White Secret of Black Money – Why Mr.Narendra Modi is Giving Congress a Chance to Prove Him Feku?

19 November 2014

White Secret of Black Money – Why Mr.Narendra Modi is Giving Congress a Chance to Prove Him Feku?

Geetings from Hitesh! It has been a fashion for the last government to talk about bringing black money back to India. The current Government also used the same point to lure the gullible voters and Media is spending lakhs of minutes to discuss the black money issue. I feel shocked that the person like Mr.Modi is getting involved and making promises to bring back the black money. I think this will prove congress right in calling him Feku.

Today I will share with you my logic of the black money. I am sure it will make some sense about the total issue.

Let me Deal with Some Ground Realities:-

1.  If somebody is having billions of dollars in Swiss locker (as per the Wikileaks list) – Do you think, he will wait till Government reach to him and his money?

2.  If a person has been able to send billions of Dollars to outside India, this it-self proves that he is well connected and influential person. Will he not been alerted by his sources till now?

3.  If at all the person gets caught – do you think Swiss Banks will allow this thing to happen? Their only business is to safe keep money and earns fee on the same. If they allow one Government, will they get black money from other countries in Future?  Their survival is at stake!!

4.  It is a conspiracy at the top levels in which one country can start business of keeping Black money of the other countries and they use the same for funding wasted interests!! Do you think this can happen without support of other top countries?

5.  If top countries are involved in the game – do you think India has that much clout to get support for this kind of initiatives?

We never stop relying on commonsense while dealing with investments and life. Our commonsense tells me something else. Let me deal with that.

What Would Have Happened to Black Money Till now?

Let me give you some historical perspective before I deal with the real logic. Alan Greenspan had failed to pop up US Economy and they had 9/11, still the economy was down. They realised that to revive the same they would need big dose of money and they also spotted that it is lying in the Swiss banks. So, they took out the legal process to force the Swiss Banks to declare the names of the account holders and their funds!!

(They did not want to know the names!! They just wanted the account holders to bring the money to the channel.)

Have you seen the movie Special 26 released in 2013?

In the same, a group of four men plan very clever robberies. They pretend to be fake Govt officials and plan C.B.I. or Income Tax raids on a Gold Smith. They see that it is not possible to take out the robbery in his shop, so they tell the shop keeper that RAID will happen and he can keep his gold to a safe place. From the safe place, they only loot it!!

In the same way – The threat to declare the name worked wonders for the US and other economies of the world. We have seen a great bull run from 2004 to 2007!!! All commodities/ shares and real estate moved in line. These three seldom moves in line!!

The money came into the system and they started buying whatever they can buy!! So, the prices of all asset classes and inflation went up drastically in last 10 years!!

What Happened To India?

We had a great bull run from 2004 to 2007. Index moved to 21000 in early 2008!! Real estate prices have sky rocketed in India during this period. Tom dick and harry started talking about investing in LAND and shares!! We had three parliament elections 2004/2009 and 2014 in last 10 years + number of other local plus state elections!! Don’t you think tons of money would have gone to finance the same?

Where is the Money Now?

According to my above logic – cash has became the integral part of the main system and it is lying somewhere. Let me show you some of the places where Indian money could be lying.

P –Notes:-

As per the lasts report, investment via participatory notes has touched 6 years high at USD 43 billion or Rs.2,65,675/-Crores in October 2014.

The funniest aspect of Investing in India is that an individual investing some thousand or lacs would need to provide KYC (Know Your Client) details while such big funds are being allowed without knowing who is investing!!  Why Indian Government is not making laws to make it Mandatory KYC for such investors also? Don’t you think at top level they would have a fair idea about the real investor behind P notes?

GOLD:-

In spite, of various Gold import curb – India is the highest importer of gold in 2014. Indians are importing Gold like anything. Look at the gold figures and you will find where is the cash has gone.

Real Estate:-

As per Media reports some 40000 to 50000 flats are unsold in Mumbai!! What about total India? Does it explain blockage of Liquidity?

Lot of commercial space is lying unsold and Malls are shutting down in Mumbai!! What a waste of liquidity?

Cash Balances With the Corporate:-

Just copy past and click on the below given link in your browser   - http://www.moneycontrol.com/stocks/marketinfo/cashbank/bse/index.html

It gives you the details of the cash top 100 companies are having in India in their balance sheet. They are waiting for the opportunities to invest. Do you understand why we are having liquidity problems and they want RBI to reduce the rates!!

Not only in India – in USA, Apple is having USD 24000 lakhs in cash and short term investments as on 27^th Sep.,2014. Mr.Buffett is sitting on USD 50 billion cash. I am just sharing big names and their publically available data. There are lacs and crores would be lying in cash with small companies and small investors.

Postal Saving Schemes:-

They have just re-launched KVP (Kisan Vikas Patra) today. It does not have your name and no PAN details are required to be given. When it closed in 2011, Post was having collection of Rs.21631.16Crs. This is apparently for very small guys – but they have R.50000 denominations for investments!!

Why they re-launched and if at all they have valid logic – why not PAN card AND NAME ON IT?

What is my Final Take on Black Money?

I do not think any black money is lying in Swiss Banks as wiki leaks list says. In last 10 years they have got channelized into the system and they have become the integral part of main system as of now.

For the present generations of Balck Money - the current KVP – may be used by top guys to invest in CASH as PAN is not required and no names are printed on the certificate!!

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