Jayant Bhandari explains the unintended consequences of India’s financial repression .. India’s government is conducting a war on cash – it banned the use of Rs 500 (~$7.50) and Rs 1,000 ($15) banknotes ..”This pretty much made most currency-in-use illegal. Banks and ATMs are closed today .. Today, there is utter chaos in the market, with only the spontaneously erupted black market available to bypass the ban — most people simply don’t have anything else but the banned currency bills. Some are booking train tickets for future rides and are subsequently canceling them — they can use the banned currency to buy the tickets and can then get legal currency back after ticket-cancellation charges. This is costing people a lot of time, but it is the only way they can stay afloat and buy food. Others are taking different measures, equally desperate .. Huge chaos in the Indian economy should be expected to continue — as India’s government is simply incapable of bringing liquidity back any time soon. Businessmen will waste their time dealing with this nonsensical event, instead of investing and creating wealth. India simply continues to do more and more of what makes it an uneconomical and wasteful place to invest in.”
LINK HERE to the article

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