The Contrarian

“In the investment markets, what everyone knows is usually not worth knowing.”

India’s Cashless Experiment Hatched In The U.S.

Excerpted from Bert Dohmen’s Wellington Letter

Analyst, Mr. Jayant Bhandari, who has worked for a number of well-known financial firms, said the following in an interview with about the crisis in India when the government, by law, called in 86% of the currency in circulation.

When the banks opened, there were long lineups everywhere in the country. People were trying to convert their banned notes into smaller denomination notes, which were still legal tender. But banks did not have those. People wasted a huge amount of time lining up at banks. And then went home empty handed. Even if you could get hold of cash, the maximum allowed was Rs 4,000 (about US$60).

If businesses could not pay, they had to lay off people. If people could not buy, businesses suffered. India is an extremely poor country. A vast majority lives on daily earnings. They had no option but to start going hungry. Anything between 20% and 80% of the economic activity as a result might have come to a halt. Tens of millions of people were laid off.

Now, 50% of Indians have no bank account. So these people did not even have the option to deposit their cash. At least 150 people died in lineups. And then you can imagine how many died unheard and how many tens of millions suffered silently. The situation hasn’t really changed much even after these two months. The problem is that once you destroy the economy, it is extremely difficult—almost impossible—to revive it.

An analyst, Norbert Haering, wrote an interesting and revealing article on the subject.  We have written about this and blamed President Modi’s stupidity which reduced currency in circulation by an enormous 86%. It appears there was more to it.

Now it is revealed that this experiment was invented and promoted from Washington. Here is an excerpt from the article:

The amount of cash that banks were allowed to pay out to individual customers was severely restricted. Almost half of Indians have no bank account and many do not even have a bank nearby. The economy is largely cash based. Thus, a severe shortage of cash ensued. Those who suffered the most were the poorest and most vulnerable. They had additional difficulty earning their meager living in the informal sector or paying for essential goods and services like food, medicine or hospitals. Chaos and fraud reigned well into December.

Four weeks earlier

Not even four weeks before this assault on Indians, USAID had announced the establishment of “Catalyst: Inclusive Cashless Payment Partnership”, with the goal of effecting a quantum leap in cashless payments in India. The press statement of October 14 says that Catalyst “marks the next phase of partnership between USAID and Ministry of Finance to facilitate universal financial inclusion”.

So far, the consequences of this experiment have not been reported by the general media.

Yes, the Establishment wants to get rid of currency notes and replace them with a digital system. That gives incredible power to the leadership of a country. For example, anyone who writes negative articles about the leadership, can have his payment system turned off and he is penniless overnight. With E-Verify, the federal system that employers should check to see if you can be hired, the Establishment can make you unemployable. And with a Federal health care system, you can be shut off from health care at will.

It’s the ultimate system for total control.

Of course, that won’t happen. Right? Our government is benevolent and the people in Congress are our “servants,” as the urban fiction goes.

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