THE CLAIRE FOSS JOURNAL
INSIDE SCOOP - Part 2
CANADIAN MPs MISLED ON MONEY CREATION
In my first exposé I revealed how Canadian MPs have been seriously misled by a heavily flawed ‘Library of Parliament’ report. This covert document, hidden from public view but paid for by taxpayers’ money, purports to explain how money is created for the funding of public spending. The apparent aim of this leaked report was to convince parliamentarians that creation of interest-laden debt money by private financial institutions leads to economic stability and controlled inflation, while even the most prudent creation of debt-free money by our own government would lead to economic chaos and hyper-inflation.
This ‘official’ guide by an unelected and ill-educated bureaucrat exerted - and continues to exert - immense influence on Canadian MPs, yet totally ignores these vitally important facts:
A. Money, at its original source, must be created by someone and the Canadian Constitution gives that sole and exclusive right to our elected Parliament. Misinformed, misguided and/or corrupted politicians have, over the years, given away that right to private moneylenders (banks and other financial institutions). As a result, both the government and the people borrow at usury (compounding interest) money that could have been provided at zero or low interest to the immense benefit of our country and its people.
B. No nation can call itself sovereign that does not control its own money and credit.
C. Control of our money and credit by private banks has, according to the prestigious Fraser Institute, led to an all-government debt-load approaching an un-payable 3 trillion dollars, while corporate, mortgage, consumer and
student debt also accelerates out of control.
D. Our nation’s insolvency, caused largely by accumulated debt loads driven by usury, has led Parliament to constantly raise both taxes and fees for service and to sell off at fire-
sale prices nearly all Canada’s public assets, including massive gold reserves built up by generations of Canadians over a period of more than 100 years.
E. We already suffer from hyper-inflation when houses at today’s prices are as much as 60 times what they would have cost our parents; and the current price of a new
automobile would have bought four to six houses in the living memory of many Canadians. All other measurements remain unchanged. A pint is still a pint, a kilo is still a kilo, an acre is still an acre, but money’s inflation is driven both by usury and the constantly escalating taxes needed to repay that usury on unnecessary and unconstitutional debt-loads.
F. Only by exporting precious raw materials and our jobs to countries where labour costs are miserably low and environmental concerns are ignored, have consumer prices been
contained. It is cheap imports, not economic stability that has held inflation in check. Foreign goods now so dominate our retail shelves that it is hard to find a product actually made in Canada.
Beginning with the statement in the penultimate paragraph of page 7 that ”the money creation process....starts with either capital or a deposit”, the first report was so full of the most fundamental errors and half-truths that it is hard to know where to start in correcting it.
First, monetary creation and expansion does NOT begin with deposits, but with loans. The money required for a private bank loan of any kind is not taken from depositors’ funds (Who among us ever received a letter from a bank advising that money we were holding in a deposit account – or in the form of government bonds -was not available because it had been lent out?) Such new money does not, in fact, exist until the approved loan is created by the loan’s officer, at which time it is simply created as a book entry and recorded in the bank’s accounts as an asset. When that same sum – this ‘approved loan’ created out of nowhere - is subsequently credited to the borrower’s account it is then shown in the bank’s account as a balancing liability.
It is this slick practice of ‘double entry bookkeeping’ that leads the ill-informed to believe the greatest myth in the banker’s handbook of deception; that banks lend their depositor’s money.
Fractional reserve system
It’s a curious fact that, while brief reference is made to Canada’s abandonment of minimum reserves (top two lines of p.3), much of pages 7 and 8 in the first report explains the process of money expansion as if the system of fractional reserves was still in existence! The report was published in May of 1998 more than four years after the need for reserve requirements had been totally phased out by a Bank Act (Bill C-19) quietly passed, without media coverage, on the 9th December 1991.
Cleverly reducing reserve requirements to zero over a three-year period gave the banks the ability they sought to create as much money as they chose. It had taken hundreds of years, but in January of 1994 the moneylenders’ dream finally come true!
The highly rewarding business of money expansion via the fractional reserve system accounts for much of the profit and power hijacked by private bankers over the past century. It also accounts for much of the inflation now so painfully evident. The report confirms that “banks lent out 10 or even 20 times their deposits - thus creating far more money than the federal government or Bank of Canada” (Italics mine)
It augured the present period of casino economics and offered financial institutions the biggest bonanza in world history. The wild expansion of global investment markets and the emergence of so many dangerously unstable investment ”instruments” would not have been possible to the same degree, had reserve controls remained in place.
Role of the Bank of Canada
Now a companion piece to the first “guide” has been leaked. It is entitled “The Bank of Canada and the Creation of Money’ This second report, designed to further ”educate” our ill-informed politicians, is also both seriously flawed and misleading.
Consider these confusing statements:
Page 1. (para. 2) ‘Among the powers given to the Bank of Canada under section 18 of the Bank of Canada Act is the authority to lend money to the provincial and federal governments.’
These curiously phrased admissions then appear:
Page 2. (para 3) “It would appear that the various Constitution Acts do not prohibit the lending of money by the Bank of Canada to the federal or provincial governments”.
Page 3. ‘The directives provision of the Bank of Canada Act.....would not appear to extend to directing the bank to provide loans to the federal or provincial governments. (Italics mine)
As anyone can prove for themselves, Section 18 (i) of the Bank of Canada Act leaves in no doubt the Bank’s ability to make loans to either or both levels of government.
Further, the researcher admits that a provincial loan was made to Saskatchewan way back in 1936 and that there was in 1938 an Act that allowed the federal government itself (not the Bank of Canada!) to make loans direct to municipalities at 2% interest.
Why then does our government continue to borrow money at usury from private lenders when it has the sole and exclusive Constitutional right to create it at low or zero interest and historical evidence exists of their exercising this prerogative?
This is the question that must be asked of our elected representatives – and all future parliamentary candidates - before Canada is thrown into a debt-filled abyss from which escape will be both costly and dangerous to us and future generations.
The statement made on page 3 that ”Modern national governments control the supply of money outstanding in their economies” is totally false. In fact, contrary to Section 92 of the Constitution Act which gives sole and exclusive authority to parliament for the creation and control of Canada’s money and credit, Section 25 (1) of the Bank of Canada Act states that the Bank has the sole right to issue notes. Under Section 18, the Bank’s powers are further expanded, to include total control over Canada’s gold reserves and the credit of the nation as guaranteed by federal or provincial securities, i.e., government bonds.
In other words, nothing in the field of finance lies within the control of our elected representatives. All financial power has been usurped by private bankers via their covert “lobbyists” and well-rewarded bureaucratic/political puppets.
Section 5 (2) ensures that even the Minister of Finance is denied a position on the board, giving up that position to a bureaucrat - the Deputy Minister of Finance - who invariably has a background of service with such key international financiers as Warburgs, Goldman Sachs, Salomon Brothers, Kuhn Loeb, Rockefeller or Lazards et al. Even if he has no such previous connection it is understood that he will secure a senior directorship with one of them upon retirement. That’s how it works!
Although we the people own all the shares of the Bank of Canada and our Finance Minister may legally exert parliament’s will on the Bank (Section 14 - 2) in the event of a dispute, he does so at Canada’s economic peril. International bankers control exchange rates via the Bank for International Settlements and can drive a nation into bankruptcy with that power alone. In effect, our elected politicians are ham-strung in all matters concerning our nation’s domestic or international finances or credit arrangements.
While there is a great deal more that could be written concerning these two documentary exposes, anyone aware of this Journal and even a small part of its contents is capable of seeing for themselves the extent to which Library of Parliament “experts” have bent the truth. They can decide for themselves whether such misrepresentation constitutes simple ignorance, malfeasance...or worse. It certainly calls every one of us to action, if only to ensure that every elected or prospective representative – from municipal to federal – is made aware of the need for the introduction of honest money and a recognition that money and credit have become nothing more than book entries for the sole benefit of the moneylender and the impoverishment of the Canadian people.
The good news is that therein lies the solution. Big Money has demonstrated that our system of money and credit is nothing more than electronic impulses on a computer chip and that is a system that knows no limit; one that, properly administered by honest government, is capable of creating a world in which wealth and power are more fairly apportioned; where wars, hunger and poverty can be beaten; where increasingly centralized global control can be replaced by genuinely democratic representative government more attuned to community needs - and where environmental destruction in pursuit of profit can become a thing of the past.
Let’s make it happen!