Monday, November 05, 2018

Money Talks but Petro Dollars Scream

 

And the US Petro dollars are beginning to scream frantically. Why?  Because they are being slaughtered.  By what, or by whom?  By increasing numbers of nations far and wide who are tired of endless US sanctions and threats of sanctions and are bolting out of the US dollar altogether.  The biggest bolters are Russia, China and Iran, following more timidly are India and Turkey.  Even some of the European nations are mulling over other possibilities rather than remaining glued to the US Petro dollar. More and more nations want gold backed currencies, not fiat paper from the US press that is so debt ridden it can hardly hold its head up.


China, which holds most of the US debt in US paper dollars, is hastily dumping as much of this debt as they can.  However, it is not as easy as it once was to get rid of US Petro dollars.  The US has to essentially buy back some, if not most, of its own debt.  Which is making the US very angry as this weakens the US dollar.  Yes, the US, including the president, his cabinet, both houses of Congress, the mainstream press and the corporate billionaire class along with  the international bankers are all ( with few exceptions) very, very angry at China .  They think China should not be allowed to have gold backed currencies that other countries are finding more attractive than their own increasingly troubled debt ridden fiat currency backed with nothing but military might.


But the US military might is something.  Something scary.  It has been this military might that has kept the US dollar strong.  When countries try to escape the hegemony of the US dollar they can expect to be bombed by the US military such as the countries of Libya, Iraq. Afghanistan, parts of Syria and the on- going nightmare of the Saudi backed carnage in Yemen.  But would the US in its final frustration and fear of failing to keep the US Petro dollar afloat as the world’s reserve currency actually physical attack China?


China thinks so.


Over the past week most of the world (except for the US, Canada, and the other national citizens who are ‘discouraged’ from having factual international news) has been learning that China seems to be preparing for a shooting war.  As reported by the Business Insider (Oct. 29th, 2018) and other international news outlets, China’s Commander-in Chief has ordered the military command to “concentrate preparations for fighting a war”. What has prompted this tough talk about war from the Chinese?  Is it the never ending US tariffs? Perhaps.  Or maybe it’s more about the US sending two US warships through the Taiwan Strait and also sending more US military hardware to Taiwan.  China is very touchy about Taiwan.  As Taiwan has always been part of China, China wants the Americans out.


The Chinese minister of Defense Wei Fenghe warned that the US should be beware of messing around with what the Chinese consider the right to their own territory.  He said that China would not give up one single piece of its territorial holdings and that “challenges to its sovereignty over Taiwan could led China to use military force”.


What do we Canadians hear of this in the Canadian press?  Nothing that I know of.  Or the mainstream US press?  Nothing.  We may be at the brink of war with China but we know nothing about it from our governments and national news sources.  Trying to prop up the Petro dollar is leading us all into social and environmental chaos. It has to stop.  We can stop it if we try.  We can try right here in Canada by insisting that our public Bank of Canada be returned to us so that we can be taken out of the madness of the struggle  to prop up the Petro dollar by sinking even deeper into the debt crisis.   Next time.


Monday, October 08, 2018

What exactly is the Bank of Canada?


The Bank of Canada Act was first created as a private bank in 1935. In 1938 The Bank of Canada was nationalized and has been wholly owned by the Canadian people ever since.  Let’s digest this for a moment.  The Bank of Canada is still wholly owned by the Canadian people.  Can any other nation in the entire world boast of such a thing? Well, a public sector bank can be classified as a public bank if more than fifty per cent is held by a government which is, of course, supposed to represent the people.  And there are a few of these kinds of public-private banks in countries like Germany and India. But are there other wholly owned public banks, with no private interest involved at all, like the Bank of Canada?

 

Not so much.  Well, there is at least one.  The People’s Bank of China.  Perhaps having their own public bank is one the reasons for their rapid rise in the financial world?  When the Chinese people themselves lend their government the money for all of the incredible infrastructure taking place in China at little or no interest? I think their public banking system has a lot to do with it.  If true, why aren’t we doing the same with our public banking system?  We have our own public bank but it isn’t being used for the purpose it was created for.  

 

Our public Bank of Canada was created for our government (the Canadian people) to be able to borrow for capital expenditures with little or no interest. Between 1938 and 1974, the Canadian government borrowed many times over from the Bank of Canada and financed debt-free big infrastructure projects like the construction of the Trans-Canada Highway, the St. Lawrence Seaway, airports and subways.  It was our public bank that largely paid for establishing Medicare and family allowances and still left Canada with little debt.  But in 1974 things changed drastically.

 

Under Pierre Trudeau the Canadian government stopped borrowing from our own public bank and started borrowing from private banks?  Why? Well, it seems that Trudeau came under the influence of the Bilderberg Group, and the Basil Committee that was spawned by the Bank for International Settlements which is the global bank for central bankers.    Their argument was that public banks created the money they loaned out, thus causing inflation, while private banks only recycled pre-existing money.  This was Milton Friedman’s idea.  Pierre Trudeau and his government bought it and it isn’t even true.

 

The respect banking specialist Ellen Brown puts it this way:  “The difference is simply that a publically owned bank returns the interest to the government and the community, while a privately owned bank siphons off the interest into its capital account, to be reinvested at further interest, progressively drawing money out of the productive economy”.   So in 1974 our powerful economic tool of using our democratic public banking system was yanked out of our hands by the Liberal Trudeau government of that time and placed into the hands and control of a cabal of foreign bankers.  We all know the obscene amounts of money the private banks are making now along with the obscene amount of power they have accrued to themselves accompanied by the obscene amount of debt that Canada and other nations have acquired under this neoliberal order.  So can anything at all be done about this now, or is it too late?  I don’t think it is too late because as more Canadians become aware that we still have a public bank although it has been temporarily and cruelly wrested from us, more eyes have been turning toward Canadian Courts.  Next time.









Wednesday, September 19, 2018

Will Canada's Public Bank Save Us?

I’ve talked about how the Petro dollar has been ruling the world of commerce since the 1944 Agreement of Bretton Woods which made the US more or less the world’s reserve currency.  At the time the US currency was backed by gold.  But in 1971 the US dumped gold and chose to use a fiat dollar with nothing to back it except the strength of its workers and the US military.  This meant that when nations wanted to trade with the US they must first buy US dollars. The buying nations were also encouraged to use US dollars to buy US bonds.  The US was strong, most of the other nations had been devastated by the Second World War. These nations desperately needed energy to rebuild. The US had the energy and know- how.  Thus the entire trading word fell under the tight grip of the American dollar that came to be known as the Petro dollar.


All of the wars in the Middle East and Africa, Libya, Iraq, Afghanistan and Syria were all fought (and are still being fought) over their resistance to the Petro dollar and the US takeover of their oil fields.    People have died in the millions in the struggle to get off the Petro dollar and reclaim their country’s independence.  Ancient towns and cities have been leveled, entire countries such as Libya and Afghanistan are on their knees.   The citizens of these countries are left to try to find new shelters in mostly unfriendly lands where many have little in common with the values of modern European society.  The newcomers will have bread, but not roses. At least any time soon.  All this unimaginable suffering and there is more in the offering if the war hawks in the US have their way.  Currently in Syria there is a last ditch struggle going on by the US to stay in Syria.  For what?  To try to protect the Petro dollar.


But Syria wants to determine its own fate, joining with Russia, China, North Korea, and Iran.  They are all in the process of ditching the Petro dollar, or planning to, and using their own currencies.  This is the death knell for the Petro dollar being the world’s currency.  It will be only one of many currencies.  The US will fight to the death to prevent this.  Which is why they won’t leave Syria when they have no right to occupy a sovereign country that does not want them there.  But regardless of what happens in Syria the death of the Petro dollar is imminent.  What will that mean for the US?  So long awash in Petro dollars there will be a devaluation of US currency which will bring inflation.   And Canada?


There is one chance for Canada to escape devaluation and inflation.  Even though we Canadians may be financially glued bone to bone with the US, unlike most other nations (including the US) we have our own public bank.  Our public bank is not tied to any private banking systems including the Federal Reserve systems.  Why is Ottawa not using our public bank now that it would allow the Canadian government to borrow with little or no interest for public expenditures?  Next time.