Gold Price Skyrockets in India after Currency Ban – Part V

A Brief Recap

India’s Prime Minister announced on 8th November 2016 that Rs 500 and Rs 1,000 banknotes will no longer be legal tender. Linked are Part-I, Part-II, Part-III, and Part-IV, which provide updates on the rapidly encroaching police state.

Expect a continuation of new social engineering notifications, each sabotaging wealth-creation, confiscating people’s wealth, and tyrannizing those who refuse to be a part of the herd, in the process destroying the very backbone of the economy and civilization.

There are clear signs that in a very convoluted way, possession of gold for investment purposes will be made illegal. Expect capital controls to follow. Chaos from people’s inability to access the money in their bank accounts is now spreading to the people who have so far been unaffected: the middle class.

This is a completely unnecessary man-made disaster, with the single aim of glorifying  Narendra Modi.

Fracturing Institutions

Several petitions in various courts across India were immediately filed against the central bank, the Reserve Bank of India (RBI), for repudiating its IOU obligation which the currency bills represent, after Modi’s announcement on 8th November.

Several postponements later, the first hearing at the Supreme Court will likely take place on 5th December 2016, almost a month after the announcement of the ban. That does not mean that the court did not deliberate over “more important issues” affecting this wretched poor country.

It inter alia heard a petition and passed a judgment that makes playing the national anthem compulsory at cinema halls before the start of every movie, to promote nationalism. It also decreed that people have to stand up while the anthem is played. Henceforth one can be charged with sedition for not actively showing proper respect to the flag and the anthem.

Only someone very numb can avoid being horrified by this.

By law, the national anthem must henceforth be played in Indian cinemas before the start of a movie (as an aside, the anthem sounds actually interesting from a musical standpoint). Per the court’s order, everyone present must stand up while it is playing, so as to show proper respect. A failure to stand up can lead to an indictment for sedition, and sometimes it leads to offenders being berated and getting beaten up on the spot by irate nationalists. Happily, it is not yet mandatory to shout “Sieg Heil”. [PT]

Indian courts are often referred to as “honorable court” and they are very actively taking steps against anyone who shows the slightest of disrespect or challenges their judgments. So any direct challenge to their “authority” would be unwise.

Indian institutions have continued to deteriorate and mutate since the British left India. They are now merely hollowed out structures, devoid of any meaning or essence. We are in the final phase in which these institutions are crumbling, but in the meantime pomp and show are amped up to fool the gullible.

Indian culture in its immense irrationality does not provide the glue to even maintain these institutions, let alone improve on them. That glue could only have come from reason and moral instincts.

Anyone with a sense of history also realizes that India produced its finest leaders while it was still under the control of the British. It was during British rule that a cultural renaissance was happening in India, which ended with the emergence of the politicized, so-called independence movement.

Britain had set up institutions that allowed the ablest and the best to rise up. Not only is this no longer happening, but Indian institutions today actively suppress the ablest and the finest, as the recent judgment of the Supreme Court on the anthem exemplifies. This happens because most Indians euphorically support suppression of the individual both in theory and practice.

Institutions of liberty have mutated into institutions of slavery.  It is this inversion that is hastening the rapid decay of Indian society. India must eventually end up with institutions that reflect its underlying culture: a hugely fractured, tribal set-up, and very likely a disintegrated India.

The Forgotten Ones

Modi’s policies on demonetization are changing on a daily basis, sometimes more than once a day. This had to happen, for once you take up a mindless social engineering project of this enormity — killing 88% of monetary value in circulation overnight in a country where most people depend on cash — massive patch-up jobs have to be undertaken for the foreseeable future, helping India to degrade and sprint toward becoming a police state.

Alas, there are simply not enough patches available. India’s economy and society will are facing massive problems.  So far, it has been the poorest citizens who have suffered the most.

The horrendous struggles of more than 50% of the population, whose situation is worse than that of the average African on virtually every metric – who have no toilets, no electricity, no water supply, no access to even primary health care or basic education – will go unrecorded.

These poorest of India’s people are seen as nobodies. International organizations only have an interest in them in terms of aggregate headline figures — Gini coefficient, poverty level, population growth, etc. India’s middle class, while it might claim to be against the caste system, does not really see these people or account for them, as they are widely perceived as mere servants.

The western media, the IMF and many international economists — if they are paying attention to the current demonetization at all — are siding with the Indian government. It is as if the forces in favor of one-world government and their craving to control people’s cash and private lives have become their sole aim in life.

Obsessed with Keynesian economics, they think that all one has to do to increase wealth is to finely adjust the currency-printing machine. Most of these people have never studied philosophy, watched or understood human psychology, investigated society in its complexity outside of econometrics and statistics, or participated in running a business.

In their eyes, India is on the path of progress and institutional reform. From their perspective — colored by a rather simplistic, socialistic indoctrination — they are completely failing to see the situation in its entirety, particularly the massive suffering the ban on currency has inflicted on society and the inevitable systemic risks it has imposed on India’s future.

A Banana Republic in the Making

Our interest here is in exploring deeper undercurrents and what they mean for the future of India. Every single indication is that India is on an inevitable path to becoming a full-scale police state.  But the Indian police state will not be a Nazi-kind of system.

Being inherently disorganized, undisciplined and lacking the capacity to plan and having no commitment to values, India will go the way of autocracies in Africa, the Middle East, Pakistan and Bangladesh. With GDP per capita of USD 1,604, India is already drenched in poverty, and wallowing in suffering and disease.

In India, suffering and violence — not reason or moral instincts — bring stability. The concept of reason is conspicuous by its absence in Indian society. Such societies — as in the Middle East, Africa, and elsewhere in the backward part of the world — tend to go through a phase of violence before stability arises. If they could reason, they would be able to bypass the phase of violence.

The last thing anyone should do is to transplant such people into a different setting or to change the structure of their societies, as Modi has tried with the demonetization edict. People with tribal mindsets do not flourish, assimilate or evolve when transplanted or destabilized.

This has been the consistent experience from trying to enforce institutional changes in these countries through top-down mechanisms. In what way have Iraq or Libya become any better after their ruthless rulers were forcibly removed?

Societies lacking in reason also lack moral instincts. They are mostly oblivious to the pain of other people. In India, those from the lower castes — even though the formal caste system is crumbling  — do not register as human beings in the minds of members of the richer classes.

Scores of people have died because of lack of treatment, having to queue for too long in their old age, etc., but in the imagination of the salaried middle class they are mere numbers, all somehow contributing to the greater good.