"There's Chaos Everywhere" - Indians Angry As ATMs Run Dry After Cash Ban

Tyler Durden's picture

The blowback from the world's latest strike in the war on cash is unraveling fast in India. This week's decision by PM Modi to ban some high-denomination banknotes (on the premise of fighting corruption) has left "chaos everywhere" according to one official who accused the prmeier of wreaking havoc on the poorest Indians. As Reuters reports, nearly half of India's 202,000 ATMs were shut on Friday and those that operated quickly ran out of the new notes as scores of people descended upon them.

Bloomberg's somewhat calming perspective on the events taking place in India...

India’s banks have been caught out by Prime Minister Narendra Modi’s unexpected and widely-praised announcement late on Tuesday of the withdrawal of 500-rupee and 1,000-rupee notes, part of a crackdown on tax evasion and the underground economy. Jaitley urged people not to rush to banks immediately and wait for a few days and to conduct financial transactions using electronic transfers, cheques and credit and debit cards.

 

“A big regret is that people are getting inconvenienced, but currency replacement of this magnitude will cause some problems,” said Jaitley. “There are long, but orderly queues. Such a big currency replacement can’t be done overnight.”

 

Indians rushed to deposit 478.68 billion rupees ($7.1 billion) of cash at State Bank of India after the government’s surprise move to abolish high-denomination banknotes, as customers queued for hours to deposit or exchange the old bills and ATMs ran dry.

Are very different from the more frantic scenes described on social media and reported on by Reuters...

Anger intensified in India on Saturday as banks struggled to dispense cash following the government's decision to withdraw large denomination notes in an attempt to uncover billions of dollars in undeclared wealth.

 

 

Tempers frayed as hundreds of thousands of people queued for hours outside banks for a third day to swap 500 and 1,000 rupee bank notes after the notes were abolished earlier in the week.

 

The banned bills made up more than 80 percent of the currency in circulation, leaving millions of people without cash and threatening to bring much of the cash-driven economy to a halt.

 

"There's chaos everywhere," said Delhi Chief Minister Arvind Kejriwal, a rival of Prime Minister Narendra Modi, accusing the premier of wreaking havoc on poor and working Indians while the wealthy found ways to skirt the new rules.

 

Customers argued and banged the glass doors at a Standard Chartered branch in southern Delhi after security guards blocked the entrance, saying there were too many people inside already.

But the crackdown by the government is affecting the real economy already...

Nearly half of India's 202,000 ATMs were shut on Friday and those that operated quickly ran out of the new notes as scores of people descended upon them.

 

 

Finance minister Arun Jaitley said ATMs had not been adjusted to handle new currency notes prior to the announcement in order to keep it under wraps. "Recalibration of ATMs will be completed within two weeks," he added.

 

Traders in Delhi's vegetable market said they were considering shutting down the market as cash was running out and banks were dispensing a limited amount.

 

"We might have to close down until the situation stabilizes," said Metharam Kriplani, president of the Chambers of Azadpur Fruit and Vegetable Traders.

 

 

People in Mumbai said grocers were charging 10 times the price of salt in return for accepting the old cash notes.

Much of India's rural economy is powered by cash, with few people regularly using a bank account.

In Dudko, about 75 kms (45 miles) from Delhi, villagers said they were finding it difficult to pay for food and fuel four days into the cash crunch.

 

"Bank officials are saying they will give the money on Monday. How will we make purchases?" said Sunita, a woman who was preparing for her daughter's wedding later this month.

Finally, as GoldMoney's Alasdair Macleod notes, due to many Indians’ deep suspicion of government motives around monetary and banking policy generally, it also has the potential to lead to a sudden surge in Indian gold demand that could more than offset any weakness due to the tax. Our sources report that the surprise move has turned the Indian retail market into a frenzy. As seen elsewhere in gold’s most important price drivers: energy prices and real interest rate expectations, the asymmetry in Indian gold demand has now shifted to the upside.

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Raffie's picture

Coming to a country near yuou soon

CaptainObvious's picture

Indians are smart fuckers, though.  Most of those who can afford to are swimming in barbarous relics.

How many Americans even look upon gold as something more than jewelry?

BaBaBouy's picture

Another Reason for the GOLD Standard ~~~

BaBaBouy's picture

WHY Have Cash when you can have FOOD Stamps ~~~

Draybin Deffercon III's picture
Draybin Deffercon III (not verified) BaBaBouy Nov 12, 2016 3:11 PM

1-2-3

GOLD-SILVER-BITCOIN

BaBaBouy's picture

SMELLS Like The US Could eliminate Fiats 100's and 50's ?..
Why Not, they did it to the 1000...
Reason... You Know, Combat Terrizm...

Vatican_cameo's picture

 

Is it PC to call them Indians?  I was thinking more like "Native Non-Americans".

Jon Bong Jovi's picture

The banks are already giving me shit about bringing in old 100's. Ask me for ID and my SSN. Ask me why I still have them.These aren't even the little face bills.

I told them, "Listen I've been banking at this branch for 35+ years, you know I own two retail businesses, why is this even a question? I'm not supposed to take money from my customers? I'm supposed to tell them I can't take legal tender? You're going to flag my account because I accept cash?"

Other bank, now takes my info for any cash deposit over $3000 and told me after the first it'll be anything more than $2500.

BrownCoat's picture

Sounds like you are on their list. Good luck getting off it.
Banks are required to submit a minimum of 3 suspicious activity incidents per month whether suspicious or not. This policy can harm innocent people, but will not stop the serious money launderers. The upside is it justifies the jobs of otherwise worthless government employees! Feel good about help'n them. Without that useless job, they would find more violent ways to victimize people.

Raffie's picture

#1 DO NOT USE BANKS

#2 Credit Unions are best

I have used both my credit unions to swap out the old $100's and never an issue.

Ask for X about of cash as long as it was under $5k, not issues at all.

I did many testing the Credit Unions and like always, they way better then banks.

Been with various Credit Unions for past 20 years and never an issue.

ConnectingTheDots's picture

Why are you doing business with this bank?

Time to go to a new bank, or better yet, a credit union.

zippedydoodah's picture

Typical ZH  pushing it's own "world's latest strike in the war on cash" agenda.

Not a single mention in the article that the notes are being replaced ny newer ones. 

In fact the largest denomination is going UP to 2000 rupees.

http://www.bbc.co.uk/news/world-asia-india-37961975

Grave's picture

be your own bank, use bitcoin, fuck the bankster cartels, starve the beast
chinese are much smarter than indians in this regard

stacking12321's picture

But...but...bitcoin will go away when they throw the internet kill switch.

And I know that's true because a redneck on zh told me so!

DownWithYogaPants's picture

The gold standard would be a bad idea.  Debt based currency is a bad idea.  Greenbacks ala Lincoln is a good idea.

Watch "The Money Masters" .........find out why gold standard ain't such a good idea.  Hint: Who owns most the gold?

stacking12321's picture

why try to tell people what's a good idea and what's a bad idea?

why not let currencies compete freely, and let people decide what works for them and what they want to use?

uzsibox's picture

theres no such thing as perfect competition.

what you said is what's happening now, for the majority to chose anything over fiat, first they would have to realise they have an option of choice. catch 22.

RaceToTheBottom's picture

And now they will be saved by.....

"Gold shirt man"....

Alex DeLarge's picture

Unfortunately he was beaten to death by 12 "unknown" attackers. 

 First they came for the gold shirters, but I didn't speak out because I didin't have a gold shirt!

Raffie's picture

The ONLY thing that keeps me from Bitcoin is the some of the thefts that crashed the price down.

I will still look and watch it, but after the market crash I think my money will be best in silver/gold mines and 1 or 2 medical companies.

 

I know some who love BitCoin, I just never got on board with it.

If you have some good links please share them, I would like to see them.

kochevnik's picture

You confuse exchanges with the coin.  Akin to avoiding all dollars because some bank became bankrupt

StychoKiller's picture

Bad publicity affects the exchange rate of BitCoins, not always in a good way.

Grave's picture

:rolleyes:
do a little bit of research

bitcoin protocol is the rule set that governs its economy
it is not in the hands of banksters, government or any central "authority"

its got censorship resistance, finite money supply, cryptographically secured ownership and mathematically provable consensus

with just a mobile phone any two parties can now transact without a central authority, company or bankster mediating the transaction

bitcoin is also much more than a computer science development:
- it's an unique, self-regulating incentive system for achieving
a notoriously difficult social objective: getting human beings to act in ways that serve both their self-interest and the common good.
- it is a governance project, an attempt to overcome the Tragedy of the Commons.

RaceToTheBottom's picture

When something can be purchased by a currency that TPTB can print up at will, something can be manipulated up and then down at will.  
Same as was and probably is being done with paper gold. 

One powerful Fiat that is manipulated screws value up for everything that can be bought/sold by that Fiat.

 

Mustafa Kemal's picture

All true, but what is the point?

Grave's picture

here's a little secret :p
when shtf and global economy debtfraud collapses, people will definitely turn to something different from debtfiat which is always created at will from thin air into infinity (runaway central authority corruption)

people want a secure way to transact/exchange their productivity, something that can be trusted without third parties (you cannot trust "authorities" whose "security" only goes as far as threats of violence and murder on a large scale, it always ends up same, psychopaths in power rob the society blind through fraud, corruption, "taxes", inflation, then turn to massmurder to cover their tracks).

pms are great for local transactions, but modern society is pretty much fully online, and there's nothing better than bitcoin protocol.
you will see the emergence of bitcoin/gold parity where digital (bitcoin) is fully backed by physical (gold) in a secure, non inflatable way. no more 300x paper gold shit.
(do the math 21m bitcoins, 210k tons of gold
thats 1 bitcoin per 10 kg gold, or 400k usd at current valuation, or 100-200 months worth of your productivity/work)

Jeffersonian Liberal's picture

Are you serious?

If the SHTF, do you really think digital/computer currencies are going to be working, will be reliable, that people will be purchasing their daily bread through digital, invented currencies?

Go ahead and believe that if you want to. Everyone else will be bartering things of value for things of comparable value. A digital coin ain't going to be exchanging hands if the SHTF. You'd be better with .22LR ammo in 50-round boxes.

RaceToTheBottom's picture

I don't disagree with anything you said.

I was just pointing out how the .Gov or NSA could manipulate things.  There was some wierd movements in bitcoin a year or so ago that could have been them testing things....

 

I think Gold is a good long term store of value.  Bitcoin is a transactional tool.

Combining the two does make sense, but you can in effect do that now....

Grave's picture

bankster cartels tried to take over bitcoin several times now (paying off some developers, forking its source code and calling it classic, unlimited, reloaded, re-un-bullshitted, etc)
morons still have no clue how it works and more importantly where its value is

good thing bitcoin is designed to be resistant to change and therefore highly resistant to hostile takeovers.

people aint seen shit when it comes to price movement
its going to be glorious when these fucks realize they have no other choice but to buy in (in effort to preserve all the wealth they stole from all the hard working people)
its going to be the greatest wealth transfer in history haha

RaceToTheBottom's picture

Thanks for your reply.  

Is that where Blythe Masters ended up after designing the CDO fiasco?   I heard that she moved to one of those startups...

stacking12321's picture

it would be good to understand what the term "fiat currency" means before making such declarations.

there is no government that i'm aware of that has decreed that bitcoin is money.

Mustafa Kemal's picture

where's the fiat in bitcoin please?

Jeffersonian Liberal's picture

Let me explain it to all of you, ok?

What is a fiat currency? It is a currency that is created/printed/distributed by "fiat," that is, by governmental degree.

Read another way, and this is the way that all intelligent people who study monetary policy take it to mean, it is currency that is not pegged to something of real, stable value. Traditionally, that means PMs. Other commodities can be used provided the supply is steady and the value consistent.

What is bitcoin?

It is a digital currency.

What is its value based on?

Nothing more than what its users say it is worth. XX number of bitcoins to purchase item YY one day. The next day, who knows?

What I'm saying as that it is a purely invented currency that is based in a digital realm. Due to its not being tied anything of real, stable value and given also the more salient fact that its digital amount can be changed with a few strokes of the keyboard (either inflated or deflated) through digital control its purchasing power and value can be destroyed instantly. Sort of what governments and central banks do with their currencies whenever they want and sort of kind of like what is the problem with fiat currencies (no anchor that cannot be manipulated).

You want to invest in bitcoins and all that, go right ahead. But you are not investing in a solid, stable currency. It is a currency that has about as solid a foundation as fiat currency.

Grave's picture

stupid is strong in this one
read the fucking bitcoin whitepaper, and learn how it works

Jeffersonian Liberal's picture

Ha. Stupid is trusting the value of something based upon a whitepaper.

Where is the PM backing to their "coin" stored? Oh wait, there is none? Or who knows?

kochevnik's picture

Fear of white paper?  Did you fail remedial maths as well?

stacking12321's picture

you avoided my question, because you KNOW you are wrong.

you even admitted:
"What is a fiat currency? It is a currency that is created/printed/distributed by "fiat," that is, by governmental degree."

so, if you're going to claim the bitcoin is a fiat currency, go ahead and tell us which government decreed that bitcoin is currency.

if you can't, then STFU with your false claims.

SoDamnMad's picture

Yeah but then we will have EBT cards that will do down with the false-flag EMP and THEN you will see SHTF.

Only metals like Pb will buy stuff. 

The central planners's picture

Gold and silver can be use as a wall againts inflation. Oops i used the word wall.

Raffie's picture

America is one of the few countries that been 'programed' to think PM is not real money and the UDS is.

When it all comes down. I know many people will be beating my door down asking why didn't I tell them what is going on. I did and they look around and told me "Nope, never gonna happen" and  "I read to much into these web sites and get caught up in their hype".

*sigh*

So many people will be washed away when the waves hits.

Will be a sad for sure.

 

Draybin Deffercon III's picture
Draybin Deffercon III (not verified) Raffie Nov 12, 2016 3:16 PM

I've tried holding cash for emergencies. I just can't do it. Not once you realize what it is, who makes it and how worthless it is. And Credit Cards/Debit Cards are even worse because it's all of the above + you are supposed to pay interest and "service fees" for the *privilege* of spending your "money"? I guess I'm just betting on waiting out the hoards to come to their senses in an emergency and using that bit of a spare-tire for calories ;)

Raffie's picture

Good to have SOME cash on the side lines.

Gold, Silver, Lead, food and water.

When they tear the system down it will take 12 to 18mo to get back online.

HAVE FUN....

Mustafa Kemal's picture

Yes, Ag, Au, Cash, Pb, H20, food, medicines, 

Dont forget to throw in some extra for your neighbors. Many of them will need help

Jeffersonian Liberal's picture

Yes, but not for those neighbors that supported politicians and policies that ultimately contributes to the crash. That ridicule us for prepping. That marginalized and isolated and demonized and ridiculed (Alinsky's tactics) when we tried to warn them what was coming.

Fuck them.

Raffie's picture

I never let anyone what I truly know what I own and strangers (neighbors) know nothing about me which is the way I keep it.

Jeffersonian Liberal's picture

As Raffie said, good to have some ($500 or $1000) for emergencies. If the SHTF and there is full-on collapse, the dollars will have some purchasing powers in the very early days of the collapse. Yes, there will be price gouging and inflation will be off the charts, but you can still use that soon-to-be-worthless cash to purchase some things that you may need.

Mr. Universe's picture

And so what is the 75% of Americans who can't come up with even $750 in an emergency going to do? When push comes to shove and you have crying children that need food...

Just saying, it won't be pretty and you will be to blame if you hoarded (the new buzzword to make it OK to kill those who properly prepared).

Escrava Isaura's picture

Raffie: few countries that been 'programed' to think PM is not real money and the UDS is.

And these nations are correct. PM is not money because PM needs to be sold for money.

Also, I wonder what the inflation is in India.

 

niemand's picture

wtf did people use before fiat paper money? for 5000 years??

is it you MDB? 

what is the currency in Sambaland?

REAL worthless fuckin´ fiat paper ponzi money

Inflation in Brazil? look for yourself..http://www.tradingeconomics.com/brazil/inflation-cpi

keep on pillin´ the REAL shit, moron