This may involve introducing new currency either with the same denomination or with completely different denominations. . Demonetization is not new and many countries around the world has taken this economic step to ban some form of currency in circulation making huge amount of cash useless overnights due to plethora of reasons like fighting counterfeit currency, limit
The main purposes of financialization are to make the financial sector more economically powerful than the real sector, to take money from the real sector and give it to the financial sector, to make income inequality greater, and to increase wage stagnation. Other possible financialization risks are debt-deflation and recession prolongment. In order to prevent financialization, the government must regain policy control over the market, force corporate responsiveness to stakeholder interests in more ways than just via the financial market, combat the neo-liberal economic schema pushed by financialization, and force political reform allowing for prevention and diminishment of corporate, political and financial elitist influence (Palley,
The elimination of incentives to place savings abroad encouraged domestic financial intermediation, resulting in the growth of the financial system. Only over the past three years, the volume of bank activity has roughly doubled, and the loan to deposit ratio has grown regularly. In addition, dollarization lowered the risk of currency(Riel) devaluation. There was little incentive for speculators to try and gain from short term changes in the price Riel since the demand of Riel remained low and the market was very small. Moreover, dollarization promoted the need to avoid bank financing of public deficits.
This ‘cashlessness’, if intended to promote a long-term cashless economy is actually not demonetisation; rather it’s monetisation of the economy. The quantum of money multiplication from cash through the banking system should be assumed by the productive forces of the economy. However, the critical aspect is that the fiscal policies should work in tandem with the monetisation drive. As far as the prevailing sense permits, the surplus by authoritarian coercion is feudal wealth and the surplus by productivity is the formation of capital. The element of coercion subsists even in the ‘much debated’ historical transition process to capitalistic development owing to the simultaneous persistence of rent seeking wealth and chaste productivity-linked capital.
Bearing the inflation tax, China is lending huge loan to other governments for free. After the internalization of renmenbi, China can improve the loss of ‘wealth drain’ caused by using foreign currency and open up a new approach by gaining from the seigniorage
This move will also affect real estate and gold prices in a positive way.The effect of demonetisation on Indian economy has affected in many ways.The real estate and gold has lost its value.Demonetisation had brought down the interest rates and force cuts in housing prices. Many builders, purchaser, and seller are determined to have hard cash as a component of payment in real estate deals.The recent ban on high-value currency notes is expected to deal a body blow to this practice. “In the short term, we expect transaction volumes to go down and downward pressure on prices, especially in land and secondary market sales in residential and commercial real estate,” says the report by international consultancy Colliers.Due to financial stress, most properties would be available on sale in the secondary market, at discounted
The devaluation of the Naira (the Nigerian currency) was undertaken in order to reduce the value of the currency against imported goods and to make exported goods cheaper. The removal of subsidies especially as regards petroleum, would release Government revenue and allow it to use the funds elsewhere whilst being able to profit from an increase in exports. This was also seen as one way of removing Government interference from the running of the economy. Through privatization, Government involvement would also diminish which was believed to cause price and market distortions, inefficient allocation of resources and stagnation. Trade liberalization signified the removal of tariff barriers on imported goods hence eliminating regulations impeding foreign investment.
The debt in the U.S. is very high as of right now, according to the us debt website we are $21 trillon dollars in debt as of today. The goverment has spent lots of tax money to raze prostitution but obviously none of it has worked or even helped in the slightest. If we legalized this it could help the economy because we could start taxing that 32,000 that I mentioned earlier made by the pimps weekly instead of losing money from trying to demolish this profession. Lets take a look at Greece for a second, Greece was in very bad economic crisis and as soon as they legalized this, they were able to get out of debt and pay back the other countries. Also, the demand for this profession is very high and it will never change, so no matter how high the price goes up the demand will always remain the same.
“The government always wants to inflate the currency so companies have to charge more for their product” said Beattie (Andrew Beattie). The government also use interest rates to affect the stock market. Andrew Beattie also said, “Dropping interest rates as opposed to raising them encourage companies and individuals to borrow and buy more”(Andrew Beattie). This being done can lead to an outrageous amount of an individual's capital being terminated. This act that comes along and terminates capital is called a asset bubble.