Category Archives: Coercion

भारतीयों को बेच दिया भारत सरकार ने ग्लोबल बैकों से

भारतीयों को बेच दिया भारत सरकार ने ग्लोबल बैकों से

भारतीयों को बेच दिया भारत सरकार ने

जैसा के अब सभी को समझ आ चुका होगा के वर्तमान भारत सरकार और उसे चलाने वालों का एकमात्र उद्देश ग्लोबल बैंकरों के समूह को लाभ पहुंचाना है|

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इस समय भारत सरकार की बागडोर ग्लोबल बैंकरो और चंद उद्योगपतियों के हाथों में है जिन का सर्वप्रथम उद्देश्य भारतीयों की बचत और कृय शक्ति को शुन्य के बराबर कर देना है.

साथ ही काले धन के नाम पर सभी की जमा पुंजि को बरबाद कर देना है जिस से की आप को अपनी हर जरूरत के लिये बैंकों से लोन लेना पडे, आप को शादी करनी है, छुट्टीयों में घूमने जाना है,  घर में रंग रोगन करवाना है तो आप को लोन लेना पड़ेगा..

इस के लिये यह भी जरूरी है की भारतीयों के पास मौजूद ज्यादा से ज्यादा धन को बरबाद कर देना, इस बात का  उदाहरण है 10 दिन रहते सरकार की ये घोषणा की एक व्यक्ति 5000 रुपये से ज्यादा की रकम नहीं जमा कर सकता है..    फिर 50 दिन कि अवधि के बाद रिजर्व बैंक में पैसे जमा करने का जो प्रावधान था उसे भी निरस्त कर दिया जबकि सरकार रिजर्व बैंक के द्वारा टैक्स काट कर भी पैसा लौटा सकती थी.. और अभी तक सरकार जनता को अपना ही पैसा बैंक से जरूरत के मुताबिक निकालने नहीं दे रही है.

सवाल यह उठता है कि क्याें नहीं जमा कर सकता है कोई अपना ही पैसा और क्यों नहीं निकाल सकता ?

परन्तु डिमोनिटाईजेशन की आड में भारतीयों को अपना बंधुआ मजदूर बनाने का खेल खेलने वाली ग्लोबल बैंको का मुख्य उद्देश्य भारतीयों का जमा पैसा बरबाद कर के उन्हें लोन और अपने बैंकिंग सिस्टम का गुलाम बनाना है .

क्या आपने कभी सोचा है  के आखिर क्यों बरबाद करने पे तुली है मोदी सरकार भारत वासियों की जीवन भर की जमा पुंजि ? भारतीय ऱूपये पर से दुनिया भर का भरोसा गिराकर क्या हासिल किया सरकार ने..भारत की आर्थिक संप्रभूता को पूरे विश्व के सामने उजागर किसके लिए किया गया..   किसको फायदा पहुंचाना चाहती है मोदी सरकार ?

ऱिलायंस ग्रुप को 25 से ज्यादा देशों में बडे बडे प्रोजेक्ट दिला दिये गये हैं…  इस समय पूरी दुनिया की मीडिया में अडाणी ग्रुप को अस्ट्रेलीया में कोल मांईस चलाने में वर्ल्ड बैंक के द्वारा अनैतिक सहयोग देने की जम कर आलोचना हो रही है परन्तु भारतीय मीडिया ने चुप्पी साध रखी है.. क्यों कि सच यही है की इस सरकार और इसके सहयोगीयों को ग्लोबल बैंकों ने दुनिया भर में लाखों करोड रुपये दे कर खरीद लिया है और जो वो चाह रहे हैं वो यह सरकार कर रही है.

ग्लोबल बैंकों के ही ईशारे पर सरकार जनता पर जोर जबरदस्ती से कैशलेस सिस्टम थोप रही है..इस के लिए वह लोगो को अपना ही पैसा अपनी मर्जी से निकालने पर प्रतिबंध लगा रखी है. . जिस से की लोग कैशलेस का ईस्तेमाल करने पे मजबूर हो जाए और ग्लोबल बैंकों की झोली घर बैठे भरती रहे.

कैशलेस सिस्टम में उपभोक्ता को जहाँ भी अपना डेबिट और क्रेडिट कार्ड स्वाइप करना होता है वहाँ गौरतलब है कि कार्ड द्वारा किये गए प्रत्येक लेन-देन पर बैंक शुल्क लेता है, और इस शुल्क का भुगतान उस व्यापारिक प्रतिष्ठान को भी करना होता है जिसने अपने यहाँ पीओएस टर्मिनल लगा रखा है।

20150224155706-payments-credit-cards-american-express-visa-mastercard-discover

इस शुल्क को एमडीआर (merchant discount rate) के नाम से जाना जाता है। एमडीआर का एक हिस्सा उस बैंक के पास जाता है जिसने उपभोक्ता कार्ड जारी किया है, एक हिस्सा उस बैंक के पास जाता है जिसने संबंधित प्रतिष्ठान के पीओएस टर्मिनल को स्थापित किया है, जबकि एक हिस्सा भुगतान माध्यमों (payment getways) को जाता है, जैसे वीज़ा (visa) रूपे (rupay) और मास्टरकार्ड (mastercard) इत्यादि ग्लोबल बैंकों को.

आप सभी को ये भी को ये जान कर भी हैरानी होगी की वर्ल्ड बैंक भी ग्लोबल बैंकों के समूह  का बनाया हुआ एक छलावा है जो असल में एक  प्राइवेट बैंक से ज्यादा कुछ नहीं है और जिसने वर्ल्ड बैंक नाम के छलावे के साथ दुनिया भर के देशों में काम करने की मान्यता ले रखी है

देशों की इकोनोमी को अपने हिसाब से प्रभावित करना इस का काम है  ग्रीस, पेरू, जिम्बाबवे जैसे देशों को कर्जदार आैर कंगाल बनाने में वर्ल्ड बैंक का ही हाथ था

आप अपने डेबिट और क्रेडिट कार्ड को पलट कर देखें तो वहां आप VISA, MASTER CARD, DINERS CLUB, AMERICAN EXPRESS जैसे नाम और लोगो पायेंगे, ये सभी इन ग्लोबल बैंकों की संस्थाएं हैं.. जान लें की ATM से आप के द्वारा 100 रू निकालने पर भी इन विदेशी बैंकों को कमीशन प्राप्त होता है .

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यही कारण है की ये विदेशी बैंकों के समूह और वर्ल्ड बैंक चाहते हैं कि सभी के सभी भारतीयों को बैंकिंग सिस्टम के अधीन ले आया जाए.

यानि आप के द्वारा किए गये हर टरांजैक्शन पर ग्लोबल बैंकों को कमीशन प्राप्त होगा .. हमारी सरकार को इन ग्लोबल बैंकों को इतनी चिंता है की यह हमें इनका कैशलेस सिस्टम यूज करने के लिये जो डिस्काउंट दे रही है वह सब्सिडी के रूप में ग्लोबल बैंकों के खाते में जमा कर रही है.

banksters_n_government_public_serpents

एक तरफ सरकार हमसे रसोई गैस की सब्सिडी छिनती है दूसरी तरफ स्वदेशी का राग अलापने वाली सरकार विदेशी बैंकों को हमारी सब्सिडी का पैसा पहुंचाने में शर्म भी नहीं महसूस करती है.

आखिर शर्म भी क्यों करे आखिर पैसा पहुंचाने के बदले सरकार चलाने वालों को भी पैसा मिल रहा है और इस मामले में तो जिंदगी भर मिलता रहेगा .

More in next..

Andolanrat

Read further:

INDIANS TOWARDS MODERN SLAVERY

https://arresteddevelopments.wordpress.com/2016/11/08/indians-towards-modern-slavery/

World Bank Secretly Supporting Adani’s Carmichael Coal Mine

https://arresteddevelopments.wordpress.com/2016/12/23/world-bank-secretly-supporting-adanis-carmichael-coal-mine

Cashless Monetary System also means Absolute Power over you

https://arresteddevelopments.wordpress.com/2016/12/17/cashless-monetary-system-means-absolute-power-over-you

Indian Government must bring legal clarity to demonetization-masked compulsory deposits

https://arresteddevelopments.wordpress.com/2016/12/02/indian-government-must-bring-legal-clarity-to-demonetization-masked-compulsory-deposits

 

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https://arresteddevelopments.wordpress.com

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Every Reporter Needs To Understand Sharyl Attkisson’s Case Against The US Government

Actual Hacking: Every Reporter Needs To Understand Sharyl Attkisson’s Case Against The US Government

questioneverything2

Sharyl Attkisson was a star investigative reporter for CBS News. After two decades at the network, she resigned on March 10, 2014.

Among the controversial stories she covered: the Fast and Furious gun-walking program, in which the government “purposely allowed licensed firearms dealers to sell weapons to illegal straw buyers, hoping to track the guns to Mexican drug cartel leaders and arrest them” (LA Times, 10/3/11); the Benghazi attacks and murders; the CDC fraud in grossly overestimating the number of Swine Flu cases in America.

Attkisson now hosts a weekly television news program, Full Measure, for the Sinclair Broadcast Group. She writes at sharylattkisson.com.

Attkisson is also engaged in a struggle with the federal government.

Attkisson writes: “I just filed my latest appeal to the FBI’s improper withholding of my FBI file. You may not know it, but every American citizen—even a lowly reporter—is entitled to see his FBI file, if one exists.”

I queried Attkisson about this yesterday, and she replied: “I find it unacceptable that the federal government, and specifically the nation’s top law enforcement agency (DOJ), would be party to improperly—and I believe unlawfully—withholding public and personal materials that we (not they) own.”

For some reason, Attkisson isn’t permitted to see her FBI file. Why? The answer may lie in the government’s role as a hacker. A hacker of Attkisson’s computers.

Attkisson writes at her website: “I have a separate federal lawsuit underway against the federal government over illegal surveillance of my work and home computers by intruders using software proprietary to a U.S. intelligence agency. The intrusions were detected and confirmed by three independent forensics exams in 2013.”

“So far, the government has not cooperated with my lawsuit. For example, without even filing the required motion, government officials failed to show up for a properly-noticed deposition in the case.”

Here, from a press release, are details about the hack of Attkisson’s computers:

“On December, 27, 2014, Investigative Journalist Sharyl Attkisson filed administrative claims under the Federal Tort Claims Act against the U.S. Department of Justice, the U.S. Postal Service, and certain unnamed employees and/or agents of the federal government. Shortly thereafter, a lawsuit was filed in the District of Columbia alleging certain violations of Attkisson’s constitutional rights based on information implicating the federal government in illegal electronic monitoring and surveillance of her home and business computers and phones.”

“As outlined in the claims, three separate computer forensics exams revealed that intruders used sophisticated, remote capabilities to monitor Attkisson’s work. The intruders installed and periodically ‘refreshed’ software used to exfiltrate data, obtain Attkisson’s passwords to various personal and work accounts, access the CBS News computer system, and monitor Attkisson’s audio using a Skype account. Forensics also revealed evidence of U.S. government-related involvement in the surveillance.”

“Through a Freedom of Information Act request, Attkisson learned that the F.B.I. opened a case on her computer intrusions in 2013, listing her as the victim, but the agency failed to interview her in the investigation or even notify her that one had been opened. To date, U.S. government officials have failed to fully cooperate with Attkisson’s efforts to learn about the intrusions, and have failed to fully respond to numerous requests to help provide information necessary to learn the truth. As a consequence of the government’s choice to ignore Attkisson’s requests, Attkisson and her family have chosen the only available option left to them.”

Yesterday, I asked Attkisson: in your opinion, why were your computers hacked?

She wrote: “On the lawsuit over the hacking: The reason I had my computers analyzed in the first place is because government sources had approached me and told me I was likely being ‘surveilled’ due to the reporting I had been conducting, especially some of my CBS News stories that were published online. They specifically mentioned my Benghazi reporting, which I began in fall of 2012. The forensics analyses were able to determine multiple unauthorized remote intrusions of my computers using software (proprietary to a federal government agency) that occurred prior to my Benghazi reporting, however. One such intrusion, for example, occurred in February 2012 (we have the date, time and method of entry) and another in July 2012. Stories I covered during this time period included Green Energy Waste stories that the Obama administration worked very hard to stop from airing on CBS, as well as Fast and Furious reports, among others. Among other details, the forensics exams were able to determine that the intruders not only accessed the CBS system, and used Skype to surreptitiously listen in on conversations, but also examined several files and photos related to Fast and Furious.”

“In addition to two separate forensics exams that I had conducted, CBS hired a forensics company that confirmed the remote intrusions. The analyst informed CBS, among other things, ‘I have definitive evidence that shows commands were run from Sharyl’s user account that she did not personally authorize during the timeframe of concern’ and ‘This history has been deliberately removed from Sharyl’s hard drive’ by a third party.”

—Read Attkisson’s next paragraph carefully. It’s explosive. It indicates Dept. of Justice (DOJ) lying and cover-up:

“A fourth forensics exam conducted by DOJ Inspector General of a different computer (only my personal computer that I asked them to examine in hopes they would recognize the government software, CBS would not give them the CBS computers in question) also confirmed the suspicious activities and that a third party deliberately removed files from my personal computers to cover their tracks. However, this information was omitted from a summary the DOJ IG released, which instead made it incorrectly sound as though intrusions had been ruled out. (The DOJ IG will not lawfully respond to FOIA requests for the documentation showing the investigators confirming the suspicious activities. I know the documents exist because the investigators let me review them during the investigation and briefed me on their findings.)”

“The 2012 intrusion dates I mentioned were NOT the sum total of intrusions—they were two dates we know of during which software was planted in my computers. The software was then used on an ongoing basis to access files, watch my keystrokes, etc.”

CBS agrees that Attkisson’s computers were hacked. Here is an excerpt from an August 7, 2013, article posted at the CBS news site:

“CBS News announced Friday that correspondent Sharyl Attkisson’s computer was hacked by ‘an unauthorized, external, unknown party on multiple occasions,’ confirming Attkisson’s previous revelation of the hacking.”

“CBS News spokeswoman Sonya McNair said that a cybersecurity firm hired by CBS News ‘has determined through forensic analysis’ that ‘Attkisson’s computer was accessed by an unauthorized, external, unknown party on multiple occasions in late 2012’.”

“Evidence suggests this party performed all access remotely using Attkisson’s accounts. While no malicious code was found, forensic analysis revealed an intruder had executed commands that appeared to involve search and exfiltration of data. This party also used sophisticated methods to remove all possible indications of unauthorized activity, and alter system times to cause further confusion. CBS News is taking steps to identify the responsible party and their method of access.”

“Several months ago, Attkisson had reported suspected intrusions of her computers, including her CBS News work computer, prompting CBS News to hire a firm to look into the hacking.”

My comment: As indicated at the beginning of this article, Attkisson is unable to see her FBI file. The FBI won’t show it to her. This is a breach of law. They won’t show it to her because it would reveal the FBI and DOJ stance on her investigative work at CBS. They didn’t like her work. They considered it a threat. They considered it an exposure of truths they wanted kept under wraps, relating to Fast and Furious, Benghazi, Green Energy Waste, etc.

That FBI file would lend further strength to Attkisson’s claim that the Dept. of Justice has been lying about what they found when they investigated the hacking of her computers.

For example: They found that some of their own people (FBI/DOJ) and/or people at other government agencies had done the hacking.

Major media consider this story “dead until further notice.” But independent journalists all over the world shouldn’t. They should cover it aggressively and keep the pot boiling, and make sure the public understands what is at stake: the right to report actual news, free from government interference and intimidation.

And the right to call government on the carpet, in court, under oath, to account for their crimes.

Read More At: JonRappoport.wordpress.com


source: https://thebreakaway.wordpress.com/2017/02/01/actual-hacking-every-reporter-needs-to-understand-sharyl-attkissons-case-against-the-us-government/

 

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NOAA data demonstrates that 2016 was not the ‘hottest year ever’

@NOAA data demonstrates that 2016 was not the ‘hottest year ever’ in the USA

 

Today, there’s all sorts of caterwauling over the NYT headline by Justin Gillis that made it above the fold in all caps, no less:  FOR THIRD YEAR, THE EARTH IN 2016 HIT RECORD HEAT.

nyt-record-heat-2016

I’m truly surprised they didn’t add an exclamation point too. (h/t to Ken Caldiera for the photo)

Much of that “record heat” is based on interpolation of data in the Arctic, such as BEST has done. For example:

But in reality, there’s just not much data at the poles, there is no permanent thermometers at the North pole, since sea ice drifts, is unstable, and melts in the summer as it has for millennia. Weather stations can’t be permanent in the Arctic ocean. So, the data is often interpolated from the nearest land-based thermometers.

To show this, look at how NASA GISS shows data with and without data interpolation to the North pole:

WITH 1200 kilometer interpolation:
2016-giss-1200km-interpolation

WITHOUT 1200 kilometer interpolation:

2016-giss-250km-interpolation

Here is the polar view:

WITH 1200 kilometer interpolation:

2016-polar-giss-1200km-interpolation

WITHOUT 1200 kilometer interpolation:

2016-polar-giss-250km-interpolation

Source: https://data.giss.nasa.gov/gistemp/maps/https://data.giss.nasa.gov/gistemp/maps/

Grey areas in the maps indicate missing data.

What a difference that interpolation makes.

So you can see that much of the claims of “global record heat” hinge on interpolating the Arctic temperature data where there is none. For example, look at this map of Global Historical Climatological Network (GHCN) coverage:

GHCN-paucity-stations-poles

As for the Continental USA, which has fantastically dense thermometer coverage as seen above, we were not even close to a record year according to NOAA’s own data. Annotations mine on the NOAA generated image:

2016-2012-conus-temperature

Source: https://www.ncdc.noaa.gov/cag/time-series/us/110/0/tavg/ytd/12/1996-2016?base_prd=true&firstbaseyear=1901&lastbaseyear=2000

  • NOAA National Centers for Environmental information, Climate at a Glance: U.S. Time Series, Average Temperature, published January 2017, retrieved on January 19, 2017 from http://www.ncdc.noaa.gov/cag/

That plot was done using NOAA’s own plotter, which you can replicate using the link above. Note that 2012 was warmer than 2016, when we had the last big El Niño. That’s using all of the thermometers in the USA that NOAA manages and utilizes, both good and bad.

What happens if we select the state-of-the-art pristine U.S. Climate Reference Network data?

Same answer – 2016 was not a record warm year in the USA, 2012 was:

2016-uscrn-annual-temperature

Source: https://www.ncdc.noaa.gov/temp-and-precip/national-temperature-index/time-series?datasets%5B%5D=uscrn&parameter=anom-tavg&time_scale=p12&begyear=2004&endyear=2016&month=12

Interestingly enough, if we plot the monthly USCRN data, we see that sharp cooling in the last datapoint which goes below the zero anomaly line:

2016-uscrn-temperature

Source: https://www.ncdc.noaa.gov/temp-and-precip/national-temperature-index/time-series?datasets%5B%5D=uscrn&parameter=anom-tavg&time_scale=ann&begyear=2004&endyear=2016&month=12

Cool times ahead!

Added: In the USCRN annual (January to December) graph above, note that the last three years in the USA were not record high temperature years either.

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CIA Has Interfered With Over 81 Foreign Elections in the Past Century

 

The U.S. is no stranger to interfering in the elections of other countries

This number doesn’t include military coups and regime change efforts following the election of candidates the U.S. didn’t like, notably those in Iran, Guatemala and Chile.

The CIA has accused Russia of interfering in the 2016 presidential election (with absolutely zero evidence) by hacking into Democratic and Republican computer networks and selectively releasing emails.

But critics might point out the U.S. has done similar things.

The U.S. has a long history of attempting to influence presidential elections in other countries – it’s done so as many as 81 times between 1946 and 2000, according to a database amassed by political scientist Dov Levin of Carnegie Mellon University.

That number doesn’t include military coups and regime change efforts following the election of candidates the U.S. didn’t like…

like, notably those in Iran, Guatemala and Chile. Nor does it include general assistance with the electoral process, such as election monitoring.

Levin defines intervention as “a costly act which is designed to determine the election results [in favor of] one of the two sides.”

These acts, carried out in secret two-thirds of the time, include funding the election campaigns of specific parties, disseminating misinformation or propaganda, training locals of only one side in various campaigning or get-out-the-vote techniques, helping one side design their campaign materials, making public pronouncements or threats in favor of or against a candidate, and providing or withdrawing foreign aid.

In 59% of these cases, the side that received assistance came to power, although Levin estimates the average effect of “partisan electoral interventions” to be only about a 3% increase in vote share.

The U.S. hasn’t been the only one trying to interfere in other countries’ elections, according to Levin’s data.

Russia attempted to sway 36 foreign elections from the end of World War II to the turn of the century – meaning that, in total, at least one of the two great powers of the 20th century intervened in about 1 of every 9 competitive, national-level executive elections in that time period.

Italy’s 1948 general election is an early example of a race where U.S. actions probably influenced the outcome.

“We threw everything, including the kitchen sink” at helping the Christian Democrats beat the Communists in Italy, said Levin, including covertly delivering “bags of money” to cover campaign expenses, sending experts to help run the campaign, subsidizing “pork” projects like land reclamation, and threatening publicly to end U.S. aid to Italy if the Communists were elected.

Levin said that U.S. intervention probably played an important role in preventing a Communist Party victory, not just in 1948, but in seven subsequent Italian elections.

Throughout the Cold War, U.S. involvement in foreign elections was mainly motivated by the goal of containing communism, said Thomas Carothers, a foreign policy expert at the Carnegie Endowment for International Peace.

“The U.S. didn’t want to see left-wing governments elected, and so it did engage fairly often in trying to influence elections in other countries,” Carothers said.

This approach carried over into the immediate post-Soviet period.

In the 1990 Nicaragua elections, the CIA leaked damaging information on alleged corruption by the Marxist Sandinistas to German newspapers, according to Levin.

The opposition used those reports against the Sandinista candidate, Daniel Ortega. He lost to opposition candidate Violeta Chamorro.

In Czechoslovakia that same year, the U.S. provided training and campaign funding to Vaclav Havel’s party and its Slovak affiliate as they planned for the country’s first democratic election after its transition away from communism.

“The thinking was that we wanted to make sure communism was dead and buried,” said Levin.

Even after that, the U.S. continued trying to influence elections in its favor.

In Haiti after the 1986 overthrow of dictator and U.S. ally Jean-Claude “Baby Doc” Duvalier, the CIA sought to support particular candidates and undermine Jean-Bertrande Aristide, a Roman Catholic priest and proponent of liberation theology.

The New York Times reported in the 1990s that the CIA had on its payroll members of the military junta that would ultimately unseat Aristide after he was democratically elected in a landslide over Marc Bazin, a former World Bank official and finance minister favored by the U.S.

The U.S. also attempted to sway Russian elections. In 1996, with the presidency of Boris Yeltsin and the Russian economy flailing, President Clinton endorsed a $10.2-billion loan from the International Monetary Fund linked to privatization, trade liberalization and other measures that would move Russia toward a capitalist economy.

Yeltsin used the loan to bolster his popular support, telling voters that only he had the reformist credentials to secure such loans, according to media reports at the time.

He used the money, in part, for social spending before the election, including payment of back wages and pensions.

In the Middle East, the U.S. has aimed to bolster candidates who could further the Israeli-Palestinian peace process.

In 1996, seeking to fulfill the legacy of assassinated Israeli Prime Minister Yitzhak Rabin and the peace accords the U.S. brokered, Clinton openly supported Shimon Peres, convening a peace summit in the Egyptian resort of Sharm el Sheik to boost his popular support and inviting him to a meeting at the White House a month before the election.

“We were persuaded that if [Likud candidate Benjamin] Netanyahu were elected, the peace process would be closed for the season,” said Aaron David Miller, who worked at the State Department at the time.

In 1999, in a more subtle effort to sway the election, top Clinton strategists, including James Carville, were sent to advise Labor candidate Ehud Barak in the election against Netanyahu.

In Yugoslavia, the U.S. and NATO had long sought to cut off Serbian nationalist and Yugoslav leader Slobodan Milosevic from the international system through economic sanctions and military action.

In 2000, the U.S. spent millions of dollars in aid for political parties, campaign costs and independent media. Funding and broadcast equipment provided to the media arms of the opposition were a decisive factor in electing opposition candidate Vojislav Kostunica as Yugoslav president, according to Levin.

“If it wouldn’t have been for overt intervention… Milosevic would have been very likely to have won another term,” he said.

Reblogged on WordPress.com

Source: CIA Has Interfered With Over 81 Foreign Elections in the Past Century

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Along with thanks and compliments to the sources for the shared data

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Demonetization: A monumental disaster

James Wilson is a Member of the Mullaperiyar Special Cell, Government of Kerala, India. Who is a civil engineer by profession has presented an extremely detailed and meticulous calculations and inferences on the Demonetization of Indian Currencies.

Just go through the full article brought here , for the  knowledge of the subject is best expressed through a clear and concise presentation by Mr. James Wilson.

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A monumental disaster in offing!

Currency in Circulation 


High denomination notes of ₹500 & ₹1000, which is 86.4% of the total currency in circulation ceased to be legal tender due to the demonetisation. RBI denotes these demonetised notes as “Specified Bank Notes” (SBN). As per RBI Annual Report 2015-2016, as of 31/03/2016, the value of the total SBN is ₹14.18 lakh crores. Volume wise it consists of 15707 million ₹500 notes and 6326 million ₹1000 notes, ie, a total of 22033 million notes. Meanwhile, the total currency in circulationvalue wise increased to ₹17.975 Lakh crores (4/11/2016) from ₹16.415 lakh crores (31/03/2016)


Exact information of the amount of SBN as on 8/11/16 is now in public domain, thanks to a question-answer in the Rajya Sabha, which shows 17165 million pieces of ₹500 (₹8.582 lakh crores)and 6858 million pieces of ₹1000 (₹6.858 lakh crores) in circulation (Total Value: ₹15.44 lakh crores Total Volume:24023 million pieces) [So my assumptions in my earlier post  of value of 15.5 lakh crores and volume of 24000 million is almost in the target]. To print and replace 24023 million (24.023 billion) notes is an enormous challenge considering this sheer volume of notes to be printed and capacity of our printing presses.




Capacity of Printing Presses


How can RBI achieve this target with resources at their disposal? 


How much time RBI will take for to print and replace SBN with new notes? 

To understand this, in a pure resources management perspective, we have to examine the output capacity of our currency note printing presses. We have two currency printing presses under Security Printing and Minting Corporation of India Limited (SPMCIL), one at Nashik in Maharastra and the other one in Dewas in Madhya Pradesh. Nashik Press was established in 1928 and Dewas was in 1974. Also two more modern currency printing press were added later to augment the printing capacity, one in Mysore in Karnataka and the other at Salboni in West Bengal under the Bharatiya Reserve Bank Note Mudran Private Limited (BRBNMPL), which were established by Reserve Bank of India (RBI) in 1996.


First look at the capacities of Nashik & Dewas presses under SPMCIL. I have relied the Annual Report of the SPMCIL as well as a presentation available on the internet by the Currency Management Wing of the RBI. From the above records, it is inferred that Nashik Press capacity is 5800 million notes per year and Dewas capacity is 2620 million pieces. 


Meanwhile, BRBNMPL’s Mysore & Salboni together can print 16000 million notes in 2 shifts in a year. See the screenshot of BRBNMPL website. So all these four presses can together print 24420 million currency notes in a year and this is closer to the supply RBI getting for last 3 years too. 


So all four presses together having a printing capacity of 66.90 million/day. If we take Mysuru and Salboni alone, this will be 43.84 million/day.


Please note that latter in this discussion, it is using billion instead of million as the volume unit since I made references to the statement given by RBI in billions. 

  • For your understanding please note that:

            1 billion = 1000 million = 100 crores


Printing aborad is out of question

My next exercise was to understand whether we can outsource this currency printing to any high quality security presses abroad. That research lead me to the Report of Committee on Public Undertakings (2012-13) which deliberates “outsourcing of printing of currency notes” as recommendation serial no.14. Selected extract from the above report is reproduced here:


“The Committee also find it pertinent to point out that during printing of currency notes worth 1 lakh crores in three different countries, there was always a grave risk of unauthorized printing of excess currency notes, which would have been unaccounted money. The Committee simply wonder how come a decision was taken to have the currency notes printed by above mentioned companies in three different countries. Logically speaking since all the said three countries are well developed, each country certainly had the capability of undertaking the entire printing assignment. In any case the very thought of India’s currency being printed in three different countries is alarming to say the least. During that particular fateful period our entire economic sovereignty was at stake.


The Committee is concerned of the grave implications of such a move as it has wider ramifications in a multi faceted angle. The danger of destabilizing the economy by the agencies of authorities who could have misused our security parameters vis-à-vis printing of currency notes, the use of such notes which could have been printed in excess could easily have fallen in the hands of unscrupulous elements such as terrorists, extremists and other economic offenders, looms large in our minds. The Committee expresses its strong resentment over such an unprecedented, unconventional and uncalled for measure. The Committee while recommending that SPMCIL be strengthened to undertake the printing and minting of the required currency notes/coins fervently emphasise that outsourcing of printing of currency notes/minting coins should never be resorted to in the future.”


Reply of the Government

Since corporatisation, SPMCIL and BRBNMPL have been meeting the requirement of coins and currency and no import has been resorted to. The concerns and recommendations of the Committee have been carefully noted for future guidance.

[Ministry of Finance, Department of Economic Affairs]

( O.M. No.3/8/09-SPMC dated 3rd January, 2013 )”

So this assurance rules out the very question of outsourcing of the currency printing abroad. I don’t think RBI will violate an assurance given to the Committee of Public Undertakings of the Parliament. Hence RBI has to depend on the four presses in our country to meet this enormous demand.


Comparison with demonetisation done in 1977-78


In this context, we have to note that during the demonetisation exercise in 1977-78 only less than 5% of the high value notes were demonetised. It is also important to note that ₹100 note, which was 50.1% of the total currency in circulation was not demonetised during 1977-78. Contrary to the above, this time RBI and Government decided to demonetise ₹500 note, which consists of 47.8% of the value of the total currency in circulation. They also demonetised ₹1000 notes in circulation, thus made 86.4% of value of total currency in circulation redundant, which choked and paralysed the entire cash based economy with a whimsical direction overnight!


₹2000 note – a short shrift solution

Now look at the ₹1000 notes, volume wise its quantity is 6858 million notes. If convert the entire ₹1000 notes to ₹2000 notes, keeping the same value, then the volume will be halved to 3429 million notes to facilitate quick printing and disposal. But there is a catch, RBI has to tweak the ratio between ₹500 and ₹2000 to provide easy change and mobility between these two notes. So obviously, there should be less  volume of ₹2000 notes and more volume of ₹500 notes is mandated to keep the equilibrium of the system. For the time being, let us assume that RBI has gone with a complete swap of ₹1000 with ₹2000 notes totally discarding the mobility in the system.Definitely this is a short shrift exercise without considering the much needed mobility and velocity of the demand of thes various denominations of the currency notes in circulation. In that scenario too, RBI has to print at least 20594 million notes (17615 million ₹500 &+ 3429 million ₹2000) in a short span of time.


Higher denominations will aid hoarding – RBI Study


The elimination of ₹1000 note and introduction of ₹2000 note is really perplexing and the RBI’s explanation made themselves a joke. In this context, invite your attention to RBI Study No. 39 “Modelling Currency Demand in India: An Empirical Study” to see how RBI and Government of India all along resisted to issue high denomination notes even when warranted in a short time to meet the inflation to control, considering the chances of this high denomination currency will be used for hoarding purpose by the black money holders.

The irony is now a high value currency note of ₹2000 is introduced in the guise of controlling hoarding of the very black money, but at the end of the day help the hoarders in transporting and hoarding! This haste and irrational decision was taken without considering the statistical principles of distribution of various denominations in the currency in circulation and also fully side lining the prudent decision to eliminate the chances of hoarding. This short shrift route of going for ₹2000 by RBI without considering any of the above consequences into account and only taking the ease of printing, is a telling reflection of how an Institution like RBI let itself to erode its independent stature to please the political masters!

Printing target – An estimation

I discarded here the essential tweak required for maintain the equilibrium between ₹500 and ₹2000 notes and also the increase of currency required to meet the demand of cash in the economy in the coming months till this disaster is mitigated. Many of Government sympathisers may definitely point that the entire ₹15.44 lakh crores of SBN will not return into the system and there is no need to replace the entire currency. My opinion is that these two factors balance and neutralise each other. Hence for the time being, I decide to go ahead with the figure of 20594 million new notes as our target for printing.

In the initial days, the WhatsApp army were busy in forwarding daring claims that only 50% of the SBN will return into the system. Even our Attorney General told to the Supreme Court that RBI & Government expects only a maximum of ₹12 lakh crores of SBN will be return to the system. Today we are hearing from the media quoting Ministry of Finance sources that around ₹14 lakh crores worth SBN is already returned to the system. Remember that we are still 13 more days away from the date set by Government to deposit the SBN at banks. So its time for RBI & Government to eat the humble pie. It is important to understand that the above cut-off date will not set free RBI’s responsibility to exchange the rest of the currency in circulation at their counters, it only limits the option of depositing/exchanging at banks. That is a detailed matter as it entangled in legal provisions and other issues and hence will be discussed in a future post.


Demonetisation Planning – Rajan or Patel?


To understand the currency printing schedule, first see the letter of transmittal dated 29th August 2016 of the RBI Annual Report 2015-16 signed by Former Governor Raghuram G. Rajan. Kindly note the above date, it is very important. We know that the present Governor Urjit R. Patel assumed office on 4th September 2016.

Now look at the same Annual Report again. Look at Table VIII.4, “Indent and Supply of Bank Notes by BRBNMPL & SPMCIL”. Look at the indent for the year 2016-17, RBI has given an indent for 5725 million ₹500 notes & 2200 million ₹1000 notes along with other lower denomination currency notes. If there was a plan in advance to demonetise these denominations, then why did RBI print and disburse such large quantities of SBN in to circulation? This is nothing but sheer wastage of exchequer’s money.

Moreover, if RBI had such an advance plan to replace the above SBN, they should have devoted their time and energy to print lower denominations notes instead of SBN. Hence it is beyond doubt that the entire demonetisation plan was come into picture after Urjit Patel taken charge. The new denomination note of ₹2000 bear the signature of the new Governor Patel, not of Governor Rajan, which also another explicit evidence to prove that these notes were introduced after Governor Rajan left RBI.

When new currency printing started?


So what is the possible date of starting the new currency printing, yes, after this so called meticulous planning, selling an amazing idea and getting a nod from high echelons to go ahead with the ‘surgical strike’? Many theories are floating in the air about this meticulous planning in the initial days by a certain section of cheerleader media and court jester journalists. I am not ready to buy any of those theories. We learnt from media reports that the printing of the new notes were confined to RBI’sBRBNMPL presses at Mysuru & Salboni. Neither Nashik nor Dewas of SPMCIL were on the loop, may be due to the secrecy of the mission involved. Another reason may be both these presses were already assigned with printing of the lower denomination notes (from ₹100 downward), which is already intended in huge quantities by the annual indent of RBI for FY 2016-17.


Considering all these constraints, let me put a rational date before you considering the resources planning angle. RBI disclosed that they have 2473.2 million ₹2000 in stock for disposal as of 8/11/2016 in response to a RTI query. With the printing capacity of 43.84 million/month of Mysore & Salboni together in 2 shifts, it will take 57 days to print the 2473.2 million notes, that means it started on 12th September 2016. Take another possibility, that RBI took an effort to enhance printing to 3 shifts from 2 shifts, then they can print 65.76 million/month, ie, means it will took 38 days, that means printing started on 1st October 2016 only.


I was really shocked to find that there was not a single ₹500 note was with RBI when they unleashed this demon over the nation! That means RBI unleashed demonetisation with just 32% of the total SBN in circulation, that too a less mobile ₹2000 note stock! They themselves will be aware that within the 50 days window period, they can’t print the rest of the SBN too!

Disbursal of Currency

Then, I look for patterns of disbursal of currency at various dates, which was inferred from the data provided through the press releases by RBI. Look at the table below:

We can see that there was a substantial increase of disbursal of currency between 27/11/06 and 05/12/16 from ₹12589 crores/day to ₹20548 crores/day, this is definitely due to the disbursement of salaries on the first of December. Thereafter, the disbursal drying up substantially in the succeeding period to ₹16000 crores/day. If we take the entire 31 days of demonetisation, the average daily release from 10/11/2016 to 10/12/2016 is ₹14871 crores/day. If the money is disbursed in the above daily average rate, between next 20 days a further ₹2,97,420 crores can be disbursed. Hence Government may be able to disburse a total of ₹7,58,420 crores or a maximum of ₹8,00,000 crores by 30/12/2016. That means just 52% of the total SBN going to be disbursed to us. But even this quantity is doubtful with the present printing woes, which is going to be examined in the subsequent paragraphs.

There is some serious cash delivery issue in the system due to inferior planning and poor judgement from the part of RBI as well as Finance Ministry. Otherwise what is the justification of various new restrictions unleashed day to day basis by RBI without respecting the notification dated 8/11/2016? It is quite depressing to see that even the address to the nation by the Prime Minister is not honoured!

RBI deleting information – why?

While looking for these data, I met with a really shocking finding. RBI published a transcript of the statement given by R. Gandhi, Deputy Governor on 07/12/2016 at its webstie under the title “press releases”. But later it is seen as purged from the RBI website! Meantime, the video of the press conference is still available in the internet (https://www.youtube.com/watch?v=IuSzeRX31ms). This really made me curious. What information was there in the above transcript, which forced RBI to delete it from the website, even sacrificing the very institutional credibility? What is there to hide from the public which was not there in the full video coverage of 5th bi-monthly monetary policy press conference 2016-17? Interestingly the RBI which deleted the transcript of R. Gandhi forget to wipe out that from the cache, so one of my friend in twitter grabbed the information from there and shared with me. See that transcript of R. Gandhi here!

It is quite an irony that the very RBI, which now exhorting us to go cashless by embracing digital mode of payment, did not even know the primary lessons of digital literacy of how to purge a document from their system! Look at the highlighted information – this is not available in the video but provided in the transcript, which RBI deleted. What is the relevance of this information? It cna lead you to the printing volume of new notes disbursed by RBI as of 10/12/2016, which they refuse to divulge so far. 

Disbursal of currency denomination wise

Look at the total value of the lower denomination notes of 19.1 million disbursed by RBI from the above. It comes only to ₹1.059 lakh crores! That means the higher denominations notes are ₹3.81 lakh crores minus ₹1.059 lakh crores = ₹2.75 lakh crores. As RBI has not given the volume of high denomination notes, I was not able to decipher the possible numbers of them.

But in the next press conference on 13/12/2016, RBI provided the numbers to decipher the new currency notes in the system. Look at the statement of R. Gandhi, Dy Governor.

Here Gandhi claimed that 19.1 billion notes of lower denomination on 5/12/16 was increased to 20.1 billion on 10/12/16 meanwhile claimed that RBI disbursed 1.7 billion higher denomination notes of ₹2000 & ₹500 notes. As the amount of the total cash disbursed is ₹4.61 lakh crores, it turned out to be a simple mathematical problem to solve. There is a limit for the lower denominations to fluctuate, as we know the denomination wise quantity of 19.1 billion notes in circulation. Then if 19.1 billion lower denominations increased to 20.1 billion notes, two borderline scenarios emerges:

  • If the entire 1 billion volume increase are of ₹100 notes, then total value will be increased by ₹1.159 lakh crores
  • if the entire 1 billion volume increase are of ₹10 notes, then total value will be increased by ₹1.069 lakh crores.
  • That simply means that the value of higher denominations notes will be in a range of ₹3451 crores to ₹3541 crores.
  • This means if the entire higher denomination notes are of  ₹2000 and its volume will fluctuate between 1.7 billion to 1.8 billion.

If Gandhi would not have given the exact volume wise distribution of each lower denominations in that 07/12/2016 in the transcript, we will not be able to emulate these scenarios. My strong feeling is that it is the very reason why RBI later deleted the said transcript from its website.

You can’t introduce more than a couple of million ₹500 notes into this equation, in that case the volume of higher denomination notes will go up from the 1.7 billion! Even after a month after unleashing the demonetisation on our heads RBI was not able to disburse any substantial quantity of ₹500 notes in the circulation, which are the most essential denomination for the reasons I cited in my previous blog post. That is why we are not seeing these notes in the market and feel the burn of cash crunch so badly.  Its shame on RBI to flash a couple of million notes of this ₹500 notes in metro cities and major urban centres for a limited purpose of optics management before the 24×7 electronics media and to flaunt in WhatsApp forwards & re-tweets on social media! It is really sad to see that a reputed professional organisation like RBI is letting down the nation with these type of cheap tricks of optics management rather meeting the pressing demands!

Lower denomination disbursal – a record??

Gandhi told on 7/12/2016 press conference that RBI has provided 19.1 billion lower denomination notes after demonetisation, which is a record as it is more than what reserve bank provided in last 3 years to the system. If we look at indent & supply for last FY year, from the above table, we can see that around 16 billion lower denomination notes were printed then. This FY year also RBI given an indent to print 16.6 billion lower denomination notes and if the presses print according to their capacity, there will be new 12.5 billion notes till 10/12/2016. Along with this quantity, there will be soiled notes which are being collected to dispose during this FY(Kindly note that, last year alone around 13 billion lower denomination soiled notes were disposed off), which are also pushed back to circulation as we see lots of old soiled notes back. Also note that the total number of lower denomination notes in circulation as  on 31/03/2016 was 56.6 billion. It is interesting to note that Gandhi never claimed RBI has printed 19.1 billion notes, instead he only made a tall claim that these notes were a record volume! Media never asked any questions to him and Gandhi barked in glory! I am sorry to say that I can’t digest this all-time record claim of attention diversion by twisting the facts!

Where is that ₹500 note?

Let us come back to the figure of 1.7 billion high denomination notes disbursed by 10/12/2016. This information is quite perplexing when we compare the printing press capacities. We have seen that RBI had a stock of 2.473 billion ₹2000 notes as on 8/11/2016 itself. So if these printing presses working at least 2 shifts/day, there would have been another 1.4 billion pieces of ₹2000 & ₹500 with RBI by 10/12/2016 (32 days x 43.84 = 1403 million). To completely replace, the ₹1000 notes by ₹2000 notes, RBI needed to print 3.429 – 2.473 = 0.956 billion pieces. So RBI should have by 10/12/2016 printed the entire ₹2000 notes to replace the ₹1000 notes. I hope and pray that RBI did not go ahead with another short shrift solution of printing more ₹2000 notes to replace ₹500 notes after done with ₹1000 notes, which will completely disrupt the mobility and balance of the currency in circulation. Why RBI holding the rest 1.729 billion of ₹2000 notes (3.429-1.7=1.729) without disbursing to public?

Also from the above we can find that a quantity of 0.444 billion ₹500 notes (1.4-0.956=0.444) printed after are with RBI, but a few millions are only disbursed to public. It is really perplexing that why RBI is not distributing these ₹500 notes in substantial quantities? This is quite baffling because RBI through its press releases informed that they disbursed ₹500 notes with the following series numbers:

·       without inset

·       with E as inset

·       with L as inset,

·       E and star as inset and

·       with R as inset.

This indicates that various printing presses are put to the task of printing the ₹500 notes, but as we are not seeing much of ₹500 notes in circulation, it is feared that some issues crop up during its printing. Recollect the media reports of two different design ₹500 notes crop up and RBI’s bizarre explanation. RBI informed that up to 10/12/16, they have disbursed 1.7 billion high denomination notes. This will definitely be 1.7 billion ₹2000 notes and a few million ₹500 notes, as I shown above. Also relying above printing calculations & RTI disclosure, we can very well conclude that RBI may have a stock of at least 1.7429 billion ₹2000 notes and  0.444 billion ₹500 notes as of 10/12/2016.

In the above context, let me put some questions to RBI:

  • Why you are not disbursing sufficient ₹500 notes to circulation to ease the mobility crisis?
  • Why you are not disbursing enough ₹2000 notes and imposing unreasonable restrictions on withdrawal for our money deposited in banks? 
  • Inform us whether the above stock of  notes is having any relation with the hoarding of huge quantity of currency notes seized from various parts of the country?
  • Exact quantity of ₹2000 notes and ₹500 notes printed and disbursed so far  
  • Or your printing systems faced any unexpected failure & you are struck?
  • Exact schedule and output of printing of various denomination of notes at various presses under RBI and SPMCIL

When we will get back our currency?


Now we have to consider when we will get back the ₹500 notes demonetised from the system back. As we seen from above that 0.444 billion ₹500 notes would have been printed up to 10/12/16, then how much time RBI will take to print remaining 16.721 billion pieces (17.165-0.444=16.721).

In this context, I am giving you three possible scenarios considering the printing capacity of our four currency printing presses. I have not considered certain constraints here, like additional skilled manpower needed to introduce a 3rd shift for a prolonged period, raw material supply constraints, machinery maintenance, forced plus routine shutdowns and other surprises which can crop up anytime. Then I have not considered additional output (?) possible with the reduced size of new notes too as someone argues. I gone ahead with a perfect printing mechanism with sufficient manpower and resources at disposal. So take this estimation and earliest possible dates with a pinch of salt.

First Scenario

Mysuru & Salboni (3 shifts/day) AND Nashik & Dewas

@88.82 million/day needs 188 days – 16thJune 2017

Second Scenario

Mysuru & Salboni (3 shifts/day) AND Nashik

@ 81.64 million/day needs 204 days – 2nd July 2017

Third Scenario

Mysuru, Salboni (2 shifts/day) & Nashik

@ 59.73 million/day needs 280 days – 16thSeptember 2017

These are the earliest possible dates to replace SBN with new currency in a pure resources management angle.

Looking at the above earliest dates will make anyone shudder, I don’t know when the normalcy of the system can be restored! Remember, our Prime Minister on 8/11/2016 sought us a couple of days to restore the normalcy  This will give you an idea about the planning prowess of the mandarins in RBI and Finance Ministry. Ask ourselves whether we have fallen into a rabbit hole? We Indians still believe in magic and we bear all subjugation as our bad karma or destiny. But here no magic wand is left to create miracles, we are destined to silently suffer this onslaught for half a dozen months too.

Estimation of possible return of SBN

Now look at the way SBN is coming back to the banks. This table extracts information from various press conferences.

This table will explain you why Government & RBI are getting panic and imposing new restrictions like deposits up to ₹5000 to non-KYC accounts and questioning people depositing more than ₹5000 into their KYC accounts. Why we are treated like criminals? Under which legal or constitutional provision Government and RBI arbitrarily gives this police power to the bank authorities to abuse us?

This is becoming a theatre of absurd when the very Government, who is reluctant to reveal to public the names of celebrities and big shots who keep thousands of crores of black money abroad arm twisting the common man and honest tax payers!. Tell us what is the crime committed by us? Are you intimidating and insulting us for believing the Prime Ministers address to the nation on 8/11/2016??

Look at various possibilities on 30/12/2016 (20 days from 10/12/2016)

  • With an average daily inflow of ₹15000 crores, entire SBN valued ₹15.44 lakh crores will return to banks
  • With an average daily inflow of ₹12800 crores, total SBN valued ₹15 lakh crores will return to banks
  • With an average daily inflow of ₹10300 crores, total SBN valued ₹14.5 lakh crores will return to banks

My strong belief is that SBN valued around ₹15 lakh crores will most probably return to the system, rest of the SBN will be trapped in Nepal & Bhutan and other countries for the time being. If ₹15 lakh crores of SBN return, then it will totally shatter and tear away all mighty claims by the Government and RBI that a maximum of ₹11 lakh crores to ₹12 lakh crores of SBN will only return to banks.

Then the entire demonetisation hungama will fall apart as a monumental disaster, yep, its now just a matter of time.. Now the deadline set by our Prime Minister in his 08/11/2016 speech has already expired.


 The above presentation is the hard work of Mr. Member of the Mullaperiyar Special Cell, Government of Kerala. A civil engineer by profession. Associated with construction & management of various hydro electric projects & thermal power projects of KSEB Ltd between 1994-2001. Since 2001, shfited to water resources management & inter state water disputes with special emphasis on the techno-legal aspects. Now working in a consultant role to provide the techno-legal inputs on various inter state water dispute issues & water policy related matters to Kerala State Government.

Via

https://decipherdemon.blogspot.in/2016/12/a-monumental-disater-in-offing.html?m=1

Read further:

The Trouble With India’s Demonetization Gamble

https://arresteddevelopments.wordpress.com/2016/11/28/the-trouble-with-indias-demonetization-gamble

Demonetization and Freakonomics

https://arresteddevelopments.wordpress.com/2016/11/30/demonetization-and-freakonomics

Indian Government has No Clues of Black Money in India

https://arresteddevelopments.wordpress.com/2016/12/16/indian-government-has-no-clues-of-black-money-in-india

Cashless Monetary System means Absolute Power over you

https://arresteddevelopments.wordpress.com/2016/12/17/cashless-monetary-system-means-absolute-power-over-you

India Came First

https://arresteddevelopments.wordpress.com/2016/12/19/india-came-first

arrested-ds-160x32

https://arresteddevelopments.wordpress.com

Along with thanks and compliments to the sources for the shared data

Creative Commons Copyright © Arrested Developments 2015

RBI Partially Rolls Back Rs 5,000 Order

RBI Partially Rolls Back Rs 5,000 Order

The Reserve Bank of India’s 60th Notification, on day number 43 of Demonetisation, since the date of announcement of Demonetization has partially rolled back an earlier notification that caused anger because it sought to restrict deposits of over 5000 rupees, in the process creating more confusion.

The earlier notification, issued on December 19, allowed the deposit of over 5000 rupees in bank accounts by citizens only once, that too after a “satisfactory explanation” could be provided to three bank officials.

 rbi-reu

Wednesday’s rollback makes an exception for fully KYC compliant customers. But it means that customers without fully compliant KYC norms will still have to give a “satisfactory explanation”.

KYC stands for ‘Know Your Customer’, a process through which banks obtain information about the identity of customers with accounts so that they cannot be misused. A proof of identity and a proof of address – Aadhar, license, Voters ID card, Passport or nrega card – have to be supplied for account verification.

Wednesday’s notification means that customers with fully compliant KYC accounts will be exempt from the order that states that deposits of over Rs 5000 could only be made once till December 30 and that people making such deposits will have to provide a “satisfactory explanation” to three bank officials as to why they didn’t deposit these amounts earlier.

This rule caused widespread anger and confusion all round, with people questioning why they had to provide an explanation for depositing their own money in excess of Rs. 5000. People cited legitimate reasons for waiting till the last week of December to deposit money. They also cited Prime Minister Narendra Modi’s promise in his November 8 address that people could deposit bank notes till December 30.

The decision follows widespread criticism of the guidelines, with people saying the Prime Minister as well as the finance minister have asked people not to throng the banks as they have time till December 30 to deposit invalid notes in their accounts.

Yogendra Yadav told CNN News18 that an “unfair and stupid” order had been rescinded. “It erodes the credibility of the RBI further,” he told the channel in a phone interview.

Another decision by the government taken on Wednesday has added to the all round confusion enveloping digital payments.

The Government passed The Payment of Wages (Amendment) Bill, 2016 to remove a provision that made employers seek written permission from employees before paying salaries by cheque or crediting them directly to bank accounts.

Demonetisation: Yogendra Yadav’s special explanation mocks RBI and Modi government

Several people including politicians and media had criticised RBI for the previous decision. Attacking the RBI decision, Swaraj Party leader had said, “It is not just about an unfair and stupid order. It is about compromising trust in Reserve Bank. Remember, currency a piece of paper that works on turst.”

It’s not just abt an unfair&stupid order
It’s abt compromising trust in Reserve Bank
Remember, currency a piece of paper that works on turst https://twitter.com/_YogendraYadav/status/811075208958226432 

Below is the explanation Yogendra Yadav had given while depositing cash in a bank:
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 Then comes Arvind Kejriwal’s tweet
c0iykbnuaaqosys
We’ve told earlier People are loosing trust in Government, The RBI and the Banks in India.
sources:

arrested-ds-160x32

https://arresteddevelopments.wordpress.com

Along with thanks and compliments to the sources for the shared data

Creative Commons Copyright © Arrested Developments 2015

Demonetized Indian Banking| What is this 5000 Rupees Deposit Rule

Demonetisation:  The new Rs.5000 rupees deposit Rule

Daily Labourers in India were accepting the demonetised currency as they can deposit them in banks till December 31.

Else in this cash crunch no where to go. 

In between The RBI on Monday has issued fresh guidelines on depositing demonetised high value currency notes of Rs. 1000 and Rs. 500. Here is what you need to know:

What is the new rule from RBI?

The Reserve Bank of India on Monday announced that deposits of more than Rs. 5000 of demonetised currency note will be allowed only once, till December 30. So if you have Rs.10,000 with you in Rs.1000 or Rs.500 notes, you will have to take it to the bank in one go. After that, you will not be able to make any more deposits of demonetised notes till December 30.

Does this mean I cannot deposit more than once?

If you have less than Rs. 5,000 in demonetised notes in your hand, you can spread it over any number of deposits.

Are there any new procedures for depositing more than Rs.5,000 in demonetised notes?

You will have to present your case of why you didn’t deposit them earlier, in the presence of at least two bank officials. If the officials find your response satisfactory, it will be accepted. But your bank account may be scrutinisied later at the time of audit.

What if I deposited Rs.4000 and later found two more Rs.1000 notes?

If the combined values of your deposits exceeds Rs. 5000, you will be subjected to the same procedure as when depositing more than Rs.5,000 once. And you will not be able to make any more deposits of demonetised till Dec.30 after that.

But how will a bank know if I have deposited Rs.4,000 earlier elsewhere?

Every time you deposit demonetised money, the bank alerts the CBS (core banking solution). If you deposit Rs. 4,000 as old notes today , you can deposit only Rs.1,000 more in old notes without being asked to give an explanation.

What is this KYC compliance clause?

The one-time deposits of over Rs.5,000 can be made only to KYC-compliant accounts. KYC, or Know your customer, is a business process to verify the identity of bank customers. Banks collect a valid identification proof and address proof and PAN card details of its customers periodically. Those who haven’t submitted these documents are KYC-non compliant. Such customers can deposit only up to Rs. 50,000 in demonetised notes.

I don’t have time to visit a bank. Can I send someone on my behalf?

Yes, you can. You have to provide suitable authorisation to the bank and the person depositing the amount should show approved identification. You still have to send a written explanation as to why you didn’t make the deposit earlier.

I have more than Rs. 5000 in cash. But they are not demonetised currency notes…

There is no restriction on currency notes that are legal tender.

I have unaccounted money worth more than Rs.5000 and I am planning to disclose it under the new declaration scheme. What should I do now?

These restrictions do not apply to deposits made under the government’s new income declaration scheme, the Pradhan Mantri Garib Kalyan Yojana 2016. You have to deposit 25 per cent of total declared unaccounted money to the Pradhan Mantri Garib Kalyan Yojana, a scheme with a four-year lock in period with no interest.

I lost track of all rules related to demonetised money. A quick recap please.

Government has demonetised Rs. 1000 and Rs.500 currency notes with effect from November 8 midnight. Though the government had earlier made some exemptions, these notes have ceased to be legal tender and are not being accepted anywhere from December 15. If you still have them, they can be deposited in your accounts in nationalised and private-sector banks till December 30. 

After that, the Reserve Bank will continue to accept these notes directly till March end after getting a declaration.. 

But there is a question  “who’s going to believe this”.

People have lost their trust in the Government, RBI and the Banks ironically in the matter of finance.

Read further:
Indian Government has No Clues of Black Money in India
https://arresteddevelopments.wordpress.com/2016/12/16/indian-government-has-no-clues-of-black-money-in-india
Cashless Monetary System means Absolute Power over you
https://arresteddevelopments.wordpress.com/2016/12/17/cashless-monetary-system-means-absolute-power-over-you

arrested-ds-160x32

https://arresteddevelopments.wordpress.com

Along with thanks and compliments to the sources for the shared data

Creative Commons Copyright © Arrested Developments 2015


Will ‘Cashless’ may be the new normal

Why ‘cashless’ may be the new normal in India

The demonetization drive is not so much about curbing black money. Consider the likely outcomes of a cashless society, and read back from them the intent behind such a move

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Perhaps the most significant development since the November 8 announcement of demonetisation is the shift in the legitimising narrative around the note ban. What was touted as a ‘surgical strike’ on black money, fake currency and terror funding has now become a radical ‘reform’ to transform India into a cashless economy. A series of measures, not least a high-decibel advertising campaign, are already in place to build national consensus in favour of this transformation.

Cashless Ki Baat

It was Prime Minister Narendra Modi’s Mann Ki Baat of November 27 that officially signalled this narrative switch. In a nuanced execution of a sophisticated communication strategy, Mr. Modi drew on the equivalence, in the Hindu imaginary, between ‘Swachh’ and ‘purity’, and ‘purity’ and ‘virtue’, to give a moral colouring to the binary of cash/cashless.

India is an economy where 90 per cent of all transactions are in cash. This is due to the large informal sector, which employs 90 per cent of the workforce. The overwhelming majority of them are not hoarders of black money. And yet, India cannot become a cashless society unless its mammoth informal sector transitions to digital payments.

Canny communicator that he is, Mr. Modi sought to pre-emptively quell the resistance such a forced transition would evoke by presenting the campaign for a cashless India as a campaign against black money and corruption. By dissolving the distinction between legal cash and black money, he cleared the ground for the treatment of all cash as potentially black unless proven white.

In other words, the informal sector is not an unintended casualty of demonetisation but the intended target. As the Reserve Bank of India Governor has clarified, the government was fully cognisant of the consequences of its move, and it was not at all an ill-planned operation, as some have suggested. As it happens, cash is the most powerful instrument of financial inclusion. Anyone can access it directly, without depending on rent-seeking technological or financial intermediaries. Once you have it, you could spend it whenever, wherever, and in whatever quantity you want to, without anyone being able to track you doing it. These are basic freedoms and rights that we take for granted. It is because these freedoms matter that there is resistance to their loss — a loss that is a given in a cashless society.

There was thus a logical need for a ‘phase one’ of demonetisation where the idea that it was about black money could be firmly planted in public memory. In phase two, which would kick in after ‘black money’ and national pride have been inserted into the demonetisation discourse, ‘cashless’ would be equated with ‘clean’, and cash with ‘dirt’ and the suspicion of dirty or black money.

In the cashless utopia that India is set to become, anyone who insists on using cash, a signifier of dirt, has a ‘dirty mind’, and is thus a suspect — a possible beneficiary of black money and the vices associated with it. Indeed, Mr. Modi concluded his Mann Ki Baat by explicitly equating ‘Swach Bharat’ with a cashless (or ‘less-cash’) Bharat, as he proclaimed, ‘Swachh Tan, Swachh Mann, Swachh Bharat, Mera Parichay’.

Why cashless?

But what explains this urgent drive towards a cashless society? One way to answer this is to consider the likely outcomes of a cashless society, and read back from it the intent behind such a move.

One immediate outcome of a cashless India would be a sharp rise in indirect taxes compliance. Traders, small businesses, shopkeepers, and consumers routinely use cash as a means to avoid paying service tax, sales tax, VAT, and any number of indirect taxes and fees. This mindset needs to change if the imminent Goods and Services Tax (GST) regime is to actually work. Brutally enforcing a cashless payments system — by sucking out 86 per cent of paper money and letting people flounder for a period in a condition of acute paper money scarcity — is perhaps the quickest means way to get there.

Apart from the state, another big beneficiary of a cashless India is finance capital. At present, India’s low-income households access credit through informal systems — be it a pawn broker or employer or a relative with cash savings.

This informality has been partially dented with the arrival of self-help groups that can access formal credit. But given India’s population, both the debt and the savings of the working classes constitute an enormous market that global finance has so far been unable to access.

Forcing them to shift to cashless payment platforms instantly formalises this world of informality. As the Prime Minister himself has reiterated many times, the mass opening of bank accounts under the Pradhan Mantri Jan-Dhan Yojana is a means towards financial inclusion, but in reverse: it channels personal income (wages/cash transfers) to financial markets via insurance and pension schemes such as the Pradhan Mantri Suraksha Bima Yojana and Atal Pension Yojana. Thanks to forced deposits, unlike cash in a piggy bank or a plastic pouch, money in Jan-Dhan accounts can serve as a fresh source of liquidity for financial institutions.

Go in for cashless transactions and get discounts, says govt.

The third beneficiary is the digital sector, which enjoys a complex but symbiotic relationship with finance capital. Digital payment apps and e-wallet companies have enjoyed record downloads and deposits post-November 8. Their massive ad spends were possible courtesy the financial institutions that have invested in these finance technology (fintech) businesses.

Finally, in a global scenario of debt-soaked slowdown, extreme income inequality, and stagnating real wages, capital accumulation is only possible through a mechanism that systematically administers an upward redistribution of income — from the 99 per cent to the 1 per cent. While an indirect tax regime like the GST would accomplish this objective for the state, the integration of personal savings into the global debt economy would manage the same for finance capital. The primary requirement in both cases is to capture the circuits of capital and commodity circulation that lie beyond their respective domains of taxation and credit — that is, the entire cash economy. The drive towards a cashless society is hence the lynchpin for securing the supremacy of the state-finance nexus.

The definition of ‘normal’

From businesses to analysts to ordinary citizens, everyone in India is waiting for life to return to normal. But what would constitute this ‘normal’? An easy definition for most people would be: no long queues at ATMs. But the queues are long not only because there are too many people and too little cash. They are long also because there is a limit on how much cash you can withdraw at a time, forcing people to queue up multiple times at different locations. A proper return to the pre-demonetisation ‘normal’ therefore entails something more: removal of any ceiling on cash withdrawals.

Indian Government to fund digital discounts

Such a definition of ‘normal’ would be valid if the reason for demonetisation was either destruction of black money or fake currency, or even a recapitalisation of banks — all of which has either already happened or no longer matter. Assuming you are an honest citizen who uses cash but not black money, you could legitimately expect to go back to the pre-currency ban status quo, with one difference: instead of old notes, you use new ones, which should soon be available in numbers proportionate to demand.

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But everything that the Prime Minister has said and done so far suggests that there may not be a return to this old ‘normal’. No matter how many currency notes are reportedly printed, how many ATMs are recalibrated, how many livelihoods affected in the informal sector, the ceiling on cash withdrawals may not be withdrawn any time soon — and no date has been indicated so far. The reason is simple: the demonetisation drive is not so much about curbing black money as it is about combating cash. The only way this could change is through extreme political pressure.

Not surprisingly, the banking sector is firmly behind the Prime Minister on demonetisation. So is the IT sector. Barring a few squeaks about the impact on growth, the corporate sector, too, is behind Mr. Modi. The only constituency that may not be, is the one targeted by demonetisation: the cash-dependent informal sector, which has taken a hit, and will continue to do so unless and until they switch en masse to digital payment platforms — which is what the government is expecting them to do.

While the political ramifications are a different story, one may view Mr. Modi’s push for a cashless India as the culmination of the economic logic of liberalisation unleashed by Manmohan Singh in 1991. From this ideological vantage point, a rapid transition to a cashless economy — even if it means not-so-subtle coercion — makes perfect sense.

Original Article published on The Hindu, an English Newspaper of India

sourced via sampath.g@thehindu.co.in

http://www.thehindu.com/opinion/lead/Why-%E2%80%98cashless%E2%80%99-may-be-the-new-normal/article16801344.ece

Read further:
Indian Government has No Clues of Black Money in India
https://arresteddevelopments.wordpress.com/2016/12/16/indian-government-has-no-clues-of-black-money-in-india
Cashless Monetary System means Absolute Power over you
https://arresteddevelopments.wordpress.com/2016/12/17/cashless-monetary-system-means-absolute-power-over-you

arrested-ds-160x32

https://arresteddevelopments.wordpress.com

Along with thanks and compliments to the sources for the shared data

Creative Commons Copyright © Arrested Developments 2015

Indian Government must bring legal clarity to demonetization-masked compulsory deposits

Government must Bring Legal clarity to Demonetization-masked Compulsory Deposits

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PROVIDE 100% insurance cover for bank deposits

The Scheme of compulsory deposit is somewhat novel and unorthodox, which we have had to undertake in the situation created by the Emergency.”

download-3

This is not a peek from our beloved Prime Minister Narendra Modi ‘s wished-for reply to Rajya Sabha debate on demonetization. This quote is from the speech given by Late Morarji Desai, Finance Minister, in Lok Sabha during April 1963 while moving the Compulsory Deposit Scheme (CDS) Bill.

The difference between the previous CDS’ (1963 & 1974 ones), and the present one, is as big as the gulf between democracy-cum-cooperative federalism and dictatorship-cum-State trickery.

Demonetization of Rs 500 and Rs 1000 notes is a fig leaf for unannounced compulsory deposit of citizens’ all savings, implemented without imposing emergency of any type. This open-ended CDS is not provided for by any law, unlike the two previous ones for which specific laws were enacted.

Moreover, the Government has inflicted a surgical strike of austerity that has left millions underfed. It has rendered millions jobless. It has reduced vibrant life to a battle for survival.

austerityage

The Demonetization-induced deaths and injuries has no parallels in the modern history.

The cumbersome procedure for withdrawal of Rs 2.5 lakh for meeting marriage expenditure by either groom or bride family reeks of Guest Control Order of the sixties & seventies.

Imposition of austerity on masses under the garb of fighting black money is a masterstroke.

It has enabled Government to abdicate its responsibility to cut its own expenditure and delay further disclosure of reports of Expenditure Management Commission (EMC).

Modi Government has cleverly packaged informal CDS as an integral component of demonetization. This has emboldened its supporters like Baba Ramdev to dub any criticism of banking mess as anti-national, pro-black money and pro-corruption.

Demonetization-camouflaged CDS has put public savings at gravest risk in India’s history. If any bank where demonetized notes have been deposited fails or is de-registered by RBI, the depositor would get paltry refund of Rs 1 lakh, even if his all deposits including fixed ones aggregate to Rs 1 crore.

This ceiling applies to depositor’s different accounts in all branches of the same bank. This ceiling has not been revised since 1993!

Modi regime has not even implemented UPA Government’s belated decision to double the deposit insurance cover ceiling to Rs 2 lakh per depositor per bank. While maintaining deafening silence on this issue, NDA Government speeded up its agenda to sell dreams to Aam Aadmi, the latest being illusionary benefits that would accrue to poor because of demonetization.

The flaws in CDS, including its brutal assault on fundamental rights of citizens, can be grasped well by recalling the previous CDS’. During 22 years of CDS ending 1 April 1985, neither economic growth accelerated nor society got reformed. Nor poverty got eradicated. Nor people developed special saving habit.

Announcing the intent to introduce CDS in his budget speech for 1963-64, Mr. Desai stated: “Like taxation, compulsory saving will restrain demand in the immediate future; whereas unlike taxation, it would provide an earning asset to the people and generally help in inculcating the saving habit in the country.”

He added: “Once the Nation imbibes the habit of saving regularly, it would have laid the foundation for its future prosperity and well-being. In fact, I would seek savings not only as an individual but as a national virtue.”

The scheme was applied to different sections of society including the ones with income below the threshold income tax level. The citizens were thus required to deposit a small part (3% in most cases) of monthly income in CDS accounts. The 4-percent interest bearing CDs were fixed deposits of five-year duration.

The Centre shared proceeds of CDS with the States, which were consulted in advance for their approval for the proposed scheme.

The Congress Government even sought Attorney General of India’s (AGI’s) opinion on CDS. In his opinion dated 28 th April 1963, the then AGI C. K. Daphtary, steered clear of issue regarding breach of fundamental rights by limiting his conditional opinion only to compulsory acquisition of money by the Government as violation of the Right to Property.

AGI appeared in Lok Sabha to answer questions put by MPs but was not invited to appear before Rajya Sabha, where some MPs from legal profession wanted to grill him.

The issue here is not AGI’s outdated opinion but the fact that the Government of the day followed democratic procedures and conventions before launching CDS.

The 1974 CDS was introduced through two diktats – The Compulsory Deposit Scheme (Income-tax Payers) Ordinance and The Additional Emoluments (Compulsory Deposit) Ordinance.

The later Ordinance was dubbed as “most obnoxious” by BJP veteran, L.K. Advani during July 1974 while condemning ordinance spree resorted to Mrs. Indira Gandhi Government. When will Mr. Advani speak on Mr. Modi’s informal CDS, which is hurting law-abiding citizens thousand times more the pain caused by legal CDS.

This brings us to core issue: Which law the Government has invoked to introduce deemed CDS and public expenditure control? All gazette notifications relating to banking restrictions and rationing of people’s hard-earned money to public have been issued “In exercise of the powers conferred by sub-section (2) of section 26 of the Reserve Bank of India Act, 1934.”

This sub-section reads as: “On recommendation of the Central Board the [Central Government] may, by notification in the Gazette of India, declare that, with effect from such date as may be specified in the notification, any series of bank notes of any denomination shall cease to be legal tender.”

This provision does not envisage rationing of depositors’ money. There might be other provisions under different banking laws under which such restrictions could be imposed.

This and several other legal complexities are expected to be clarified by the Government in its submissions to the Supreme Court and High Courts that are flooded with petitions against botch demonetization.

Meanwhile Indian Government also imposed restrictions on gold holding by individuals. Government want the public to hold paper gold.

Coming back to demonetization-enhanced risk to public’s savings, the percentage of protected bank accounts to total accounts has declined from record 96.5% in 1991 to 92.35% in 2015-16, according to RBI subsidiary, Deposit Insurance and Credit Guarantee Corporation (DICGC).

It is surprising that neither Mr. Modi nor Finance Minister Arun Jaitley have spoken on the need for providing full protection to all bank accounts during their regular sermons on financial inclusion.

NDA Government must explain to the Nation its reluctance to double the insurance cover cap to Rs 2 lakh, a decision taken by UPA in 2012-13.

NDA washed its hands off from this decision. Answering a question in Lok Sabha on 8 th May 2015, the Minister of State for Finance stated: “At present, there is no proposal to increase the existing deposit insurance cover of Rs.1 lakh.”

Keeping in view grave danger posed to banking system, Modi Government should enhance

deposit insurance cover from present ceiling of Rs one lakh to 100% insurance cover for the deposit of any value.

The issue of hiking insurance cover for hapless depositors has been studied by a few committees over the years. The last panel named Committee on the Differential Premium System for the Banks in India, observed: “In India, there has been a persistent demand from stakeholders and public representatives in the recent past for a hike in deposit insurance cover from the current level of Rs.0.1 million.”

In its report submitted during September 2015, the Committee stated: “A hike in cover without calibrating the premium rates to the risk profile of the insured banks only exacerbates the moral hazard. Recognizing this, it has been felt that introduction of RBP may be taken up to make ground for considering raising the insurance cover from the present ceiling of Rs 0.1 million.”

Let the Government walk the talk on Demonetization’s benefits for the poor by providing for 100% deposit insurance cover.

NDA also needs to separately explain why it has reduced the serious challenge of tackling black money to a cat-and-mouse game. It has to realize that it is doing the same mistake that Vajpayee Government did by amending High Denomination Bank Notes (Demonetisation) Act, 1978 to reintroduce Rs 1000 notes.

The Act says: “Whereas the availability of high denomination bank notes facilitates the illicit transfer of money for financing transactions which are harmful to the national economy or which are for illegal purposes and it is therefore necessary in the public interest to demonetise high denomination bank notes.”

(The Act in its ordinance form had demonetized Rs 1000, 5000 and 10,000 notes).

In 1998, several MPs had cautioned the Government to not to re-introduce Rs 1000 notes as Rs 500 notes were already been counterfeited in Pakistan and elsewhere and flooded into Indian economy.

As put by P.C. Chacko in Lok Sabha during December 1998, “What is the security of our monetary system? Now fake notes are being printed outside and then smuggled into India.The Government does not have any account. The Government does not have any control. The Heavens are not going to fall if Rs. 1,000 notes are not printed (read re-introduced) tomorrow; and no common man will die of starvation.”

Modi Government has now introduced Rs 2000 note, which would benefit more the corrupt and tax evaders in India and printers of fake notes than Aam Aadmi.

Good governance and common sense requires the authorities to first explain to the public all dimensions of hydra-headed black economy and corruption. The Government should have listed all options required to attack the twin malaise that have not been eradicated so far in any country.

The Government should tone down its political rhetoric on dubious benefits of demonetization. It ought to set up an independent commission to compute the net benefit/loss of demonetization-cum-CDS-cum-public expenditure control to common man and economy.

Simultaneously, it should make public UPA-commissioned three studies on black money and complete five reports of Justice Shah panel on black money. The Government should complement these efforts by issuing an action not taken report on recommendations of various committees on black money and corruption.

The Government should realize that the high moral ground, on which it is standing , would ultimately turn out to be sand, if not quicksand.

excerpts taken from the article of:

Naresh Minocha, Consulting Editor

http://www.taxindiaonline.com/

  more to come..

Rupee Falls To Near Record Low

https://arresteddevelopments.wordpress.com/2016/11/25/rupee-falls-to-near-record-low

Supreme Court of India To Hear Challenge To Demonetization On December 2

https://arresteddevelopments.wordpress.com/2016/11/25/supreme-court-of-india-to-hear-challenge-to-demonetization-on-december-2

The Trouble With India’s Demonetization Gamble

https://arresteddevelopments.wordpress.com/2016/11/28/the-trouble-with-indias-demonetization-gamble

Demonetization and Freakonomics

https://arresteddevelopments.wordpress.com/2016/11/30/demonetization-and-freakonomics

arrested-ds-160x32

https://arresteddevelopments.wordpress.com

Along with thanks and compliments to the sources for the shared data

Creative Commons Copyright © Arrested Developments 2015

How Putin, Khamenei and Saudi prince got OPEC deal done

How Putin, Khamenei and Saudi prince got OPEC deal done

mw-fb020_opec_v_20161130024029_zh

Russian President Vladmir Putin played a crucial role in helping OPEC rivals Iran and Saudi Arabia set aside differences to forge the cartel’s first deal with non-OPEC Russia in 15 years.

Russian President Vladmir Putin played a crucial role in helping OPEC rivals Iran and Saudi Arabia set aside differences to forge the cartel’s first deal with non-OPEC Russia in 15 years. Interventions ahead of Wednesday’s OPEC meeting came at key moments from Putin, Saudi Deputy Crown Prince Mohammed bin Salman and Iran’s Supreme Leader Ayatollah Ali Khamenei and President Hassan Rouhani, OPEC and non-OPEC sources said.

Putin’s role as intermediary between Riyadh and Tehran was pivotal, testament to the rising influence of Russia in the Middle East since its military intervention in the Syrian civil war just over a year ago.

It started when Putin met Saudi Prince Mohammed in September on the sidelines of a G20 gathering in China. The two agreed to cooperate to help world oil markets clear a glut that had more than halved oil prices since 2014, pummelling Russian and Saudi government revenues. Oil prices are up 10 pct this week topping USD53 a barrel. The financial pain made a deal possible despite the huge political differences between Russia and Saudi over the civil war in Syria.

“Putin wants the deal. Full stop. Russian companies will have to cut production,” said a Russian energy source briefed on the discussions. In September, OPEC agreed in principle at a meeting in Algiers to reduce output for the first time since the 2008 financial crisis. But the individual country commitments required to finalise a deal at Wednesday’s Vienna meeting still required much diplomacy.

Recent OPEC meetings have failed because of arguments between de facto leader Saudi Arabia and third-largest producer Iran. Tehran has long argued OPEC should not prevent it restoring output lost during years of Western sanctions.

Proxy wars in Syria and Yemen have exacerbated decades of tensions between the Saudi Sunni kingdom and the Iranian Shi’ite islamic republic.

Brinkmanship

Heading into the meeting, the signs were not good. Oil markets went into reverse. Saudi Prince Mohammed had repeatedly demanded Iran participate in supply cuts. Saudi and Iranian OPEC negotiators had argued in circles in the run-up to the meeting. And, then, just a few days beforehand, Riyadh appeared back away from a deal, threatening to boost production if Iran failed to contribute cuts.

But Putin established that the Saudis would shoulder the lion’s share of cuts, as long as Riyadh wasn’t seen to be making too large a concession to Iran. A deal was possible if Iran didn’t celebrate victory over the Saudis. A phone call between Putin and Iranian President Rouhani smoothed the way. After the call, Rouhani and oil minister Bijan Zanganeh went to their supreme leader for approval, a source close to the Ayatollah said. “During the meeting, the leader Khamenei underlined the importance of sticking to Iran’s red line, which was not yielding to political pressures and not to accept any cut in Vienna,” the source said.

 “Zanganeh thoroughly explained his strategy … and got the leader’s approval. Also it was agreed that political lobbying was important, especially with Mr. Putin, and again the Leader approved it,” said the source.

On Wednesday, the Saudis agreed to cut production heavily, taking “a big hit” in the words of energy minister Khalid al-Falih – while Iran was allowed to slightly boost output. Iran’s Zanganeh kept a low profile during the meeting, OPEC delegates said. Zanganeh had already agreed the deal the night before, with Algeria helping mediate, and he was careful not to make a fuss about it.

After the meeting, the usually combative Zanganeh avoided any comment that might be read as claiming victory over Riyadh. “We were firm,” he told state television. “The call between Rouhani and Putin played a major role … After the call, Russia backed the cut.”

 Iraq last-minute hitch

But OPEC would not be OPEC without a last-minute quarrel threatening to derail the deal. Iraq became a problem. As ministerial talks got underway, OPEC’s second-largest producer insisted it could not afford to cut output, given the cost of its war against Islamic State.

But, facing pressure from the rest of OPEC to contribute a cut, Iraqi Oil Minister Jabar Ali al-Luaibi picked up the phone in front of his peers to call his prime minister, Haider al-Abadi. “Abadi said: ‘Get the deal done’. And that was it,” one OPEC source said.

Iran’s President Hassan Rouhani is welcoming OPEC deal that cut the oil cartel’s output to push up crude prices.

Iran’s President Hassan Rouhani is welcoming OPEC deal that cut the oil cartel’s output to push up crude prices. Speaking in a provincial meeting, broadcast live on State TV Thursday, Rouhani called the decision “a positive development.” Iran had initially been hesitant to cut its oil production.

The country was eager to make up lost revenue after international economic sanctions were lifted in the wake of a landmark nuclear deal. Tehran agreed to limit its production to just under 3.8 million barrels per day. Iran’s arch-rival Saudi Arabia agreed to the largest production cuts, chopping nearly half a million barrels from its current 10.5-million-barrel daily output.

Freakonomic reaction

The 14-member group, known formally as the Organization of the Petroleum Exporting Countries, agreed to cut daily production by 1.2 million barrels a day to a ceiling of 32.5 million barrels.The reductions will take effect at the start of the new year.

Oil futures posted a gain of more than 9% Wednesday after OPEC reached an agreement to cut production for the first time in eight years.

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What the OPEC Production Cut Will Really Mean for Oil Prices

Crude oil pricesand the shares of U.S. oil and gas companiessurged over 8% Wednesday as the Organization of Petroleum Exporting Countries (OPEC) agreed to cut its output by some 1.2 million barrels a day to end a global glut.

Oil prices have already begun surging

As always with oil, the stakes are high. The price of crude matters for everything from what drivers pay at the pump to the trajectory of the global economy. OPEC, it would appear, still has the power to make world markets shudder.

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