Why is Canada Enriching Bankers at the Expense of its People?
In 1938 the Bank of Canada was publicly owned. Its charter required that it lend money to the federal government and provinces. The federal government borrowed money at zero interest, while others borrowing from the bank paid interest that was recaptured for the public.
The bank was not always operated that way. It was privately held for the first four years of its existence. In 1938 the government nationalized it, in part to respond to the Great Depression, which gripped North America like a vise.
Between 1938 and 1974, the bank served as the primary lender for the Canadian government. It provided debt-free funds to pay for infrastructure to lift the country out of the Depression, similar to how the U.S. government injected money into its Works Progress Administration programs to provide jobs when none were available anywhere else.
During World War II, the Bank of Canada was the source of money for Canada to take on its big role in the war. It helped pay for the creation of the thirdlargest navy in the world and Canada becoming the fourth-largest supplier of Allied war matériel. After the war, the same bank paid for programs for vocational training, university educations and even subsidizing the rebuilding of the country’s farming industry.
For the following 30 years after the war, the bank – as the country’s lender and central bank – made it possible for Canada to do amazing things: The TransCanada Highway, the St. Lawrence Seaway, major airports and subways in key metropolitan areas were all made possible thanks to the bank. It also helped establish things like Medicare, free health care, pensions for seniors, the building of universities (and special project funding for them), research centers and family allowances.
The money the country borrowed was also interestfree. What that meant was all this was created with minimal federal debt. Crazy as it may sound, because of this financing approach, the government changed the lives of its citizens with only an $18 billion debt as of 1974. That debt was also virtually unchanged since 1867, 107 years earlier.
For a country twice as big as the United States and with one-tenth the population, having access to debtfree funding enabled Canada to become one of the best, most livable countries in the world at a fraction of what it would have cost otherwise.
Despite the vast distances between Canada’s communities and its widely differing cultures and languages, the development made possible with the debt-free funding set a tone of unity, pride, courage
and optimism that resonated across the great land and invigorated communities. It touched the hearts, minds and souls of every Canadian.
Flash-forward to 2017. During the 43 years since 1974, that federal debt has spiraled to $728 billion. The combined federal and provincial debt in 2017 was $1.4 trillion. What happened is not out-of-control borrowing by the government. And the bank did not change either – at least, not by itself. What happened instead is that in 1974 the corrupt government of Pierre Trudeau decided to cut back its borrowing of money from the interest-free Bank of Canada. It shifted instead to borrowing from chartered banks and began paying interest on the loans in order to enrich a powerful international elite and dis-empower the nation.
It is estimated that roughly 90% of the total 2017 debt of $1.4 trillion is from compound interest charged by the chartered banks on the loans. Unlike the Bank of Canada, the chartered banks keep the interest payments. They also continue to lend at rates designed to make profit for themselves, something which was also not a requirement for the Bank of Canada. All it needed to do was keep from going under while handling its own debt.
One of the reasons for this change is that in 1974 the secretive Bank for International Settlements formed the notorious Basel Committee with the purported goal of maintaining global monetary and financial stability. At that time, the world – and Canada in particular – was suffering from what was called “stagflation.” It was a dreaded period of high inflation, slow economic growth and high unemployment. The Basel Committee, of which Canada was a part, was recommended as a solution for stagflation to encourage governments throughout the world to stop borrowing from their own publicly owned banks and instead shift to private banks for their funding. They would also pay interest to those private banks.
The flawed logic behind the shift was the dogma that publicly owned banks – especially ones operating without collecting interest – tended to inflate the monetary supply, with prices flowing upwards too. The theory was that private banks only recycle existing money.
That logic was dead wrong, as the exact opposite is really what happens with private banks. They loan money, collect interest and then set at least some major part of that interest into self-controlled capital accounts. The effect is to continuously strip out major parts of the private bank lending pool and take it away from the country’s economy. If the banks need more money, they just adjust their interest rates and effectively “create” more money – in direct contrast to the theory of the Basel Committee and the Bank for International Settlements.
This has left the country saddled with so much debt that it will not dig out from under the financial mess for generations – even if the economy is soaring.
Because so much of Canada’s wealth is now being given to banksters, the country has gone from being an optimistic one to one with failing infrastructure and widespread anger, frustration and pessimism.
In recognition of what the ruling elite has done to Canada by shifting to private borrowing, in 2011 the Committee on Monetary and Economic Reform sued the Government of Canada and the Bank of Canada to ask them to “restore the use of the Bank of Canada to its original purpose by exercising its public statutory duty and responsibility. That purpose includes making interest-free loans to the municipal/provincial/ federal governments for ‘human capital’ expenditures (education, health, other social services) and/or infrastructure expenditures.”
The committee and the people lost.
On May 4, 2017, the corrupt and incompetent Supreme Court of Canada betrayed the Canadian people and declined to even hear such a critically important case, deferring to the equally corrupt and incompetent politicians to sort the issue out.
If Canada were a real democracy and the major three political parties weren’t controlled by the same sinister forces, this issue would become a political one and the people could vote for the party that would resolve it. But Canada is no longer a democracy and is as much of an oligarchy as is the United States.
The AMERO could bypass the banksters and broken political system and restore debt-free funding to Canada – but only if enough Canadians participate.