Credit Reform

Thanks Donold. William Krehm refers to the post-GCM(Government created money) era in Canada as the period during which  Stalinization of economic theory began. We are not supposed to ever refer to the period 1938 to 1974 as its been purged from texts and university courses on economic theory and finance. Mulroney's dictatorial change to the Bank of Canada Act in 1991 is the dead rat under the floorboards.

The Canadian dollar has floated for some time, something that Krugman praised in a piece he published some years ago.

The monetary changes in Canada were prefaced by changes in economic theory and practice that appeared in the 1970s, however. Do you not think that the Chicago School's effect was more than marginal in such monetary "reforms'? And finance capital was brought to the fore with credit expanded exponentially to lift economies out of stagflation of the 70s.   :)

And Paul Hellyer?   Only the brave mention that chap in relation to events political... His thing was (is) monetary reform?   I have been meaning to try to understand his role back when...What of his stuff should one read?

But, conversely, since Canadian banks have been praised for two years now for their regulation (thanks to Chretien), do you not find it just a bit too convenient that NEW international conventions are suddenly signs of an international plot ?  Ottawa had to use CMHC funding to buy up more than $60billion in mortgages to provide the banks with the liquidity to allow them to finance the mini-boom of house buying/building last year. That is a sign, to me, of the degree to which banks have been co-opted to maintain national fiscal goals as well as monetary.

George Victor wrote:

But, conversely, since Canadian banks have been praised for two years now for their regulation (thanks to Chretien),

- banks have been praised by their politician puppets and the MSM - most of us understand that modern politicians don't have a high credibility index about anything, and some of us at least have learned that the MSM is not necessarily an impartial or truthful purveyor of important things about what is happening in the world - Rabble's own Murray Dobbin, for example, if my words do not persuade -

http://www.rabble.ca/blogs/bloggers/alex/2010/05/canadian-good-banks-myth

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..... do you not find it just a bit too convenient that NEW international conventions are suddenly signs of an international plot ? .... 

What 'suddenly'? The banks have been highly influential for a long, long time (just coincidentally, I listened to this today -http://www.corbettreport.com/mp3/episode139_colonial_scrip.mp3 (much further interesting reading with it here http://www.corbettreport.com/index.php?ii=364&i=Documentation ) -  they have been running things in Canada for the last 30 years, although few understand this.obviously (see prior about MSM...). I find it a bit scary that they are so blatantly telling everyone here that they all take orders from central bankers in Basil - they seem confident that either noone will understand this, or what it means - and I suppose they are right ( see 'scary ...' )

Quote:

Ottawa had to use CMHC funding to buy up more than $60billion in mortgages to provide the banks with the liquidity to allow them to finance the mini-boom of house buying/building last year. That is a sign, to me, of the degree to which banks have been co-opted to maintain national fiscal goals as well as monetary.

- I don't mean to be insulting, but that is just ass-backwards - the national governments of the world have been completely co-opted to the fiscal goals of the elite banking class. And we're all paying and will continue to pay, until people start to understand this, and get rid of this monstrous disease. (which, unfortunately, I don't see much hope for - the 'progressive leaders of the pack', as we see on Rabble, seem oblivious to this in every way - and if these people are not interested and willing to take the lead, there's not much hope the 5-hr per day tv-head is ever going to wake up ...)

That's a bit incoherent, GV. Be a bit more specific and I'll see what I can do. I don't have any great knowledge of what happened during the late 60s and early 70s financially, a bit before my time, aside from Nixon removing the gold standard, which has a lot of libertarian types still frothing, but whatever that led to, it is not the root of the problem. The root of the problem is, as I keep saying and you keep refusing to engage, is the fact we allow private/commercial banks to create our money supply and charge interest on it - everything else follows, as I explain in detail in the essay. Anytime you wish to challenge this, I would be happy to talk about it.

As for 'freeing up credit' - that's just a typical sort of "let's hide what we're *really* doing haha' way of saying 'allowing banks to create as much money as they want leading to inflation, debt and speculation!!! we're SO freaking clever!!!' - the problem is, of course, they charge interest on all that money they create out of thin air, and that leads to problems. Freeing up heroin injections for the population would make everybody pretty happy for awhile too - but that kind of thing catches up with you and eventually extracts a pretty big price - we've been seeing the results of essentially unregulated, bank-controlled money since the great 'freeing up of (bank) credit' in the 70s in the boom-bust cycles, the several major bank bailouts since then, the inflation that has caused the average family to currently have higher debt and lower savings than 40 years ago and require two working people to support a decent life where one could do the same back then, and the massive national and provincial debts of Canada that we have paid some two trillion dollars in interest on over the last 30 years. Not a glorious history, really, when examined through a lens other than the MSM, which is, of course, owned by the same people who control the banks. And "our" government ....

 If the Bank of Canada was the entity controlling our money, issued debt-free, we would have a much saner and financially stable society, in every way (assuming 'democratic' control, of course, rather than the Bay St oligarch control we currently have ... but that's a different discussion, although certainly related).

This:
"..If anything is bassackwards, sd, it is talking monetarist niceties without dealing with those ideas flowing out of the University of Chicago, and the corporate control that that bestowed on us..."

- sorry, I don't get your point - what ideas are you talking about? Basically, Freidman and the U of Chicago did what they could to justify the 'market rules' economic policies later enshrined by various neocon/lib/NWO etc governments, starting officially with Mulroney in Canada, Reagan in the US, Thatcher in GB, etc. - given the context, you sound as if you approve of these things, as you ask me to 'deal with them' - but then you seem to say you do not approve of the corporate government these policies supported - so which is it?

More clarity in every way would help - although I well understand the great fear that those supporting these right wing policies have of clarity - shining a bright light on the money supply situation and waking the public up to this massive scam must be one of their worst nightmares. Or maybe not - I and others have been trying to do this for quite some time, and as the great lack of interest from most 'progressives' such as here on Rabble would seem to indicate, they don't actually have much to fear.

To paraphrase a famous Huxley quote, 'And they shall be told the Truth - and not give a fuck. What's on tv?'

George Victor wrote:

My friend, it would be wonderful to see the end of the debt burden.  I'm just pointing to how we got to this point of being deeper in debt. The masses were conscripted - enticed - by the iniquitous use of extended credit.  Let's start to undo the rule of finance capital by charging for its movement around the globe, a Tobin tax,  and making credit harder to get through the usurious rates in credit cards. Let's ban the bastards. But let's have a fallback plan to support continued production without that kind of stimulus to consumption.

 

- still curious, GV, if you have any thoughts on the connection between the 'debt burden' and the fact that we allow private banks to create all of our money at interest - as we have been doing since the 70s ???

The normal procedure for things is first recognizing there's a problem, and then figuring out what to do about it. Since I don't know maybe ~99% of Cdns don't seem to understand what the problem is yet, it's a bit premature to be talking about solutions. But once the recognition that there is a problem, and a rather serious one at that, starts to wend its way through the body politic, the solution will likely be along the lines of Democracy. Which will then lead to the understanding of the next problem - we don't actually have a 'democracy', so we'll have to do something about that  .... anyway, one step at a time.

Glad to hear you say my reforms would be lovely - again, one small step at a time. Now if you can just manage to say out loud something like '...yea, letting banks create all of our money and charge interest on it really is, like, a really stupid freaking idea...' - or something along those lines - one more small step.

(actually, I do spend a certain amount of time exploring such things as 'what to do about it?' in the essay, which I understand you have some religious thing about refusing to read it or something - but there it is. two steps forward, one step back, tangents to the right of me, tangents to the left, and good stuff on tv as well - what is one to do? enlightenment is such an erratic process ...)

George Victor wrote:

If  "it's a bit premature to be talking about solutions," and in your mind, we will have to achieve democracy first - and I get reamed out for my elitist position - you have just confirmed for me that life is too short to try this path to some sort of Socratic salvation. Sorry.

I guess that's a bigggg step back. Not to worry, though, the light is always there when you choose to see it.

"The Truth knocks on the door, and you say 'Go away! I'm very busy looking for the Truth!' - I've wondered who that person was - now I see ..... I must go and ponder this mystery further - something to do with television, I suspect, and the inability of the television generation to distinguish the fantasy television Ministry of Truth world from reality ....

siamdave wrote:

'letting banks create all of our money and charge interest on it really is, like, a really stupid freaking idea...'

Yes I agree that it isn't very smart of our governments. But it's part of what Linda McQuaig refers to as the cult of impotence. They want Canadians to believe that there is something greater and more important than elected government, which is the power of global money markets. No one elects money changers though.  It's all a charade to make people believe that democratically elected  governments are powerless in the face of financial capital and money speculation. Afterall, markets are powerful enough to punish whole nations if they should get out of line. The impotence is not real though - it's of the self-imposed variety.

McQuaig goes on to say that even conservative economists like Pierre Fortin realize that since the end of Bretton Woods agreement in the 1970s, some room for maneuvering on money policies was given up by western world governments while, at the same time, new items on the policy menu were made available to them. Our people in Ottawa choose not to use those policy options. Canada could have fuller employment policies if we wanted them. IOWs, our elected stooges don't really have to kow-tow to Bay Street bond salesmen. But they choose to do just that. It's part of creating a false aura of political impotence for everyone to see. They are shameless about this perceived impotence, because it's what they want to project onto the public who must be made to learn that we, too,  are impotent to do anything about it in kind. They want us to believe that populist policies are out of reach and unavailable to the real and powerless majority of Canadians.

Okay shazam! GCM is now the way in Canada. And there is a lot we could do with GCM. Fine, we're on the road to sovereign control of our national destiny. But wait!

We would still have foreign control of our national energy policy. Don't forget that the Liberals sold our environment to Exxon-Imperial and friends with NAFTA and even before that. That's a lot of hard currency generation in the hands of corporate America and marauding multinationals. We would still have to pay the bills for what we import. And we don't export very much in the way of innovation and high technology products and services.

Even with GCM in the hands of democratically elected government, we would still have multinationals bleeding the country from the other end of things. Canada's economy reverted back to hewer and drawer status as of 2005. We could really use our natural wealth to pay for the transition to a greener more sustainable high technology economy of the future. I think energy nationalism is also key to sustainable economic policies in Canada. We owe it to the rest of the world to help curb corporate America of its voracious appetite for cheap Canadian energy. There will be costs for transitioning to a sustainable economy of the future, and we need responsible government to work toward those goals. It's why I vote NDP.

There doesn't really seem to be much point in trying to talk to you, You say I have ignored the process of how we wound up in this pickle - once again might I remind you of the essay - which is entitled "What happened?' - and as the title suggests, it describes in some detail how I believe we wound up in this 'pickle' - you seem like an intelligent person, as I said, but this kind of thing puzzles me greatly. If you have even scanned the piece and disagree with my ideas, say so - but it is simply nonsensical to say I ignore the process that got us where we are.

You say 'you' have described the process - perhaps you think I need to regurgitate these things and that would indicate I 'understand' the situation - but I think your analysis is superficial - it's like you have read the capitalist text books, newpapers, etc and believed them - but they leave out a lot of the very most important stuff, which I try to flesh out a bit in the essay - as Einstein noted, and applies here, you cannot solve problems with the faulty reasoning (or simply intentionally false excuses masquerading as economics, which the Chicago 'school' generally is, lies justifying capitalism ...) that created those problems in the first place. Specifically, the capitalst economists try to make the story that everything is some kind of natural phenomenom that nobody could prevent, like a tornado or something (the 'natural business cycle') - I don't believe that crap for a second. At every step of the way, decisions were made that empowered certain people, hid certain information, and created a system that favored the few at the expense of the many. Other decisions could have been made - there is no 'natural disaster' aspect to this at all - as the economy implodes around us, certain people are stealing massive amounts of wealth, and impoverishing the rest of us - and other decisions could be made, other things done, that would stop the tsunami instead of encouraging it. But as long as we have tsunami-drivers doing as they will to a huge crowd of ignorant (dictionary meaning, as in possessing no useful knowledge), passive sheep - nothing is going to change. I am trying to tell the sheep to open their f***ing eyes and brains before it is too late. It's a bit like being a lemming in the middle of the herd talking about cliffs. But I try.

I don't quite get your point in referring to Japan and Globe articles - these are people who are doing their best to stay afloat in their own mess - I understand well what is happening, but there's nothing I can do about it from where I am sitting at the moment - aside from trying to wake people up to the great money creation scam, which is the first step, after which we would decide what to do, when people are ready to do something. There are things that could be done about this (again, in the essay...), but of course the current rulers will fight like helll to retain their privilege and power if 'we' wake up and start to challenge them, so nothing is certain - except that it is certain nothing is going to change if people don't start to understand what is happening and start demanding change. Rearranging the deck chairs - that is, doing anything that does not challenge and change the banks' money-creation-as-debt monopoly - is simply doing what politicians often do, lots of smoke and mirrors whilst changing nothing they don't really want to change. I have another essay coming soon for you not to read and not to get enlightened with further.

Edited

donOld wrote:

siamdave wrote:

- still curious, GV, if you have any thoughts on the connection between the 'debt burden' and the fact that we allow private banks to create all of our money at interest - as we have been doing since the 70s ???

SD the private banks have been creating all of our money at interest for centuries, not just since the 70s. In the early 70s, the Bank of Canada was only supplying about 4% of the total credit needs of the nation. By the 1990s, that percentage had dropped to under 2%, but the private banks have always maintained a firm control of our money supply. What is so significant about the 70s and 80s is that it was the period that the bankers began their coup d'etat of government finances. Here's a quick summary of the key events that led to their takeover:

- if you'r read some of the essay I noted at the first you might have seen that I understand these things. You can't caveat everything in short discussion comments, but my question did refer to 'all' of our money, which would certainly seem to imply that I understand that before they started doing that in the 70s, the gov was creating at least some through the Bank of Canada, the 'hard cash' plus creating gov 'debt', which, of course, is somewhat different than allowing banks to create money and borrowing it from them. It's pretty hard getting any kind of exact figure, but James Robertson figures the Bank of England was creating as much as 30% of the money in GB before the banks took over completely in the 70s, and I expect the ratio would be comparable in Canada at some point in time between the 30s and 70s.

Hi donOld, welcome to babble. I've moved this thread to humanities and science.

donOld wrote:

Here's a more detailed summary of the federal government's debt distribution for 2006.

http://www.monetaryreform.com/BoC_detail.pdf

- thanks - I've been wondering about this - it adds a bit of necessary perspective to what I am working on, whilst not changing the general theme - do you have any idea how much more or less liquid, investible wealth is kicking around in Canada, in terms of these major investment funds (mutual, pensions), or where to get an overview? Have you done any thinking on the implications when, for instance, a major money fund has big investments in the stock market, and the stock market crashes? All that money simply 'disappears'? But not really - if you give me a thousand dollars for a car, and that car turns out to be junk - you have lost 1000 bucks - but I still have the money - so with stocks - somebody got the big money in the first place, even if the pension fund stocks are now worth half of what they were bought for .... I'm just trying to work out a broad sort of picture of money creation, wealth, circulation, etc .... this plays into the big picture, for of course the wealth people take that cash and buy property, which of course does not appear then on the money supply records -

"The General Public includes financial institutions (chartered banks, trust & mortgage loan companies, investment dealers & funds, credit unions & caisses populaires, life & other insurance companies, non-depository credit intermediaries, trusteed pension funds), Non-financial corporations, governments (provincial, municipal), Canada savings bonds (& other retail instruments), and all other holdings"

does not make sense.

neither does the use of the dollar sign in depreciation if time is the credit.