Why Did Hillary Lose?

There is no market for values. Every election anywhere in this populist world is on the way to prove it. Trump has almost no knowledge about many things including, economy, trade, international relations, laws, rules and regulations and so on. So it is clear that he will be dependent largely on his officials and senate rather than his personal wisdom and experience. OK let us not be so reactionary and wait and watch.

Now let us focus upon the reason behind his victory which are as follows:

1. The population of US was frustrated with the democrat government that could not satisfy a large section of the society. They were more outward looking and the US population considered Hillary as the part of same establishment. In short people were fed up of the current establishment.

2. The WikiLeaks report about Hillary and her infamous emails. Her hawkish approach towards other countries of the world. Her involvement in the "wars" that US waged on middle eastern countries like Iraq, Syria and Libya. This costed US a lot of money while US citizens were going jobless. Trump took an advantage of this.

3. Bernie sanders lost hope in between.

4. The economy of USA could not overcome the economic crisis after the collapse of Lehman brothers in 2007. This caused a great loss in jobs and it was later on complimented with global economic slowdown that still continues to persist. Multilateral Trade has slumped, Job losses can be seen on the surface today. The gap in the salary of a CEO and a clerk has drastically increased. The poor is getting poorer and rich is getting richer. This has created a frustration and wrath against the government.

5. The bigger section of the society of USA has increasingly been valueless, misogynistic, racist and economically, politically and socially frustrated. The reason is the "NEO-LIBERAL regime as a whole" which many of the Americans may not know, thanks to the wide spread mediocrity in the world and America. They may not agree with this but they must feel it and they are feeling it at present. "They also need to reconsider their education system."

PS: "Wrong" and "biased" Socio-economic political setup leads to frustration and frustration gives rise to a fascist leader not Bernie Sanders. The examples can be seen in post WW I Germany that nurtured Hitler, and at present it can be seen in countries like Philippines, Turkey and up to some extent in India (sorry if you mind but it is the fact, Indians were frustrated with congress government.)

Pros and Cons of Scrapping Rs. 500 and Rs. 1000 Currency Notes

A good move. A big blow to Fake currency. We have been listening about fake currency notes of Rs. 500 right from our childhood, no one easily trusted Rs. 1000 bills. This step will suddenly curb down the fake currency market and terrorism. Much of the black money and fake currency that was used to fund terrorism would be halted since the validity of these two big currency notes has come to an end.

A rational approach would be taking into account the ways by which it will curb the black money and what are the loopholes in doing so. The pan account for those who deposit more than Rs. 50,000. Would be required. This may help the income tax department to track people and collect more taxes but no way has been defined to sack black money holders if they come and deposit their money into banks.

The loopholes of the system may include the following:

1.   The black money holders may deposit the money through different channels. Through tens of different accounts of their family members, friends and other channels. The biggest channels for domestic money laundering would be the sectors that enjoy exemption from taxes. For example: charity and religion. The babas, mandirs and Masjids are not taxed. What if the black money holders give their black money (Rs. 500/ 1000 notes) as charity to these entities (that are exempted from tax) and then get the money back from them in the form of new currency notes when the new currency notes are in circulation. They can do this in return of small amount to money?

2. The agriculture sector is also exempted from tax. In 2014-15 alone more than 400,000 tax payers claimed exemption from tax for their agricultural income. The small and big farmers do not have to pay income tax over their agriculture income. Not only the farmers but big multinational corporations like Monsanto, Kaveri seed company limited, Sri Ram fertilizers, Agricultural units of Aditya Birla group are also exempted from income tax. Not only these but the rich Farmers of states like Punjab, Haryana etc. who earn in crores are also exempted from taxes. The black money holders can deposit the money with the help of these channels as well.

3. There can always be transactions of 500/ 1000 notes for the first 50 days in sectors like jewelry business where the small black money holders can buy gold for their black money. This is because the jewelers can deposit the money in the banks and say that it is the money that they received 2 months back. This can be done safely at a nominal rate.

There can be other channels as well of which I am unable to think now.

Does the government have ways to check these channels as well?

Other factors:

It may be painful for Mamta bannerji, because in states having corrupt governance it would be a tough time for many politicians who have huge amount of black money in cash. But I was wondering when I saw Baba Ramdev appreciating the news. He was the one who was totally against the big notes/ bills during the tenure of UPA II. 

Other than this RBI officials will have to think that those who earn less than 2000 per month and other Khudra market will require more than enough bills of Rs. 50 and 100 because 2000 is too big to handle. 

"So RBI will end up spending more for printing more currency notes of Rs. 100, 50 and 500 and 2000. According to a report more than 85% of the money was circulated in the form of Rs. 500 and Rs. 1000 currency notes. So it will cost too much for the exchequer to print the new and scrap the old currency notes.

[If all this additional money (a total of Rs.6.666 trillion) has to be printed in Rs. 100 currency notes it would cost RBI about Rs.11,900 crore, which is more than a four-fold increase. This is without taking into consideration the increased costs of operating ATMs (since they would need to be refilled more often), and of handling money in general.

In other words, there is a significant cost to stopping issuance of Rs.1,000 and Rs.500 notes, as advocated by Ranade, and these costs should be weighed against what misuse of high-value notes costs the economy, before we make a decision. (Source: http://www.livemint.com/Politics/fhNlITluEPxCOHef3GSA6H/Scrapping-Rs500-Rs1000-notes-a-costly-idea.html)]

Now with new currency notes of Rs. 2000, wouldn’t it be more easy for black money transaction in future?

New note of Rs. 500

A crack down on black Money?

Frankly My dear, I don't care..!! :P

but lets have a look on the "challenges"
that may arise after the bills of Rs. 500/ 1000 are invalid after 8th of November.

1. The consumption will go down. All the money under table and hidden in mattresses and bags are not Black money. Even if they are black only 40% of them are black money. Those who posses huge amount of money in the form of big bills will fear going to banks for depositing it. Thus even the white money may be lost which will cause consumption to go down and thus the GDP will go down,

2. Jewelers and unorganized Real estate businessmen who have been doing transaction in cash will have problems in transaction for the next 50 days. This may cause the price to go down initially. Although good for the consumers.

3. The daily wage workers may starve if they have problems getting the bills of Rs. 100/50 as their will be huge demand for small bills. for one or two days.

4. People will have problems for sure those who do not have bills of Rs. 50/100 but they can still do "WHITE TRANSACTION" as far as they can persuade the "foolish-reluctant-seller" out there by enlightening them by saying that they can still deposit the money or get an exchange from banks and Post offices. When business will go down they will themselves understand the concept and will start accepting these bills. There may be some foxes who know this concept and may charge extra money initially for transaction of 500/1000 bills.

5. RBI officials will have to think that those who earn less than 2000 per month and other Khudra market will require more than enough bills of Rs. 50 and 100 because 2000 is too big to handle.
"So RBI will end up spending more for printing more bills of 100 and 50". बहुत ज़्यादा 100/50 के नोट चाहिए होंगे अब..

6. It is to be pondered upon that it is going to be a hard time for them who have saved their hard earned money in cash, especially the old people and housewives and their amount is 'little big".

7. The coaching institute owners who do not pay taxes and earn crores of Rupees like those in Patna, varanasi, Kota etc. will burst in tears today.

I am still not sure what action they are going to take against those who deposit their black money in banks. Is the government really going to sack them or just leave them after the money comes in the market (banks). Are they later going to be caught? or not?  and if yes what will be the mechanism of sacking them. Would it be easy for the concerned departments to track everyone since huge money will be deposited in near future.

Will come up with next post soon pointing out more of loopholes and more of pros and cons of this move. Keep following :P


PS: और हाँ अब 2000 के नोट गिरइलऽऽ त गईलऽऽ बेटा..!!