What Happens When Your Money Is Suddenly Worthless?

That was a problem, because in such an under-the-table economy, it was a lot easier for people to avoid paying income tax. Specifically, 99 percent of the population. It also means that counterfeiting was a much bigger deal than in Western countries, where most purchases involve standing around dumbly until the chip reader screams at you. So Prime Minister Narenda Modi did the sensible thing: He got on TV and declared that the government would be issuing new, more secure bills. They would also be collecting the old ones, which would become worthless in, oh, about four hours. Not only that, but the announcement was made at 8 p.m.

Bharatiya Janata Party
"It's November 8, 2016. I heard today's the day we do crazy shit."

It was absolutely necessary to do it this way, Modi explained, because otherwise the ne'er-do-wells would have had time to prepare. You gotta take ne'er-do-wells by surprise! Everybody knows that. Besides, even though citizens could no longer use their money, they would have 50 days to exchange it at the bank. See? Plenty of time! As long as you caught the broadcast, which was kind of hard for the 200 million Indians who do not own a TV, phone, or radio.

Ejaz Rizvi
"Let's hope every one of them have kept up their newspaper subscriptions."

Tanmay, a writer and blogger living in Mumbai, missed the public announcement and heard the news later from a neighbor. Prithiviraj only realized what was going on a week later, when he noticed the lines and asked his friends if the new Star Wars movie was premiering at banks or something. Keep in mind, both these guys lived in the city; nearly 70 percent of their countrymen live in rural areas, where news travels at a slower clip -- and there are fewer banks to supply you with valid currency.

It was time to take matters into his own hands. Tanmay and his friends hopped on their motorcycles and took to India's dangerous roads in search of working ATMs, like the lamest version of Mad Max. It was no small feat, because they could only get a small chunk of their cash from each ATM, if they even worked.

Biswarup Ganguly

NDTV

Subhav Shukla/The Indian Express
Meanwhile, other people would just die in their ATM lines.

It also wasn't cheap. Merchants who were accepting the defunct notes (with the hope that they could later exchange them at the bank) were unwilling to part with the suddenly precious smaller-rupee notes, so they didn't give change. As a result, Tanmay ended up paying a kind of unofficial demonetization tax each and every time he needed gas or food. He also had to take time off from work to spend several days standing in line at a variety of ATMs, which is possibly the weirdest call-in excuse we've ever heard.

For people who just couldn't afford to stand in line at the bank for a week, the situation was pretty grim. Oh, and the mustache-twirlers? They simply threw out their ill-gotten gains, rather than report them. Other, more cunning criminals convinced poor people to launder their money for them in return for a small commission. You might recognize that as exactly the opposite of what the law intended to accomplish.

Varun Chatterji
"A thousand cocaine-stained 500-rupee notes? Sure, I'll go change that for you."

It's hard to overstate how big a clusterfuck this was for the Indian economy. Prior to demonetization, India was one of the world's great economic hopes. Thanks to the severe cash shortage -- and with many savings piles gutted -- demonetization slowed India's economic growth so much that the International Monetary Fund officially downgraded the country from "world's fastest-growing economy."

samxmeg/GettyImages
China gets to teabag them financially in addition to geographically.

And it didn't even help. According to Tanmay, the counterfeiters "responded within days" with enhanced techniques to duplicate the new bills. We're not sure what the lesson is here. Don't suddenly and inexplicably destroy all your money? We never thought that needed stating, but there you go.

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