Why Billionaire “Philanthropist” Bill Gates Loves India’s Demonetization Program

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The profit motive in the War on Cash.

By Don Quijones, Spain & Mexico, editor at WOLF STREET.

For the last 12 days, India has been turned into the world’s biggest open-air laboratory for extreme financial experimentation, after the Modi government decided, at the drop of a hat and apparently without warning even the banks, that the two biggest denomination notes were all of a sudden worthless, to be replaced by new notes.

Before Modi’s fateful decision, on Nov. 9, the 1,000 rupee ($14.67) and 500 rupee ($7.33) notes accounted for 86% of India’s cash economy, which itself represented well over 90% of the country’s retail transactions. The result has been widespread financial and economic chaos. Consumption in the cities dropped considerably. In the countryside, where bank branches are few and understaffed, the economy has ground to a shuddering halt. As the WSJ reports, for many the last remaining lifeline has been the barter economy:

Rice, abundant after the autumn harvest, has become a common medium of exchange. Rice for lentils, rice for potatoes, rice for cooking oil, rice for salt.

As is now abundantly clear, the government did not do all its homework before unleashing this demonetization drive. It completely overestimated the country’s readiness for such a radical move. The newly designed cash bills don’t even fit in the ATMs. “You needed to have almost a military-style remonetization effort” to get the new bank notes out, says Partha Mukhopadhyay, an economist at the Centre for Policy Research in New Delhi. “That hasn’t happened.”

Even Kenneth Rogoff, the Pinceton economist who advocates the abolition of physical currency in advanced economies, has expressed reservations about the government’s methods, arguing that a more gradual phase out of the large denomination bills would have had a much less disruptive impact on an economy in which well over half of the population is unbanked.

But in India, a large cross-section of the professional classes supports the government’s anti-corruption drive, in spite of the disruption it has caused. How long they remain supportive will entirely depend on the legislation’s impact on corruption at the top of Indian society as well as the government’s ability to restore some semblance of order.




Another person who has come out strongly in favor of the government’s actions, for very different reasons, is the world’s richest (official) billionaire, Bill Gates, who just happened to be in India on business a few days after the government’s decree.

“The world as a whole will go cashless, but predicting for any country when that will happen is very hard,” he told the Indian prime minister. In Gates’ opinion, India’s latest move should put it at the forefront of the fintech revolution: “All of the pieces are coming together,” he said. “I think in the next several years India will become the most digitized economy, not just by size but by percentage as well.”

Gates has good reason to be excited at such a prospect. After all, both, Microsoft and the Bill and Melinda Gates Foundation stand to benefit enormously from a more digitized Indian economy. As the Indian financial daily Business Standard notes, Gates wants to partner with the Indian government on a whole raft of major initiatives, including cyber crime, digital health, digital literacy, e-agriculture and, of course, e-payments.

During his stay in India, Gates had a meeting with the government’s Minister of Information Technology, Law and Justice Ravi Shankar Prasad to discuss those collaborative opportunities. Industry experts say that Microsoft is already providing back-end support to a number of payment banks in India, which are set to launch in the next few months. According to Business Standard, the Ministry has requested the Bill and Melinda Gates Foundation to be part of the digitizing process.

“It’s a very exciting time in India and some of these digital platform opportunities are really quite amazing,” Gates gushed after the meeting. “The government has invested manpower and the payments banks and payment infrastructure. It is now a case of building the applications on top of those. We need to work on health issues, health applications. Our Foundation is committed to working on those areas – our relationship with this Ministry will be very critical for us,” Gates said.

That the Bill and Melinda Gates Foundation should emerge as an important advocate and beneficiary of India’s demonetization drive should come as little surprise. The foundation has carved out an important role for itself in India since launching operations there in the early 2000s. It is also one of the most vocal proponents of a cashless economy. As Gates himself wrote in the Bill and Melinda Gates’ Foundation’s 2015 annual letter, poor communities in emerging economies — in particular Africa — represent a wonderful untapped potential for e-payments providers (emphasis added):

“(B)ecause there is strong demand for banking among the poor, and because the poor can in fact be a profitable customer base, entrepreneurs in developing countries are doing exciting work – some of which will “trickle up” to developed countries over time.”

In 2012, the BMG Foundation helped launch the Better Than Cash Alliance (BTCA), a UN-hosted partnership of governments, companies and international organizations whose stated mission is to “accelerate the transition from cash to digital payments globally through excellence in advocacy, knowledge and services to members.”

As we’ve pointed out before, in light of the inexorable advance of electronic payment systems, cash’s days may well be numbered. But there is a whole world of difference between a slow natural death and euthanasia. It is now clear that an extremely powerful, albeit loose, alliance of governments, banks, central banks, start-ups, large corporations, and NGOs are determined to pull the plug on cash — and their vehicle of choice is the BTCA.

The BTCA’s membership list reads like a Who’s Who of some of the world’s most influential corporations and institutions. They include Coca Coca, Visa and Mastercard, the Citi Foundation, the US Agency for International Development (USAID), the World Saving Banks Institute, which represents 7,000 retail and savings banks worldwide, the Ford Foundation, the Clinton Development Initiative, and a bewildering alphabet soup of UN organizations.

But as we warned in October, it’s BTCA’s member governments that matter the most, for it is they who will ultimately be shaping or even bending the laws and traditional practices of their respective lands to “accelerate the transition from cash to digital payments.”

BTCA currently has 18 member governments among its ranks, all of them representing emerging and developing economies, the most important testing grounds for cashless economics. They include India, which joined the organization on September 1, 2015, exactly a year after the launch of Modi’s flagship financial inclusion program Pradhan Mantri Jan-Dhan Yojana, which saw 175 million new bank accounts created. In BTCA’s own words, its new partnership with India is an “extension of the Indian Government’s commitment to reduce cash in its economy.”

It’s a commitment that the government has now more than honored. And amidst all the chaos and impoverishment that its actions have unleashed, Bill Gates hopes to reap the benefits. By Don Quijones, Raging Bull-Shit.

This is how “Economic Shock & Awe” turned into “Nightmare without End.” Read…  India Launches War on Corruption, Hits Cash, Chaos Ensues




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  63 comments for “Why Billionaire “Philanthropist” Bill Gates Loves India’s Demonetization Program

  1. Damage Inc.
    November 20, 2016 at 7:38 pm

    IMF WANTS YOU CASHLESS AND A DIGITAL CHIPPED SLAVE:

    In order to be able to implement negative interest rates, Larry Summers, Harvard economist and former US treasury secretary, bluntly demanded the global abolition of all cash currency at an IMF research conference.
    His presentation gave the impression of being a declaration of war against cash. The primary goal according to Summers should be to enable governments and banks to push interest rates below the level of zero. Consequently, every saver would then have to pay a fee for the warehousing of his money. In order to prevent a run on banks, cash would have to be completely abolished.

    Speaking of the mark of the beast, The elite and other oligarchs safeguard their looted money while they want a cashless digital enslavement economy for the rest of us.

    Here is whats been on the horizon for a while now. The plan for a negative interest rate economy coupled with the excuses of combating tax cheats and
    other criminal activity with all of it being a cashless economy. So the freedom loving (/s) Council On Foreign Relations had a CFR live event for the author to talk about his new book, “The Curse Of Cash” on the 29th of Sept. @ 6PM ET.

    He was basically telling you why this is good for you while regurgitating the statist mantra, “If you don’t have anything to hide then this shouldn’t bother you”.

    Get ready for the mark of the beast where they can monitor your every move and turn off your chip at will, of course due process of law not included.

    http://www.cfr.org/transnational-crime/-curse-cash/p38347

    If you are not familiar with NIRP, please read:

    In order to implement N.I.R.P. in the U.S. they will have to go to a totally cashless economy. You cannot have negative interest rates on depositors in banks without a run on the banks to withdraw the cash. People are simply not going to stand for paying a bank to hold their money. So to prevent this the central planners have to eliminate physical cash. This way you have no choice but to keep your money, (which now only consist of ones and zeros stored on a computer server) in a mandatory clearing house, i.e. a bank.

    Also comes with this is forced bail-ins, whereas to stave off the collapse of your bank they will use your deposit/money to prevent it’s collapse. The F.D.I.C. fund cannot cover it. In addition F.D.I.C. rules state that it does not have to give you cash back on the banks losses, it only has to give you bank stocks in lieu of your cash, which at that point the banks stocks will be worthless as the institution has failed.

    https://www.sovereignman.com/trends/the-ban-on-cash-is-coming-soon-18687

    http://govtslaves.info/new-legislation-permits-authorities-to-freeze-accounts-and-use-them-for-bail-ins/

    • David G LA
      November 21, 2016 at 12:19 am

      Damage inc.,
      Are you sure that the FDIC can substitute shares for dollar losses? I’ve never heard this before. Wolf?

      • Damage Inc.
        November 21, 2016 at 6:29 am
        • November 21, 2016 at 9:21 am

          That debt-to-equity swap is only for “unsecured debt” beyond the insured deposits. The insured deposits remain sacred.

      • November 21, 2016 at 9:20 am

        “Damage Iinc.” is wrong. FDIC INSURED DEPOSITS will always be paid at face value.

        Only “unsecured creditors” that are NOT insured depositors may be subject to a debt-for-equity swap.

        • Petunia
          November 21, 2016 at 10:06 am

          How big is the FDIC fund these days, because it has always been historically underfunded. Could it cover any of the big banks?

        • robt
          November 21, 2016 at 11:13 am

          Petunia, the FDIC fund covers only a miniscule percent of deposits, i.e. they have 25 Billion against maybe 10 Trillion in deposits. But then, banks only carry a miniscule amount of cash relative to their deposits – any greater amount would be excess under normal operating circumstances.
          But infinite supply of money can be created instantly. It’s an interesting thought experiment to consider what would happen if, say 5 Trillion dollars vaporized, (which could happen if some banks were caught on the wrong side of derivative positions, which amount to hundreds of Trillion dollars), and 5 Trillion were created instantly to restore affected deposits up to the FDIC limit. Would everything just be OK?
          Intuitively, it would seem like nothing happened, but I invite opinions.
          Anyway, I don’t keep much over the insured limit in any one bank. And if one bank offers various Guaranteed Investment Certificates (Canada), or whatever the equivalent is in the States, I just get GICs from each insured issuer not over the max.

          About banks and derivatives, a bank in Canada got caught on the wrong side of an energy trade some years ago, and lost 700 million (but it didn’t cause any severe distress, just reduced profits for the year), so it can, and will, happen. It also makes you wonder why a bank was speculating on energy as part of their business plan.

        • Petunia
          November 21, 2016 at 11:58 am

          My impression of what Sheila Bair said at the time of the financial crisis is that they could have saved insured deposits but bond holders and equity would have been wiped out. This is why they bailed out the banks, because the money left in the system would not have been enough to recapitalize them. This is also why they will keep getting bailed out and can do whatever they want, still. And this is also why they need to be broken up and regulated as utilities.

        • JMiller
          November 21, 2016 at 1:56 pm

          Mr. Richter, you are correct. Insured depositors will be covered for the dollar amount that is insured. However the dollars that they get may not be worth as much as before.

          Petunia, the FDIC insurance fund, while underfunded, has a credit line with the Treasury should they need it. So all insured depositors will get paid if there is any bank failure. And when a bank fails the FDIC has never had to pay out close to what the failed bank had in insured deposits. If fact, most times when a bank fails it gets acquired by another bank and the deposits are moved to the new bank with little or no loss to the FDIC insurance fund.

          robt, actually the FDIC insurance fund has about $78 billion in it. They also have a credit line with the Treasury if they need more. And the FDIC fund is used only to cover insured deposits which is not $10 trillion but about $6.5 trillion.

        • robt
          November 21, 2016 at 7:06 pm

          JMiller:
          Yes, infinite amounts of money can be created instantly, to cover any shortfall, as I say. Also as I say, the assets of the FDIC, however much they are at any particular time, are miniscule relative to their exposure but this is irrelevant, first because it’s just not necessary to have more, and second, because the government can create as much money as it wishes should the FDIC needs be greater in an emergency.
          What I was interested in was anyone’s thoughts regarding 5 Trillion dollars vaporizing (deflationary?) due to banks’ now- customary risking of assets and customer deposits, to be restored by 5 Trillion dollars created by the government (inflationary?). Would the effect be zero, neutral? If it happened overnight would anyone notice?

        • Maximus Minimus
          November 21, 2016 at 9:30 pm

          At face value, that is probably correct. What will the face value buy you at that point is another matter.

        • November 21, 2016 at 9:40 pm

          Yes, that’s always the problem.

    • babu
      November 21, 2016 at 1:41 am

      Cashless? Poor? Same thing.

    • November 21, 2016 at 9:17 am

      You’re fear-mongering about the FDIC, and you’re wrong.

      FDIC-insured deposits have always been and will be honored in cash at face value (usually transferred to other banks).

      “Unsecured creditors,” NOT INCLUDING INSURED DEPOSITORS, may be part of a debt-for-equity swap, as is typical in bankruptcies.

    • JMiller
      November 21, 2016 at 1:31 pm

      Bail-ins are applicable only to Systemically Important Financial Institutions (SIFI). Insured deposits of those institutions are not part of any bail-in law. They are specific stated to be excluded. The FDIC insurance fund has nothing to do with covering bail-ins. The FDIC covers insured deposits only. However uninsured deposits may be used in bail-ins. That article from govtslaves is misleading.

    • JMiller
      November 21, 2016 at 2:16 pm

      Damage Inc.,

      Abolishing cash will not prevent bank runs as you state. Bank runs can happen just as well by having large numbers of depositors take money out of the bank electronically or by writing checks or by closing their account and getting a cashier’s check. There is also something called a silent bank run.

      http://www.investopedia.com/terms/s/silent-bank-run.asp

      Only capital controls which prevents people from closing accounts and limits the amount one can withdrawal from their account can stop bank runs.

  2. NotSoSure
    November 20, 2016 at 8:45 pm

    Can this article be fixed? “Before Modi’s fateful decision, on Nov. 9, the 1,000 rupee ($14.67) and 500 rupee ($7.33)”

    Yes, but they are also introducing the 2,000 rupee bill.

    Until such time that it’s proven that they are going to phase out the EVEN BIGGER new denomination bill, we should probably not go into too much speculation.

    • milking institute
      November 20, 2016 at 8:56 pm

      Not much “Speculation” required to figure out where this is going.lol.

    • Ricardo
      November 20, 2016 at 10:28 pm

      The “new” bill that the article mentions is too small for the ATM machines is the 2,000 rupee bill.

  3. Kevin Beck
    November 20, 2016 at 9:28 pm

    What humanity needs is a rapid phase-out of Kenneth Rogoff’s ideas.

    And the more Bill Gates spouts his ideas, the more dangerous he becomes.

  4. Petunia
    November 20, 2016 at 9:29 pm

    So, Bill Gates was in India when they pulled this stunt. This stinks all the way from India. Where’s Warren?

    Just a few other thoughts. They designed a new note, which I assume takes time, that doesn’t fit its ATM’s. Do the Indians really believe that, I don’t. They also didn’t print enough new notes, even though they know exactly how many need to be converted. Pay attention folks.

    To those of you who think gold is going to save you in a crisis, take a good look. This is the second recent example of a country in financial collapse, Venezuela being the first. You are investing in the wrong thing, if you are investing in gold.

    • milking institute
      November 20, 2016 at 10:05 pm

      To all that are still unfamiliar with the history and role of gold: It is NOT a “investment”, gold is money or you could call it a insurance policy against fiat debasement and financial instability. there is a reason the current gold price is included in EVERY live ticker of every finance news org along with Oil,the Dow,Nasdaq etc. nobody forces you to have part of your holdings in gold but ignorance is not a great base for giving advice,jmho https://snbchf.com/2016/11/bhandari-gold-price-skyrockets-india-currency-ii/

    • Frederick
      November 20, 2016 at 11:50 pm

      I totally disagree with Petunia I believe in having a portion of your liquid wealth in precious metals along with physically held cash of various denominations But thats just me I guess to each his own

      • babu
        November 21, 2016 at 1:42 am

        I believe in physical gold.

    • anonymouse
      November 21, 2016 at 12:35 am

      Sure, I hope YOU are pay closer attention or maybe you’re clouded at viewing what’s really happening. Or some other motive?
      Those in Venezuela that invested in goods, commodities, and other currencies (https://news.vice.com/article/unable-to-get-dollars-venezuelans-turn-to-bitcoins) are probably surviving. Given Indians are more attracted to Ag/Au, they are benefiting from holding something other then their own currency and Ag/Au IS money.
      Nothing about your statement has any merit or backing. When currencies fail any and all other assets become trad-able.

    • Tinky
      November 21, 2016 at 9:41 am

      “This is the second recent example of a country in financial collapse, Venezuela being the first. You are investing in the wrong thing, if you are investing in gold.”

      Where do you come up with such nonsense? Had one exchanged Bolivars for gold anytime between November of 2014 and March of this year, one’s “investment” would currently be up around 57%.

      • Petunia
        November 21, 2016 at 10:08 am

        Had you invested in cans of Spam of tuna fish you would have been up hundreds if not thousands of times your investment.

    • robt
      November 21, 2016 at 11:55 am

      India is not in financial collapse, there’s just confusion and a temporary shortage of cash because the plan was not effectively implemented.
      Even the poor people have some gold, so in a bind, they can use it to buy what they want (which is why it’s part of the Indian culture), if they can’t obtain something by pure barter.

  5. milking institute
    November 20, 2016 at 9:33 pm

    Next stop:mandatory chip implants. required to receive your health care benefits,Mr Gates,always at the forefront of human enlightenment and caring would certainly be a big advocate. these sillicon valley MINI ME’S will stop at nothing to pursue their goals of total control and profit. i used to think this was tin foil hat conspiracy stuff but it’s now rapidly approaching….

    • Frederick
      November 20, 2016 at 11:52 pm

      Isnt that what Aaron Russo warned us about twenty years ago milking He got that info from his friend Nick Rockefeller For those who havnt seen it go to youtube and have a look

  6. nick kelly
    November 20, 2016 at 10:16 pm

    I’m confused- is the premise of the article that Bill and Melinda Gates will personally make money from their Foundation?
    If so I didn’t know that- I thought they were genuine philanthropists.

    Now if Gates is happy merely because his nerdy (in my opinion) idea of a digital economy looks closer- well to a shoemaker there’s nothing like leather.
    If his ‘ulterior’ motive is seeing a concept he believes in come to pass, is that enough to put “philanthropist” in quotes, implying he isn’t really any such thing?

    • November 20, 2016 at 11:47 pm

      Microsoft will make money, among other enterprises Gates is involved with.

    • Frederick
      November 20, 2016 at 11:55 pm

      Nick I wouldnt let his looks fool you Just like with his good “friend” uncle Warren Wolves in sheeps clothing for sure

    • Petunia
      November 21, 2016 at 9:37 am

      The Gates Foundation was a tax shelter and trust fund for the Gates and Warren Buffet.

  7. Curious Cat
    November 20, 2016 at 11:25 pm

    Once again the policies are glibly made by those who don’t need to suffer the immediate effects. I’d pay a lot more attention to what Bill Gates had to say if he had to stand in line waiting for cash to buy food. So all those in power can do is stand around and say “It’s gonna be great. It’s gonna be great.” Bullshit. It may end up great for them, but not for the other 99%.

    • Frederick
      November 20, 2016 at 11:57 pm

      Cat especially if you think for yourself and rebel in any way then they will just shut your chip off Done

  8. Chicken
    November 21, 2016 at 12:58 am

    in India, a large cross-section of the professional classes supports the government’s anti-corruption drive, in spite of the disruption it has caused.

    The new world order. Odd though, supposedly Soros added to his ABX

    Petunia, I don’t quite understand the point you’re making concerning gold but it seems if we’re all going to be chipped and every aspect of our lives is through microsoft (Bill gates is the Devil himself), not convinced gold would provide a means of protecting our dwindling pocket wealth?

    Anyway, I predict there will be backlash and it’s already gaining momentum, maybe that’s the plan?

    • Petunia
      November 21, 2016 at 9:48 am

      My point really is that gold as a store of wealth is obsolete in the modern world. While it is still considered important in the third world for historic reasons, you can see that people are bartering for useful items, food, batteries, petrol, etc. Gold is just like cash, only less transactional. If you use the example we have, India, those people would have all been better off diversifying into many global currencies. I bet you can still buy stuff in India with dollars, euros, and yen. Gold holders have to convert gold, for a fee, before they get any other type of money or asset.

      • Petunia
        November 21, 2016 at 9:50 am

        P.S., I agree with you about Gates. Also we live in a time when crises are manufactured for political gain to the detriment of democracy. Stay tuned.

      • dbl
        November 22, 2016 at 3:42 pm

        But Silver is way more transactional than Gold.

  9. M Singh
    November 21, 2016 at 1:14 am

    The Indian demonitisation being painted as a war-on-cash is incorrect, as newly issued Rs 2000 & Rs 500 notes are legal tender. That it should have been planned better is another matter. What is a cause of concern is the type of thing that the ECB did in the EU by withdrawing the 500 Euro note, thus strengthening the hand of the neo feudal banking elite by digitising most of the European money supply.
    India’s demonitisation has emptied the coffers of the insurgent groups who loosely control 1/4 of it’s land mass in the NE, Central & Eastern India. Also, it has hit political funding by cleaning out the real estate mafia’s war chests. All in all a great move for a country wracked by corruption, the dark legacy of the Nehru family.

    • Realist
      November 21, 2016 at 2:09 am

      M Singh: Correction the € 500 note wasn’t withdrawn, it is still circulating and legal tender, but the ECB did stop printing new.such notes.

      • M Singh
        November 21, 2016 at 2:30 am

        Thanks for the correction.

    • Don Quijones
      November 21, 2016 at 5:10 am

      M Singh,

      Cearly Modi’s move has hit political corruption where it hurts — the wallet. But as to the question of whether Modi’s actions should be painted as part of a war on cash, the best place to begin is with the chosen title of his program: demonetisation (meaning: to end something — e.g. gold or silver — as no longer the legal tender of a country. That’s clearly what just happened: 86% of India’s currency stopped being legal tender).

      It’s true that the government has introduced 2,000 rupee notes and new 500 rupee bills, but the big question will be in how much volume. If the words of India’s finance minister, Arun Jaitley, are any indication (and they should be since he is the man in charge of the demonetisation program), the Indian government has a very clear goal in sight: to usher the country toward a cashless economy:

      “The logical step was India has to move towards a cash-less society. Now will India become cash-less overnight? The answer is no. But this will be one very significant step where people have been shaken, people have realised and I can tell you the bulk of India is welcoming it.”

      Here’s another quote from the same man:

      “This one decision will change the way people spend and keep their money. It will take India towards a cashless economy, it doesn’t merely push the country in that direction, but significantly pushes it,” Jaitley added.

      • M Singh
        November 22, 2016 at 1:07 am

        Don Quijones,

        Mr. Jaitely, the Indian Finance Minister, no doubt sees demonetisation as a step towards a cashless system. And he may well think that he’s doing “God’s Work” as they do at the US Fed & ECB. But, that digresses from the primary issue.

        The moot point for India, is that demonetisation has hit the core of corruption that has plagued ordinary Indians for years. In addition it has enhanced India’s security by emptying out the war chests of terrorist outfits.

        No matter what Mr. Jaitley may say, it’s nigh impossible to digitise 70% of India that is rural. Even if they did, by that time the current predatory financial system will be long gone.

        Thus I see this as a war-on-corruption and not a war-on-cash.

        Warm regards

        • Catherine
          November 22, 2016 at 9:27 am

          I’m an American who’s lived in India for the past 5 years now, and I find this article showing its Western bias. I should preface this by saying that I’m someone who is very concerned about any government eliminating cash. It’s fundamental to privacy, as I see it.

          However, the Indian economy is nothing like that of most Western countries. Here in India, the rich hoard bundles of cash in their mattresses. The elite put a literal truck full of cash to be shuttled to candidates during election time (and the politicians pay for votes in cash to constituents). Many real estate transactions can be 50% “black money” or, cash… so, a $1 mil flat in Delhi might be paid for in 50% cash. We’re talking the actual, physical notes. It’s crazy, and as an American with a regular savings account and normal debit card, I’d never seen anything like it. There’s an entire separate cash economy, and unfortunately, India’s terrible infrastructure stands testament to the realization that the cash-holding elite aren’t paying their fair share into the coffers.

          Politicians themselves are also one of the largest holders of cash, because this is still a country where bribes are the norm. To pay bribes requires cash, and this subsequently perpetuates this problem.

          Thus, this surgical strike on cash is less about the desire to eliminate it (as evident by the roll out of new currency notes), and more about the desire for this unaccounted, untaxed money to be purged.

          The government fully acknowledged the interim was going to suck, especially for the poor. This article is right about that. But in the long-term, the goal is to eliminate both corruption and the sizable dark underbelly of India’s cash economy.

          As M Singh points out, India’s banking system has such a long way to go before it can be digitized owing to the rural populations. So, I can’t see this as a conspiracy between Modi and Western interests to bring the country one step closer to a cashless economy. That day may come and those may be the ultimate step, but that wasn’t the biggest goal of this program.

  10. walter map
    November 21, 2016 at 8:46 am

    Frederick / milking institute:

    I have long since predicted corporate totalitarianism. How total, and how soon, I leave to your extrapolation, but it should be quite clear that it hasn’t even gotten ugly yet, much less weird ugly.

    • Captain Kurtz
      November 21, 2016 at 11:47 am

      The idea of a cashless economy will force many back to the barter stage, which will drive many of you gold bugs crazy.

      Gold will be as worthless as cash, cuz you can’t eat it, drink it, put it in your tank and its a bitch to carry around cuz its so heavy, and cuz you can’t get drunk off it, Gold and silver will be close to worthless in the barter economy.

      Got Rice

      Got booze

      Got Water

      Got Salt

      etc. etc…..

      AU/ AG just fell way down the list of the things that will be important in the future…..

      PS As for you gun nuts, lead won’t be much help either,…. unless you are bartering with it.

      • Petunia
        November 21, 2016 at 12:04 pm

        That’s what I keep seeing over and over again.

        • nick kelly
          November 21, 2016 at 2:53 pm

          But that doesn’t make it true.
          Look at the post- apocalypse fantasy world Kurtz imagines.
          One near and dear to preppers

          We’re in a primitive barter economy – got water, etc.
          But he doesn’t like gold because you can’t ‘put it in your tank’

          Huh?
          So are there still oil wells, refineries, service stations, etc.etc. not to mention spark plugs, etc. Do they want to barter?

          It’s all very well to think about what might be the case in the future, but the situation NOW is that gold is universally exchangeable for currency at very reasonable commissions anywhere in the world.
          It just isn’t convenient for retail transactions.
          Neither is a thousand dollar bill- you’ll have to get it changed at a bank.
          As an American you currently occupy a bit of a privileged position re: your currency. It is the most acceptable currency world wide.
          But that recent darling of the BRICS, Brazil, has a currency much weaker than gold.
          One test of any store of value is what the seller will buy it back for- right now.
          If you bought Brazil reals and then wanted to sell them back again, you might take a 20% hit.
          The gold dealer will buy back silver or gold for really small costs- for a sizable amount (cuz there’s the guys time) you might get below 2%.
          There will be a gold dealer within at the most an hour from where you are now.
          You can buy it for around 1200 US$.
          But in India it’s 2000 US$

          BTW: if you buy the idea that gold is pretty much useless, silver has a whole bunch of industrial and medical uses.

          Personal note: I am greatly attracted to the myth of the post- civilization survivor(s) myself.
          As a young guy who liked Westerns- I can remember watching the hero ride off into the sunset, and thinking how great that was.
          But where is riding to? Where is all his camping stuff, if he isn’t heading to a house? If he’s in a film made in the badlands what does the horse eat?
          If he actually is a lone individual, he can only be a thief.
          I think the lone individual survivalist is primarily a male thing, something like the secret agent fantasy; women know its BS.

          When someone says: got water, got salt? ask if we’re going back 200 years or 10,000 years.
          Re: got salt. This is hard to obtain in most places. It is certainly a barter good, but its production and delivery is a collective endeavor of a civilization- some of the earliest trade routes are for salt.
          And in urban centers, Athens, Rome etc, you could pay for it with gold.

      • milking institute
        November 21, 2016 at 8:37 pm

        Ahh,the precious old argument “you can’t eat it!” seriously? assuming you have any substantial amount of wealth to protect,you are telling me to built a warehouse to store 10 tonnes of beans? because that’s what it would take VS 10 ounces of gold witch i can easily carry on board any international flight of my choice (if in form of personal jewellery,beyond the reach of customs,just in case you’re wondering) And how are you planning to protect your warehouse full of beans and rice from the hungry hordes,with a stick? since you equally dismiss ammunition in your brilliant survival plan…best of luck!

        • Petunia
          November 22, 2016 at 1:09 pm

          If you are buying gold because it is a concentrated form of money, may I suggest you try stamps. I met a guy once who carried a $5M one in his wallet.

  11. Rihana
    November 21, 2016 at 10:18 am

    Funny how the word “demon” is right in the title.

  12. Steve
    November 21, 2016 at 6:18 pm

    @ nick kelly, you said a lot of thought provoking things about gold but this especially caught my eye: You can buy it for around 1200 US$. But in India it’s 2000 US$

    Seems as if carrying over three or four ounces would pay for the plane ticket and maybe more. But I’m a bit curious about the particulars. Will there be hassles with the TSA? Would I need bodyguards in India? Is $2000 a black-market price? If at a legal shop, do I need to show ID or deal with any paperwork? Please advise.

    • milking institute
      November 21, 2016 at 8:57 pm

      A simple google search will answer many of your questions Steve, India has tightened Gold imports severely in the last few months so there is a massive gold smuggling industry emerging,therefore the premium buyers will have to pay. most “official” gold will be bought on the DUBAI exchanges and brought in via airline travel. not sure what the current limitations are but obviously it’s not that easy. as for TSA regulations,pesonal jewelry is exempt from any scrutiny,not sure about the indian customs regulations at this point. friend of mine took a 125 gram neck-less last year,worth roughly 9000.00. if you like adventure,there you go! lol

    • nick kelly
      November 23, 2016 at 8:26 pm

      Milk did a good job re: yr question.
      If you think the other bank notes were on Modi’s hit list- the Indian govt has been anti-gold with a vengeance for decades. It has been parachuted in a ton at a time- like a drug.
      The latest campaign appeals to patriotism, saying gold is un-Indian.
      There have also been crackdowns on black market exchange of $ US etc.
      At one time a tourist to get India Rail pass had to show receipt for where he had changed money.
      The lure for hard currency and gold are related but there is more to it.
      Gold, as in the West is used for ornamentation but more so, especially by women.
      I don’t pretend to know much about this currency swap but the implementation looks hare-brained. Tough on the poor.

      A gold belt buckle would weigh several ounces.

      I expect the sentences for gold smuggling per se are pretty stiff.

  13. Mike
    November 22, 2016 at 5:09 am

    We’ve been in Rishikesh since they started this. It seems to be a disaster. The first week all of the ATMs were closed. The next week 2 were open but you could only get out 2000 rupees (35usd). Now they’ve been closed for the past 2 days. The first week lots of foreigners were getting out. I talked to the manager of a general store. He said his business is off 50%. The foreigners are bringing in foreign exchange. It isn’t delayed consumption. We were planning on staying 3 months. Now we are thinking 1 month is enough. It is amazing Modi still has support.

    As for tackling corruption. One has to wonder how much these corrupt people actually had in cash as opposed to other assets as well as overseas.

    • November 25, 2016 at 9:34 am

      Am from India and I guess am qualified to answer this..

      There is an extreme hardship – no doubt.. But did you also notice that people were wearing a large smile and were appreciating this move ? Why ?

      For the past 60 years a stupid government ruled India and ruined it completely.. It is being alleged that during that time, Fake notes were LEGALLY printed by the then government to help the party leader – who jumped to India from Italy..

      Indian economy would have died in 3 years, and Modi had to restart the stuff. 87% of FAKE CURRENCIES are in 500 and 1000s. I’ve seen people having room full of unaccounted cash – numbering to millions of dollars. while poor people are suffering for a morsel of food.

      You apparently have no idea on the background. Modi is a God’s gift for us. Had he not won, India would have gone to shambles…

  14. Phoenix Pilgrim
    November 22, 2016 at 1:40 pm

    The aspect of the forced move to digitized monetary exchange that is never mentioned in any of these articles is the transaction fee for the exchange. Nor the inflation that this exchange “tax” inherently adds to the cost of goods and services. I’m quite sure Mr. Gates et al will not be waiving the fees to help society become more “efficient” in transferring wealth to the elites.

  15. Shawn
    November 22, 2016 at 3:28 pm

    Gates is a carpetbagger. Since most of India’s economy is ‘black’, meaning the ‘black’ economy is the real economy in India which sustains hundreds of millions of people. All this is going to end very badly for Modi.

  16. November 25, 2016 at 9:54 am

    Ok. I guess I should jump in now and can no longer be a silent observer on these comments. First of all, thanks for the concern on India.

    There are enormous hardships – probably because – people are pushed out of their comfort zones. But do you still notice that millions of Indians welcome this step of the government with a smile on their faces ?

    We WERE ruled by highly corrupt politicians for close to 60 years. We had a respite during 2000-2005 – but after that again corruption came to the forefront. It is being said that the previous government had “Legally” printed close to USD 20 Billion of Fake Currency for funding their elections. Do you believe this ?

    India is a great country made bad by Corruption. Decades of Corruption since independence – people got so used to corruption. Basically corruption is a part of our comfort zone. Now we have a strong leader who is challenging the status quo. He is pushing people out of that comfort zone.

    He has declared an all out war on Black Money.. To all those who say he did not plan, let me give you a short background.

    1) Modi won handsomely with a promise of taking STERN AND TOUGH action against Black Money / Corruption.

    2) In India only 3% of the people pay tax. RBI expects 30% of money as Tax. Do you get the idea ? People hoard PHYSICAL CASH. I have witnessed room full of Rs.1000 notes – all unaccounted – worth about 10 million dollars. As a result country’s economic conditions have the potential but is never realized.

    3) Fake Currency are estimated at Rs.60 Billion dollars at any given time – this is money under circulation at any given time.. The hoard of fake cash exceeds hundreds of billions of dollar.. This fake currency is used during elections and by terrorists..

    4) Local wholesale vendors who usually make tens of millions of dollars worth sales each month – rarely account their wealth. Mostly they deal with cash. They will declare about 1/10th of their income and pay tax on that. While the reality is they hoard the rest of the money in cash.

    Now coming back to the planning part. Government planned it extremely well. He has been warning us on this for close to one full year now.

    1) As soon as Modi won, he launched the “Jan Dhan” scheme (Banking for all scheme). A zero balance bank account was being handed over to the poor people all over India. They were given a debit card (India’s own “Rupay” network that is intended to compete with VISA and Mastercard). Many people who did not have bank accounts signed up with the government’s scheme.

    2) It was decided that cooking Gas subsidies (GOI subsidies cooking gas bills) would directly be transferred to bank accounts. People opened the account in large numbers and almost all of the indians then had their account.

    3) Government encouraged cashless finance transactions. For almost one full year as a part of “Digital India” initiative.

    4) Voluntary income disclosure scheme was introduced and ran for one full month before this shock announcement.. Modi warned those having black cash that they would lose their sleep after September 30th if they did not disclose. There was a 20% penalty on the tax paid in this scheme. The remaining income they can keep (close to 65% people can retain)… It attracted about USD 50 billion of black money. It was duly disclosed.

    5) After the Indian festival of Deepavali (festival of lights, good over evil) this move was announced. Rs.500 and Rs.1000 was withdrawn overnight… Corrupt People were either burnign their money or throwing it in rivers.. Indian government has accounted more than USD 100 billion worth of money till now..

    6) People – despite the inconvenience are largely supportive of this move. An independent survey of CVoter and Huffington post revealed that over 82% of Indians support the move and over 67% of Indians were satisfied at the preparation of the government.

    7) No one DIED due to demonetization. It is a media propaganda. Basically any death anywhere is being linked to this. A baby sadly died because the hospital they took them to did not have medical facilities. But media linked it with this.

    8) The crowd now is considerably reduced though cash is in severe shortage. Modi has requested us for 50 days of support until December 30th. Hopefully things rectify..

  17. EcuadorExpat
    November 27, 2016 at 10:01 pm

    I have read that 92% of all retail sales in the USA are electronic transactions. My two millennial sons said this number was correct for them. Anybody can get a card scanner for a smartphone literally for free. Want to split the check at a restaurant? I can process your debit or credit card sitting at the table in the restaurant.

    Getting people connected to some kind of an account is the only barrier to a cashless society. The technology has been around for years. Ever been to a carnival ride where you bought tickets for rides at a kiosk? That’s the principle that can take any third world market cashless. That government ID with a magnetic strip or a chip is the only thing necessary to connect you to your account.

    Every tax authority in the world issues tax ID numbers. There is no reason why they cannot Automatically create an account at the country’s central bank when they issue that number.

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