[sirtaj]

> Let's assume that "black money" is a real problem and not an overstated political bogeyman.

It absolutely is a real problem. I would say that undocumented cash transactions are the default, not the exception.

> Let's ignore the fact that the last thing anyone with serious money is going to store wealth in is cash

The kind of "wealthy" people you're thinking of are not necessarily the sorts targeted. We're not talking about rich industrialists and financiers (those folks have access to the same tax avoidance tactics in use in the West, or they can just ship the money abroad), but entire industries like general retail, real estate and domestic construction that have been running almost entirely on cash that never goes on any audited book. Until demonetization, you simply could not buy most properties in India if you weren't willing to pay at least half the asking price in off-book cash. I'm not sure how those big-ticket transactions are taking place now, but one can probably guess from the number of people already caught with massive sums of the _new_ banknotes.

[x3n0ph3n3]

Could you imagine the US Federal Government declaring $50 and $100 notes null and void because drug dealers use them? I'm surprised the Indian people have not revolted against this action -- I'm pretty sure Americans would.

[greglindahl]

The US government withdrew all bills over $100, but over a very long period of time. The bills were last printed in 1945, and have been withdrawn (destroyed when handed into banks) since 1969. They are still legal tender.

https://en.wikipedia.org/wiki/Large_denominations_of_United_...

So here we have the same motivation -- but a quite different implementation.

Instead, India could require all cash transactions over $10,000 to be reported. This is how the US actually catches money laundering via cash.

[sirtaj]

I should have been more clear - I'm not defending demonetization. I'm really, really tired of standing in ATM queues. Just pointing out that black money is a real and serious problem at an almost intractable scale.