Cash is King or Cash is Corruption? Know this secret and make tons of money.

 8^th November 2022

Cash is King or Cash is Corruption? Know this secret and make tons of money. 

Dear Fellow Travellers,

Namaste! Buffett has always said – Cash is king in Crisis. But this time the issue is different in the Indian context. After Diwali, Various Data have emerged and they say the following things. Let us see each data point first.

1.   Currency in Circulation falls to 20 years low: -

The data said currency in circulation declined for the first time in the last 20 years by about Rs.7800 Crs. In 2009, we also had a decline due to global financial crises by Rs. 900 Cr something. But this time the figure is really meaningful. The data gives credit to MOBILE PAYMENT and ONLINE shopping.

There is always DEVIL in details. So, here comes the second part of the data.

2.   Currency in Circulation to GDP Ratio: -

When demonetization took place the idea was to reduce the cash in the system. During 2016, it was around 8%. In 2015 it was around 12%. It made a high of 14% plus in 20-21 and now it is 13.24%. It means – there is an increase of 5% plus from 2016 levels!! This is the massive failure of the so-called smart move of Demonetisation. See the attached chart.

 

3.   Currency with the Public: -

This is the most eye-opening figure. In 2015, we had 14.4 Trillion rupees in cash with the public. When the government announced the demonetization – they expected that they will get at least Rs.1.5 trillion less in the banks in terms of the old notes. But they ended up receiving more notes in the form of old notes of Rs.500 and Rs.1000. So, the country suffered the losses of FAKE currency plus we printed the new currency and incurred tons of money in distributing the same.

The eye-opening figure is – we have Rs.30.88 trillion in our economy now – more than 100% growth in currency with the public. See the attached chart.

Who is using the UPI and ONLINE mainly?

Mr. Nandan Nilekani had said recently that 40% of the Indian population is using the UP in a 14^th September 2022 interview with the Economic times.

This 40% consists of the people at the lower end and middle class as they don’t have any income to generate EXTRA CASH. In fact, most middle-level businessmen are also having a cash crunch. So, the major holders of the CASH are not the PUBLIC at LARGE.

The major source of public spending this time was from Consumer loans and Loans against FD as per the data. It means the general public has used WHITE MONEY to do the shopping.

State Election in India: -

Starting from November 2022 to December 2023 – we have 11 states going for Elections. They are - Gujarat / Himachal Pradesh / Meghalaya / Nagaland / Tripura / Karnataka / Chhattisgarh / Madhya Pradesh / Mizoram / Rajasthan/ Telangana.

It's an open secret that tons of cash will be used by concerned candidates to win the elections. From the above details, it can be concluded that the CASH with the PUBLIC is not with the GENERAL PUBLIC but the cash with the SELECT Class of the Public. How they got this CASH? God Knows.

What it means for the SHARE MARKET?

We have 11 elections in 2023. 7 state elections in 2024 and  the parliamentary election in 2024. Tons of cash will be spent in various ways. With this cash – tons of economic activities will take place directly or indirectly. This will push up the GDP and fuel the rally in the market.

FII inflow will add more fuel to the market rally. So, you have a sure-shot knowledge of what to do in the coming two years – just invest in the right kind of stocks and sleep.

If you want to make tons of money – you are welcome to approach us for our insights.

I wish you all my readers a very happy GURU NANAK JAYANTI and DEV DIWALI.

Follow me on Twitter @hiteshmparikh / WhatsApp -+91-9869425399.

Learn a Lesson. Live with Passion & Invest with Reason.

Hitesh Parikh.