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Faced With New Round Of Demonetization Indians Turn To Gold

Faced With New Round Of Demonetization Indians Turn To Gold

Authored by Michael Maharrey via SchiffGold.com,

The Indian central bank has…

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Faced With New Round Of Demonetization Indians Turn To Gold

Authored by Michael Maharrey via SchiffGold.com,

The Indian central bank has announced another round of demonetization with a plan to withdraw 2,000-rupee notes from circulation.

The announcement led to a big jump in gold bullion sales.

The 2,000-rupee note will remain legal tender, but they will have to be deposited or exchanged for smaller denominations by Sept. 30.

The 2,000 rupee note ($24.19) is the largest currency denomination in India. According to Reuters, they make up about 10.8% of the currency in circulation.

T.V Somanathan, the top official at the Indian Finance Ministry, said confiscation of the 2,000 rupee notes wouldn’t cause any disruptions “either in normal life or in the economy.”

His assurances fall flat given history.

We’ve seen this play before. The Indian government announced a surprise demonetization policy in the fall of 2016 meant to drive so-called black money out of the shadows and declared that all of the 1,000 and 500-rupee notes then in circulation would no longer be valid. The suddenly worthless notes made up 86% of the currency in circulation in the country at the time. The move made virtually all of the cash in India valueless.

The government produced new 500 and 2,000-rupee notes to replace the old currency.

Now the government is pulling those 2,000-rupee notes out of circulation.

The government policy announced in 2016 was meant to force Indians to trade in the old notes for new ones. But there was a catch. The government placed limits on the amount of currency Indians could exchange, but no limits on bank deposits until the end of the year. The idea was to push Indians into putting their hoarded cash in the bank – thus bringing it “out of the shadows.” The demonetization policy resulted in severe cash shortages. As many as 90% of ATMs in some regions of the country completely ran out of currency.

With more time to exchange notes this time around, the latest round of demonetization is not expected to be as disruptive.

War on Cash

The Indian government’s move was part of the broader war on cash. The goal was to bring “black money” out of the shadows so it can be tracked and taxed. The vast majority of transactions in India are in cash. It is an overwhelmingly cash economy and virtually every Indian has currency stashed away in their home.

Transactions using black money mean no taxes are collected. Government estimates show that only 1% of the Indian population pays any taxes at all. By making the 1,000 and 500 rupee notes valueless, government officials hoped to force the black money into the light so they could get their cut.

Reserve Bank of India (RBI) justified eliminating the 2,000-rupee note, saying they are at the end of their useful life and citing evidence showing 2,000 rupee notes aren’t typically used in transactions. But the real motivation for this latest round of demonetization is likely the same as the first – to better track and tax transactions.

This war on cash isn’t isolated to India. The European Central Bank stopped producing and issuing 500-euro notes in 2018, and officials in the US have floated the idea of eliminating the $100 bill.

More recently, governments have experimented with central bank digital currency (CBDC) as a cash replacement.

There are also political motives for getting the 2,000-rupee notes out of circulation now.

The move comes ahead of elections in four Indian states and a national election next spring. According to Reuters, “Most of India’s political parties are believed to hoard cash in high denomination bills to fund election campaign expenses to get around tough spending limits imposed by the Election Commission.”

Forcing people to deposit the notes will also help boost bank deposits. Indian banks have struggled to maintain deposit levels large enough to support the country’s massive credit expansion.

Gold to the Rescue

When the government pulled 1,000 and 500-rupee notes out of circulation in 2016, Indians turned their “black money” into gold.

Tax officials attempting to track black money say gold jewelry sales spiked the night of Nov. 8, 2016, after the government announced the demonetization policy.

“Jewelers offered a platform to convert unreported cash into gold,” one official said.

To avoid reporting the transactions, sellers simply split single transactions into multiple sales in order to keep them below the Rs 2 lakh threshold that triggers reporting requirements in India.

After the RBI announced the elimination of 2,000-rupee notes earlier this month, local newspapers reported a similar rush to jewelry shops to exchange the notes for gold. The Hindustan Times reported a 10 to 20% increase in gold sales after the announcement.

People scrambled to buy gold and silver in bulk in bullion markets, leading to increase in prices, dealers in several states said.”

Gold was also a lifeline for Indians pummeled by the economic storm caused by the government response to the coronavirus pandemic.

Indians understand that gold tends to store value and that in the end gold is money. If they have gold, they know they will be able to get the goods and services they need – even in the event of an economic meltdown or a cash crunch.

Gold is not just a luxury in India. Even poor people buy gold in the Asian nation. According to an ICE 360 survey in 2018, one in every two households in India purchased gold within the last five years. Overall, 87% of households in the country own some amount of the yellow metal. Even households at the lowest income levels in India own some gold. According to the survey, more than 75% of families in the bottom 10% had managed to buy gold.

It’s no surprise that when faced with the possibility of another disruption to the cash system, Indians have turned to gold.

Tyler Durden Tue, 05/30/2023 - 19:00

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International

This is the biggest money mistake you’re making during travel

A retail expert talks of some common money mistakes travelers make on their trips.

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Travel is expensive. Despite the explosion of travel demand in the two years since the world opened up from the pandemic, survey after survey shows that financial reasons are the biggest factor keeping some from taking their desired trips.

Airfare, accommodation as well as food and entertainment during the trip have all outpaced inflation over the last four years.

Related: This is why we're still spending an insane amount of money on travel

But while there are multiple tricks and “travel hacks” for finding cheaper plane tickets and accommodation, the biggest financial mistake that leads to blown travel budgets is much smaller and more insidious.

A traveler watches a plane takeoff at an airport gate.

Jeshoots on Unsplash

This is what you should (and shouldn’t) spend your money on while abroad

“When it comes to traveling, it's hard to resist buying items so you can have a piece of that memory at home,” Kristen Gall, a retail expert who heads the financial planning section at points-back platform Rakuten, told Travel + Leisure in an interview. “However, it's important to remember that you don't need every souvenir that catches your eye.”

More Travel:

According to Gall, souvenirs not only have a tendency to add up in price but also weight which can in turn require one to pay for extra weight or even another suitcase at the airport — over the last two months, airlines like Delta  (DAL) , American Airlines  (AAL)  and JetBlue Airways  (JBLU)  have all followed each other in increasing baggage prices to in some cases as much as $60 for a first bag and $100 for a second one.

While such extras may not seem like a lot compared to the thousands one might have spent on the hotel and ticket, they all have what is sometimes known as a “coffee” or “takeout effect” in which small expenses can lead one to overspend by a large amount.

‘Save up for one special thing rather than a bunch of trinkets…’

“When traveling abroad, I recommend only purchasing items that you can't get back at home, or that are small enough to not impact your luggage weight,” Gall said. “If you’re set on bringing home a souvenir, save up for one special thing, rather than wasting your money on a bunch of trinkets you may not think twice about once you return home.”

Along with the immediate costs, there is also the risk of purchasing things that go to waste when returning home from an international vacation. Alcohol is subject to airlines’ liquid rules while certain types of foods, particularly meat and other animal products, can be confiscated by customs. 

While one incident of losing an expensive bottle of liquor or cheese brought back from a country like France will often make travelers forever careful, those who travel internationally less frequently will often be unaware of specific rules and be forced to part with something they spent money on at the airport.

“It's important to keep in mind that you're going to have to travel back with everything you purchased,” Gall continued. “[…] Be careful when buying food or wine, as it may not make it through customs. Foods like chocolate are typically fine, but items like meat and produce are likely prohibited to come back into the country.

Related: Veteran fund manager picks favorite stocks for 2024

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Spread & Containment

As the pandemic turns four, here’s what we need to do for a healthier future

On the fourth anniversary of the pandemic, a public health researcher offers four principles for a healthier future.

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John Gomez/Shutterstock

Anniversaries are usually festive occasions, marked by celebration and joy. But there’ll be no popping of corks for this one.

March 11 2024 marks four years since the World Health Organization (WHO) declared COVID-19 a pandemic.

Although no longer officially a public health emergency of international concern, the pandemic is still with us, and the virus is still causing serious harm.

Here are three priorities – three Cs – for a healthier future.

Clear guidance

Over the past four years, one of the biggest challenges people faced when trying to follow COVID rules was understanding them.

From a behavioural science perspective, one of the major themes of the last four years has been whether guidance was clear enough or whether people were receiving too many different and confusing messages – something colleagues and I called “alert fatigue”.

With colleagues, I conducted an evidence review of communication during COVID and found that the lack of clarity, as well as a lack of trust in those setting rules, were key barriers to adherence to measures like social distancing.

In future, whether it’s another COVID wave, or another virus or public health emergency, clear communication by trustworthy messengers is going to be key.

Combat complacency

As Maria van Kerkove, COVID technical lead for WHO, puts it there is no acceptable level of death from COVID. COVID complacency is setting in as we have moved out of the emergency phase of the pandemic. But is still much work to be done.

First, we still need to understand this virus better. Four years is not a long time to understand the longer-term effects of COVID. For example, evidence on how the virus affects the brain and cognitive functioning is in its infancy.

The extent, severity and possible treatment of long COVID is another priority that must not be forgotten – not least because it is still causing a lot of long-term sickness and absence.

Culture change

During the pandemic’s first few years, there was a question over how many of our new habits, from elbow bumping (remember that?) to remote working, were here to stay.

Turns out old habits die hard – and in most cases that’s not a bad thing – after all handshaking and hugging can be good for our health.

But there is some pandemic behaviour we could have kept, under certain conditions. I’m pretty sure most people don’t wear masks when they have respiratory symptoms, even though some health authorities, such as the NHS, recommend it.

Masks could still be thought of like umbrellas: we keep one handy for when we need it, for example, when visiting vulnerable people, especially during times when there’s a spike in COVID.

If masks hadn’t been so politicised as a symbol of conformity and oppression so early in the pandemic, then we might arguably have seen people in more countries adopting the behaviour in parts of east Asia, where people continue to wear masks or face coverings when they are sick to avoid spreading it to others.

Although the pandemic led to the growth of remote or hybrid working, presenteeism – going to work when sick – is still a major issue.

Encouraging parents to send children to school when they are unwell is unlikely to help public health, or attendance for that matter. For instance, although one child might recover quickly from a given virus, other children who might catch it from them might be ill for days.

Similarly, a culture of presenteeism that pressures workers to come in when ill is likely to backfire later on, helping infectious disease spread in workplaces.

At the most fundamental level, we need to do more to create a culture of equality. Some groups, especially the most economically deprived, fared much worse than others during the pandemic. Health inequalities have widened as a result. With ongoing pandemic impacts, for example, long COVID rates, also disproportionately affecting those from disadvantaged groups, health inequalities are likely to persist without significant action to address them.

Vaccine inequity is still a problem globally. At a national level, in some wealthier countries like the UK, those from more deprived backgrounds are going to be less able to afford private vaccines.

We may be out of the emergency phase of COVID, but the pandemic is not yet over. As we reflect on the past four years, working to provide clearer public health communication, avoiding COVID complacency and reducing health inequalities are all things that can help prepare for any future waves or, indeed, pandemics.

Simon Nicholas Williams has received funding from Senedd Cymru, Public Health Wales and the Wales Covid Evidence Centre for research on COVID-19, and has consulted for the World Health Organization. However, this article reflects the views of the author only, in his academic capacity at Swansea University, and no funding or organizational bodies were involved in the writing or content of this article.

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Government

The Grinch Who Stole Freedom

The Grinch Who Stole Freedom

Authored by Jeffrey A. Tucker via The Epoch Times (emphasis ours),

Before President Joe Biden’s State of the…

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The Grinch Who Stole Freedom

Authored by Jeffrey A. Tucker via The Epoch Times (emphasis ours),

Before President Joe Biden’s State of the Union address, the pundit class was predicting that he would deliver a message of unity and calm, if only to attract undecided voters to his side.

President Joe Biden delivers the State of the Union address in the House Chamber of the U.S. Capitol in Washington, D.C., on March 7, 2024. (Mandel Ngan/AFP/Getty Images)

He did the opposite. The speech revealed a loud, cranky, angry, bitter side of the man that people don’t usually see. It seemed like the real Joe Biden I remember from the old days, full of venom, sarcasm, disdain, threats, and extreme partisanship.

The base might have loved it except that he made reference to an “illegal” alien, which is apparently a trigger word for the left. He failed their purity test.

The speech was stunning in its bile and bitterness. It’s beyond belief that he began with a pitch for more funds for the Ukraine war, which has killed 10,000 civilians and some 200,000 troops on both sides. It’s a bloody mess that could have been resolved early on but for U.S. tax funding of the conflict.

Despite the push from the higher ends of conservative commentary, average Republicans have turned hard against this war. The United States is in a fiscal crisis and every manner of domestic crisis, and the U.S. president opens his speech with a pitch to protect the border in Ukraine? It was completely bizarre, and lent some weight to the darkest conspiracies about why the Biden administration cares so much about this issue.

From there, he pivoted to wildly overblown rhetoric about the most hysterically exaggerated event of our times: the legendary Jan. 6 protests on Capitol Hill. Arrests for daring to protest the government on that day are growing.

The media and the Biden administration continue to describe it as the worst crisis since the War of the Roses, or something. It’s all a wild stretch, but it set the tone of the whole speech, complete with unrelenting attacks on former President Donald Trump. He would use the speech not to unite or make a pitch that he is president of the entire country but rather intensify his fundamental attack on everything America is supposed to be.

Hard to isolate the most alarming part, but one aspect really stood out to me. He glared directly at the Supreme Court Justices sitting there and threatened them with political power. He said that they were awful for getting rid of nationwide abortion rights and returning the issue to the states where it belongs, very obviously. But President Biden whipped up his base to exact some kind of retribution against the court.

Looking this up, we have a few historical examples of presidents criticizing the court but none to their faces in a State of the Union address. This comes two weeks after President Biden directly bragged about defying the Supreme Court over the issue of student loan forgiveness. The court said he could not do this on his own, but President Biden did it anyway.

Here we have an issue of civic decorum that you cannot legislate or legally codify. Essentially, under the U.S. system, the president has to agree to defer to the highest court in its rulings even if he doesn’t like them. President Biden is now aggressively defying the court and adding direct threats on top of that. In other words, this president is plunging us straight into lawlessness and dictatorship.

In the background here, you must understand, is the most important free speech case in U.S. history. The Supreme Court on March 18 will hear arguments over an injunction against President Biden’s administrative agencies as issued by the Fifth Circuit. The injunction would forbid government agencies from imposing themselves on media and social media companies to curate content and censor contrary opinions, either directly or indirectly through so-called “switchboarding.”

A ruling for the plaintiffs in the case would force the dismantling of a growing and massive industry that has come to be called the censorship-industrial complex. It involves dozens or even more than 100 government agencies, including quasi-intelligence agencies such as the Cybersecurity and Infrastructure Security Agency (CISA), which was set up only in 2018 but managed information flow, labor force designations, and absentee voting during the COVID-19 response.

A good ruling here will protect free speech or at least intend to. But, of course, the Biden administration could directly defy it. That seems to be where this administration is headed. It’s extremely dangerous.

A ruling for the defense and against the injunction would be a catastrophe. It would invite every government agency to exercise direct control over all media and social media in the country, effectively abolishing the First Amendment.

Close watchers of the court have no clear idea of how this will turn out. But watching President Biden glare at court members at the address, one does wonder. Did they sense the threats he was making against them? Will they stand up for the independence of the judicial branch?

Maybe his intimidation tactics will end up backfiring. After all, does the Supreme Court really think it is wise to license this administration with the power to control all information flows in the United States?

The deeper issue here is a pressing battle that is roiling American life today. It concerns the future and power of the administrative state versus the elected one. The Constitution contains no reference to a fourth branch of government, but that is what has been allowed to form and entrench itself, in complete violation of the Founders’ intentions. Only the Supreme Court can stop it, if they are brave enough to take it on.

If you haven’t figured it out yet, and surely you have, President Biden is nothing but a marionette of deep-state interests. He is there to pretend to be the people’s representative, but everything that he does is about entrenching the fourth branch of government, the permanent bureaucracy that goes on its merry way without any real civilian oversight.

We know this for a fact by virtue of one of his first acts as president, to repeal an executive order by President Trump that would have reclassified some (or many) federal employees as directly under the control of the elected president rather than have independent power. The elites in Washington absolutely panicked about President Trump’s executive order. They plotted to make sure that he didn’t get a second term, and quickly scratched that brilliant act by President Trump from the historical record.

This epic battle is the subtext behind nearly everything taking place in Washington today.

Aside from the vicious moment of directly attacking the Supreme Court, President Biden set himself up as some kind of economic central planner, promising to abolish hidden fees and bags of chips that weren’t full enough, as if he has the power to do this, which he does not. He was up there just muttering gibberish. If he is serious, he believes that the U.S. president has the power to dictate the prices of every candy bar and hotel room in the United States—an absolutely terrifying exercise of power that compares only to Stalin and Mao. And yet there he was promising to do just that.

Aside from demonizing the opposition, wildly exaggerating about Jan. 6, whipping up war frenzy, swearing to end climate change, which will make the “green energy” industry rich, threatening more taxes on business enterprise, promising to cure cancer (again!), and parading as the master of candy bar prices, what else did he do? Well, he took credit for the supposedly growing economy even as a vast number of Americans are deeply suffering from his awful policies.

It’s hard to imagine that this speech could be considered a success. The optics alone made him look like the Grinch who stole freedom, except the Grinch was far more articulate and clever. He’s a mean one, Mr. Biden.

Views expressed in this article are opinions of the author and do not necessarily reflect the views of The Epoch Times or ZeroHedge.

Tyler Durden Mon, 03/11/2024 - 12:00

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