The primary objective of the Indian currency demonetization was to sharply reduce gold demand in the world’s most important retail market, India, one that is controlled by the Deep State oligarchy via a captured agent, its Prime Minister [Modi]. The manner in which the demonetization was carried out indicates some kind of desperation…Stewart Daugherty
Indian Demonetization Denotes Severe Stress in the Global Gold Market
By Stewart Dougherty
It is becoming clear that the Indian currency demonetization is actually a planned attack on Indian gold demand, launched to disrupt gold prices and discredit gold as an asset class. The attack was required to alleviate severe stress in the global gold market that is becoming increasingly difficult for the Deep State controllers to contain.
For two decades, physical gold has been migrating from the west to the east in increasing quantities. Numerous reports cross-confirm that the world’s leading refineries are operating at capacity to convert western gold into the kilo products demanded by Asian buyers. Refiners also confirm that the sourcing of western gold has become problematic, as supplies dry up in the face of voracious world, and particularly eastern demand.
Western central bankers and their Deep State handlers have made it clear that they intend to transition to a cashless society. However, they are not yet ready to make this transition. Therefore, their current focus is to start the process by eliminating high-denomination currency, such as Euro 500 and USD 50 and 100 notes. At the same time, they are working to digitize the payment infrastructure, a prerequisite to the elimination of cash.
Their problem is the steady awakening of the people to the disturbing implications of a cashless society, and to the assault on human liberty it represents. The Deep State oligarchs must implement their agenda before the people mobilize to prevent it from being imposed upon them.
The Deep State oligarchs understand that the western governments they commandeer are bankrupt. To continue operations, they must tap into the people’s private wealth for funding. In fact, the IMF has produced a position paper recommending a “one off capital levy of 10%” (a 10% wealth tax), to deal with western governments’ intractable fiscal problems. The authors of this paper state that the “levy” must be imposed at night and by total surprise, to prevent citizens from being able to take any steps to avoid it.
This type of ambush is exactly what just happened in India, with its shock demonetization.
The IMF’s proposal does nothing to change governments’ current trajectory of greater deficits and debt; the money raised would simply be used to service existing debt. This means the first capital levy will just be one of many going forward. Governments’ only solution is to expropriate the private wealth of the people, which is exactly what the IMF has admitted.
If people have cash and other private monetary assets outside of the banking system when the “capital levy” is imposed, governments will lose out. This is one of their primary motivations to eliminate cash: in order to maximize proceeds from the capital levy, they need the greatest possible amount of money within the banking system, in non-withdrawable, digitized form, when the levy is executed.
It is not in the interests of governments if people figure out that they are far better off being their own bankers, by privatizing their monetary assets, than handing them over to commercial bankers, who have become wards and enforcement agents of the state. Therefore, a full scale campaign is underway to demonize cash and to make precious metals appear dangerous by routinely pulverizing their prices.
In the meantime, supplies of physical metals in the west constantly diminished and are now strained. This means that the bullion banks’ LBMA and Comex paper price suppression activities must steadily escalate for them to maintain control of a market that is spinning out of their control. Unlike eastern investors, western investors tend to buy into rising prices, as they chase momentum. Rising prices can lead to a buying stampede. If a buying stampede were to break out in today’s supply-stressed precious metals market, prices would surge, which would be antithetical to the Deep State oligarchs’ agenda.
Given that Deep State operatives can do nothing to increase western gold supply, their only options are to somehow discover supply elsewhere, and/or to crush gold demand. But could the gold supply be closer than they think? With the help of a metal detector and a gold pan kit, (click here to learn more), they will be able to uncover the depths of their mines with the hope that they are rewarded with the gold supply that they are desperately craving for.
The “somehow” is India, a nation whose people possess an estimated 20,000 tons of gold, and who buy hundreds more tons of it each year. Prime Minister Modi, the Deep State establishment’s captured and controlled facilitator, has been instructed to obtain supply and control demand of gold in India, and he has been working overtime to achieve both objectives ever since his election.
First, Modi launched a Paper Gold scheme, whereby the Indian people were urged to tender their personal gold holdings to the state, in exchange for “notes” and “bonds” paying less-than-inflation interest rates on the value of the gold they provided. The notes are irredeemable for gold for at least five years, by which time the gold will be long gone from India and used in the bullion banks’ market rigging and other for-profit operations. Modi’s Paper Gold scheme failed, because the Indian people did not trust it, and correctly so.
Next, Modi imposed a 10% import duty on gold (India produces next to no gold, so virtually all of it is imported). This resulted in a multi-week strike by jewelers, which did reduce demand, one of the two aims of the Deep State oligarchs’ plan.
But shortly, this scheme failed, too, because gold smuggling surged, enabling the Indian people to obtain the gold they desire at prices roughly 5% over global spot, reasonable in the circumstances.
In a companion effort to crimp demand, Modi enacted a special reporting regulation. Enacted in 2015, it requires anyone purchasing jewelry or precious metals having a value of 200,000 rupees or more (the equivalent of roughly US$ 2,900) to present an Indian PAN Card. PAN stands for Permanent Account Number, a ten digit alpha-numeric number issued by India’s Tax Department to individuals and businesses. The PAN enables tax personnel to track all of a card holder’s financial transactions over their entire lifetime.
Only 17% of India’s population have obtained a PAN number to date, meaning that 83% of the population are unable to purchase $2,900 or more worth of jewelry or bullion in a single transaction; without a PAN Card, it is illegal to do so. This regulation has reduced jewelry and bullion purchases by upscale Indians who do have PAN but do not want their personal transactions permanently recorded. Alternatively, it has led them to make smaller purchases that do not require presentation of a PAN Card.
While the PAN regulation curbed demand in the $3,000+, high end of the market, it did nothing to address the vibrant, lower end, cash market. Smaller purchases of jewelry and bullion have traditionally been paid in cash, using 500 and 1,000 rupee currency notes. This was the Deep State’s Achilles’ heel in India, and they decided to deal with it.
Accordingly, on November 8, 2016, in a shock move, Modi “extinguished” all Indian 500 and 1000 rupee notes. Holders of the old notes have been required to exchange them for new ones, but the process has been extremely difficult and time consuming. Further, there are sharp restrictions on the amount of new currency citizens can obtain. Withdrawals are capped at 40,000 rupees per week, roughly $575.00. After paying for living expenses (90% of Indian purchases are made with cash), very little is left over for discretionary purchases such as gold jewelry. Given that the demonetization was specifically timed to occur in the middle of the robust festival and wedding season, the reduction in demand has been pronounced. Jewelers in Mumbai, the nation’s largest retail market by far, report sales being off by up to 90%.
We believe that the primary objective of the Indian currency demonetization was to sharply reduce gold demand in the world’s most important retail market, India, one that is controlled by the Deep State oligarchy via a captured agent, its Prime Minister. The manner in which the demonetization was carried out indicates some kind of desperation, because it defied all economic prudence, logic, humanitarian regard and common sense. India is the only country where this kind of attack on demand could have been carried out, and this is why it occurred there. It indicates to us that the bullion banking cabal is coming up against the wall, and that there is severe supply – demand stress in the global gold market that is rapidly becoming non-containable. Desperate times are producing desperate measures by the manipulators.
It is critical to note that the Governor of the Reserve Bank of India up until mid-2016, Raghuram Rajan, declined a second three year term. Rajan was a former Chief Economist at the International Monetary Fund, the “capital levy” people. He is also a member of the Group of Thirty, along with Larry Summers, the head cheerleader for the elimination of one hundred dollar bills in the United States, and cash in general. Much more important, Rajan has now become Vice Chairman of the Bank for International Settlements, the so-called “central bank of central banks,” and long regarded as the chief architect and enabler of global gold manipulation and price oppression. He has been characterized in the press as being “a vocal votary for increased coordination among central banks.” Clearly, an important Deep State global agenda is now in play.
Brexit and the Trump victory have demonstrated that the people can only be pushed so far, but the Deep State oligarchs are far too addicted to easy money and god-like power to hear the message. They are pushing forward as if nothing whatsoever has changed in the world. The retention by the people of financial liberty is far more important to them than Brexit or Trump, and we believe they will defend their rights to it, particularly as they awaken to the full implications of the tyranny that will be unleashed by its elimination.
As demand rebuilds from the shock demand reduction that has occurred in India, we believe the market for precious metals will become stronger than ever. First, India has discredited governments’ prized monopoly product: fiat currency. Second, India’s demonetization-related gold demand shock has no effect whatsoever on demand from Russia, China and the rest of Asia, which is stronger than ever. Third, the fiscal and monetary realities of governments throughout the west continue to worsen, strengthening the already compelling case for precious metals. Fourth, and as we have pointed out in previous articles, supply cannot withstand even a fractional redeployment of liquid personal assets into metals, without prices being forced significantly higher than where they are today. And fifth, the bullion banks and Deep State schemers are running out of curve balls to throw at the people. In fact, the stunt they just pulled in India might be their last, at least of anywhere near this magnitude. While we put nothing past them, including desperate dumping of remaining western central bank metals holdings (which might not even exist at this late stage) and prohibitions that the people will realize they must ignore if they are to have any chance of remaining financially free, it seems clear to us that they are fast running out of options.
November 28, 2016
P.S. One additional inference we draw from events in India is that it almost certainly proves the United States gold reserve is gone. What has happened in India indicates that a critical supply – demand imbalance exists in gold, which required an unprecedented, draconian and reckless “solution.” Actually, it has solved nothing; it has only bought the oligarchs some time, and probably not much of it. If western, and particularly U.S. gold reserves had been available, they almost certainly would have been deployed before a massive, destructive currency demonetization in the world’s second largest nation, by population, would have been ordered.
Stewart Dougherty is the creator of Inferential Analytics (IA), a forecasting method that applies to events proprietary, time-tested principles of human instinct, desire and action. In his view, forecasting methods not fundamentally based upon principles of human action are unlikely to be reliable over time. He is a graduate of Tufts University (BA) and Harvard Business School (MBA), is a 35+ year veteran of the business trenches and has developed IA over a period of 15+ years.
Dave you and Stewart are providing articles at a level of necessity and intricacies that are truly outstanding. You are both to be commended for your efforts and dedication to the truth. The analysis on the dynamics in India make perfect sense. Thanks for giving me a seat on the front row of this cluster****. The gripping reality of all the moves the Deep State Oligarchs are taking makes for unparalleled drama and have to admit outside of an occasional diversion into the sports world or some other mind candy is fully absorbing.
Rock On Comrades! ( pun intended)
Please to explain, what comes first? Do the ten percent bail in
occur first or the elimination of the $100 and $50 notes.
I thinks that if large notes are eliminated first that could be a
clue that the ten percent bail in comes next.
Many thanks for your writing, my English is second language so
hope this makes good sense.
Could be another country that the deep state wants to blow up and get subsumed by Islam. Not sure why the master planners have such a hard on for islam, but they took out Libya, they tried to take out Egypt, and theyve been at it for years in Syria. Maybe this is just a continuation of that. Side benefit to them is with the economic devastation there will be a corresponding depopulation effect, both on the living and lower birth rate going forward from the economic ravages. Clinton foundation, Planned Parenthood, Gates foundation, etc. are all about that in Africa, I could see them eager to do the same in India. There are so many companies, foundations, “charities” and ngos coordinating on this its mind blowing.
Why the hard on for Islam? (Don’t forget Iraq and Iran.) Probably because the Deep State is heavily Jewish and these countries are Israel’s enemies.
I understand who runs the deep state, but why are they taking steps to expand islam? I think they control House of Saud, maybe its easy to do the same elsewhere.
Also, this attack on India is another proxy measure against Russia as they collaborate on weapons systems. They developed a missile that looks pretty lethal:
FYI – As the London Gold Pool that started in 1961 to about March 1968, the India Gold Control Act of 1968 was enacted in September.
This time India screwed up because they should have banned imports before the cash fiasco. The “smugglers” are well entrenched and unstoppable thankfully. On March 19, 1968, President Johnson signed a bill eliminating the “gold cover” (i.e., the reserve backing by gold) for Federal Reserve notes. http://nationalinterest.org/feature/who-really-killed-the-gold-standard-12435
Gold on international market was moving up already and by the time Nixon did his dirty work in August 1971, gold was on the rise.
It’s been noted that the FED has been working behind the scenes to Short Gold on the Paper Market, not the Production Market where the quantity of gold mined has a direct effect on the price. Too many unscrupulous players that have made a killing over the years on the floating market created in 1971 !
i have read many articles on this indian demonetization ,but this goes much deeper.it all makes sense .save the fact that you have fallen for the trump hustle.he will do exactly as they tell him to.he is a wall street fed.res. insider.his comments on the fed are nil in meaning that he will not do anything to disrupt the rothchild banking system.just look to who he has installed as sec of treasury.mnuchen a dual citizen israeli financier .better you pay attention to his son in lkaw and what he is up to .his the puppet master in the trump cabal.
The solution may well be going back to private currencies and a barter economy. Ultimately, freedom from oppression must be paid for by blood. That is the lesson of history.
Monetary policy aims at controlling economic growth. If the economy refuses to grow despite zero interest rates, then perhaps there is too much money in the economy. Hence the idea of reducing the total amount of cash circulating in the economy. However, what policy makers may be overlooking is that economic growth may be obstructed by other factors, completely independent of monetary policies. If that is the case, then clearly every interest rate policy is destined to fail.
Time may reveal the truth.
Indians have figured this out already. Per latest report, gold imports post demonetization is at 20-month high
–From Times of India—
hmedabad: Clearly due to effects of demonetization, Gujarat witnessed a significant spurt in gold imports last month. According to records of Ahmedabad Air Cargo Complex, 18.65 metric tonne (MT) gold was imported to Gujarat in November. The imports, which were at a 20-month high, rose by 191% as compared to 6.39 MT in November 2015. In fact, gold imports have doubled as compared to October 2016, which was at 9.2 MT. “A majority of the imports took place two weeks after the demonetization move by the Union government,” confirmed Samir Mankad, executive director, GSEC Ltd.
The frenzy to buy gold occurred after demonetization. Piyush Bhansali, president, Choksi Mahajan, said, “Investments in gold have gone up following demonetization. While there was some speculative investments by small traders, retailers have also invested in gold in a bid to replenish stocks.”
Shanti Patel, president, Gems & Jewellery Trade Council, said, “Since the trading was good just ahead of Diwali, most jewellers had limited stocks. Soon after demonetization, there was a sudden spurt in gold demand, which exhausted their stocks forcing them to import more gold.”
“In the last one week, our sales were significantly good. This is mainly because prices went down and people had money in their bank accounts. Moreover, most jewellers have begun accepting payments online and via cheque thus aiding customers in their purchases,” said Manoj Soni, a city-based jeweller.
Why aren’t the other BRICS nations helping India out (as well as Brazil)? I had kind of thought they would be looking out for each other, especially as relates to currencies and precious metals.
TPTB are attacking gold because Italy’s election this weekend. Every one is worried about France’s election in 2017 that will usher in Marin Le Pen but Italy’s Sunday election is about to rock the world. The snowball is getting larger and larger and its going to steam roll the Central Bankers and elites.
Excellent article ! Thank you.
We need more heroes like Mr Rocco Galatti.
SR 1372 – Lawsuit To Restore the Power of The Bank of Canada to Create Sovereign Money. 7 Dec 2016. Video 20 mins