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All existing 500 and 1,000 Indian rupee banknotes will be unusable starting on November 11th, and worthless on New Year's Eve:
Indian Prime Minister Narendra Modi has announced that the existing 500 and 1,000 rupee banknotes will be withdrawn from the financial system overnight. The surprise move is part of a crackdown on corruption and illegal cash holdings, he said in a nationwide address on television. "Black money and corruption are the biggest obstacles in eradicating poverty," he said.
New 500 and 2,000 rupee denomination notes will be issued to replace them. The move is designed to lock out money that is unaccounted for and may have been acquired corruptly, or be being withheld from the tax authorities. It is seen as the boldest move by any Indian government to clampdown on tax evaders.
People will have until December 30th to exchange the notes at banks.
(Score: 4, Insightful) by mendax on Thursday November 10 2016, @01:31AM
The French after the Second World War did something similar. They withdrew the old franc in favor of a new one, but with a twist. You could only exchange so much old for new unless you were able to satisfactorily explain where the excess came from. It was a way to screw over war profiteers and black marketeers.
This step, however, is not a great way of inspiring confidence in a country's currency. For example, the United States, with one exception, has never withdrawn any currency it has issued and made it worthless. It was always worth its face value. That means that if you are a dictator who has US dollars in a vault somewhere, you are pretty certain that you will be able to use your dollars whenever you like, and that the government will not withdraw the older currency. However, if your vault is full of old $100 bills (either the design from the 1920's or the newer one from the early 2000's) you may have trouble finding a bank wanting to take them. The new $100's have lots of anti-counterfeiting features embedded in them, while the older ones don't. I've also noticed that once the new $100's came out, the old bills started becoming scarce. I think the Federal Reserve is withdrawing and shredding the old ones as they receive them, and replacing them with the new ones. My housemate pays the rent in cash and I almost always receive new bills.
It's really quite a simple choice: Life, Death, or Los Angeles.
(Score: 3, Interesting) by SanityCheck on Thursday November 10 2016, @03:53AM
We would be so lucky to do the same with all USD and launch new USD. It would be easily convertible from old to new provided you can show you paid fucking taxes on the old. All electronic funds can only be replaced in US banks, meaning you have to bring the cash back in or say bye bye to it.
(Score: -1, Flamebait) by Anonymous Coward on Thursday November 10 2016, @06:23AM
Give me ten percent of all your resources, SanityCheck! What, you object? Don't worry - I'll just get my "little friend" to "persuade" you.
He's from the IRS.
(Does it really matter the name the gang has? Mafia, MS-13, US federal government? Also, only would that said criminals took just 10%.)
(Score: 2) by bob_super on Thursday November 10 2016, @07:05PM
I wouldn't be surprised to hear that the mafia is digging its own telco infrastructure, but I doubt that racketeering gangs fix potholes and bridges, or help build universities.
Idiot.
(Score: 2, Insightful) by tftp on Thursday November 10 2016, @08:06AM
It would be easily convertible from old to new provided you can show you paid fucking taxes on the old.
And the rules of "showing" will be such that nobody who was not aware of these rules 33 years ago will be able to come up with all the supporting documentation. But even if you have all what the craziest BOFHs of IRS could think up, your money will be locked in "escrow" for many months, if not years, as it is not a trivial matter to check all the 2,736 pages of densely printed sheets of paper that each of the "lucky" people provided to verify that their life savings are, actually, their, and not the stolen property of the government. Note that if even one number on those 3,863 pages cannot be confirmed (to a random source, such as lost or destroyed government records,) your entire case will be stamped with a big fat DENIED. You owe the processing fee, of course.
(Score: 2, Interesting) by Anonymous Coward on Thursday November 10 2016, @05:26PM
I just took $1,000 out of the ATM and put it in my sock drawer. I do this almost every month. How do I prove I paid taxes on it? How can I even prove the ATM receipt is for the specific bills I have?
(Score: 2) by bob_super on Thursday November 10 2016, @06:57PM
> How can I even prove the ATM receipt is for the specific bills I have?
That's the easiest part, because the bank has a big database with the serial numbers and your transactions.
Until you give them to you dealer or your girl's pimp, those are known as yours.
(Score: 1) by tftp on Friday November 11 2016, @12:53AM
I seriously doubt that the banks know the s/n of the bills that you were ever given. Tellers most certainly do not record those. Besides, what if you were given $100 bills and exchanged them for $20's in a grocery store next door? Nobody keeps track of retail cash. But those are legitimate operations, not related to semi-criminal activities that you allude to.
Otherwise you can earn $3K/mo, withdraw $3K/mo, and at the end of the year present $36K. This means that you never paid for housing or food, but all the money is accounted for. The government will never accept this trick. They will say that only excess above some average expenses may qualify. Naturally, that excess will be pitifully small, and for most people - negative.
All in all, the task of proving that your cash is really yours is very difficult - especially when the other side is interested in not accepting your evidence. They hold all the cards, you hold nothing, and you have no power. You are just a beggar at their door.
(Score: 2) by bob_super on Friday November 11 2016, @01:26AM
Just because tracking the serial numbers is not reliable, because they indeed can change hands a dozen times before hitting a bank again, doesn't mean that the banks don't record serial numbers at their ATMs and when cash comes in.
It's data. Data has value because someone will figure out how to extract value out of data eventually. Storing data is cheap. Let's acquire all the data we can.
(Score: 1) by tftp on Friday November 11 2016, @04:37AM
I agree that it's data. However there are so many bills in circulation, and so few of them are promptly tracked, that it's infeasible _currently_ to make any use of that data. In my scenario, I got 3 $100 bills and left one at the grocery, another at the neighboring Starbucks, and another at the Walmart. What can be concluded? Those places deal with a lot of cash; in case of Starbucks, for example, those bills may not hit the bank for weeks; they will change many hands in that time, untraceably. Not all data is information - quite often more data means more garbage, more noise.
If I were the government, I'd simply try to eliminate the cash from the society by making it *profitable* to pay with traced plastic. This is already the case with credit cards, as they pay you a small kickback out of the fees that merchants pay by adding the VISA costs to their prices. This is ridiculous, of course, but paying the same price in cash is even worse, as you pay for VISA services and do not use any of them. Merchants are prohibited from declaring VISA fees in the bill - they are required to hide them in the price. Cash discounts are allowed, but very few sellers, only in very competitive markets (4 gas stations per intersection) have to use those. The rest gladly overcharges cash customers.
The main reason why cash is still accepted is because there are very many people in the country who only deal in cash. For one reason or another, they cannot or do not want to use banks. Anyone on social assistance, for example, fears banks, as if he gets a temporary job or any income, the bank will be happy to report it, and the person will get his assistance cut. On one hand, this is fair, on the other hand it demotivates the person, and forces him to earn extra money only in form of hard, cold, untraceable cash.
Richer European countries are much farther on the road of eliminating cash. Cashless society, where every transaction is recorded by a private entity, is the paradise of all tracking aficionados. And it's coming, one way or another. Most likely, just by making cash too hard or expensive to use. For example, you can't pay with gold coins in a store anymore... but they still have value and can be traded in a proper setting.
(Score: 0) by Anonymous Coward on Friday November 11 2016, @02:38AM
> Tellers most certainly do not record those.
Technically true: tellers don't write them down. But the cash dispensing machines that the transaction spits the bills out from definitely do record transaction ID and serial. Tellers don't have big drawers of cash anymore because of bank robberies, they're just there to check ID/passcode/bankbook and key in the interaction.
(Score: 2) by SanityCheck on Friday November 11 2016, @06:59PM
Note I spoke of the USD OUTSIDE the US. Assuming you do not live outside US you are fine. If you do, you should not be using foreign currency to store wealth, that is just risky, and if you do you are taking the risk of this happening to you. Problem we have in the US is companies siphoning money out of the country while not paying any taxes on it. It's bullshit, and it needs to stop.
(Score: 0) by Anonymous Coward on Thursday November 10 2016, @07:56PM
Property tax, sales tax, income tax, excise tax and estate tax weren't enough, so now you want to tax fucking!? That's outrageous, even if it doesn't affect me personally.
(Score: 2) by driven on Thursday November 10 2016, @05:07AM
Almost certainly. In Canada, we've got the $1 and $2 coin in wide circulation. You'll never find a $1 or $2 bill in circulation. Same with the move to the new "plastic" looking bills that replace the older paper ones. It's a pain in the butt because vending machines need to be upgraded to accept the plastic bills. The paper ones are still around but gradually lessening as they are removed from circulation. Not to mention pennies - no store returns pennies as part of your change anymore. All cash transactions are rounded up or down to the nearest 5 cents.
Found this interesting page on the topic: https://en.wikipedia.org/wiki/Withdrawn_Canadian_banknotes [wikipedia.org]
And apparently $1 and $2 Canadian bills in mint condition can fetch a good price these days: https://thelapine.ca/canadian-banks-now-buying-old-2-bills-for-20/ [thelapine.ca]
I know I have one of each stashed away somewhere.
(Score: 2) by mendax on Thursday November 10 2016, @05:28PM
That's nice to know because I have some of these, even though I am a Yank. I have a goodly amount of the paper denominations, from the previous redesign and the one before that.
It's really quite a simple choice: Life, Death, or Los Angeles.
(Score: 2) by TheRaven on Thursday November 10 2016, @02:00PM
sudo mod me up
(Score: 1, Insightful) by Anonymous Coward on Thursday November 10 2016, @05:03PM
I've also noticed that once the new $100's came out, the old bills started becoming scarce. I think the Federal Reserve is withdrawing and shredding the old ones as they receive them, and replacing them with the new ones. My housemate pays the rent in cash and I almost always receive new bills.
Yes, they are doing this. It's no secret, either; they outright say they do. It's not for any nefarious reason, either.
Money just wears out, and then gets replaced with new money. [federalreserve.gov] You don't see many old bills for the same reason you don't see many 1960s cars.
Much like that car analogy, you'll only see old bills in places where money can't circulate well. In Cuba you see lots of vintage cars, and in the various vaults of foreign countries you'll see lots of old bills.
Incidentally, this is one of the reasons the government periodically makes pushes to move society to dollar coins... coins last substantially longer than paper currency does, and thus it is substantially cheaper to make and maintain them than to print and reprint all that money over and over.
(Score: 3, Informative) by Arik on Thursday November 10 2016, @09:24PM
To move *back* to coins, really. Our original currency was the spanish silver dollar. Worth about $25 today.
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