3

There Was No Sure Way To Legitimize Your Own Money

Things got downright dystopian right quick. People stormed the banks, because the government had neglected the small matter of printing anywhere near enough of the new bills.

NDTV
Because the counterfeiters had all the printing presses?

"As days progressed, the ATMs were all either temporarily shut or had long lines outside of them for the few hours that they were operational during the day," Tanmay says. Often, he and his neighbors stood in line for hours, only to be directed to a different bank.

2

It Wound Up Being A Huge, Unannounced Tax On The Poor

The law was intended to target mustache-twirling tax evaders and counterfeiters, but in practice it was most devastating to honest people who simply didn't have much use for a bank. "While digitally savvy folk and others who were financially well-off tightened their belts, it was the regular people on the streets who got hit the most," Tanmay says. "The fruit and vegetable vendors, daily wage workers, and small-time tradesmen were the ones who suffered. Housewives, too -- who usually salt away cash for a rainy day -- had their savings disappear right in front of their eyes. People were hoarding cash because they didn't know when they'd run out of currency."

Haran Kumar/Getty Images
"At least you have something to wipe the tears with."

1

It Was All For Nothing

In the end, up to 97 percent of the old bills were returned to the banks. That means the demonetization effort was pretty fucking pointless. Either there wasn't as much black money out there as the government thought, or the tax cheaters and counterfeiters had figured out ways to deposit their cash without getting caught.

Tanmay noted that mobile wallets -- aka India's answer to PayPal -- like "PayTM, MobiKwik, and others, reported spectacular hikes in their transactions," surely by total coincidence. All the Indian government succeeded in doing was stimulating the money laundering industry.

mkakade711/GettyImages
And the printing industry.

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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