Make money moves

If we are going to save our economy for us, our children and future generations, we must demand that our politicians return the responsibility of money creation to government via the Bank of Canada.

Money issued directly to the people by government benefits all citizens, not just the bankers.

In 1974, Paul Martin, a Liberal, sold us out by transferring money creation to the corporate banks. Since then, almost all money created became debt money. How so?

Let’s assume you arrange for a car loan of $10,000 at five per cent interest.

The bank prints the digits $10,000 in your bank book. A new deposit has been created. You write a check to the car company for $10,000 and it cashes your cheque.

The $10,000 now enters the overall money supply. The catch is that you are paying five per cent interest on the newly created money.

Two truths have emerged. First, the $10,000 was created out of printing ink, out of thin air so to speak. The money didn’t come from the banks reserves or deposits.

Secondly, the newly created money came encumbered with five per cent interest payable to the bank.

In 2016, federal and provincial debt totaled $1.2 trillion, which came at a cost to taxpayers of $25.9 billion in interest expense.

In Canada, we also have another problem with our banks. Most banks around the world operate under a fractional reserve requirement in which they must hold a percentage of deposit liabilities as capital instruments.

In 1991, via bill C-19, the government changed, over a twoyear period, our banks reserve requirements to zero.

This guarantees that banking problems will be fixed by higher taxes.

The only restraint on banks now, is capital requirements.

We can return our economic system to a sound footing in two ways.

First, let the Bank of Canada create money without debt. Second, get rid of the fractional banking system.

Banks would be lending their own money, not money created out of thin air.

Banks would still exist but their accounting system and business model would change.

Today, in the U.S., there are very profitable state banks, credit unions and loan companies operating as such without creating new money.

Talk to your member of Parliament.

If he or she doesn’t support government money creation, then you know whose interest he or she really has – it is not yours.

Bill Wilson Prince George