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Today even most ardent Modi critics have become his fan
Modi has demonetized 500 & 1000 Rs notes to be exchanged at bank for new 500 and 2000 denomination.
This thread is to discuss the far reaching impact both apparent and non apparent.
As per me following will happen in next few days and months :-
- Asset price deflation - Immediate :- Money will go into productive sources after 2/3 months when things settle down.
- Control on inflation - Immediate effect :- May have some long term impact.
- Wider acceptance of digital currency.
- Dawood and ISI kii Dukaan band
To end corruption best thing is to introduce new notes in the denominations of 500, 1000, 2000 and ask everyone to exchange old notes for new notes and make sure of their IDs (adhar cards, pan cards etc) if they exchange more than say Rs100,000 or so in a day and withdraw old notes after one year.
That was me two days back. The limit for exchange is set even lower. Good going, Mr Modi. What will the Congoons do now with all the crores and crores in currency notes?
To end corruption best thing is to introduce new notes in the denominations of 500, 1000, 2000 and ask everyone to exchange old notes for new notes and make sure of their IDs (adhar cards, pan cards etc) if they exchange more than say Rs100,000 or so in a day and withdraw old notes after one year.
That was me two days back. The limit for exchange is set even lower. Good going, Mr Modi. What will the Congoons do now with all the crores and crores in currency notes?
I would have liked GoI to wait some more and introduce currency with some compatibility to make it blockchain enable in future...
Maybe this is already done with new Gandhis who knows.... wait and see
I am not sure how much percentage of black money kept in cash can be exchanged into white after this. Let us say 50% could not be exchanged. Means looters lost that money for good. Right? Now their asset value is gone. If they want money they have to liquidate other assets. Like real estate. Already real estate is dead in most of the cities except maybe Bangalore ( congress in power there) So if they want money like for UP elections then they have to find it somewhere. I do not know where.
But in the badlands of India like Bihar, there will be huge deposits of cash in bank accounts under threats. One can not stop it. But IT I am sure will look into all this.
Yagnasri wrote:I am not sure how much percentage of black money kept in cash can be exchanged into white after this. Let us say 50% could not be exchanged. Means looters lost that money for good. Right? Now their asset value is gone. If they want money they have to liquidate other assets. Like real estate. Already real estate is dead in most of the cities except maybe Bangalore ( congress in power there) So if they want money like for UP elections then they have to find it somewhere. I do not know where.
But in the badlands of India like Bihar, there will be huge deposits of cash in bank accounts under threats. One can not stop it. But IT I am sure will look into all this.
They will introduce some kind of bond which can be exchanged for remaining. This bond would have no interest and may mature after 7/8 years therefore effectively demonetizing portion of this stash.
Brilliant execution, and super secrecy - this is a harder operation to pull off in secret than even a nuclear test.
The 2000 note was a fantastic idea. Pictures leaked for sure, and as expected. Had the notes been 1000 or 500 denominations, someone would have put two and two together. But since it was a larger denomination, instead of thinking demonetization, a lot of people were criticizing the government for doing exactly the opposite - making it easier for black money.
However this is a one-time action which can't be done more than once in about 20 years, or even longer. This has to be followed up with cleaning the system itself. It's like a computer program that runs more and more slowly. Rebooting the computer can be a short-term fix but the bad code will bite sooner or later.
This demonetization also explains why Modi got every individual to open a bank account. This is a genius move.
yensoy wrote:Brilliant execution, and super secrecy - this is a harder operation to pull off in secret than even a nuclear test.
The 2000 note was a fantastic idea. Pictures leaked for sure, and as expected. Had the notes been 1000 or 500 denominations, someone would have put two and two together. But since it was a larger denomination, instead of thinking demonetization, a lot of people were criticizing the government for doing exactly the opposite - making it easier for black money.
However this is a one-time action which can't be done more than once in about 20 years, or even longer. This has to be followed up with cleaning the system itself. It's like a computer program that runs more and more slowly. Rebooting the computer can be a short-term fix but the bad code will bite sooner or later.
This demonetization also explains why Modi got every individual to open a bank account. This is a genius move.
This single step will be defining moment in India's history.... This put us on road to superpower status in a decade to come...
There is frantic rush at ATMs .. Every one is withdrawing money @ 400 per transaction.
There may be short term artificial liquidity crunch because of this...
Some shopkeepers may hesitate from accepting current 500/1K notes in next few days....
yensoy wrote:
However this is a one-time action which can't be done more than once in about 20 years, or even longer.
Only once in Independent India in 1978 - by non-Congress government. Vaguely remember it, so 38 years ago.
while lots of money from illegal trade, corruption, etc is black. The majority of black money is in the hands of the "unorganized" sector, the largest sector in India made up of small businesses. So your paan walla to jewelers and most retail.
This move will not be without backlash from many interested groups. Hope Modi stays strong to resist these pressures. All the best to him.
Builders who take cash components are truly screwed. Along with the real estate bill preventing diversion of building funds for other purposes, homebuyers are in for good times.
Congoons are dead in the water without the money from the black economy to finance their illegal activities. None of these folks would get any solace from the Scamgress as they themselves are scurrying to salvage whatever is left of their ill-gotten booty. Plus with Pappu and Pappini both not wanting to sit in the hot seat, all these folks can run but there is no place to hide.
Much needed surgical strike. Q is have they gamed the immediate aftermath. Is there a reason for the timing?
There is massive queus in ATMs, petrol bunk. Hotels not accepting cash, card machines not working.
There is going to be short term liquidity crunch affecting common man for the next few days. Not everyone will accept cards.Have they thought through this really? Ideally they should have loaded ATM with lower denomination first. I don't have cash except for a few 5 hundred rupee notes and how will I pay my kirana grocer, autowallah? Will banks be replenished with lower denomination notes in the next couple of days?
Last edited by Sridhar K on 08 Nov 2016 23:06, edited 1 time in total.
Biggest losers (I hope) will be chacha/bhatija/netaji + Amar Singh who have a stash of cash for UP election spending. But these goons can force local bank branches to launder money.
LokeshC wrote:Not that much. Inventory hoarding will go up and compensate.
So the next step should be to disincentivize the housing hoarders.
Better than that, we have to dis-incentivize money hoarding/wealth hoarding all together. Put an artificial cap above which no body should be allowed to earn. Rich getting richer is a curse and we should make sure nobody becomes rich
LokeshC wrote:Not that much. Inventory hoarding will go up and compensate.
So the next step should be to disincentivize the housing hoarders.
Better than that, we have to dis-incentivize money hoarding/wealth hoarding all together. Put an artificial cap above which no body should be allowed to earn. Rich getting richer is a curse and we should make sure nobody becomes rich
I think I may be the only guy who thinks this is a bone head move for the economy. This will not solve any problem in the economy and will actually make many industries worse. It is most likely to impact the middle class more than anybody else.
Already the growth of small/ medium sector industries into large scale multi billion $ industries is piss poor in india compared to even countries like mexico and this move will make it even worse. This is a classic case of cutting the nose to spite the face. Please save this thread and may be after one decade, you can visit here and see this post as a fore warning on what will happen in the coming years to indian economy.
Btw, USA has 100$ , UK has 50 £ bills both 500% more valuable than indian 1000₹ note. Has that meant india has had a corruption level 20% that of US or UK? anyway, i am pretty sure you guys have already made up your mind on why this is great and I am no economist to convince you guys otherwise. So i will leave it at that
Dinesh S wrote:
Better than that, we have to dis-incentivize money hoarding/wealth hoarding all together. Put an artificial cap above which no body should be allowed to earn. Rich getting richer is a curse and we should make sure nobody becomes rich
Yaay for socialism!
so you din't catch the sarcasm?
I was just taking your proposal to the next logical level.
You are posting rants without any logical statement to back it up. Post something logical with facts instead of your "feelings" and retarded predictions, otherwise please stay quiet.
Dinesh S wrote:I think I may be the only guy who thinks this is a bone head move for the economy. This will not solve any problem in the economy and will actually make many industries worse. It is most likely to impact the middle class more than anybody else.
Already the growth of small/ medium sector industries into large scale multi billion $ industries is piss poor in india compared to even countries like mexico and this move will make it even worse. This is a classic case of cutting the nose to spite the face. Please save this thread and may be after one decade, you can visit here and see this post as a fore warning on what will happen in the coming years to indian economy.
Btw, USA has 100$ , UK has 50 £ bills both 500% more valuable than indian 1000₹ note. Has that meant india has had a corruption level 20% that of US or UK? anyway, i am pretty sure you guys have already made up your mind on why this is great and I am no economist to convince you guys otherwise. So i will leave it at that
it all depends on how its implemented. the chinese have the lowest denomination and this is what happened.
But I have to say one thing though- i am glad the govt din't go full retard and ban the larger denominations outright.
Btw guys, sometimes having a black economy is better than having a white economy- the RTE act being a prime example. Without bribes, millions of schools would have closed down already in india as per rte and the brilliance which followed it . But since many here actually support that RTE stupidity, i doubt any amount of me arguing about it will change your opinion on it either. Anyway, me out
Last edited by Dinesh S on 08 Nov 2016 23:33, edited 1 time in total.
saip wrote:Will this affect the voting patterns in the near future? UP, Punjab?
It won't have direct effect to go BJP way but indirectly the cash-hoarding relatives of any political family will have less cash for their Rath Yatras etc to spend on. I am sure Modi has factored in the effect on UP election which is the biggest prize for BJP in coming months.
Akhilesh was planning on giving away millions of smart phones to get votes.
Anyway, I am done with groceries for next 1-month. Filled my petrol tank and will watch cricket for next five days.
Dinesh S wrote:But I have to say one thing though- i am glad the govt din't go full retard and ban the larger denominations outright.
Btw guys, sometimes having a black economy is better than having a white economy- the RTE act being a prime example. Without bribes, millions of schools would have closed down already in india as per rte and the brilliance which followed it . But since many here actually support that RTE stupidity, i doubt any amount of me arguing about it will change your opinion on it either. Anyway, me out
If you can post your bile without being derogatory to readers of this forum, it will be much appreciated.
LokeshC wrote:Not that much. Inventory hoarding will go up and compensate.
So the next step should be to disincentivize the housing hoarders.
Better than that, we have to dis-incentivize money hoarding/wealth hoarding all together. Put an artificial cap above which no body should be allowed to earn. Rich getting richer is a curse and we should make sure nobody becomes rich
You are posting rants without any logical statement to back it up. Post something logical with facts instead of your "feelings" and retarded predictions, otherwise please stay quiet.
Sabsey badaa mazaa porki isi ki printing presses, paper stock, ink stock, printed money ki labour bekaar, future operations ke liye jo paisa bheja sab ka sab khatm!
