An actual attempt to kill cash and its consequences.

[salihno71]

There are a lot of topics on BCT asking is cash obsolete, will it be removed from usage and similar. Here is an interesting article about the attempt to do something similar in India and all the consequences that it caused.

A year ago, on Nov. 08, prime minister Narendra Modi’s announcement that Rs500 and Rs1,000 notes were going to be taken out of circulation overnight predictably led to utter chaos and mayhem. Not only a flustered public, even the government and India’s central bank were caught flatfooted. Some 74 notifications were issued in 50 days following the note-ban announcement, several involving an about-face on the previous announcements. And in the months that followed, about 1.5 million jobs were lost, business in several cash-intensive industries came to a screeching halt, and economic growth took a beating.

Full article on https://qz.com/1123463/demonetisation-the-narendra-modi-government-tried-to-kill-cash-it-ended-up-strangling-the-economy/

What is your view?

[1715179997]

1715179997

[soham]

I am also the part of the group of people who lost their job after de-monetization on November 8th, 2016. I was working in a transport company which got closed overnight because transportation is a cash intensive business. However, I still support the decision of Narendra Modi because a lot of black money became unusable overnight and brought back some kind of transparency in the market. We all had to face a lot of inconvenience after that big decision but still I support the fact that it is good in long run.

I am just waiting for Modi to abolish the age old reservation system from India. Only he can take such decision.

[LoyceV]

It's the first time I hear about this, but it doesn't make sense. From Wiki:

In the announcement, Modi declared that use of all ₹500 and ₹1000 banknotes of the Mahatma Gandhi Series would be invalid past midnight, and announced the issuance of new ₹500 and ₹2000 banknotes of the Mahatma Gandhi New Series in exchange for the old banknotes.

If they could just exchange old banknotes for new ones, how is that killing cash?

Wiki also shows there were certain limits per person, which can easily be solved by some more black market trades: sell ₹4000 old money for ₹3950 new money.

After the exchange is completed, all illegal activities can just continue with new banknotes.

[salihno71]

I am also the part of the group of people who lost their job after de-monetization on November 8th, 2016. I was working in a transport company which got closed overnight because transportation is a cash intensive business. However, I still support the decision of Narendra Modi because a lot of black money became unusable overnight and brought back some kind of transparency in the market. We all had to face a lot of inconvenience after that big decision but still I support the fact that it is good in long run.

I am just waiting for Modi to abolish the age old reservation system from India. Only he can take such decision.

Point of view of directly affected people is the most precious testimony of the taken measures because it reflects the exact consequence of the action. There will always be a group of people who don't want to pay taxes and they will always find the way to avoid this.

[Hydrogen]

Money, whether its paper, gold or electronic is a mechanism for solving problems in society. The invention of money facilitates trade, industry and finance. When a percentage of a population rely on paper money to solve problems, fund jobs, run businesses it may naturally follow that banning paper money will cause an economy and job market to suffer negatively.

Taking fiat money out of circulation represents a destruction of wealth, innovation and time. The scene in the movie The Dark Knight where the Joker lights a mountain of paper money on fire could be considered a rough equivalent to recent policies of note-banning. There are negative consequences. Whether there will be enough positive effects to compensate for the negative effects are undetermined.

In my eyes, note-banning is like the government saying you can't use your right arm. You can only use your left arm. They limit what people are able to achieve with what they have. This restricts the resourcefulness and creativity of the population while destroying wealth & restricting growth. But I might be biased, here. If there are positive effects of this I'm unaware of I would be interested in knowing what they are.

[merchantofzeny]

From what I remember in the news, they said that India is removing their 500 and 1000 bills but it seems most people are now saying it failed to do what it promised. A quick search and I found articles saying that 99% of the money made it back to the system. Is so, then the government could have just wasted money, printing new money to replace the demonetized bills.

[Kiweikoo]

I am also the part of the group of people who lost their job after de-monetization on November 8th, 2016. I was working in a transport company which got closed overnight because transportation is a cash intensive business. However, I still support the decision of Narendra Modi because a lot of black money became unusable overnight and brought back some kind of transparency in the market. We all had to face a lot of inconvenience after that big decision but still I support the fact that it is good in long run.

I am just waiting for Modi to abolish the age old reservation system from India. Only he can take such decision.

Point of view of directly affected people is the most precious testimony of the taken measures because it reflects the exact consequence of the action. There will always be a group of people who don't want to pay taxes and they will always find the way to avoid this.

Exactly! I don’t think so that there is someone who actually wants to pay tax and all that stuff by his very own personal willingness. The main reason behind this much fame of bitcoin and all other crypto currencies which are there in the world of crypto currency is that it is helping the people in making themselves free from those rules and regulation which government is imposing on them.

[Pixyoxx]

I think when u reach out for a long term goal and a wider perspective as a motive, you cannot do it with zero loss. Note ban in india was one of such examples. Offcourse if some major 500-1000 notes will be cut off from the curculation overnight, many sectors will be hampered but you can never find a better option. Because once ample people know about the execution, they will find their way out and get themselves clean out of the curroption pit. Economic imbalance that we listen assiciated with the note ban is just momentary, many economic forums have identified the long term benefits in favour of citizens of the country which definetely will tale time to show up and meanwhile complocations may arise, but then if we are not in terms with the forthcomming conplications, we should also not have tge desire of a better change. As they say, no pain no gain.

[Palmerson]

I am also the part of the group of people who lost their job after de-monetization on November 8th, 2016. I was working in a transport company which got closed overnight because transportation is a cash intensive business. However, I still support the decision of Narendra Modi because a lot of black money became unusable overnight and brought back some kind of transparency in the market. We all had to face a lot of inconvenience after that big decision but still I support the fact that it is good in long run.

I am just waiting for Modi to abolish the age old reservation system from India. Only he can take such decision.

This decision is not peculiar to the democratic States, and adds confidence in the currency of that state. I do not understand such methods. What's the money? If many people use such notes it does not mean that they need to cancel. What are the law enforcement agencies? Let them fight crime. This action is a hidden attempt to cover up inflation. Government ruled by crooks.