India–Ban on Cash

Dear Everyone:

I sent one musings this morning and I am sending another…

I am in India these days. And this wretched place is going downhill rather rapidly, much faster than I thought.

Nationalism is increasing rapidly. I no longer go to cinemas for they run national anthem in the hall, and I refuse to stand up. These days’ people get arrested and beaten up for not standing up.

There has been a significant increase in tension between Pakistan and India. Most of this in my view is being done to increase control over people using the tool of nationalism. And Indians are sheep and they are all joining the herd. The only difference between India and Pakistan was that it was possible for the guy at the fringe in India to speak his mind. I doubt if this relative freedom of speech will stay for much longer.

Last week, in Bhopal, the police killed in cold-blood, eight unarmed people. They were Muslims, although it does not really matter anymore. Modi government is stifling any voice against him and sending out a message that the state will come after you if you speak against it. India increasingly looks like India of 1970s, the days when emergency was imposed. In fact, India is rapidly becoming another Pakistan.

But this is why I decided to write again today… Indian government has today banned Rs500 (about $7) and Rs1000 (about $14) currency notes. Because Indian government never makes anything clear, people no longer know if these are now worthless paper or if these can be exchanged for lower denomination currency. Banks are will be closed for the next two days. This will be a very major crisis for India, at least over the next few weeks. I hope people revolt against him—and I would not be surprised if they do.

Modi ran a one-person tea-shop before he joined politics—not a good experience to run a country of 1.3 billion people. He then became a bully in his party. He sees the world through very simplistic lenses. He will be a worse disaster for India than I can imagine.

My view is that gold consumption will skyrocket in India. Instead of hoarding and transacting in Indian rupees, people will start to use gold and US dollars.

Warm regards,

Jayant Bhandari

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