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Old 11-09-2016, 05:14 PM   #1
A.T. Hagan
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Default In Surprise Move, India Voids 500 And 1,000 Rupee Bills To Fight Corruption

http://www.npr.org/sections/thetwo-w...ght-corruption


India is doing away with old currency notes of 1,000 and 500 rupees.
Manish Swarup/AP


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In a surprise move, Indian Prime Minister Narendra Modi announced that the country is taking all existing 500 and 1,000 rupee notes out of circulation.

He said in a televised speech that voiding the country's highest-denomination bills is aimed at cracking down on the black market and getting counterfeit cash out of the financial system. The black market boosts corruption and is used to fund terrorism, he said.
The rest at NPR.

A whole lot of people are about to get a whipping.
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Old 11-09-2016, 05:16 PM   #2
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So, if you have legit bills of those denominations, I assume you can trade them in. Otherwise... you're screwed.
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Old 11-09-2016, 05:26 PM   #3
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You can deposit them in your bank, but they will not allow you to immediately withdraw them again in different denominations.
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Old 11-09-2016, 05:35 PM   #4
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The best way to fight petty "state" corruption is to transfer all services into e-government.

Turkey had a lot of corruption, as everything started to flow on electronic systems, the "need" to pay for signature disappeared

with all their software industry, I am suprised India is slow to adapt
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Old 11-09-2016, 11:31 PM   #5
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Cash = financial privacy. Governments hate that.
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Old 11-09-2016, 11:41 PM   #6
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The people who have houses full of those denominations will not be able to change them in the banks without explaining where it came from

This demonetisation is an excellent way to catch the money launderers, tax evaders and corrupted people.
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Old 11-10-2016, 04:50 AM   #7
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Quote:
Originally Posted by dharma View Post
Cash = financial privacy. Governments hate that.
This. This has nothing to do with fighting corruption or stifling money laundering. It's called capital controls. He who controls the capital controls everything and everyone.
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Old 11-20-2016, 02:38 PM   #8
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Surprise! You can't yet run an economy without cash—especially if it's a mostly-cash economy..

http://mobile.reuters.com/article/idUSKBN13C0DR

http://www.economist.com/news/asia/2...spurs-protests

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For many among the estimated 80% of wage earners who are paid in cash, for the tens of thousands of villages with no banking facilities, and for the traders, drivers, farmers, prostitutes, beggars and others who work in the “informal” economy that accounts for anywhere between 25% and 70% of India’s GDP, it has brought anxiety and hardship. “We’ll know later if Modi is right or wrong,” a man outside a bank in Delhi told one television crew. “All I know now is I’m starving.”
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Old 11-20-2016, 05:04 PM   #9
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At 68 rupees to the US dollar the 500 And 1,000 Rupee Bills would be like our $10 and $20 bills.
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Old 11-20-2016, 05:27 PM   #10
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This was a good move by India. They didn't outlaw cash -- if you wanna buy something that costs 500 rupees you can just use 5 100rupee bills. So the effect of this is to outlaw the underground economy of people, mostly rich and connected people. who hoard and deal in large amounts of cash in order to evade taxes. This is a good first step toward minimizing the culture of lawlessness that has kept India a third world country and kept western companies out.
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Old 11-20-2016, 05:28 PM   #11
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Quote:
Originally Posted by Sonny
At 68 rupees to the US dollar the 500 And 1,000 Rupee Bills would be like our $10 and $20 bills.
A bit different if you use Purchasing Power Parity (PPP), which puts value at maybe 20 rupee/dollar. This suggests that they might be equivalent in daily usage to $25 and $50, respectively.

https://www.quora.com/Foreign-Exchan...n-terms-of-PPP
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Old 12-02-2016, 04:09 PM   #12
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It reminds me of so many other commentaries when dealing with "Bail-In" scenarios.
http://www.investopedia.com/terms/b/bailin.asp

"An efficient path for returning the sound operations of the G-SIFI to the private sector would be provided by exchanging or converting a sufficient amount of the unsecured debt from the original creditors of the failed company [meaning the depositors] into equity [or stock]. In the U.S., the new equity would become capital in one or more newly formed operating entities. In the U.K., the same approach could be used, or the equity could be used to recapitalize the failing financial company itself—thus, the highest layer of surviving bailed-in creditors would become the owners of the resolved firm. In either country, the new equity holders would take on the corresponding risk of being shareholders in a financial institution."

I thought this was a pretty good article.

India's Currency Cancellation: Seigniorage and Cantillon Effects
Here we emphasize two features of Modi’s initiative that have been little noticed. First, the combination of demonetization followed by “remonetization” will transfer billions worth of US dollars from the Indian public to the Indian government. Second, the skewed pattern in which new notes will be injected will favor some sectors over others.
By Larry White
November 28, 2016
https://www.alt-m.org/2016/11/28/ind...tillon-effects
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Old 02-06-2017, 12:09 PM   #13
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A great article can be found here relating the experiences of a
senior executive in India attempting to navigate his company
through the cash drought .

You may think the Indian cash crisis is over ..... it ain't and the worst
is yet to come .

Quote:
I am the Chief Executive Officer of a multi-national corporation,
and I am still reeling under the demonetisation policy announced on November 8, 2016.
I will neither disclose my name nor my company’s, lest there is a blowback.
But the figures and facts that I will cite are all from our books or mentioned
in our in-house discussions. It will give the reader a sense of the disruptive
consequences of demonetisation.
..
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Last edited by Ross; 02-06-2017 at 12:16 PM.
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Old 07-24-2017, 06:31 PM   #14
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To cap it all off the Indian Government has now introduced a
complicated Goods and Services Tax which is a nightmare for
businesses in India .
Quote:
On 1st July 2017, India changed the way it imposes indirect taxes.
As a result, there has been massive chaos around the country.
Many businesses are closed for they don’t know what taxes apply to them,
or how to do the paperwork. Factories are shut, and businesses are
protesting.

The locals are not impressed

Quote:
Increases in administrative costs have made economics of trading and
manufacturing unfavorable for many. Most lack access to accounting and IT
skills to implement the new system — India simply does not have that many
skilled people. As many as half of all transportation trucks are not operating.
The media have “decided” not to cover the demonstrations.
Much more here.
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Old 07-25-2017, 08:41 AM   #15
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Quote:
Originally Posted by Ross View Post
To cap it all off the Indian Government has now introduced a
complicated Goods and Services Tax which is a nightmare for
businesses in India .
Translation: People, especially people used to living on the black economy, don't like taxes.
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Old 07-25-2017, 12:56 PM   #16
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I have a pending order to india for about $20k. It has been "in process" for years. What i make is not availble in india or elsewhere. So, either they steal my technology or they pay incredibly high dutie taxes.

---------- Post added at 12:53 PM ---------- Previous post was at 12:52 PM ----------

With China, by the time they copy it - i have advanced the technology another few generations.

---------- Post added at 12:56 PM ---------- Previous post was at 12:53 PM ----------

I am going to have to invent "spread spectrum computing".
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