India Confiscates Gold, Even Jewelry, In Raids On Hidden Money

STOCK PHOTO OF GOLD BARS.
Side profile of a mature man counting gold bars

If India goes into a full-blown Venezuela style economic crisis that includes food riots, the West has much to fear. There are millions of Hindus and Sikhs ready and able to flood Australia and New Zealand to escape the turmoil in their own country.

What the (((powers that be))) like to do is to conduct social experiments. India is the laboratory for demonetization and gold confiscation, it seems. Once the results of the experiment are in, the elites will then turn their eyes to confiscating wealth in other countries.

If the Indians have any way to resist this theft of their wealth by (((the one percent))), then break out the pitchforks and machetes and get to work, guys.

Zerohedge

Global financial repression picks up steam, led by India. After declaring large denomination notes illegal, India now targets gold.

It’s not just gold bars or bullion. The government has raided houses, no questions asked, confiscating jewelry.

For background to this article, please see my November 27 article Cash Chaos in India, 86% of Money in Circulation Withdrawn; Cash Still King in Japan.

Large denomination means 500-rupee ($7.30) and 1,000-rupee notes ($14.60), which account for more than 85 percent of the money supply. They are no longer legal tender, effective immediately.

The chaos accompanying “demonetization” hasn’t eased up noticeably. It seems likely the disruption to the economy, especially in cash-centric rural India, will hit growth sharply for at least a few quarters. It’s tough to say for how long and by how much; we are in uncharted territory here and guesses have varied widely. But many analysts agree with former Prime Minister Manmohan Singh, who’s predicting the new policy will knock 2 percentage points off that world-beating GDP growth rate.

Demonetization was originally sold as a “surgical strike on black money” — the illicit piles of cash many rich Indians have accumulated out of sight of the taxman. It’s now clear the policy has been anything but surgical. Worse, uncomfortable questions are being asked about whether the complicated rules and exemptions that have accompanied demonetization have allowed black-money holders to launder most of their cash. Of late, Modi’s chosen to focus instead on demonetization as means of advancing a cashless economy.

Yet the idea of a war on unaccounted-for wealth remains central to demonetization’s popular appeal, which means Modi will have to find other ways to keep that narrative going. So the government has now begun to push income-tax officials to conduct raids on those who might be concealing assets in forms other than cash, such as gold.

There’s already enough fear of such raids becoming common again that the government felt the need to step in to quell some of the anxiety. That didn’t help much. The government “clarified,” among other things, the rules governing when tax officials could seize gold: Nothing would happen “if the holding is limited to 500 grams per married woman, 250 grams per unmarried woman and 100 grams per male.” It also said that there would be no limits on jewelry “provided it is acquired… from inheritance.” Also, the “officer conducting [the] search has discretion to not seize [an] even higher quantity of gold jewelry.”

What this means, unfortunately, is that India’s income tax officers have just won the lottery. During a raid, they can, on the spot, decide whether or not to confiscate a family’s gold holdings. And remember, India has an enormous amount of gold — 20,000 metric tons, much of it inherited. (The rules governing simple searches are different, but few know that.) Rather than cleaning up tax administration, the government has handed tax officials more power than they’ve had for decades. The rich will pay what they need to escape harassment; the rest will suffer.

The last line in the preceding article says all you need to know about what’s happening: “The rich will pay what they need to escape harassment; the rest will suffer.”

Evidence suggests the politically connected, and their friends, knew about the ban on cash and acted in advance. Everyone else is stuck.

India’s raid on gold reinforces its ban on cash. Short term aside, these kinds of actions will increase demand for gold.

What’s Next?

I keep wondering: what’s next? People pretend they know, I admit I do not. However, I am quite sure a currency crisis is coming. Where it strikes first is unknown, but the list of likely candidates increases every year.

My spotlight has been on Japan, China, and the EU. India caught me off guard, but it adheres to my general theory this pot will eventually boil over in a cascade from an unexpected place, outside the US.

US actions may cause a currency crisis, but I believe a crisis will hit elsewhere first. If I am correct, gold will be the safe haven, regardless of currency, but especially where the crisis hits.

2 thoughts on “India Confiscates Gold, Even Jewelry, In Raids On Hidden Money

  1. Indian government graft and corruption brought this to a head. The Indian people have historically been poor for centuries with only a small wealthy elite. In India, in 2009, the Levi Strauss Co. (Levi’s jeans) started selling their $30 jeans on an installment plan of three monthly payments. I think that little tid-bit might say something about the Indian people’s overall wealth. Of course the average person will seek to hide their “wealth” from the corrupt gov’t/taxman. It has become no different in the U.S. Our corrupt, graft-ridden gov’t has been at war with the middle class for generations now regards taxes. The wealthy elite (via tax code manipulation) can afford to protect much of their wealth from taxation and the “poor” get covered by the middle classes’ taxes. There have been all sorts of rumblings from our wonderful gov’t as to how to extract even more money from us. Hopefully, with the Glorious Leader’s election, we will not find gov’t people at our door ready to steal our property.

  2. This could be the canary in the gold mine gasping for air – that the Jews are short of gold to deliver. The day had to come and maybe the Indian Govt is helping the Jews avoid a collapse of the US dollar.
    No Government has a right to confiscate a persons wealth – except Communist dictatorships. India is meant to be a “democracy”. The vast majority of gold would be held by honest people who have paid their taxes. That is, if any brownskin in India is honest.
    If India was smart – and they are not – they could hold the world and the Jews to ransom. Indian private individuals, not the Govt, have 20,000 tons of actual gold, more than twice what the Fed of the USA claims to have stored. Thusly, the country India is twice as sound financially as the USA. Very little private gold is held in the USA and good old Commie Roosevelt confiscated US citizens gold about 1932 at less than its market value.. Jews used to love gold but now they hate it. They realised they can make ten times more profits with counterfeit money, like Fed dollars and fractional reserve banking, and margin loans, mortgages, options, futures etc.
    Gold is for honest people, not Jews, or the Indian Govt.
    If you want to hurt Jews, buy gold and keep it safe somewhere. Never pay someone to store it for you, they often steal it, eg by going bankrupt or organsising a break in. You can use a bank stoarge box in a vault or safety envelope and you do not need to tell them what is in it. Roosevelt stopped anyone from opening their bank vaults without some snoop from the Fed watching ready to pounce. Just like modern day India – this was in the “free” USA.

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