“If you hand in your physical cash hoard, we’ll let you keep 50% of it…”
That’s the message coming out of the Indian government today. Last week, Indian Prime Minister Narendra Modi announced a shock demonetization order. All 1,000- (about $14.60) and 500-rupee bills (about $7.30) will become worthless by December 31.
The bills amount to 86% of Indian currency in circulation.
The move’s sent India’s economy—the fastest-growing in the world (7.1% annually before the order)—into a tailspin. Panicked citizens are trying to unload the bills anywhere they can before the deadline hits and their savings are wiped out.
ATMs have run out of smaller bills. So now citizens are liquidating their currencies on the black market (for sizable losses). But their troubles are just beginning…
Now the government has announced it will tax “unexplained” cash deposits at 50%. Those who won’t voluntarily declare where the money came from will get hit with a 90% tax… and even face prosecution for “illegally” hoarding their own money.
In today’s can’t-miss 3-Minute Market Minder, The Palm Beach Letter’s Teeka Tiwari chimes in with what to do next as the War on Cash spreads across the seas… to Australia, Europe, Japan, and even the United States… [Transcript here.]
(Teeka shares his preferred “currency alternative”—which he believes everyone must hold for insurance against the global War on Cash—right here.)
Hello, friends, and welcome to Big T’s 3-Minute Market Minder. Today, I want to give you an update on the absolute pandemonium that’s going on in India right now. Just over two weeks ago, India decided to ban the 500- and 1000-rupee note, in an effort, they said, to stop corruption. The bottom line is this was a straight-up grab for cash.
And we can see that here. Now the Indian government is saying, “Well, if you hand in your cash hoard, we’ll let you keep 50% of it. Oh, by the way, the 50% we’ll keep—the 50% you get to keep, you have to put a four-year limit on you using that cash, you’re not allowed to use that cash for four years.”
Friends, back in April of this year, I wrote to you and told you that such an event like this would happen. I remember writing that and thinking, “You know, people are going to think I’m nuts, talking about an outright ban on cash,” and yet we are seeing it take place here in India. Not only in India, but just this past weekend I read a report coming out of Australia that Citibank in Australia is refusing to accept cash in their branches. You are not allowed to use cash in a Citibank branch in Australia.
Friends, the War on Cash is very, very real. These poor folks in India, they have been forced to exchange their money on the black market at a huge loss. They are trying to buy gold, but gold is trading at a 100% premium in India right now. Here in the United States, it’s trading at around $1,180–$1,200 an ounce. In India, it’s trading at over $2,200 an ounce. Here in America, we can buy bitcoin at around $730 a bitcoin. In India, it’s $900 a bitcoin.
This is exactly what I said would happen once you see the War on Cash take place. You would see this enormous move into assets that are traditional—and non-traditional—safe havens. And that the demand would be so huge, you wouldn’t be able to get into them. Because the prices would virtually double overnight. We’re certainly seeing that being true with gold, and we’re certainly seeing that be true with cryptocurrencies.
So, friends, the long and the short of it is that there’s a worldwide assault on cash. Now, in India, they have taken some extreme measures in order to remove cash from their society. Here in America, they’ll probably use a slightly different playbook. But the bottom line is that governments want to get rid of cash. They want to be able to view every single thing you buy, and they want to be able to tax every single transaction that you use your money for. This is a trend that is only going to continue. And you’ve got to be prepared for it now, not six months from now.
So, I’ve written extensively about this. I think everyone should own a little bit of gold, I think everybody should own a little bit of bitcoin, and you should be aware of how you manage your cash. I’m going to leave it at that.
All right, friends, that is enough out of me. I will catch up with you in the next video. And I want you to always remember: Let the Game Come to You!