By Mac Slavo
Behold, the power of banksters, and the very rapid shift into the cashless, digital control grid that has been an objective now for many decades.
Suddenly, things are moving faster than anyone could have imagined.
Officially, the government of India believes their demonetization efforts to haul in some 86% of the cash in circulation will bolster the economy and improve the situation for the world’s second most populous country.
But on the ground, and in reality, the pain is still spreading – and it could become even worse.
The cost of goods is increasing sharply and the poor and working classes are being hit hard … and many are still waiting in long bank lines to deposit what little they have.
Cash-related industries, which dominate Indian daily life, including tourism, shops, farming, vendors, day labor, jewelry and the informal industries are facing huge declines as cash bans have severely cut back their business.
via Business Insider:
Modi’s announcement that 500 and 1,000 rupee bills — making up 86% of India’s currency — were no longer legal tender has posed an enormous hardship for millions of people who use cash for everything from salaries to cellphone charges.
Empty ATMs and ever-changing rules are preventing people from withdrawing money, and many small, cash-reliant businesses from cinemas to neighborhood grocery stores are suffering huge losses or going under.
Daily commerce in essentials including food, medicine, and transportation screeched almost to a halt.
Real estate, tourism, transportation, and gold and gems have been hit the hardest, along with informal sectors that rely mostly on cash. Prices are forecast to rise since the cash crunch is pinching supplies of all sorts of goods.
“The first two months have been so bad for us, we don’t even have enough money to buy food,” daily wage laborer Neeraj Mishra, 35, said.
Worst affected were the country’s hundreds of millions of farmers, produce vendors, small-shop owners and daily-wage laborers who usually are paid in cash at the end of a day’s work. Many lost their jobs as small businesses shut down, compounding their poverty.
The direct shortage of cash, with no reliable alternative system in wide use among the nation’s poorer majority, resulted in demand that outstripped supply on every front for physical cash and a means of exchange.
This is how quickly they could bring things to a halt.
The inhumane impact on literally hundreds of millions of poor people there remains largely in the background of policy discussions – which have actually been branded as fighting for the poorest – as banking modernization becomes the most important factor.
So far, despite the widespread inconvenience and costs… The Indian government is urging patience, insisting it’s playing a long game that will eventually modernize Indian society and benefit the poor.
Since domestic commerce drives most economic activity, analysts have expressed alarm over the scale of economic and social disruption and are warning a contraction is likely in coming quarters.
The wide impact of the demonetization won’t be known until the government issues its next quarterly gross-domestic-product figures in February, but the Reserve Bank of India already has shaved half a percentage point from this year’s GDP growth forecast, to 7.1%.
Despite the fact that a majority of transactions in America are now electronic, cash still remains a stubbornly viable exchange medium for all sectors of society, across wealth and age brackets, and remains especially vital for the working poor who often rely upon cash for daily transactions.
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