Howestreet.com - the source for market opinions

ALWAYS CONSULT YOUR INVESTMENT PROFESSIONAL BEFORE MAKING ANY INVESTMENT DECISION

November 25, 2016 | India Economy Falls into Chaos – Dollar Rise in Huge Demand

Martin Armstrong

Martin Arthur Armstrong is the former chairman of Princeton Economics International Ltd. He is best known for his economic predictions based on the Economic Confidence Model, which he developed.

india-cash-protest

US dollars are soaring in premiums on the street. There is a serious risk that the government has shaken the confidence of the people to such a degree, that they trust the US dollar more than their own currency. Prime Minister Narendra Modi has come out an said the currency changeover could still take a few weeks and could lead to inconveniences, according to the magazine Brics. The Indian economy is a highly cash transacted economy far more so than the United States and Europe. The government has brought the economy to a virtually standstill. Food stores are close to closing because the customers have no money. Small and medium-sized enterprises have stopped functioning because the invoices are not paid for.

When Japan would routinely devalue the outstanding currency in the same manner each time a new emperor took the throne, the population responded by using rice and Chinese coins. The Indian economy is turning to the dollar. Physical dollars are commanding a premium because they can politically trust the dollar and not their own currency.

Indians are participating in protests against the the government simply cancelling the 500 and 1,000-rupee notes. This has unleashed real chaos in India and the experiment is proving to be a complete disaster, which is good news for the West. Literally, hundreds of thousands of Indians have stormed the ATMs trying to get cash, reports the Hindustan Times. They are trying to get their money out of banks. This has proven in many places to be just not possible as cash is in short supply

STAY INFORMED! Receive our Weekly Recap of thought provoking articles, podcasts, and radio delivered to your inbox for FREE! Sign up here for the HoweStreet.com Weekly Recap.

November 25th, 2016

Posted In: Armstrong Economics

Post a Comment:

Your email address will not be published. Required fields are marked *

All Comments are moderated before appearing on the site

*
*

This site uses Akismet to reduce spam. Learn how your comment data is processed.