In this discussion with Cory Fleck of Korelin Economics Report, I give a firsthand account of India’s currency controls after the sudden ban on 500- and 1,000-rupee notes.

India’s demonetization has thrown daily life into chaos. Cash has disappeared, banks are overwhelmed, small businesses are being crippled, and ordinary people are being forced into long lines, fear, and uncertainty. What is being presented as a fight against corruption is instead becoming an expansion of state power over savings, transactions, and economic life.

Watch the full discussion below:

Original listing at Korelin Economics Report →

Key Takeaways

• India’s sudden ban on 500- and 1,000-rupee notes has created immediate chaos across the country.
• The poor, small businesses, and the informal economy are being hit hardest by the disappearance of cash.
• Banks are overwhelmed and unable to meet the demand for new currency.
• The policy is unlikely to end corruption; it is more likely to create new forms of corruption and arbitrary enforcement.
• Gold, foreign currency, and geographical diversification become more important when governments attack cash.