Thoughts on Two Events

Two major events shook the world. One was the election of Donald J Trump as the president of the United States. The second, and closer to home (and more important in my mind) was the demonetization of large denomination currencies by the government of India.

First on US Elections

I had always held through this election season that HRC - the Democrat contender, would be a global disaster as a president. Part of the sentiment was the disdain with which she dealt with an emerging India. She made it a deliberate policy decision to hyphenate India with a failed state, Pakistan. Her shenanigans as a secretary of defense in hurting Indian interests has been detailed elsewhere, and I shall not venture into them here. Suffices to say, I am glad she lost. While she will still have considerable pull in the way Indo-US relations will shape up, she won't be in the driver's seat.

Having said that - it would be naive to suggest that DJT is the best thing since sliced bread for Indian interests. In fact, DJT is a complete unknown. As a quintessentially successful American businessman, DJT would put his interests above all else. Some Some of the stories that came out later in the campaign - including those using questionable (legal, yes) means to evade taxes - suggest that he is not above bending the law to suit his convenience / profit. Also, he is an unknown entity with respect to geopolitics.

With HRC, we knew where she stood (global disaster), and we rejected her for that. So far, DJT has been making sensible (for the US) noises - such as pulling back US' sphere of influence, and focusing on strengthening the domestic arena. These are things that a super power must do time to time. The US has been exerting her influence across the globe for too long, and too far. She is stretched thinly. It is time for her to group up and shape up. This is where Trump's rhetoric of looking inwards, sounds optimistic.

On the other hand, DJT could easily be taken for a ride in the Geopolitical arena by vested interests. It is quite possible since there are bound to be vested interests right inside the walls of the White House. As to whether DJT will listen to sane advice, is something we need to wait and see. Also to be seen is his approach towards Evangelist Jesuits who get funding from the US organizations and run riot inside India. Would he be neutral? Or supportive of EJ activities? Would he tone them down and give India her due civilizational / sovereign respect? These are unknowns. For now, it seems, the US people have given the certain disaster a miss, and picked an iffy choice. For this, we will wait and see.

Demonetization in India

The bigger news in India is the demonetization. As a crude WhatsApp joke went, the PM of India just told the US election news chest beaters a "bitch ... please!!" in his own inimitable way. The curbing of high value denomination currencies had wide spread clamor even before the advent of NDA-2 government. For instance, Baba RamDev (the Billionaire yogi) and many activists against corruption (including the venerable Prof R Vaidya of IIM-B) have been asking for a ban on 500 and 1000 INR notes, since they make transport of high values easy in small packages.

This ban will hurt hoarders: Real Estate, Mining, Private Edu Institutions, Power brokers (of the election kind), hawala transactions that happen under the premise of film making, corruption in government offices - I can't imagine one area where hoarders will not be affected by this order. Rightly, we expect black money to take a big hit. The new 2000 INR note is supposed to be a technological marvel - but that speculation can wait until we get confirmation.

However, I do not think this particular order was made for black money hoarders at all. They are merely small change collateral damage - no matter how big their hoarding is. This order has to be seen in the light of national security. The current government is cracking down on all sorts of anti-India forces: from terrorists in Kashmir, to Maoists in Central India, to NGO's, to active Islamic terror groups across various states, there has been relentless crackdown in the past one year. However, a police crackdown only reduces the menace. In order to destroy them, it is necessary to destroy their finance. Many of these organizations thrived on a) hoarded black money, and b) fake currencies that were printed in Pakistan by the ISI, and circulated in India. How many times have you seen your 1000 Rs / 500 Rs note being looked suspiciously at toll gates? The crack down has achieved in one stroke, what years of fighting these individual hydra heads didn't: break their finances. All their cash stash is now useless.

The second dimension to this issue is the rumor that Indian currency was not printed in India. In one of his election speeches, NM had mentioned how India manufactures some of the world's best currency printing ink, and yet we print our own currencies outside India. I think this move is to give a fillip to a very niche yet important industrial sector of our country. Will Pakistan again make fake currencies of this new lot? Yes - but it will take a relatively longer time, and we hope that will be enough time to break that country.

The last aspect of the rumored GPS tracking for the new currency might simply be a RFID based integrity check system. Here we enter a strictly speculative territory. Such a system may help verify if a given currency note is real, and also when stacked in large quantities, an RFID detector may pick up hidden stashes (during raids of course). So, while it may not be tracked by satellites - these currencies may actually make it difficult to fake. This will also cut down the fake currencies that float inside India, helping Islamists, Maoists and god knows what not.

Overall, we are firmly in the "Interesting Times" territory. Hopefully, we will all come out of it unscathed.

SBM

Comments

  1. GPS/RFID chipping is a hilariously ridiculous piece of fiction. Imagine: can a satellite detect individual tiny reflected signals from tiny passive chips in millions of notes? Why don't we put this technology in our kids' clothes then, so that they can be found when they're lost or abducted? Apart from the bandwidth required and the sensitivity of equipment this calls for, do we have computational power to track individual bank notes?

    When your powerful smartphone can lose a signal in a Faraday cage or a refrigerator, how can satellite signals reach the tiny passive chip on a bank note stored in such a contraption? People can also simply exchange notes at nodal points and defeat tracking.

    ReplyDelete
  2. Thanks for the comment GE.

    I also think it is rumor (and hence the warning about speculation). In fact, many others have raised this point too. However, there is a certain clamor about using advanced electronics in making currencies safe from duplication.

    Thanks for commenting.

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