Will the great gamble work?

Two questions are vexing pundits everywhere: How did Donald Trump win the US election for president and why did Narendra Modi suddenly withdraw Rs 1,000 and Rs 500 notes from circulation, causing enormous hardship to people, especially the poor. TK Arun, normally virulently anti-Modi, thinks that Modi has changed his voter base in one fell swoop. He says that demonetization, as it is called, is hurting small traders and middle income groups, a traditional vote bank for the BJP, but will benefit the poor so Modi is ditching a small group of loyal voters for a very large group of poor. That would be a very risky gamble. The vast majority of people queuing at banks are those who want to exchange Rs 4,000, which means they are migrant workers with no bank accounts. They are allowed to change only once, so if anyone has Rs 10,000 in old notes he will lose Rs 6,000. That is hardly likely to please him. The poor vote for personal gain, so they will vote for any party promising greater handouts. A former Deputy Governor of the Reserve Bank angrily says that this will not encourage a change to digital economy. For that the government should make digital transactions free while charging a fee for cash transactions. That is silly because banks will withdraw all credit cards, which allow a grace period of up to 6 weeks before being paid. Rohit Prasad applies game theory to Modi's decision. He says that there were 2 options. One was to withdraw the old notes gradually while allowing those with black money to take a haircut. That would have been criticised by the opposition for allowing money laundering. By doing it all at once he is challenging the opposition. If they support it Modi gets the credit, if they oppose it they will be labeled anti-poor. One writer thinks that it will recapitalise public sector banks which are sitting on mountains of bad loans, with no hope of being repaid. There maybe something in that. There were a total of Rs 16.42 trillion of notes in circulation, of which 86% or Rs 14.18 trillion were in Rs 1,000 and Rs 500 notes. Banks have already collected Rs 4 trillion and could reach Rs 10 trillion. If a fraction of that amount stays in banks they will have a lot of easy money to lend. Pronab Sen thinks that this will not stop tax evasion and bribery, while Mihir Sharma thinks that it will damage the economy, perhaps permanently. Surely it was not a coincidence that the move was announced in the evening of 8 November, one day before US election results were announced. Perhaps, Modi thought that Clinton will win, in which case the Federal Reserve will hold interest rate at present level, thus reducing the pressure on the rupee. Or he knew that Trump will win and was sucking liquidity out of the country to support the rupee. Seems like queen sacrifice in chess. Which side mates?