It has been almost a month since Indian Prime Minister Narendra Modi’s decision to invalidate all 500-rupee and 1,000-rupee notes. And so far, it’s been an absolute failure, with angry mobs across India protesting the government’s sudden decision.
India’s actions are aligning with my war cycles that I’ve been talking about until I’m blue in the face.
Plus, it’s just another chapter in the foolish drive for a cashless society that I’ve warned you about here as well. This kind of policy is going to make the bad guys go deeper underground, and could potentially devastate economies of every shape and size.
Modi’s move, known as demonetization, is designed to crack down on tax evasion by forcing people to tender their cash to the bank, where it then can be tracked and taxed.
But it’s not about to work.
In fact, his decision has sucked out 86 percent of currency in circulation and blindsided the nation. This has left Indian citizens scrambling to get their hands on valid currency.
To make matters worse, this is an economy where 98 percent of consumer payments are in cash. With banks functioning with about half the amount of currency they need, the consumer is getting slammed.
It is only a matter of time before India’s economy is crippled by even more dangerous money shortages. And that’s going to put India’s economic output at risk … and the government itself as well.
But this kind of misguided thinking isn’t limited to India. Consider …
Less than a week after the Indian government announced it was withdrawing large bills from circulation, Citibank said that it was going cashless at some of its Australian bank branches.
Plus, Swiss giant UBS called for the elimination of the Australian 100-dollar and 50-dollar bills because it would be “good for the economy and good for the banks.”
Then, just last week, it was reported that Greek banks have proposed a series of measures to limit the use of cash in the economy. And one of the measures proposed is a special tax on cash withdrawals.
That’s right: Greek banks want to tax customers for access to their own money.
Government rational: Cash money can easily and largely be channeled in the underground economy. Therefore, a tax on cash withdrawals will drastically reduce cash transactions and by extension the underground economy.
And while that may sound nice on the surface, it’s not the REAL reason governments across the globe are on the hunt for cash.
You see, as governments watch their revenues fall and are unable to curtail their spending, they start to go broke. As they go broke, they turn against their citizens and seek more ways to bleed money from them while at the same time cutting and even backing out on promises.
As I’ve said before, in bad economic times, the self-interest of government rises to the top. And that’s aligning perfectly with my war cycles, which have been ramping up since late 2013.
This is not the end — it’s just the beginning.