In this discussion with Financial Repression Authority, I give an update on India’s demonetization and the continuing damage caused by the government’s war on cash.

India’s attempt to force a largely cash-based, informal, and technologically backward economy into a cashless system is creating chaos. The poor, small businesses, farmers, savers, and the informal economy are bearing the brunt of this policy, while corruption, fear, and arbitrary state power are expanding.

Watch the full discussion below:

Key Takeaways

• India’s demonetization has crippled large parts of the informal economy, where most Indians live and work.
• The government’s attempt to impose a cashless system ignores India’s technological backwardness, poor infrastructure, and lack of institutional competence.
• Small businesses, farmers, and poor workers are being hit hardest as cash shortages disrupt ordinary economic activity.
• The policy has increased fear, corruption, raids, and arbitrary state power rather than reducing corruption.
• Indians are likely to increasingly turn to gold, silver, farmland, barter, and other ways to protect wealth from government control.
• India’s war on cash is part of a broader trend toward financial repression and growing state control over private savings.