India Update: Gold Ownership Effectively Illegal

Politics

Gold Bullion Is Now Effectively Illegal in India

As previously reported in separate posts, here is a consolidated recap of the events as they have unfolded thus far in India. We also take a look at previous (more) disturbing actions PM Modi has engaged in trying to understand the end game in India- Soren K.

Cash is being outlawed
Gold is being taxed higher
Modi believes he is India's Saviour

There are clear signs that in a very convoluted way, possession of gold for investment purposes will be made illegal"
"The situation is getting worse by the day... people are desperate"-Jayant Bhandari

[Editor'sNote: As we are correcting our picture rendering module, pic usage will be at a minimum until the new system is implemented.]

Article Contents

0) Summary

1) The Ban is Implemented and Banks are Closed

2) Banks Open and Chaos Ensues

3) Enter the Police State

4) Gold Bullion Is Now Effectively Illegal

Jayant Bhandari, advisor to institutional investors worldwide and founder of “Capitalism and Morality" recently interviewed with Maurice Jackson to update and elaborate on the situation in India. Jayant provides the clearest explanation of where India is (and where it is going) in the brief interview with ProvenAndProbable.com's Maurice Jackson

Here is a summary of his multiple articles and interview excerpts sprinkled with our old and new observations

Summary:

What Modi Did

India Banned 500 and 1000 Rs announcing they could be exchanged for different denominations at banks
India then makes exchange of the notes impossible, accepting them only for deposit.
Police State measures are now being used to “re-stabilize” the citizenry
Gov’t will tax Gold Jewelry over 500 grams owned by citizens

What the Result Was

Those who find themselves stuck with high denomination bills,must accept as little as Rs 700 in usable currency for every Rs 1000 of banned currency.
Banks are closed for the first 2 days post announcement
Riots begin as businesses cannot remain operative
Corruption goes deeper underground
People die from misallocated resources and rampant looting

What is Likely to Happen Next

Gold is now all but illegal
Modi has murdered Muslims for Indian nationalism in the past
Not assimilating in the system will result in taxes, punishment, illegal search and seizures , imprisonment and brutality

The Stated Reason for the Recall

The government believes that doing this will help eradicate corruption and push counterfeit money out of circulation. According to the Indian government, the counterfeit money tends to come from Pakistan and helps finance terrorism. This is not unreasonable. The idea is to flush out the black market money. But Gresham's Law tells us: “Bad money drives out good money.”

As previously stated:The "Stop Crime" Pretext

Simultaneously it will be sold to government as a way to close criminal operations and black markets. Remember the war on Iraq that neocons were itching for was justified after Saudi bombers hit the USA. Ken Rogoff is one such Cash Neo-Con.
"Paper money fuels corruption, terrorism, tax evasion and illegal immigration—so the U.S. should get rid of the $100 bill and other large notes" Ken Rogoff

Modi's Ends Justify His Means

When considering Modi’s actions one can look at his thought process 2 ways assuming he was doing what he thought was best for India.

He knew of the collateral damage risk and thought the eventual good would outweigh the chaos initially created.
Or he overestimated the power of centralizing the sheep and underestimated the reaction of an irrational populace.

Modi Will Kill if He Thinks He is Right

Based on precedent we believe that Modi does what he thinks is best. And eradication of what he deems is not good is something he would kill to accomplish. Modi was allegedly behind the massacre and rapes of thousands of Muslims in 2002 when he was the Chief Minister of the Indian state of Gujarat. As a result of this, Modi was banned from entering most Western countries. Modi has no family. He left his wife soon after he married. He hs no loose ends to morally tether him from any action pursuant to his goals.

In this case, Modi is killing cash because he feels it is a vehicle for evil, if not evil itself. His previous eradication was much more direct and telling. The pathway to hell is paved with good intentions, especially when ego and false messiah complexes obscure truth.

How It Went Down:

1) The Ban is Implemented and Banks are Closed

Market Forces Intervene

At least theoretically, people could still use the otherwise banned bills at hospitals, gas stations, pharmaceutical shops, and train stations. As one would expect in India, these places have been converted into corrupt currency-exchange shops as of today. Some well-connected people are prepaying for their medical treatment.

But for most legitimate uses, none of these organizations are accepting the otherwise banned instruments. Why should they, when they can force customers to pay in the still-legal currency and then buy the banned instruments for Rs 700 for every Rs 1000 in face value, making a neat 43% extra profit without doing anything?

Those who find themselves stuck with high denomination bills today, must accept as little as Rs 700 in usable currency for every Rs 1000 of banned currency.

Contrary to what the World Bank and IMF are saying, India is suffering economically. Its institutions are crumbling. And India is on the path to becoming another banana republic.

Gold’s Initial Reaction to India’s Ban

Any import of gold is subject to a cumulative tax of about 11%. The retail price of gold should be around 111% of the international price. Ironically, it mostly sells for 105% of the international price. Putting it simply, any law-abiding businessman must lose this 6% differential, ensuring his bankruptcy.

In reality most of the gold entering India is brought in by smugglers. These smugglers are happy to pass on almost half of their profit to consumers, while at the same time paying bribes to the Indian army, customs officials, other bureaucrats and politicians. If one wants to run a gold business, one must use smuggled gold if one wants to be competitive.

Crime Finds a Way

The problem is central planners believe criminals will all of a sudden follow the rules. We will show that the crime finds a way. And that the law abiding citizens of India suffer.

Those who look deeper, understand that corruption in public life comes from ingrained corruption in India’s society and culture. If one had to make an effort to remove corruption this is where one should start. The problem is endemic, and to succeed a bottom-up approach needed also to be combined with a top-down attack. In this way, the corruption would press down on the heads of state involved while squeezing the grass roots level of criminals simultaneously. That did not happen.

The Democratic Primary as Example

An example in the U.S. is the failure of the Bernie Sanders campaign. He was representative of grass roots move to eradicate corruption and was more popular than Hillary. But without a top-down flank, Hillary’s operatives undermined him. When the whole system is the problem, swamp draining has to happen from the top down AND the bottom up simultaneously.

2) Banks Open and Chaos Ensues

Unintended Consequences?

Day 1 of the banks opening. Poor, desperate people, whom the government treats like slaves or perhaps insects line up to get limited exchanges of currency. Somehow these people have been brainwashed into thinking they live in a free country. Does this sound familiar to you?

Small businesses are in shambles, and many will probably never recover. The Hindu wedding season has just started and people are left with unusable banknotes. Their personal and family lives are now an utter disaster. Our coverage here

3) Enter the Police State

Habeus Corpus Suspended

Police now reserve the right to randomly search people’s possessions without a warrant. Those who live in India — in an economy in which 97% of all consumer transactions are in cash, most salaries are paid in cash, and most revenues are collected in cash — routinely transport and carry large amounts of cash on their person.

A regular sight outside of bank branch offices, where poor desperate people laid off from work because of the monetary crisis must bear insults and physical harm from the police, all for the “greater good” and a “corruption-free” India

Legitimate Gold Demand Dies

Fear has gripped the bullion market, for one is deemed to be guilty until proven otherwise. People with perfectly legal cash are afraid of cameras recording their purchases and having to pay outrageous bribes. After an adjustment period people will buy more — not less — gold. For now, the gold market has gone mostly underground with the gold price hovering around US$1,700 per ounce. Did Modi want to boost the informal economy?

4) Gold Bullion Is Now Effectively Illegal

Assaults on people’s private property and the integrity of their homes through tax-raids continue. In a recent notification, government has made it clear that any ownership of jewelry above 500 grams of gold per married woman will be put under the microscopic scrutiny of tax authorities.

As Jayant detailed previously, expect a continuation of new social engineering notifications, each sabotaging wealth-creation, confiscating people’s wealth, and tyrannizing those who refuse to be a part of the herd, in the process destroying the very backbone of the economy and civilization.There are clear signs that in a very convoluted way, possession of gold for investment purposes will be made illegal. Expect capital controls to follow.

Steep taxes and penalties will be imposed on those who cannot prove the source of their gold. In India’s Orwellian new-speak this means that because bullion has not been explicitly mentioned, its ownership will be deemed to be illegal. Courts will do what Modi wants. Huge bribes will have to be paid.

Conclusion

It is happening globally. The tactics may be different, but the strategy is the same. Individual economic freedom will be exchanged for the promise of safety by well intentioned and not so well intentioned centrists, fascists, and institutions most concerned with preserving themselves. Some examples previously posted here.