On November 9, 2016, the prime minister of India declared that circulation of all Rs 500 and Rs 1000 notes of the Mahatma Gandhi series were no longer legal tender in India.
This created a great panic among the citizens of India since these notes accounted for over 88% of all outstanding currency in the country. Employers could not pay their employees and since a very large portion of the Citizens live a hand to mouth existence, this created chaos in the streets of India and brought daily life to a halt..
The prime minister announced this without having the replacement notes ready to be distributed to the banks that everyone had money in. As a result, people were forced to exchange these bills to 100 Rupee Notes or smaller. This created a huge run-on the bank and left most of the ATMs out of cash.
One of the byproducts of this was that there was a huge rush of people attempting to convert their Rupees to gold. This drove the price of gold in India to over $2800 per ounce and it became very scarce.
This just shows the effect that a loss in faith and access to Fiat currency has on the price of gold.
Do you think it can’t happen here in America?