Have A Happy Thanksgiving, But Be Aware Of The War On Cash In India
With so much happening in regard to our election and the transition, most eyes have been fixed on Washington, DC and New York City’s Trump Tower. Over the last weekend, I went to DC and met with some of the top people associated with the incoming Trump Administration. It was very hopeful, both in terms of economic plans as well as national security. I was able to provide my view regarding top priorities for the first 100 days. First and foremost, I shared Psalm 107 and the need to give thanks and praise to God Almighty. In honor of Thanksgiving, I recommend reading the chapter in the King James:
107 O give thanks unto the Lord, for he is good: for his mercy endureth for ever.
2 Let the redeemed of the Lord say so, whom he hath redeemed from the hand of the enemy…
Essentially, the psalm explains the following pattern that humans encounter: People are shown grace. They mess up big time. Things go wrong. The people cry out to God and He delivers them. Then, He wonders if men will stop to thank him.
This Thanksgiving, we must stop and properly Thank God.
I do believe that the election provided an important change to the direction of our nation. It provides hope for our future and takes us off at least one dangerous path. We don’t know what will happen going forward. But I do know that there are good people working with President-elect Trump at the highest levels.
There will be many challenges we will face. The global economic war remains underway. And the globalists seeking chaos will not give up easily. As one example, we see riots across the country, some of which may be funded by George Soros. Remember that in 1999, the Chinese authors of Unrestricted Warfare basically accused George Soros of being a financial terrorist. For those who wonder who the real George Soros might be, we’ve dug up a 60 Minutes interview from 1998.
Recently, evangelical leaders have also warned about Soros. He was “all in” for Clinton. Could he really be funding riots now? Hackers have certainly has exposed many very disconcerting things about this man. We do know that he was convicted of insider trading. We also know that he was the man who “broke the Bank of England.” China was worried about Soros attacking their economy, warning him to stay away earlier this year.
Now, we are seeing chaos underway inside India. Essentially, the government decided to ban all larger denomination bills. Could Soros be playing a role there? We don’t know, but there is certainly panic and chaos underway. It may be a test for the banning of cash globally.
Recently, my friend John Mauldin published an excellent piece by Patrick Watson that “connects the dots” and serves as a warning for other nations, including the United States. I’ve excerpted it here:
By Patrick Watson November 22, 2016
Two weeks ago, millions of Americans voted against Hillary Clinton because, among other reasons, we thought she would raise taxes or otherwise take our money.
Most of us didn’t notice what happened on the other side of the world that very same day. Indian Prime Minister Narendra Modi really did take everyone’s money.
Citizens of India learned, with only a few hours’ notice, that their 500 and 1,000-rupee notes were no longer legal tender. Those are—or were—the country’s largest-denomination bills and the foundation of a huge underground economy. Now they’re just paper.
The results were what you would expect: confusion, chaos, and fear. Nevertheless, you can bet other governments watched closely. India could be just the first cash domino to fall.
Modi’s “Demonetization” Turned into a Mess
I must confess to not knowing much about India—the closest I’ve ever been is hearing some Sanskrit words in yoga class. I hope to visit someday, though. When I do, I’ll have to bring my Visa card because my cash may not work there.
The Reserve Bank of India posted this notice on November 8:
Government of India vide their Notification no. 2652 dated November 8, 2016 have withdrawn the Legal Tender status of ₹ 500 and ₹ 1,000 denominations of banknotes of the Mahatma Gandhi Series issued by the Reserve Bank of India till November 8, 2016.
This is necessitated to tackle counterfeiting Indian banknotes, to effectively nullify black money hoarded in cash and curb funding of terrorism with fake notes.
Starting from November 10, 2016, members of public/corporates, business firms, societies, trusts, etc., holding these notes can tender them at any office of the Reserve Bank or any bank branch and obtain value thereof by credit into their respective bank accounts.
Just like that, billions of currency notes suddenly became unusable. They will retain their value until the end of the year, but the only way to use them is by going to the bank and exchanging them for smaller notes, up to a limit of 4,000 rupees (about US$60).
People can also deposit them in a bank account and then use a debit card or electronic transfers for purchases.
That sounds simple enough, but quickly became a mess.
Lines formed at banks, with people waiting for days, only to find the bank ran out of smaller bills. Those without bank accounts had no way to make routine transactions. Already impoverished people had to spend their work time waiting to exchange their money. New bills intended to replace the old ones were scarce.
The results spread through the economy like wildfire. Merchants lost sales because customers couldn’t pay. Some resorted to barter. Media reports suggest restoring normal commerce could take months.
A few people reportedly died, most of them elderly citizens waiting outside banks for days, but also some overworked bank employees.
Analysts are already saying the sudden contraction will hurt economic growth. Economists at Ambit Capital cut their 2017 GDP growth estimate almost in half, from 6.8% to 3.5%. They think the effects will last into 2018, too.
With consequences ranging from disruptive to fatal, why would any government do something like this?
It’s the latest step in Prime Minister Modi’s war on corruption and tax evasion, much of it conducted in cash. He says restricting cash (he calls it “demonetization”) will help boost the economy.
Maybe it will. Estimates show anywhere from 25-40% of India’s economic activity happens off the books. Bringing it out of the shadows and into the banking system, even by force, may help in the long run. It will certainly raise tax revenue initially. But it also carries a big cost.
Believe it or not, some experts think we should do something much like this in the US.
Are We Moving Toward a Cashless Society?
Harvard economist Kenneth Rogoff has a new book out called The Curse of Cash. He thinks we should eliminate most paper bills. His plan is to phase out $100, $50, and $20 bills, which together account for about 97% of the face value of all US dollars in circulation. He generously lets us keep the small change.
Rogoff isn’t aiming only at tax evaders and drug dealers. He thinks paper money is problematic no matter who holds it because cash restricts monetary policy. It would get in the way if the Federal Reserve ever wanted to push interest rates into the negative range, the way central banks in Japan and the Eurozone already have.
Under a negative interest rate policy (NIRP), putting cash in the bank costs the depositor money instead of earning it. You can avoid this simply by holding paper currency… but not if the paper currency doesn’t exist because your government followed Professor Rogoff’s advice.
In a blog post after the India move, Rogoff said his plan isn’t meant for developing nations where fewer citizens use the banking system. But he still thinks it may benefit India in due course.
Professor Rogoff isn’t some fringe wacko. Influential people listen to him and read his books.
Forcing more transactions into the banking system would make tax collection easier and help authorities keep tabs on everyone’s activities. It’s the sort of thing central planners and authoritarian regimes have always loved, but modern technology lets them do it more effectively.
Would any major powers do this? Some already are. Denmark, Norway, and Sweden are all trying to go cashless. The European Central Bank hasn’t gone that far but is phasing out €500 notes.
Some banks are moving even faster. Citicorp’s Australian arm said this month it would stop handling notes and coins in its branches due to lack of demand. Fewer than 4% of its Australian customers have used cash in the last year, Citi says.
Watch for the Warning Signs
This whole idea of a “cashless society” used to be a kooky fringe belief. Conspiracy promoters said jackbooted government thugs would kick in your door any minute and confiscate all your vegetables.
Guess what: the kooks had a point. People in high places really do want to take away your cash, or at least most of it…. [To read the entire article, click HERE.]
Senior Economic Analyst Patrick Watson is a master in connecting the dots and finding out where budding trends are leading. Patrick is the editor of Mauldin Economics’ high-yield income letter, Yield Shark, and co-editor of the premium alert service, Macro Growth & Income Alert. You can also follow him on Twitter (@PatrickW) to see his commentary on current events.
We live in an era of rapid change… and only those who see and understand the shifting market, economic, and political trends can make wise investment decisions. Macroeconomic forecaster Patrick Watson spots the trends and spells what they mean every week in the free e-letter, Connecting the Dots. Subscribe now for his seasoned insight into the surprising forces driving global markets.
Interestingly, at the same time this was published, there was an opinion piece about India, warning them of Unrestricted Warfare attacks. Now, remember that the Chinese authors of Unrestricted Warfare claimed that this type of financial warfare would be based on what they learned watching George Soros.
Here are excerpts from today’s article in DNA India:
SUDARSHAN RAMABADRAN | Tue, 22 Nov 2016-08:00am , DNA
On October 20, 2016, it was reported that India underwent the biggest data breach to date with as many as 3.2 Million debit card details reportedly stolen from multiple banks and financial platforms. The massive financial breach hit India’s biggest banks including State Bank of India (SBI), HDFC Bank, Yes Bank, ICICI Bank and Axis. The report which was widely carried across multiple news platforms also has quoted sources saying that the malware took almost six weeks to be detected, compromising transactions that took place during this period.
On October 21,2016, it was again reported, a distributed denial-of-service attack — a common attack that floods a server with traffic so it can’t perform — hit the domain name system managed by the popular provider Dyn, disrupting user access to some of the web’s biggest sites, including Twitter, Etsy, GitHub, Reddit and the New York Times was not spared either.
On November 6, 2016, it was reported that the Indian embassy websites in seven different countries namely, Switzerland, Italy, Romania, Mali, South Africa, Libya, and Malawi have been hacked, and attackers have leaked personal data, including full name, residential address, email address, passport number and phone number, of Indian citizens living abroad.
To all these attacks, there has been one standard line of response by those investigating. “The nature and source of the attack is still under investigation.”
In June 2011, Stuxnet, a computer virus was seen lurking in databanks of power plants, traffic control systems, and factories around the world. This virus was said to be 20 times more complex than any previous virus code. The virus had the capability to switch of oil pipelines or even nuclear reactors. Stuxnet was a weapon, an open source weapon, a first to be made entirely by a code.
Be it in 2011 or now through debit card attacks or striking global websites in almost consecutive days, the inference is clear, whether one likes it or not, we are at war and civilian technology is being employed as military weapons without blood being shed. As days go by, the intensity of such wars will only get bigger and better. Thus it is time India braces up to warfare being fought not just frontally but also to other confrontations fought asymmetrically or through multidimensional attacks on almost every aspect of social, political, and economic life. It is in this context that the statement of fighting undefined war assumes great significance. Two of China’s finest military strategists, Col. Qiao Liang and Col. Wang Xiangsui term this as ‘Unrestricted Warfare’, in their words this form of warfare has ‘no rules and nothing is forbidden’.
The United States too has in its defence documents has clearly stated that the different types of war fighting that will take place in the future, will be, information warfare, precision warfare, joint operations and significantly military operations other than war.
In 1999, China’s People’s Liberation Army’s Arts, Culture and Publishing House came out with a forewarning at least 3 years before 9/11 attacks : The vast majority of development plans of the present American military, such as those of the army for the 21st century, are all focussed upon dealing with an enemy with conventional heavy armour, and if the United States encounters an enemy with low-level technology, an intermediate –level enemy, or one with equivalent power at the beginning of the next century, then the problem of insufficient- frequency bandwidth will possibly occur. Actually, with the next century still not yet arrived, the American military has already encountered trouble from insufficient – frequency bandwidth brought on by the three above- mentioned enemies. Whether it be the intrusions of hackers, a major explosion at the World Trade Centre, or a bomb attacking by Bin-laden, all of these greatly exceed the bandwidths understood by the American military. This is because they have never taken into consideration and have even refused to consider means that are contrary to tradition and to select measures of operation other than military means.
So, in essence, the battlefield today is omnipresent and it is everywhere. It is best to recognise and be aware of it.
Does the battlefield have any form? Is one aware that such a battlefield with no rules exists? Is one equipped to fight this asymmetric battle?
Delving deep, there are several forms to‘Unrestricted Warfare’. Col. Qiao Liang and Col. Wang Xiangsui have enlisted different types of unrestricted warfares, some of these as Financial Warfare, which means, entering and subverting banking and stock markets and manipulating the value of a targeted currency. Second, Smuggling Warfare, which means, sabotaging a rival country’s economy by flooding its market with illegal goods, and jeopardizing a local economy by flooding the market with pirated products.
Third, Cultural Warfare means influencing the cultural biases of a targeted country by imposing your own cultural view points. Fourth, Media and Fabrication Warfare, means, manipulating foreign media either by comprising or intimidating journalists or getting access to another country’s airwaves and imposing your own perspectives.
Fifth, International Law warfare, which means, joining international or multinational organisations in order to subvert their policies and the interpretation of legal rulings. Network warfare which revolves around dominating information systems. Environmental and economic warfare are some of the many more types of unrestricted warfare that can be used in today’s time and age.
These are some examples of how the strong can easily be defeated by simple merciless methods.
The awakening to guard oneself and fight such forms of unrestricted warfare can start just by recognising that such forms of warfare exist and that the boundaries to warfare will not be defined as the normal convention goes.
Today every enemy will move beyond the contours of traditional warfare and as Sun Tzu says the thumb rule will be “Strike where the enemy is not prepared, take him by surprise”
And this is why Manohar Parikkar’s statement even though personal in capacity offers a glimmer of hope that India may be moving beyond the contours of defined warfare and may well be preparing ground to confront the various forms of ‘unrestricted warfare’ and to me this should be the guiding principle for India’s strategic doctrine in years to come.
The author is the Deputy Director of the India Foundation – A New Delhi based think tank. The views expressed by the author are strictly personal. [To read the entire article, click HERE.]
If we truly connect the dots, the push for chaos, India’s currency turmoil, and the external attacks on India, we have to wonder who is involved and what the end game might be. Is Soros at work? Is China? Domestic ineptness? A test by elitists to see what happens when moving to a cashless society? No matter what, this is global economic warfare and it will not remain in India. We will see an American impact, sooner or later.
So what should you do? Celebrate Thanksgiving! Give praise for the opportunity the election affords America for positive change. But remain aware that there are many forces at work in the world. Being aware is the first step in addressing the problem. God bless, and Happy Thanksgiving.
Article originally published on Global Economic Warfare.