India Confiscates Gold, Even Jewelry, In Raids On Hidden Money

Tyler Durden's picture

Submitted by Michael Shedlock via,

Global financial repression picks up steam, led by India. After declaring large denomination notes illegal, India now targets gold.

It’s not just gold bars or bullion. The government has raided houses, no questions asked, confiscating jewelry.

For background to this article, please see my November 27 article Cash Chaos in India, 86% of Money in Circulation Withdrawn; Cash Still King in Japan.

Large denomination means 500-rupee ($7.30) and 1,000-rupee notes ($14.60), which account for more than 85 percent of the money supply. They are no longer legal tender, effective immediately.

As one might imagine, chaos ensued. And it continues.

India Confiscates Gold


Picking up where we left off, please consider Message to Modi: Do No More Harm by Mihir Sharma.

The chaos accompanying “demonetization” hasn’t eased up noticeably. It seems likely the disruption to the economy, especially in cash-centric rural India, will hit growth sharply for at least a few quarters. It’s tough to say for how long and by how much; we are in uncharted territory here and guesses have varied widely. But many analysts agree with former Prime Minister Manmohan Singh, who’s predicting the new policy will knock 2 percentage points off that world-beating GDP growth rate.


Demonetization was originally sold as a “surgical strike on black money” — the illicit piles of cash many rich Indians have accumulated out of sight of the taxman. It’s now clear the policy has been anything but surgical. Worse, uncomfortable questions are being asked about whether the complicated rules and exemptions that have accompanied demonetization have allowed black-money holders to launder most of their cash. Of late, Modi’s chosen to focus instead on demonetization as means of advancing a cashless economy.


Yet the idea of a war on unaccounted-for wealth remains central to demonetization’s popular appeal, which means Modi will have to find other ways to keep that narrative going. So the government has now begun to push income-tax officials to conduct raids on those who might be concealing assets in forms other than cash, such as gold.


There’s already enough fear of such raids becoming common again that the government felt the need to step in to quell some of the anxiety. That didn’t help much. The government “clarified,”  among other things, the rules governing when tax officials could seize gold: Nothing would happen “if the holding is limited to 500 grams per married woman, 250 grams per unmarried woman and 100 grams per male.” It also said that there would be no limits on jewelry “provided it is acquired… from inheritance.” Also, the “officer conducting [the] search has discretion to not seize [an] even higher quantity of gold jewelry.”


What this means, unfortunately, is that India’s income tax officers have just won the lottery. During a raid, they can, on the spot, decide whether or not to confiscate a family’s gold holdings. And remember, India has an enormous amount of gold — 20,000 metric tons, much of it inherited. (The rules governing simple searches are different, but few know that.) Rather than cleaning up tax administration, the government has handed tax officials more power than they’ve had for decades. The rich will pay what they need to escape harassment; the rest will suffer.

Rich Escape, Poor and Middle Class Suffer

The last line in the preceding article says all you need to know about what’s happening: “The rich will pay what they need to escape harassment; the rest will suffer.”

Evidence suggests the politically connected, and their friends, knew about the ban on cash and acted in advance. Everyone else is stuck.

India’s raid on gold reinforces its ban on cash. Short term aside, these kinds of actions will increase demand for gold.

What’s Next?

I keep wondering: what’s next? People pretend they know, I admit I do not. However, I am quite sure a currency crisis is coming. Where it strikes first is unknown, but the list of likely candidates increases every year.

My spotlight has been on Japan, China, and the EU. India caught me off guard, but it adheres to my general theory this pot will eventually boil over in a cascade from an unexpected place, outside the US.

US actions may cause a currency crisis, but I believe a crisis will hit elsewhere first. If I am correct, gold will be the safe haven, regardless of currency, but especially where the crisis hits.

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booboo's picture

Never happen here (sarc)

HungryPorkChop's picture

Shoud we assume India is getting ready for a Bank Holiday and Currency Devaluation?  Maybe another Venezula complete with food riots and hyperinflation?

Draybin Deffercon III's picture
Draybin Deffercon III (not verified) HungryPorkChop Dec 7, 2016 4:45 PM

Bitcoin users unaffected.

Government needs you to pay taxes's picture

Must not have a 2nd Amendment in India.  

nuubee's picture

From my cold dead depths of the near-coast pacific ocean!!

Stainless Steel Rat's picture
Stainless Steel Rat (not verified) nuubee Dec 7, 2016 5:36 PM

Did someone make a joke about the gold shirt guy yet?  No?  Ok, here goes.  Something about losing your shirt, blah blah blah...

hedgeless_horseman's picture


Governor Greg Abbott signed a law last week to build a depository for its 5,600 bars of the precious metal and, as he said in a statement, “repatriate $1 billion of gold bullion from the Federal Reserve in New York.”


The gold, it turns out, isn’t at the New York Fed -- it’s in a rented vault in midtown Manhattan -- and is worth about $650 million. Regardless, Texas aims to bring it home.


“We want to show off our strength and resilience,” said Giovanni Capriglione, the Republican lawmaker who sponsored the repatriation bill. “This is to be able to say, ‘Hey, listen, Texas is unique, it’s stable, it’s strong and we can show that by letting other states and individuals know that, yes, Texas has a billion dollars worth of gold. Does your state have a billion dollars worth of gold?’”

38BWD22's picture



"Molon Labe" is about to become a new Texas word.  



Luc X. Ifer's picture

India is just a giant lab/simulator for big, at-scale giant experiments. This is the largest experiment TPTB afford to run/replay before triggering the real, global one. 

boattrash's picture

At last count, India has enough people with pitchforks to end this quickly.

Manthong's picture

I submit that financial oppression is a better description of the dilemma.

And there is plenty of wood in India as well as enough people to swarm and assure that no oppressive politician or banker is not displayed on a pike in public space.

..and the pitchforks would be handy to hoist them up and plant them firmly. 

manofthenorth's picture

Rich Escape, Poor and Middle Class Suffer

Where have I heard that before ???

Manthong's picture

well, whiskey tango texas mentioned it…..

..but for me the big question is whiskey tango foxtrot, over?.


and HH ….


SafelyGraze's picture

stocking stuffers for india friends:

(spoiler: it's just chocolates, wrapped in foil)


Manthong's picture

And the perfect accompaniment to the snack….

fockewulf190's picture

Not for nothing but working as a tax collector in India is soon going to be the most dangerous job you can have.

Omen IV's picture

Weddings are a big deal in India - they can go for days - can you imagine a woman about 55 years old well connected with 20 weddings (at the low end) she has been invited to in the last 5 years - who wore her various extensive collection of Jewelry and photographed endlessly and the Bride (who wanted face time for her 15 minutes in the sun) posted the pics on Facebook of the guests.

That woman is completely freaked out right now !


boattrash's picture

Absolutely Beautiful! And their weddings should continue to be as well. Hence the reason/need for their men to "cowboy the fuck up" and start showing the "enforcers" the scam is over, and they can call the note due in blood.

boattrash's picture

Dup! Gotta love this Hotel Interweb...

sun tzu's picture

Sheep don't have pitchforks

boattrash's picture

Nope, but they've likely been had by you.

SilverRhino's picture

You are assuming they have any balls left.   

Modi is basically committing national armed robbery against his own citizens.    



Bobbyrib's picture

Wish I saw this before I posted. It would have saved me some key strokes.

HenryKissingerChurchill's picture

yes, but somehow a tiny wooden stick seems enough to manage the herd

BobEore's picture

India is just a giant lab/simulator for big, at-scale giant experiments.

Well done. That sums up nicely what has proceeded out of the 4 year effort by the assorted echelons of the moneypower to rein in gold-heavy Asian sovereignities by means of stealth expropriation of private sector savings of real wealth. The experiment in India proceeds out of what I termed the "Turkish Model" of the 2011-2013 period,  in which the Ankara regime collaborates with media and finance interests to hatch a "get gold from under the matresses scheme" which raked in some 20 - 40 tonnes of real gold.

It then exports to India, where implementation suffers from the lack of "sophistication" on the part of the target victims - the majority of private citizens there having no bank account from which to achieve the alchemical transformation of real gold into "XAU" credits -aka paper gold. Failure of which program required a period of retrenchment and the rolling out of new, improved methods of taking liberties with the savings of the electorate/villeins.

It's no accident that the incipient meltdown of civil society occurring in both countries corresponds with their respective positions as second and fourth largest gold-consuming nations. The gold grabs targeting private wealth are a form of covert expropriation in which the same shadowy powers which completely own the leadership of both regimes are formulating the means by which they will achieve similar results in the new United States satrapy which they have now won equal control as of last month.

Nor is it in any way accidental that the exports of plasma from Turkey to Israel have grown exponentially in the same time period. Gold and Blood - flowing from the veins of the citizenry targeted by the moneypower on whose sacrifice can be built the "New Jerusalem" - there are many billionaires of dual-citizened status who fed some of their vast resources of stolen wealth into the electoral circus who expect to be paid back now in the currency of red & gold. And their wish shall be fulfilled by means of the TRUMP DECEPTION. Fools and their corpuscles will soon be parted!

Dancing Disraeli's picture

They shant get my precious bodily fluids.  I deny them my essence.

weburke's picture

folks there regret not putting their money into dollars

HelluvaEngineer's picture

Pretty sure even the cops in India don't have firearms.  I remember a story of a Pakastani shooter...the police had to run back to the station and unlock their crusty old Enfield rifles.

The takeaway is that when they lightly tap on your door and ask pretty please for all your gold you can tell them, "Sorry Sanjay, I don't think I'm going to let you take my gold today.  Why don't you leave before I kick your ass?" will most likely work.

Of course, no one there has actually tried it.

Miss Informed's picture

The people that stopped the spread of Islam dead in its tracks

Jethro's picture

The Sikhs paid a heavy price for combatting islam. The shit that population went through back in the day makes the crap ISIS is doing look bush-league.

Miss Informed's picture

Nonsense. Have you never heard of the Sikhs or the Ghurkas? Fat, silly militia types and posers wouldn't survive the first round with people like that, unless the fight would be in "World of Warcraft".

HelluvaEngineer's picture

Yeah.  Looked it up.  Totally don't fucking care.  Posting it twice doesn't make it true.  Go home.

Jethro's picture

The Sikhs are generally good to go.  Gurkhas are just Nepalis, but they too are generally decent folk.  In my experience, the ethnic groups up in the mountains and hill stations are waaay easier to get along with than the ordinary Indian population.

East Indian's picture

Gurkhas are not the common nepalis. They are socially apart. 

Jethro's picture

Just out of curiosity, since when?  If by socially apart you mean status-wise, I could agree with you.  But culturally, they are the same.  I remember a push for a "Ghurkaland" back in the early 90's (ostensibly to be carved out of northern India).  But, i have a layman's perspective.  I mostly hung out with Nagas, and a Sherpa or two, so if I have an incorrect bias, I am willing to admit to it. 

Jethro's picture

Depends on the police force.  The cops around the diplomatic areas in New Delhi back in the 90's had Enfields, and the odd Sten.  The riot cops had lathis with weighted collars.  I saw several rioters get laid smooth out with lathis one time..over the CCTV while we were waiting to see if the crowd would try to breach our compound.  I had been recalled, and had only my civvies on.  Flip flops, shorts, my react gear and an 870 some CS cannistets and a gas mask.  Good times.

gellero's picture

Police are armed.......with rifles and shotguns....chained to their the Mob can't get them...

drendebe10's picture

Why would any entity or person have their Au stored by another party?  WTF?

Not My Real Name's picture

Crazy, isn't it? People who buy gold to eliminate counterparty risk and then promptly give it to a custodian, thereby subjecting themselves to ... counterparty risk.


HedgeJunkie's picture

I am now marketing post hole safes.

For $500 I will send you  a manual posthole driller, twelve inches of plastic pipe, and two end caps, and a can of PVC glue..  Recommended depth is three feet.

A Depth that is easiy obtainable using our Survivorist Post Hole driller.

Guaranteed to accomplish what your boating accident didn't...and works fantastically in dry lakes.

Desert tested, desert proven.

For Maximum effect for every post hole drilled, put a solid steel pole in place above the cache.  Then toss bits of rebar (included) around your yard.


The Gun Is Good's picture

"It’s in a rented vault in midtown Manhattan."

Glad it wasn't in the vault that got cleaned out by the real 9/11 perps. 

(And wasn't there another disappearance / robbery during the "Frankenstorm" event a few years back? Or was that just paper securities... can't recall.)

nmewn's picture

lol...great minds think alike  ;-)

Mr. Bones's picture

I think we should take a moment of silence to remember the barbarous relics, firearms, and other miscellaneous non monetary assets that have been committed to the deep and left in the custodianship of Davy Jones.

golden kafir's picture

Going Long in Canoes or could just start a canoe rental service

MANvsMACHINE's picture

How can you think about Slurpees at a time like this?