How to view from the institutional economics of India's abolition of banknotes event

The abolition of banknotes, this extreme practice, the direct damage to the country's credibility of the axiom, the author will not be more tired, today only to say why India to abolish banknotes, the reason behind what exactly. Indian Prime Minister Moody's this policy is very interesting, this side of the conflict with Pakistan, over there Moody out of such a hand, always feel Moody and the Indian military is not a line. He did a good job of pulling the military's leg. India is actually a very strange country, this large-scale abolition of banknotes to the global eye-opening, and playing the anti-corruption this highly appealing, inciting banner, think carefully, I'm afraid it's not so simple, behind the scenes there must be reasons we do not understand. The author's personal guess, should be the Indian banking system has a payment crisis, if not change the banknote, I am afraid that India is going to appear a comprehensive economic crisis, a large number of banks will fail, the financial system is fully paralyzed, therefore, rather than looking at the outbreak of a full-scale economic crisis, it would be better to take the change of the banknote to alleviate or get through this crisis. This possibility is the greatest. In the final analysis, the purpose of the exchange of banknotes is to freeze a large number of circulating funds in the market to prevent a run on the tide, with the current India in the implementation of this exchange of banknotes in the implementation of the process to see, due to the suddenness of the incident, the preparatory work, supporting policies and the implementation of policies at all levels of the implementation of the department of implementation of the limited, and ultimately may have to appear problematic. The governor of the Reserve Bank of India has only been out of office for a short time, and Moody's thinks he's too much of a headline grabber, so he might as well take the prime minister's position, forcing out that Rajan financial genius! Moody's now surrounded by a group of high caste blowhards (such as the domestic what Zhang, what Mao, etc.) 。。。。 This foundationless economy is showing its true colors! First, some people say that India's exchange of banknotes can combat corruption, I think that is pure nonsense. Two days ago, there is not news that some people with 50% rate from the hands of the people in exchange for old banknotes, and then through the relationship to the bank for new banknotes? Then those rich and powerful corrupt people can not directly put the funds from corruption through the relationship in the bank directly for the new version of the banknotes? Let's put it this way: 1. What kind of corrupt officials can be combated by exchanging banknotes in this way? At most, it will take away the cash from the corrupt officials. Of course, it also took away a lot of money in the hands of ordinary people, because a lot of old men and women also like to save cash, hide the cabinet, they can not find it, and can not remember how to come? Even if you take away the corrupt official's cash, is it a blow to him? The real estate is still there, the car is still there, the land is still there, the company is still there, as long as the power is there, the money will come back. And next time there may not be much cash, mostly securities and shares. This you play the exchange of money will not have a chance, right? And you think changing money is fun? Not to say that the cost is not more than you change the money back to get the stolen money how much less, on the loss of the country's reputation is impossible to calculate, such as China's yuan has begun to become an international currency, if there are foreigners holding the yuan can not rush back to exchange, the reputation of the yuan how to measure the damage? And the resulting conflicts and the harm to ordinary people is your society may be difficult to bear! Causing unrest are possible! 2, India's corruption problem is not a day or two, India's corrupt officials can do exactly this. Bank officials, gangsters can make a fortune in conjunction with each other. Banks provide a large number of new currency to the gangsters at low prices, slowing down the speed of exchange to the masses. The officials use their power to ban the circulation of old currency, making it impossible for the masses to buy rice and food with old currency. The people can't go to the bank to exchange the new currency, so they have to go to the black market to exchange with the gangsters. The gangsters recovered the old coins from the masses at a low price. In fact, this trick can be played a little more ruthlessly. After the gangsters get the new currency, they purchase food, gasoline, diesel, salt, coal and other necessities in large quantities. So much so that even if the masses exchange the new currency, they cannot buy food. Gangsters take the opportunity to sell food, gasoline and diesel fuel, salt, coal, high prices on the black market, selling the old currency and new money is not collected, selling goods are all gold-denominated. The Indian people in the hands of gold jewelry, all fishing to hand. Author's note: this "gangster", can refer to India's "underground money changers". The people can not use the old currency to buy rice to buy food, the bank is difficult to exchange to the new currency, can only go to the help of underground money changers. Officials, banks, underground money changers joint with each other, from the people to pick a layer of skin. 3, the author leaked a secret, huh. The real big corruption, giant corruption, a few will put a lot of cash at home? The author tells you a few corrupt officials to dispose of a large amount of cash law it.　A, arrogant type - the acquisition of a large number of real estate property, company shares or dry shares.　　B, half-arrogant type --- in the Swiss bank account through money laundering or shell companies into the Swiss account, the local currency of the dollar and the euro do not matter.　C, semi-secretive --- buy a set of houses in foreign countries to put the money in that house in the vault, the local currency, the dollar and euro do not matter. D, secretive --- all the money exchange into physical gold, go to a no one place to dig a pit buried. So: even if the abolition of anti-corruption success, corrupt officials and the hands of the black forces of the money have become waste money, but they have to come to the ill-gotten gains of the channel has not been abolished, that is, the roots of corruption is not removed. Then after this wave, the black is still the same or continue to black, the corruption is still the same or continue to corrupt, after a few years is not the same? You can't do this every three to five years, can you? In the future, they will probably be replaced by gold bars, and it is useless to abolish the banknotes again. The abolition of banknotes has only caused confusion, but has not solved any problems at all. Corrupt officials have boxes and boxes of banknotes at home, no more, moldy, no effect on them, because they do not need, and the people have no money in their hands, that will kill people, that is their living expenses, medical money, children's tuition fees and so on. Empty thought, abolishing banknotes is indeed a good law against corruption, the best law is to change new banknotes once a year, not to give life to corrupt officials, go India! Oh 。。。。。 Second, I think the Indian Prime Minister Moody's abolition of the order because the Indian financial system has a big problem. Simply put. The country has no money, how? Want to ask the consortium to collect taxes, the consortium does not agree, how? High caste blowhards came up with a bad idea. (Same as when the self-inflicted death of Daming, could not collect taxes from the gentry class, desperately collect taxes from the poor peasants a reason) India has been a trade deficit, PM Moody has spent a lot of money to stimulate the economy again, and now the banking system should run out of money, through the exchange of banknotes, forcibly force the cash in the market back to the bank. Otherwise the overissuance of money is bound to create a serious inflationary problem and probably the gold within the Indian treasury is now drying up. To curb inflation also lacks the means, so the direct use of currency exchange to temporarily alleviate. India's great power ambitions of the general public really can not quite understand, it is a pity that the eye is high and low, only to say not to do. China's economic takeoff has greatly stimulated this ambition of India, therefore, India has taken a series of radical policies in the economy, especially in the financial sector, specifically, is to use the super-issuance of money to stimulate investment, drive economic growth, a series of financial policies have played a certain role in India in the past few years, the pace of economic development has accelerated significantly, and in the major economies is really quite eye-catching. However, go too fast will certainly have problems, India's domestic inflation is becoming more and more serious, the rupee from 2007 1 U.S. dollar for 37 rupees depreciation of the current nearly one U.S. dollar for 70 rupees, starting from 2014, in fact, India's financial system has been a problem. Give some examples to analyze: 1, India and China has been a huge (for India) trade deficit, which has not been a few years, but this year India began a total boycott of Chinese goods, why would it be this year? Because India is now extremely lack of foreign exchange. 2, India has long wanted to import advanced fighter jets to replace the old domestic aircraft, but the light said there has been no action, and then finally reached with France to import 126 Rafale fighter agreement, and after more than N time, and ultimately only to buy 36, which there are a few so that we all can not figure out why India wants to buy such a high price of the Rafale fighter, why the number is reduced so much? Why was the number reduced so much? Why India does not buy the performance is almost the same but the price is much cheaper Russia's Su35 fighter, the main reason should be India has no money, Russia needs to pay in cash, and France can provide loans, from which you can judge India's extreme lack of foreign exchange to pay for the ability to pay for. 3, why India finally reached a high-speed railroad cooperation agreement with Japan? Instead of and China? Because India does not have foreign exchange, Japan is willing to provide high-speed rail construction of most of the costs, as for the Japanese loan how to pay back, that is the future, now do not have to consider, so the agreement was reached. But in the matter of purchasing Japanese seaplanes, although Japan reduced the price to the extent of losing money, as long as India paid to be able to reach an agreement, but India did not have the money, and ultimately did not buy. Due to the Indian big country ambition, want to do a prestigious country like China, so the economic growth rate is the goal of its pursuit, for this has been to take a greater risk of double-deficit fiscal and financial policies, this policy in the Singh era, although there have been foreign exchange payment difficulties (and finally use the gold reserves to repay the due payment), but the overall is still in a controllable range; Moody's assumption of office in order to pursue higher After Moody took office, in order to pursue a higher rate of economic growth, in the country to carry out infrastructure construction, industrial zones, power plants, highways and so on the construction of the full bloom, its investment has far exceeded the scope of India's economy can afford. A large number of infrastructure construction has taken up a large amount of bank funds, these funds are difficult to recover in the short term; in addition, because a large number of Indian banks belong to the private sector banks, the previous few years in the economic boom, the bank of the domestic real estate market and the stock market invested a large amount of money, the last two years, the global economy's sudden cooling of India's real estate market is also from the hot to the cold, so that a large number of bank investment in capital has also appeared to recover the difficulties Under the double pressure, although the country continues to increase the amount of printed money, but the bank's liquidity is still drying up, and finally stepped into the edge of the financial crisis. The sudden arrival of financial risk should be out of Moody's surprise, is to watch the wave of bank failures, or to take decisive measures? Moody's took the latter, India's this economic crisis, is only the beginning of the follow-up will appear what the situation, it is still difficult to judge, but one thing is certain, that is, will hit the Indian economy, if the crisis is handled well, there will be a few years of impact, if not handled well, the crisis will spread to India's politics, the economy and all aspects of the community. So: I think the so-called Indian abolition of the main reason for the order is that India's financial system out of a big problem before this plan, this kind of no chapter and verse of the anti-corruption is an individual know that it does not work, or other countries have been engaged in the early! It is possible that India has been unable to exchange foreign exchange, Moody's financial system to their own time to adjust. Third, inflation is terrible, but deflation is also very dangerous. India through the exchange of money directly to inflation into deflation can not be said not violent. Now the most critical is how to quickly complete the screening through the bank, the new banknotes will be passed to the real economy and the general public in urgent need of cash, the longer the delay, the greater the damage to the economy. But if the unconditional exchange is purely a toss-up, now is the real test of India.　　Finally: the dollar is now strong stage, the global economy, regardless of size, are trying to find ways to save the economy, to prevent the financial chain was ripped off by the dollar, India is good, their own financial chain ripped off to create panic, the United States is worried about no place to transfer the crisis, sucking the blood it is really a "divine helper", the effect of the Ganges River is really extraordinary. The effect of Ganges water is really extraordinary. "Ruling a big country is like cooking a small fish", all the drastic policies may create a momentary effect, but afterward, they will certainly produce great side effects. Especially this kind of abolition of banknotes policy, related to the personal interests of thousands of households and even the survival of life and death, a carelessness caused by the chaos can be imagined. A country, the best internal less tossed. Unless you get to the point where you have to toss and turn, you have to reform.