demonitization - interesting way money is laundered

by truthbetold Sun Nov 13, 2016 5:53 pm

One of the most daring idea was implemented by a MLA from Karnataka. He gave a loan of 3 lakhs to farmer with no papers. Now his money is out there in other hands who he hopes will remain loyal to him ( I am sure he has other methods involving muscle in case of any disloyalty).

Another idea is major politicians distributing money to key party workers at low level for future loyalty.

in the first few days money moved into goods that can be converted into backdated sales.

Of course buying gold at high price was rampant on 8th but govt tightened screws on gold shops.

Real estate prices dropped like a rock.

Surprise worked as intended as all legal methods of hiding 500 and 1000 notes are exhausted. BJP supporters are claiming that terror network finances are damaged significantly.

If things settle down in second week, people may forget Modi govt's surprise. If life continues to be disrupted by this decision for another week, Modi will pay a political price. He is already making enemies in Traditional BJP supporters in Marwari Seths and Aggrawal businessmen and movie moguls and powerful real estate money bags.

by garam-kuta Sun Nov 13, 2016 8:17 pm

truthbetold wrote:One of the most daring idea was implemented by a MLA from Karnataka. He gave a loan of 3 lakhs to farmer with no papers. Now his money is out there in other hands who he hopes will remain loyal to him ( I am sure he has other methods involving muscle in case of any disloyalty).

Another idea is major politicians distributing money to key party workers at low level for future loyalty.

in the first few days money moved into goods that can be converted into backdated sales.

the big fish will always find a way. apparently they are paying advanced salaries to their employees and using their businesses to convert some of the old notes. and then there is agricultural income that is not taxed. they will use some farmers.
village level politicians will use 10 people in their village. district level 100 people and state level thousands of people each depositing just under 2.5 lakhs and unlimited if you can find enough farmers.
the whales like jagan,jaya,mk will use hundreds of big fishes. some this way , some via gold, some via hawala operators and viola, all their old notes are converted into white.
in the mean time, economy is taking a big hit as malls, restaurants, movies have virtually no business. daily wage earners and streetside vendors cannot do any business. people are using the precious currency only to buy essential stuff.
i am afraid this is turning to be a kondani tavvi elakani pattinattlu.

by Hellsangel Sun Nov 13, 2016 9:30 pm

The bulk of illegal money is already parked in shell accounts, real estate, gold and such. Modi being a drama queen won't change that. I hope he loses the UP elections big time for this foolish move.

by truthbetold Sun Nov 13, 2016 10:18 pm

HA, according published information black economy in India is about 18% to 22% of 22.2 Trllions dollars (plus). That is close to 400 Billion dollars. (this amount may miss some of the money stashed away in Gold). Cash in circulation in India is about 265 billion dollars ( which is slightly above average among major economies). Of the cash 85% is in 500 and 1000 notes. Of the big notes, according Indian govt, 1/3rd is black money or does not come into tax process.

RBI stated that it increased big note circulation between 2012 and 2016 by 40% but actual number of big notes incresed by another 40% or more. These additional big notes were pumped into Indian economy by Pakistan and its terror instruments.

Modi govt decided to flush out terror money and clean up cash transaction process as soon as possible. UP elections, pushing deposits to major banks to cover for large NPAs and other reasons heard in media may have been added incentives. Note that the policy was decided around April 2016.

Even if few large players survive, very large money will flow into Tax coffers. 30 or 40 crores were paid into GHMC (Hyderabad Administrators) with in last 4 days.

Real estate prices are expected to go low and in future prices could all be white or % of white could increase significantly from current 30 to 40% white money in the best of situations.

Punishing corruption kings is an important goal but moving to transparent cashless transactions would increase tax revenues and increase the velocity of money.

Smuggling of consumer electronics used to be rampant during my younger days. A good transistor radio or a quality camera can only be purchased from smugglers (giving rise to people like Haji Mastan and Dawood). Govt. reforms brought those and similar consumer products into common man's house in a decade. Things do change and good change is possible. India needs somebody to give the people a chance.

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demonitization - interesting way money is laundered

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