Friday, October 23, 2020

When and how the Bank of Canada went to hell in a handbakset



What has the Bank of Canada actually been mandated to do for Canadians? And is the Bank of Canada a public or private bank? 


The Bank of Canada started out as a private bank in 1934 but was nationalized in 1938. The Bank has been a public bank since then and functions as our central bank. It advertises itself a public bank, as a Crown corporation. But it isn’t really. Not now. But it used to be. Our public Bank of Canada was originally mandated to lift the standard of living of Canadians by loaning money to the government interest free for capital expenditure. The Bank also loaned to the provinces, interest free or very little interest. When some small interest amount was charged, it went straight back to the bank, and as the Bank belonged to the people, that money went into further expenditures that paid for some pretty wonderful improvements to Canada and her citizens. What improvements? 


For thirty years after the nationalization of the Bank of Canada things happened. Big things. Wonderful things. By borrowing from our own central bank the government got the money to construct the Trans-Canada highway, the St. Lawrence Seaway, airports, and subway systems and also assisted a corporation that placed Canada in the forefront of aviation technology, mostly without interest. And it wasn’t only infrastructure projects that benefited Canadians. Professor John Ryan, a senior scholar at the University of Winnipeg, explains. ”During this period seniors’ pensions, family allowances, and Medicare were established, as well as nation-wide hospitals, universities and research facilities.” Pretty impressive stuff, right? Then how come we can’t do things like that now? And why are we now carrying so much massive federal debt? Because things turned bad for our public bank back in 1974. What happened then?


Well, Pierre Trudeau, Justin Trudeau’s father, was in power and the bankers from the Bank of International Settlements came to visit our contented country. Remember the Bank of International Settlements? This bank is top dog in the central banking world as it is owned, operated, supported and in turn led by the sixty odd central banks of the western world. The International Bank of Settlements. Remember the name. This bank has affected your life as a Canadian in more ways than you can remember in the past, and is all set up to foist upon us a new money reset whither we like it or not. But back to Pierre Trudeau.


When the king lord bankers of The Bank of International Settlements came to visit Canada from Europe they had one view in mind. To get rid of the idea that the nationalization of the public nature of the Bank of Canada, and all the loans that were made to provinces and the nation without interest, was a good idea. To these bankers this was just a crazy idea. Banks were created, in their opinion, to make money. Period. Lots of money. Instead of no interest, as our public bank was practising at the time, they reasoned that the practice could easily be reversed. All Pierre Trudeau had to do was instruct the Bank of Canada that in the future, to get their loans for public expenditures from the private banks with compound interest loans instead of interest free ones as had been practised. All of the sophisticated central banks in Europe were doing this, they said. This way of doing things also curtailed inflation. Canada didn’t want to be kept out of the loop, now did it? 


Evidently not. At least Pierre Trudeau didn’t want that. He began the practice of privatizing the Bank of Canada and that is what we have had from that day to this. There are a good many people who think this was woefully wrong, the cause of our massive public debt, and loss of Canadian wealth. Did you ever wonder about the difference in interest rates the banks give you on savings (1 or 2 per cent) and the interest on past due credit cards (18-19 per cent)? This is why the banks hate anything that even smells of public ownership. But if Pierre Trudeau could make such a drastic change in Canada’s fortunes in 1974 by just instructing the Bank of Canada to change one of its policies, then Justin Trudeau could give instructions to return to the bank. A lawsuit has been fought over this – trying to legally force the government to return the Bank of Canada to its 1938 mandate. And what the judge had to say was very interesting. Next time.



Saturday, October 17, 2020

A Very Serious Tiff Indeed


The tiff is over our climbing housing prices. There seems to be some sort of a serious difference of opinion between Tiff Macklem, who is the Governor of the Bank of Canada, and government policies, about whose responsibility it is to address the problem of soaring house prices. Macklem told a virtual audience at the Global Risk Institute last month that “The Bank of Canada is aware that its policies are inflating house prices, and it (the Bank of Canada) is going to keep an eye on the country’s heavily indebted households”. However, in a speech just a few days ago, he made it clear he plans to do nothing about it as the Bank of Canada would continue with its current policies “in place for a long time”. His parting shot...”But if too many Canadian households start to become dangerously over-leveraged, policy makers have several macroprudential tools they can use...”


What the heck even are macroprudential tools? Even without knowing about those, it’s clear we are being told to stop looking to the Bank of Canada for relief of sky high housing prices, and to look to the Trudeau government. I think we all may be forgiven for thinking that the Bank of Canada was part of the Canadian government. Our Bank of Canada that masquerades as a Crown institution is, in reality, a private bank. I’ve talked previously about how our current Prime Minister’s father, Pierre Trudeau, engineered it that way in consultation with the central banks of Europe. Even though it went totally against the charter for the Bank of Canada.


So our public bank that is supposed to watch out for the welfare of Canadians is in reality a private bank that pays out dividends to shareholders like regular banks do. Well, I am happy at least that Justin Trudeau cares enough, it seems, to be getting checks out to out of work Canadians that may suffer the most from the tiff between Tiff Macklem and the Trudeau government.


The bank shares in the Bank of Canada are now owned by private persons and money markets, some domestic and some foreign. But just try to find out exactly who the share owners are other than other banks and “large institutional investors”. Blank wall. And the weird thing is that the Bank of Canada is the only government institution that is authorized to print money. And how did the Bank of Canada get this much power? So much power that it seems to be almost totally independent of the government it is supposed to serve?


Trudeau can only spend from the tax base. He can’t just print more money like the Bank of Canada can. The Bank of Canada is not the only institution that create money in Canada. All of the chartered banks do it. When anybody goes in for a bank loan and is approved, the bank doesn’t give the borrower the money the bank already has from deposits. Oh, no. The bank just creates the new loan money out of thin air by simply clicking on a few computer numbers and opening a balance sheet for that much money. Then that thin air compound interest money is loaned out again, and again, and again with taxes on every movement. No wonder the banks, especially the central banks, get so rich, no matter what is happening to us, like paying most of our income for housing. How do we get our Bank of Canada - which propelled Canada into the 20th century with no interest - back into Canadian hands? Next time I will show how the Bank of Canada actually worked under its original public charter. And why we desperately need it now in these times of a second wave of Covid-19 which is threatening the Canadian people and their ability to have stable housing.

Tuesday, October 13, 2020

5 years on: Revisiting "How Trudeau turned us into debt slaves"

In researching online what others have found about how the Bank of Canada turned from a public bank into a private one, I came across this...


Click on image for video

...a video and writing of my own from five years ago trying to explain this transformation. The find startled me but demonstrated how little is written about the theft of our public bank, and it's worth revisiting. Others seem to agree as it's my highest visited post by far, with more than 3,000 people having watched the video.

As I re-watched myself and re-read my words, I am horrified by how five years on, there remains so little research. What has changed, aside from the horrors of Covid-19, is the consolidation of the central banks into into one huge international bank that is eating the western world, including Canada. I will be posting further about this consolidation because I believe it is the most important issue that no one is talking about. Next time.