John Eucist Posted November 18, 2016 Share Posted November 18, 2016 http://www.bbc.com/news/business-37906742 This news is a little over a week old but I still can't figure out how replacing 500 and 1000 rupee denominations with new 500 and 2000 rupee denominations will help decrease "black money and corruption" in the future. Sure, it will help in the short term by revealing undocumented money for tax purposes but by replacing them with the same and an even higher denomination note wouldn't that make the problem worse in the long run? Further related reading:http://www.latimes.com/world/la-fg-india-currency-20161115-story.htmlhttp://www.chicagotribune.com/news/sns-wp-blm-india-bg-2374ea40-acbc-11e6-8f19-21a1c65d2043-20161117-story.htmlhttp://www.hindustantimes.com/static/demonetisation-2000-rupee-notes/ Link to comment Share on other sites More sharing options...
Hunka Hunka Burning Love Posted November 18, 2016 Share Posted November 18, 2016 I wonder if there's a huge counterfeit money problem in India? Maybe they want to purge counterfeit bills out of the system. In Canada we tend to do it slowly like a money upgrade over time while phasing out old bills. We now have plastic money which is a lot different than the old paper bills. They are a lot harder to photocopy. You can wash and dry them, but they get a little melted/distorted. For a country to suddenly purge older bills that may be a sign of overwhelming corruption in the security of their paper money system. ? Just my theory. It could also allow the government to perform a subtle audit of its citizens to verify how much cash holdings they have and then investigate unpaid taxes. I was reading that only 3% of people there pay taxes... Link to comment Share on other sites More sharing options...
John Eucist Posted November 18, 2016 Author Share Posted November 18, 2016 9 minutes ago, Hunka Hunka Burning Love said: It could also allow the government to perform a subtle audit of its citizens to verify how much cash holdings they have and then investigate unpaid taxes. I was reading that only 3% of people there pay taxes... With a higher denominated note then it would be even more convenient to stash away corrupt money in the future. For counterfeit notes yeah replacing them is a good move. As for 3% of the population paying taxes, they said that's because 97% of them have not passed the threshold to require to pay taxes. Link to comment Share on other sites More sharing options...
Hunka Hunka Burning Love Posted November 18, 2016 Share Posted November 18, 2016 What exactly is corrupt money? Is it untaxed and counterfeit money mainly? I don't know how they will be able to tell it is untaxed except to create a database of money exchanged and try to verify it against taxes paid in the past. If a corporation is not declaring their income properly there would be large discrepancy. Are international banks now refusing to exchange rupees into their currency? What's to prevent money from being smuggled out to be exchanged into US dollars say? There could be a big rush on the money markets? Link to comment Share on other sites More sharing options...
John Eucist Posted November 18, 2016 Author Share Posted November 18, 2016 10 minutes ago, Hunka Hunka Burning Love said: What exactly is corrupt money? Is it untaxed and counterfeit money mainly? Hmm. When I hear "corrupt money" the first thing that comes to mind is "money taken as bribes" or "stolen money" and not untaxed or counterfeit money. 10 minutes ago, Hunka Hunka Burning Love said: I don't know how they will be able to tell it is untaxed except to create a database of money exchanged and try to verify it against taxes paid in the past. If a corporation is not declaring their income properly there would be large discrepancy. I think anyone who has extremely large amounts of cash won't be able to exchange at the banks because there are transaction limits set and/or require ID. I read that they have an "amnesty program" so that those people can do their explaining about the origin and pay their penalties or taxes without having to lose everything. 10 minutes ago, Hunka Hunka Burning Love said: Are international banks now refusing to exchange rupees into their currency? What's to prevent money from being smuggled out to be exchanged into US dollars say? There could be a big rush on the money markets? Yeah worldwide banks already refusing the "old" currency.http://www.bbc.com/news/business-37938925 Link to comment Share on other sites More sharing options...
Hunka Hunka Burning Love Posted November 18, 2016 Share Posted November 18, 2016 Wow that is crazy! Say people are living abroad, have a stash of rupees, and only return to India once a year for holidays. Unless they are monitoring the news or hear about the exchange from friends/family it could leave a lot of money in limbo if they miss the exchange deadline? Talk about a pretty radical decision by their government. They don't have a Buprinder Trump as their president, do they? I'm no politcal scientologist or economicsologist, but a move like that could drive the value of rupees way down in an already stagnant global economy? Link to comment Share on other sites More sharing options...
John Eucist Posted November 18, 2016 Author Share Posted November 18, 2016 6 minutes ago, Hunka Hunka Burning Love said: I'm no politcal scientologist or economicsologist, but a move like that could drive the value of rupees way down in an already stagnant global economy? Based on google's exchange rate chart the value is holding remarkably steady over the past three years:https://www.google.com/search?q=1+rupee+in+usd&gws_rd=cr&ei=Ki8vWPaOMcy70gS_5KDgAQ I suppose a lot of the "old cash" will be removed from the money supply due to this move so that should theoretically make the new rupee more valuable. I guess this counteracts what you just said. Link to comment Share on other sites More sharing options...
The Fat Unicyclist Posted November 18, 2016 Share Posted November 18, 2016 1 hour ago, Hunka Hunka Burning Love said: We now have plastic money which is a lot different than the old paper bills. They are a lot harder to photocopy. Off topic from this off-topic, but that's never stopped us before... Have you ever tried to photocopy an USA $20 note? We investigated some security printing options for a customer a while ago and came across the EURion Constellation, which triggers photocopier software to stop - we obviously had to try this out, and it's quite clever. Plastic money seems a lot simpler. We use it in New Zealand too and the latest series (7) is very bright with transparent pieces making it a challenge to copy - but the EURion thing is still very cool. Link to comment Share on other sites More sharing options...
Hunka Hunka Burning Love Posted November 18, 2016 Share Posted November 18, 2016 People still are able to do it. Where there's a will there's a way! http://www.cbc.ca/amp/1.3234427 Link to comment Share on other sites More sharing options...
The Fat Unicyclist Posted November 18, 2016 Share Posted November 18, 2016 4 minutes ago, Hunka Hunka Burning Love said: People still are able to do it. Where there's a will there's a way! http://www.cbc.ca/amp/1.3234427 Oh yes... I know a wee bit about printing, and there is still a lot of "opportunity" for copying. Which is why we should all use Rai... They are not easy to copy! Link to comment Share on other sites More sharing options...
Recommended Posts
Archived
This topic is now archived and is closed to further replies.