A Brief Recap

India’s Prime Minister announced on 8th November 2016 that Rs 500 and Rs 1,000 banknotes will no longer be legal tender. Linked are Part-I, Part-II, Part-III, and Part-IV, which provide updates on the rapidly encroaching police state

Expect a continuation of new social engineering notifications, each sabotaging wealth-creation, confiscating people’s wealth, and tyrannizing those who refuse to be a part of the herd, in the process destroying the very backbone of the economy and civilization.

There are clear signs that in a very convoluted way, possession of gold for investment purposes will be made illegal. Expect capital controls to follow. Chaos from people’s inability to access the money in their bank accounts is now spreading to the people who have so far been unaffected: the middle class.

This is a completely unnecessary man-made disaster, with the single aim of glorifying  Narendra Modi.

 

modi

Indian prime minister Narendra Modi

Photo credit: Reuters

 

Fracturing Institutions

Several petitions in various courts across India were immediately filed against the central bank, the Reserve Bank of India (RBI), for repudiating its IOU obligation which the currency bills represent, after Modi’s announcement on 8th November.

Several postponements later, the first hearing at the Supreme Court will likely take place on 5th December 2016, almost a month after the announcement of the ban. That does not mean that the court did not deliberate over “more important issues” affecting this wretched poor country.

It inter alia heard a petition and passed a judgment that makes playing the national anthem compulsory at cinema halls before the start of every movie, to promote nationalism. It also decreed that people have to stand up while the anthem is played. Henceforth one can be charged with sedition for not actively showing proper respect to the flag and the anthem.

Only someone very numb can avoid being horrified by this.

 

By law, the national anthem must henceforth be played in Indian cinemas before the start of a movie (as an aside, the anthem sounds actually interesting from a musical standpoint). Per the court’s order, everyone present must stand up while it is playing, so as to show proper respect. A failure to stand up can lead to an indictment for sedition, and sometimes it leads to offenders being berated and getting beaten up on the spot by irate nationalists. Happily, it is not yet mandatory to shout “Sieg Heil”. [PT]

 

Salaried middle class Indians — lacking moral instincts and incapable of imagining the concept of individual liberty in this extremely irrational society — are happy with the court’s decision. Insecure in their own skin, they prefer the comfort of the collective. They are the true source of this collectivist poison.

Indian courts are often referred to as “honorable court” and they are very actively taking steps against anyone who shows the slightest of disrespect or challenges their judgments. So any direct challenge to their “authority” would be unwise.

Indian institutions have continued to deteriorate and mutate since the British left India. They are now merely hollowed out structures, devoid of any meaning or essence. We are in the final phase in which these institutions are crumbling, but in the meantime pomp and show are amped up to fool the gullible.

Indian culture in its immense irrationality does not provide the glue to even maintain these institutions, let alone improve on them. That glue could only have come from reason and moral instincts.

Anyone with a sense of history also realizes that India produced its finest leaders while it was still under the control of the British. It was during British rule that a cultural renaissance was happening in India, which ended with the emergence of the politicized, so-called independence movement.

Britain had set up institutions that allowed the ablest and the best to rise up. Not only is this no longer happening, but Indian institutions today actively suppress the ablest and the finest, as the recent judgment of the Supreme Court on the anthem exemplifies. This happens because most Indians euphorically support suppression of the individual both in theory and practice.

Institutions of liberty have mutated into institutions of slavery.  It is this inversion that is hastening the rapid decay of Indian society. India must eventually end up with institutions that reflect its underlying culture: a hugely fractured, tribal set-up, and very likely a disintegrated India.

 

ruinsWithout reason, institutions are destroyed by entropy

Photo via indiaspend.com

 

The Forgotten Ones

Modi’s policies on demonetization are changing on a daily basis, sometimes more than once a day. This had to happen, for once you take up a mindless social engineering project of this enormity — killing 88% of monetary value in circulation overnight in a country where most people depend on cash — massive patch-up jobs have to be undertaken for the foreseeable future, helping India to degrade and sprint toward becoming a police state.

Alas, there are simply not enough patches available. India’s economy and society will are facing massive problems.  So far, it has been the poorest citizens who have suffered the most.

The horrendous struggles of more than 50% of the population, whose situation is worse than that of the average African on virtually every metric – who have no toilets, no electricity, no water supply, no access to even primary health care or basic education – will go unrecorded.

These poorest of India’s people are seen as nobodies. International organizations only have an interest in them in terms of aggregate headline figures — Gini coefficient, poverty level, population growth, etc. India’s middle class, while it might claim to be against the caste system, does not really see these people or account for them, as they are widely perceived as mere servants.

The western media, the IMF and many international economists — if they are paying attention to the current demonetization at all — are siding with the Indian government. It is as if the forces in favor of one-world government and their craving to control people’s cash and private lives have become their sole aim in life.

Obsessed with Keynesian economics, they think that all one has to do to increase wealth is to finely adjust the currency-printing machine. Most of these people have never studied philosophy, watched or understood human psychology, investigated society in its complexity outside of econometrics and statistics, or participated in running a business.

In their eyes, India is on the path of progress and institutional reform. From their perspective — colored by a rather simplistic, socialistic indoctrination — they are completely failing to see the situation in its entirety, particularly the massive suffering the ban on currency has inflicted on society and the inevitable systemic risks it has imposed on India’s future.

 

Residents of Sanjay Colony, a residential neighbourhood, crowd around a water tanker provided by the state-run Delhi Jal (water) Board to fill their containers in New Delhi June 30, 2009. Delhi Chief Minister Sheila Dikshit has given directives to tackle the burgeoning water crisis caused by uneven distribution of water in the city according to local media. The board is responsible for supplying water in the capitalThis is the water supply for the lucky ones. Many do not have even this.

Photo credit: Adnan Abidi / Reuters

 

A Banana Republic in the Making

Our interest here is in exploring deeper undercurrents and what they mean for the future of India. Every single indication is that India is on an inevitable path to becoming a full-scale police state.  But the Indian police state will not be a Nazi-kind of system.

Being inherently disorganized, undisciplined and lacking the capacity to plan and having no commitment to values, India will go the way of autocracies in Africa, the Middle East, Pakistan and Bangladesh. With GDP per capita of USD 1,604, India is already drenched in poverty, and wallowing in suffering and disease.

In India, suffering and violence — not reason or moral instincts — bring stability. The concept of reason is conspicuous by its absence in Indian society. Such societies — as in the Middle East, Africa, and elsewhere in the backward part of the world — tend to go through a phase of violence before stability arises. If they could reason, they would be able to bypass the phase of violence.

The last thing anyone should do is to transplant such people into a different setting or to change the structure of their societies, as Modi has tried with the demonetization edict. People with tribal mindsets do not flourish, assimilate or evolve when transplanted or destabilized.

This has been the consistent experience from trying to enforce institutional changes in these countries through top-down mechanisms. In what way have Iraq or Libya become any better after their ruthless rulers were forcibly removed?

Societies lacking in reason also lack moral instincts. They are mostly oblivious to the pain of other people. In India, those from the lower castes — even though the formal caste system is crumbling  — do not register as human beings in the minds of members of the richer classes.

Scores of people have died because of lack of treatment, having to queue for too long in their old age, etc., but in the imagination of the salaried middle class they are mere numbers, all somehow contributing to the greater good.

 

Throngs of desperate people are storming a bank. How can such scenes possibly strike anyone as symptomatic of “good economic policy”? [PT]

 

But now, with the month of November having ended, salaried people are starting to get hit as well. The money that they thought was safe in the banks is no longer available. It is now their turn to join the queues and return home empty-handed, as the banks have mostly run out of cash.

 

banks-atms-crowd-pti_650x400_51478859671The middle class is now starting to suffer as well, as cash in the banking system has been depleted

Photo credit: PTI

 

inside-the-banksPensioners and salary earners will likely change their view about the demonetization policy as they increasingly realize that their pensions and salaries are now stuck in the banks

 

Gold Bullion Is Now Effectively Illegal

Assaults on people’s private property and the integrity of their homes through tax-raids continue.  In a recent notification, government has made it clear that any ownership of jewelry above 500 grams of gold per married woman will be put under the microscopic scrutiny of tax authorities.

Steep taxes and penalties will be imposed on those who cannot prove the source of their gold. In India’s Orwellian new-speak this means that because bullion has not been explicitly mentioned, its ownership will be deemed to be illegal. Courts will do what Modi wants. Huge bribes will have to be paid.

Sane people are of course cleaning up their bank lockers. The secondary consequence of this will be a steep increase in unreported crimes, for people will be afraid of going to the police after a theft, fearing that the tax authorities will then ask questions. At the same time, the gold market has mostly gone underground, and apparently the volume of gold buying has gone up.

The salaried middle class is the consumption class, often heavily indebted. Poor people have limited amounts of gold. The government is merely doing what pleases the majority and their sense of envy, to the detriment of small businesses and savers. Now, the middle class is starting to face problems as well. This will worsen once the the impact of the destruction of small businesses becomes obvious.

India has always had a negative-yielding economy. It has suddenly become even more negative-yielding. Business risk has gone through the roof. Savers will be victimized. It is because of negative yields that Indian savers buy gold. They will buy more going forward.

Sane Indians should stay a step ahead of their rapacious government and the evolving totalitarian society, which are less and less inhibited by any institutions or values in support of liberty.

 

Conclusion

India will become a police state, likely with the full support of most Indians. Nationalism will be the thread that weaves them together. But it is a fake thread, devoid of any value. Eventually, there will be far too many stresses in the system, whose institutions are already in an advance stage of decay.

India as it exists today is a British creation. With the British now gone for 69 years, it is an entity has less and less reason to exist in its current form. The glue of reason that the British have applied is flaking, and it is doing so rapidly under the catalyst by name of Narendra Modi.

 

Edited by PT, image captions by PT where indicated

 

Jayant Bhandari grew up in India. He advises institutional investors on investing in the junior mining industry. He
writes on political, economic and cultural issues for several publications. He is a contributing editor of the Liberty magazine. He runs a yearly seminar in Vancouver titled Capitalism & Morality.

 

 
 

Emigrate While You Can... Learn More

 
 

 
 

Dear Readers!

You may have noticed that our so-called “semiannual” funding drive, which started sometime in the summer if memory serves, has seamlessly segued into the winter. In fact, the year is almost over! We assure you this is not merely evidence of our chutzpa; rather, it is indicative of the fact that ad income still needs to be supplemented in order to support upkeep of the site. Naturally, the traditional benefits that can be spontaneously triggered by donations to this site remain operative regardless of the season - ranging from a boost to general well-being/happiness (inter alia featuring improved sleep & appetite), children including you in their songs, up to the likely allotment of privileges in the afterlife, etc., etc., but the Christmas season is probably an especially propitious time to cross our palms with silver. A special thank you to all readers who have already chipped in, your generosity is greatly appreciated. Regardless of that, we are honored by everybody's readership and hope we have managed to add a little value to your life.

   

Bitcoin address: 1DRkVzUmkGaz9xAP81us86zzxh5VMEhNke

   
 

2 Responses to “Gold Price Skyrockets in India after Currency Ban – Part V”

Your comment:

You must be logged in to post a comment.

Most read in the last 20 days:

  • Gold Sector Update – What Stance is Appropriate?
      The Technical Picture - a Comparison of Antecedents We wanted to post an update to our late December post on the gold sector for some time now (see “Gold – Ready to Spring Another Surprise?” for the details). Perhaps it was a good thing that some time has passed, as the current juncture seems particularly interesting. We received quite a few mails from friends and readers recently, expressing concern about the inability of gold stocks to lead, or even confirm strength in gold of...
  • Incrementum Advisory Board Meeting, Q1 2017 and Some Additional Reflections
      Looming Currency and Liquidity Problems The quarterly meeting of the Incrementum Advisory Board was held on January 11, approximately one month ago. A download link to a PDF document containing the full transcript including charts an be found at the end of this post. As always, a broad range of topics was discussed; although some time has passed since the meeting, all these issues remain relevant. Our comments below are taking developments that have taken place since then into...
  • Trump and the Draining of the Swamp
      Swamp Critters BALTIMORE – The Dow is back above the 20,000-point mark. Federal debt, as officially tallied, is up to nearly $20 trillion. The two go together, egging each other on. The Dow is up 20 times since 1980. So is the U.S. national debt. Debt feeds the stock market and the swamp. What’s not up so much is real output, as measured by GDP. It’s up only 6.4 times over the same period. Debt and asset prices have been rising three times as fast as GDP for 36 years! Best...
  • Gold and Silver Divergence – Precious Metals Supply and Demand
      Gold and Silver Divergence – Precious Metals Supply and Demand Last week, the prices of the metals went up, with the gold price rising every day and the silver price stalling out after rising 42 cents on Tuesday. The gold-silver ratio went up a bit this week, an unusual occurrence when prices are rising. Everyone knows that the price of silver is supposed to outperform — the way Pavlov’s Dogs know that food comes after the bell. Speculators usually make it...
  • When Trumponomics Meets Abenomics
      Thirty Year Retread What will President Trump and Japanese Prime Minister Shinzo Abe talk about when they meet later today? Will they gab about what fishing holes the big belly bass are biting at? Will they share insider secrets on what watering holes are serving up the stiffest drinks? [ed. note: when we edited this article for Acting Man, the meeting was already underway]   Japan's prime minister Shinzo Abe, a dyed-in-the-wool Keynesian and militarist, meets America's...
  • The Great Wailing
      Regret and Suffering BALTIMORE – Victoribus spolia... So far, the most satisfying thing about the Trump win has been the howls and whines coming from the establishment. Each appointment – some good, some bad from our perspective – has brought forth such heavy lamentations.   Oh no! Alaric the Visigoth is here! Hide the women and children! And don't forget the vestal virgins, if you can find any...   You’d think Washington had been invaded by Goths, now...
  • Receive a One Percent Gift When Buying or Selling a Home
      How to Save Money When Buying or Make More When Selling a Home In your professional capacity and perhaps also in your private life, you may be closely involved with financial and commodity markets. Trading in stocks, bonds or futures is part of your daily routine.  Occasionally you probably have to deal with real estate as well though – if you e.g. want to purchase an apartment or a house, or if own a home you wish to sell.   The people who took this photograph probably want to...
  • Unleashing Wall Street
      To Unleash or Not to Unleash, That is the Question... LOVINGSTON, VIRGINIA –  Corporate earnings have been going down for nearly three years. They are now about 10% below the level set in the late summer of 2014. Why should stocks be so expensive?   Example of something that one should better not unleash. The probability that a win-lose proposition will develop upon meeting it seems high. It wins, because it gets to eat... Image credit: Urs Hagen   Oh,...
  • Silver Futures Market Assistance – Precious Metals Supply and Demand
      Silver Is Pushed Up Again This week, the prices of the metals moved up on Monday. Then the gold price went sideways for the rest of the week, but the silver price jumped on Friday.   Taking off for real or not? Photo credit: NASA   Is this the rocket ship to $50? Will Trump’s stimulus plan push up the price of silver? Or just push silver speculators to push up the price, at their own expense, again? This will again be a brief Report this week, as we are busy...
  • Boondoggles for the Swamp Critters
      Monster or Mozart? BALTIMORE – Investors seem to be holding their breath, like a man hiding a cigarette from his wife. It’s just a feeling, and it’s not the first time we’ve had it... but it feels as though it wouldn’t take much to send them all running.   Actually, they're not going anywhere yet... but there is a lot of overconfidence by those who were very worried when prices were a lot better - click to enlarge.   Meanwhile... we’re coming to a deep...
  • The Art and Pseudoscience of Monetary Policy
      Definitely Maybe Everyone’s got a plan for sale these days.  In fact, there are so many plans out there we cannot keep up with them all.  Eat celery sticks and lose weight.  Think and grow rich.  Stocks for the long run.  Naturally, plans like these run a dime a dozen.   All social engineers who get to impose their harebrained schemes on the rest of the world through the coercive powers of the State, as well as all armchair planners regaling us with their allegedly...
  • California, Nestle and Decentralization
      Goodbye, Socialist Paradise Nestle USA has announced that it will move its headquarters from Glendale, California, to Rosslyn, Virginia, taking with it about 1200 jobs.  The once Golden State has lost some 1690 businesses since 2008 and a net outflow of a million of mostly middle-class people from the state from 2004 to 2013 due to its onerous tax rates, the oppressive regulatory burden, and the genuine kookiness which pervades among its ruling elites.*   There has been a...

Austrian Theory and Investment

Support Acting Man

Own physical gold and silver outside a bank

Archive

j9TJzzN

350x200

Realtime Charts

 

Gold in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Gold in EUR:

[Most Recent Quotes from www.kitco.com]

 


 

Silver in USD:

[Most Recent Quotes from www.kitco.com]

 


 

Platinum in USD:

[Most Recent Quotes from www.kitco.com]

 


 

USD - Index:

[Most Recent USD from www.kitco.com]

 

THE GOLD CARTEL: Government Intervention on Gold, the Mega Bubble in Paper and What This Means for Your Future

 
Buy Silver Now!
 
Buy Gold Now!
 

Oilprice.com