India’s New Rs.75 Coin and the Ban on Rs.2000 Note: A Potential Economic Time Bomb?

Hey guys, the Chennai Super Kings 👑 just won the IPL! The CSK fans are going crazy with tears of joy while everyone else is just crying, except for the RCB fans🤴🏻, of course. You know what they say, never expect just one thing!

Anyway, in the middle of all this sports hoopla, the Indian government quietly announced that they’re releasing a new Rs.75 coin and banning the Rs.2000 note. Some people might think this is a good move, but I don’t.

I mean, think about it, when was the last time you used a coin? Anyone born after 2010 probably hasn’t really used coins for anything important. So, while some of you might be excited, let’s not forget that this is not the time to celebrate. We’re actually one step closer to trouble.

Here’s something to think about: have you ever wondered why the price of gold keeps going up every year? It’s because the value of money keeps decreasing. Crazy, right?

Anyway, let me explain it a little better.

Check out this chart of gold stock from 2010 to 2022.

Now, let’s see the value of 1 rupee from 2010 to 2022.

In 2010, the purchasing power of Rs. 100 was around Rs. 220 in 2023 due to inflation. This means that if you could buy a plate of meals for Rs. 100 🍱 in 2010, the same meal would cost Rs. 220 now.🍛

I wrote a fun story about inflation that uses two fictional characters to explain it. It’s a great read! ( Coming Soon)

Regarding the Rs. 75 coin, the source indicates that the government of India has not collected any money or exchanged the old currency for this one. If the government were to collect all banned Rs. 2000 notes and replace them with Rs. 75 coins, the supply and demand could balance. Unfortunately, the government has already exchanged the Rs. 2000 notes for other notes already in the market.

If the government decides to release the coin, they will make it available and ask citizens to use it, making it legal. However, the addition of more money into the market could lead to inflation. This can be explained using the example of gold. The value of gold increases due to its limited supply. If gold became abundant, its value would decrease, and it would no longer be considered a luxury item.

The same thing happens with the rupee. If fewer rupees are in the market, their value is higher. However, the government prints more money to meet the demand, decreasing the value of the rupee. You can ask your parents what they could get for Rs. 1 in 1980 or Rs. 10 in 2000 to see this. The increased availability of money in the market leads to inflation.

If the Rs. 75 coin were to be introduced, let’s say with 100,000 coins minted, the new printed money would total around Rs. 75,000,000. This new money supply could lead to inflation, causing grocery prices to go up and potentially triggering the inflation monster.

So, the Indian government hasn’t officially announced how many coins they’re planning to release, but once I find out, I’ll be sure to update my Twitter.

In the meantime, if you’re into crazy stuff like this, you should definitely check out my Twitter for instant updates.

I hope I was able to get my point across, but if not, my bad.

Seriously though, it’s super important to understand why grocery prices are going up while salaries are decreasing. To help explain this crazy phenomenon, I came up with a story featuring two characters. You should totally give it a read if you want to learn more about what’s going on in our society right now.(Coming Soon)