The Petro dollar collides with the Trudeau legacy

 

Now that there seems to be a pullback in a US shooting war with China we can take a deep breath and soldier on, unless of course, the Russia and Ukraine war of words over who controls the waters of the Kerch Strait starts World War Three.  Otherwise we can continue the exploration of how a simple change in the way our formally public Bank of Canada might be rescued from its capture by the international private banking systems.  As I have mentioned before, it was under Pierre Trudeau’s watch that our public banking system went private.  When it was public, all capital expenditures such as construction, highways, dams and railways were serviced at little or no interest by our public Bank of Canada.  This was what the bank was created for in the first place.  An excellent history of this transition from Canadian public banking to private banking is recounted  by Joyce Nelson in her book: Beyond Banksters, Resisting the New Feudalism.  This slender paper back volume is written with clarity in plain English.  For all who are curious about how our public bank was whisked out from under us by international financiers and replaced by the private banks that are swindling us daily, this is a valuable book.  It also informs us about an organization named COMER (Committee on Monetary and Economic Reform) that is affording us some hope of getting our public Bank of Canada back.

The Comer committee has launched constitutional challenges to the way that the Bank of Canada was arbitrarily changed from that of a public bank to one subject to the private international banking system.  In her book, Nelson tries to give Trudeau some slack by suggesting that he may not have been aware, or fully aware, of how this transitioning from public to private banking would affect the Canadian economy.  I rather disagree on this point.  Pierre Trudeau was a very smart man.  He must have known that the private international banking systems highly favoured austerity measures for the people. They even said so.   This would keep inflation in check, they claimed.  Now the private banks globally suck money from cut and demolished social programs that benefit ordinary people into their own coffers along with compound interest on the loans.  So how are the legal Comer challenges coming along?

Not so good, at least on the legal front. On May 31, 2017 Comer released a statement advising that the Supreme Court of Canada refused to hear the case of the people who want our public banking system back as opposed to the blood sucking private international banks, on the grounds that it was a political matter. Okay, so let’s get political.  If more Canadians learn that we do have a public banking system that would release us from our ever growing public debt, wouldn’t they be in favour of getting this kind of banking system reinstated?  We should start asking politicians what they know about our history of public banking, and what do they think about trying to reinstate our public Bank of Canada.  And we might start with Justin Trudeau.  He is, at the moment, going down the rabbit hole of another kind of investment bank for public funds. Private, of course.  Like father, like son. Next time.

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.

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.