Comment:
"The study of money, above all other fields in economics, is one which complexity is used to disguise truth not reveal it."
Economist, John Kenneth Galbraith
In some ways, this was the Don Quixote of court cases: a small group of individuals, and a small economic think tank known as the Committee on Monetary and Economic Reform sued the Bank of Canada, a national entity under the juridsiction of the Crown, for abandoning its original mandate to be a public bank. Bank of Canada did this in 1974, and since then, has functioned largely as a middleman to funnel public money into the hands of international private banks, and to arrange loans from those private entities for the financing of Canadian needs. The money lost in interest (since B of C, functioning as a public bank, would have lent at low interest and subsequently collected the interest back itself) has been in excess of a trillion dollars.
As I wrote several months ago on the heels of an earlier procedural win for the plaintiffs:
The plaintiffs alleged that the Bank of Canada "is the only central bank among the G-8 countries that is a 'public' bank created by statute and accountable to the legislative and executive branches of Government." They also argued that the bank's secretive dealings and particular accounting practices further undermine the ability of the government to meet its constitutional obligations to provide economic security to the Canadian people.Betty Krawczyk cites the plaintiff's arguments as follows:
1.The Bank and Crown refuse to provide interest free loans for capital expenditures;2.The Crown uses flawed accounting methods in describing public finances, which provides the rational for refusing to grant interest-free loans, and3.These and other harms are caused by the Bank being controlled by private foreign interests.The case is still in its typically long procedural motion stage, but that stage is coming to a close now. The plaintiffs have won some solid victories, including the declaration of public standing (which allows a plaintiff to assert a "genuine interest" in a policy question even if they are not personally affected by the policy, a legal status not allowed in the U.S.) and the ability to amend their claim to make it stronger.
An interview with plaintiff's attorney and well-known populist lawyer Rocco Galati immediately following the October 14 hearing was posted at Max Resistance. Galati seems calm and confident during the video. "After the federal court of appeals decision," Galati said, "the government tried an abusive second stab at striking the whole claim, largely on the same basis that they lost in 2013 and 2014 in the federal court of appeal. And they also tried to strike the new, amended portion, which they had a right to try to do. Basically it was another motion to strike and the judges reserved and we'll see what happens from here."
Comment: Here is the video of Galati from the link above:
The Crown hopes that people will lose energy and momentum, Galati said. But "the plaintiffs here are not walking away."
Someone then asked: "Why should Canadians care about this?"
"Because," Galati answered, "they're paying $30-40 billion a year in useless interest since [19]74. $1.1 trillion in useless interest alone. To fraudsters."
Galati also answered a time frame question--how long will this last if the case goes to trial? "If we get this onto trial," he answered, "it would take a couple of years to finish." Which sounds about right.
Comment:
"Once a nation parts with the control of its currency and credit,
it matters not who makes the nations laws. Usury, once in control,
will wreck any nation. Until the control of the issue of currency
and credit is restored to government and recognized as its most sacred
responsibility, all talk of the sovereignty of parliament and
of democracy is idle and futile."
1935 - Prime Minister of Canada, William Lyon Mackenzie King
The Problem
The above chart illustrates the history of Canada’s federal debt; obviously something went terribly wrong after 1974. Over a 108 year period (1867-1974) the accumulated debt shows as nearly a flat line growing to only $21.6 billion. But around 1974, the debt began to grow exponentially and, over a mere 39 years, it reached over $600 billion in 2013.
So, what happened around 1974? In that year
To achieve that goal, the Committee discouraged borrowing from a nation’s own central bank interest-free and encouraged borrowing from private creditors
the Basel Committee was established by the central-bank Governors of the Group of Ten countries of the member central banks of the Bank for International Settlements (BIS), which included Canada. A key objective of the Committee was and is to maintain “monetary and financial stability.” To achieve that goal, the Committee discouraged borrowing from a nation’s own central bank interest-free and encouraged borrowing from private creditors, all in the name of “maintaining the stability of the currency.”
The presumption was that borrowing from a central bank with the power to create money on its books would inflate the money supply and prices. Borrowing from private creditors, on the other hand, was considered not to be inflationary, since it involved the recycling of pre-existing money. What the bankers did not reveal, although they had long known it themselves, was that private banks create the money they lend just as public banks do. The difference is simply that a publicly-owned bank returns the interest to the government and the community, while a privately-owned bank siphons the interest into its capital account, to be re-invested at further interest, progressively drawing money out of the productive economy.1
Paul Hellyer,2 also notes that lobbying by the banks and adoption of monetarism — the idea that “markets know best” and should be without regulation, and that public services should be privatized — took hold.
So, around 1974, the Government of Canada began to borrow all of the monies to cover its shortfalls from the private sector at interest rather than creating money through the Bank of Canada interest-free. In other words, since 1974, the Bank of Canada has not been acting in the best interest of its shareholders: the people of Canada.
To understand how ridiculous the present situation is, consider the 1993 Auditor General of Canada report (Section 5.41)3 which states:
Of this, $37 billion represents the accumulated shortfall in meeting the cost of government programs since Confederation. The remainder, $386 billion, represents the amount the government has borrowed to service the debt created by previous annual shortfalls.
The cost of borrowing is the third area that affects the annual deficit. In 1991-92, the interest on the debt was $41 billion. This cost of borrowing and its compounding effect have a significant impact on Canada’s annual deficits. From Confederation up to 1991-92, the federal government accumulated a net debt of $423 billion. Of this, $37 billion represents the accumulated shortfall in meeting the cost of government programs since Confederation. The remainder, $386 billion, represents the amount the government has borrowed to service the debt created by previous annual shortfalls.
In other words, of the accumulated debt of $423 billion, the government really needed to borrow only $37 billion—accumulated over 127 years—to cover its shortfalls on real spending for goods and services. The rest of that accumulated debt was monies borrowed to service the debt, essentially a payment of interest on interest to the private sector when the government could have created the money to cover the shortfall at what amounts to be no interest.
In 2011, alone, Canadian taxpayers paid the private banks an estimated $37.7 billion to service the federal debt
According to Paul Hellyer, from 1974–1975 to 2010, Canadian taxpayers have paid one trillion, 100 billion dollars ($1,100,000,000,000) in interest on the federal debt to private lenders.4 In 2011, alone, Canadian taxpayers paid the private banks an estimated $37.7 billion to service the federal debt—over $103 million each and every day of the year!5 These are tax dollars that, ceteris paribus, could have gone towards infrastructure, health care, education, and other social needs (see examples in Table 1, below) if the Government of Canada used the Bank of Canada to create the money to cover its shortfall. Ultimately, the government could pay off the federal debt through the same means......continued....[Link]