The toys were redistributed in the days before Christmas by the Local Committees of Supply and Production (CLAPs), the same committees charged with distributing enough groceries to feed every needy family – and which have been credibly accused of starving Maduro’s critics.
– Cited from Ben Johnson in http://joemiller.us/2016/12/socialism-grinch-stole-venezuelas-children/
Why doesn’t Venezuela work? As Friedrich von Hayek’s noted in The Road to Serfdom, even the most enlightened government cannot properly manage an economy, because it lacks the necessary information to do so.
There would be no difficulty about efficient control or planning were conditions so simple that a single person or board could effectively survey all the facts. But as the factors which have to be taken into account become numerous and complex, no one center can keep track of them. The constantly changing conditions of demand and supply of different commodities can never be fully known or quickly enough disseminated by any one center. Under competition — and under no other economic order — the price system automatically records all the relevant data.
It is exactly the opposite of what von hayek wrote. the marginalist theories, menger, bohm-bowerk, von mises, etc were mathematically destroyed by post-Keynesians. Even Greenspan, who still in the sixties wrote apologetic essays about absolute free market and the role of gold, had to reconsider it all as time passed. capitalism is absolutely condamned to failure if the state does not intervene to settle the debts with public money. and in any case the general crisis, dictatorship, war and the destruction of all means of production are periodically inevitable. our age is defined in fact, scientifically after Lenin, as a phase of imperialism and state capitalism. the free market anarchy is totally inefficient since a small fraction of humanity owns most of the wealth (which by the way is totally, and I repeat, totally – either as user and exchange value – produced by workers), while billions of people living in poverty, and millions are slaughtered by marauding capitalist. Instead, within individual industrial conglomerates, eg inside the Ford factories, production is planned years in advance by statistical methods and scientific programming, automation and robotics, almost absolutely. Only the external market is anarchic, and the root of all the evils that surround us. The marginalist theories are therefore part of the metaphysical materialism strand, that promise eternal duration of capitalism, which exists as a class rule only for two centuries, and this idealism serves only to mask the class struggle of the bourgeoisie against the proletariat.
One and one half Indians coming to America.
Let me see. I was told that there were approximately 300 million people in America. I was at the time, in elementary school. So, that was a while back.
Whenever there is a problem in some part of the world, people run to America. As far back, and probably further back than this, the Mayflower brought settlers from England seeking freedom from persecution. The Irish came to escape hunger; and so forth. This was always problematic because there were cultural differences; and feelings of being invaded, which were real; from the Natives on down, immigration always resulted in violent opposition.
If even a small fraction, let’s say one third of one and one half billion, that is five hundred million; more than all the people living here. We would be destroyed. Traffic would be more than twice as bad, just to mention one of hundreds of consequences. Most likely, our economy would collapse and there would be war between the Indians and the white people. Cowboys and Indians on steroids.
It would be a perfect time for Middle Eastern men and North Africans to rise up. So, let’s face it. It is time to overturn the 1965 immigration Act. As, my grandmother told me, “A stitch in time, saves nine”.
They are not just running to the USA B from CA – we are copping our share in Aussie as well and the % that are still on welfare 10 years after they get here is very high!
Europe is being flooded as well, but I don’t feel sorry for them one bit as they have been preaching to us and you to be “humanitarian” long enough ….. well, the boots on the other foot and the Euros are kicking themselves in the ass with it.
I hope you all had a Merry Christmas (NOT a PC freakin’ “Happy Holidays”)
A demographer once told me that at the current rate of immigration the US will be at 1 billion people around 2100. Not a word from the Sierra Club. Oh, wait, they took a $100 million bribe, ‘er donation, to keep quiet about that.
California 1950, 10,500,000 population. California 2016, 39,200,000 population. I wonder why there’s a water shortage? What ever could it be?
Sierra Club is more corrupt that Hilary.
That’s interesting. Here is what the Corrupt Sierra Club is all about now since the $100 Mil Bribe.
Joe Guzzardi: The Sierra Club and the $100 Million Donation That Changed It Forever
The money came with strings attached — that the club never speak out against or try to limit immigration into the United States
By Joe Guzzardi | February 17, 2012 | 10:09 p.m.
The Sierra Club has a long history of saying one thing but doing another. The organization made headline news recently for accepting $26 million in secret donations from individuals associated with Chesapeake Energy, a New York Stock Exchange-listed natural gas company.
As reported by Time magazine, from 2007 to 2010 the Sierra Club accepted more than $25 million mostly from Aubrey McClendon, CEO of Chesapeake Energy, one of the biggest United States-based gas drilling companies and heavily involved in fracking. In the three days leading up to the Time expose, the Sierra Club refused to answer direct questions about its Chesapeake funding history and tried to mislead its members about its nefariously close association with the driller.
In 2010, under the direction of new Executive Director Michael Brune, the Sierra Club stopped accepting Chesapeake funds and allegedly refused an additional proffered $30 million.
Brune also ended the Sierra Club’s association with the Clorox Company, which had donated $1.3 million over four years in exchange for the right to display the club’s logo on its new line of “Green Works” cleaning products. Clorox Bleach is an EPA-registered pesticide; the EPA has fined the company for violating the bleach’s labeling guidelines.
But the biggest donation the Sierra Club ever received is the one that altered it forever. In 2004, the Los Angeles Times revealed a $100 million gift made by investor David Gelbaum. Unfortunately for environmentalists, Gelbaum’s money came with the string attached that the club never speak out against or try to limit immigration into the United States no matter how obvious it became that adding more people has severe ecological consequences.
Gelbaum told Times reporter Kenneth Weiss that his instructions to then-Sierra Club Executive Director Carl Pope were that “if they ever came out anti-immigration, they would never get a dollar from me.” Pope eagerly agreed — but with devastating results.
Not that long ago, the Sierra Club had willingly tackled immigration-related population issues. In her spring 1989 report, Dr. Judy Kunofsky, chair of the Sierra Club Population Committee, concluded that the club should work to “bring about the stabilization of the population first of the United States and then of the world.” That goal was abruptly abandoned after the club deposited Gelbaum’s check.
Throughout the years, true environmentalists such as legendary Sierra Club founder David Brower, UCLA astrophysics professor Ben Zuckerman, elected to its board in 2002, and former Colorado Gov. Richard Lamm, defeated in his 2003 board run, tried unsuccessfully to guide the club back to its roots. Neither Zuckerman nor Lamm knew until they read it in the newspaper that Gelbaum and Pope had conspired against members who wanted population growth curbed.
Brower once said, “Overpopulation is perhaps the biggest problem facing us, and immigration is part of that problem. It has to be addressed.” After he resigned from the Sierra Club in frustration in 2000, Brower famously described the board as “fiddling as the Earth burns.”
In the decade since Gelbaum bought out Pope, the club’s pro-immigration folly is easily documented. According to a Center for Immigration Studies study titled
“A Record Setting Decade of Immigration: 2000-2010,” the nation’s legal and illegal immigrant population reached 40 million in 2010, the highest number in American history. Nearly 14 million settled in the United States from 2000-10.
Each one of them adds to America’s footprint. Had the Sierra Club not taken Gelbaum’s bribe but had instead stayed on its original course, the United States’ ever-deepening population crisis might not be so acute.
Hello all I hope everyone out there had a great Christmas and time with family and friends. Regarding the cash matter in India as far as I believe is simply a sign of the times and one country at a time will eventually go cashless. This must come to pass. And my hope is that the folks in our part of the world are paying close attention and take the time we have to either start or continue preparing for the time ahead. Of course I am certain most of the people that frequent this site have done their best to try and wake family and friends up, some with success but probably most not. Now to get back on track one only has to look at how society has been conditioned to not use cash. Personally I use cash for as many transactions as I can about 90% of the time. That is just the way I fight the conditioning. Make no mistake the day is coming for us in the western world. Whether you believe in Jesus Christ or not I will say this is all prophesied in the bible and must come to pass in order for the mark of the beast to be put into place. Stay alert and keep preparing. And for the Christians who say preppers lack faith, I say read your bible as the bible is full of prepper people, Josepth, Noah, and Elijah, just to name a
few.I hope all of you have a safe and blessed new year. Take care as I believe 2017 will be yet another big year in prophecy. May the good Lord bless all of you!!!
If you protest your politicians too much, they can cancel access to your card. Or if your state didn’t vote the right way…..Get it?
India was the Soros Oligarchs’ guinea pig. The reason: the population is known to be pacifist and docile. That makes the odds of a bum like Modi being assassinated for doing something this stupid very small.
However, they managed to kill the guinea pig in their little experiment. The vast majority of India’s population doesn’t earn enough to even participate in the banking system. All Modi succeeded in doing is push them completely out of the economy. Then there’s the Indian economy, which has always been am economy of hundreds of millions of small businessmen. The bulk of their business activity has always been conducted in cash, so they are now effectively out of business, thanks to Modi.
Imagine what would happen if they tried this in a country like Italy, where the vendetta was invented. Or the United States, where the Three Percent, who make up considerably more than 3% of the US population, handed the One Percent’s asses back to them on a paper plate in the recent election. They also happen to own the majority of the firearms in the US, so guess what would be the likely outcome for anyone who would try to pull a stunt like this in the US? Very likely, secession and another civil war.
Best course of action? Hoard cash and back it with precious metals. Should we see secession and civil war, the new country borne out of that secession and the wreckage of the United States will be one where cash, along with metals, will be king.
A well-kept open secret: Washington is behind India’s brutal
experiment of abolishing most cash