Russ Browne

Pliny, It was not Armstrong that said Canada moved from a public debt to a private debt after 1974, it is the group that is suing the federal government for not using the Bank of Canada to loan money to the government - these people - http://www.comer.org/projects/index.htm It is somewhat confusing, I agree that Canada has been selling bonds since WWII but according to Comer, the Bank of Canada also issued interest-free loans from 1935-1974. "Therefore, we Canadian civil society organizations, who work for public welfare, call on our federal government to revive the powers of the Bank of Canada to provide funding to all levels of government in Canada, largely with interest-free loans, as was done between 1935 and 1975 with very low inflation, enabling our nation to break out of the Great Depression, to fulfill extraordinary responsibilities during World War II, and to prosper while building our infrastructure and highly valued social programs during some thirty post-war years. We Canadians now urgently need a renaissance of these powers of our Bank of Canada." ..... Comer.org eople -

Albert: What has been hugely inflationary is jacking interest rates up to 20% thirty years ago to "control inflation", the fallacy of this was that government (both US and Canada) were the largest borrowers causing Canada's debt to move from 18 billion in 1974 to 614 billion now, this was like shooting yourself in the foot to slow yourself down. Were the politicians really that stupid to not use a calculator to estimate what high compounding interest on those bonds would lead to at those high rates? There is no intention to pay anything back, they will just keep the debt rolling until it crashes. I agree with Martin Armstrong that the only way out is to halt all payments on the bonds and issue local spending credits for them, the alternative is to let it run its course to the point that the 'zero bid day' shows up for the bond markets which would be followed by a bond market crash of biblical proportions, sky-rocketing interest rates and the implosion of the economy which is what Armstrong thinks will happen between 2016 and 2020. Gold will surge to at least $5000 as confidence is totally lost in the governments. The politicians are gutless and will not do long term planning and do not want to give up their power, so as Armstrong says we are going to crash and burn. You think we can get out of debt by raising taxes and or cutting expenditures, if they raise taxes that will cause the velocity of money to slow down leading to more stagflation and hoarding of money by the productive members of society since there is not purpose in investing and working hard if the government is just going to grab your profits. Canadians are already handing 43% of their income over to governments at all levels - federal, provincial and municipal. I do not see anyway out of this, we are screwed and Mr. Armstrong's long standing debt crisis prediction is going to unfold, the train is going to hit the mountain.

Topaz: Yes all the main parties are guilty of running up debt, including the NDP provincially. From the links I have posted above the solution is to start to use the Bank of Canada again as was done between 1939 and 1974 to borrow money or issue credit if you will, at very little cost to the Canadian taxpayer. It is our bank and we have the legal authority to use it but the governments have refused to use is since the 1970's. International bankers conspired to extract large amounts of money out of Canadian taxpayers. If people really understood what was going on their would be a revolution. Payments on the bonds must stop otherwise we will be like the frog in the pot of water that is slowly getting hotter until there is a phase transition and the water comes to a boil, then it will be too late.

Pliny, Here is some more very good information about how Canada moved from a public debt to a private bank debt and at the bottom it includes the solution as to how to get out of the mess... Between 1939 and 1974, the government actually did borrow from its own central bank. That made its debt effectively interest-free, since the government owned the bank and got the benefit of the interest. According to figures supplied by Jack Biddell, a former government accountant, the federal debt remained very low, relatively flat, and quite sustainable during those years. (See chart below). The government successfully funded major public projects simply on the credit of the nation, including the production of aircraft during and after World War II, education benefits for returning soldiers, family allowances, old age pensions, the Trans-Canada Highway, the St. Lawrence Seaway project, and universal health care for all Canadians. The debt shot up only after 1974. That was when the Basel Committee was established by the central-bank Governors of the Group of Ten countries 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 instead from private creditors, all in the name of “maintaining the stability of the currency.” (The above is ironic as the reason to move to a private bankers debt was to "maintain monetary and financial stability"... exactly the opposite is true, a debt crisis leads to currencies crashing. The bankers neglected to mention that perpetual borrowing and compounding interest would eventually lead to a massive debt that would consume everything. RB ) 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. The debt curve that began its exponential rise in 1974 tilted toward the vertical in 1981, when interest rates were raised by the U.S. Federal Reserve to 20%. At 20% compounded annually, debt doubles in under four years. Canadian rates went as high as 22% during that period. Canada has now paid over a trillion Canadian dollars in interest on its federal debt!!! — nearly twice the debt itself. If it had been borrowing from its own bank all along, it could be not only debt-free but sporting a hefty budget surplus today. And that is true for other countries as well. Another way Why are governments paying private financiers to generate credit they could be issuing themselves interest-free? According to Professor Carroll Quigley, Bill Clinton’s mentor at Georgetown University, it was all part of a concerted plan by a clique of international financiers. He wrote in Tragedy and Hope in 1964: The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations. Each central bank . . . sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world. In December 2011, this charge was echoed in a lawsuit filed in Canadian federal court by two Canadians and a Canadian economic think tank. Constitutional lawyer Rocco Galati filed an action on behalf of William Krehm, Ann Emmett, and COMER (the Committee for Monetary and Economic Reform) to restore the use of the Bank of Canada to its original purpose, including making interest free loans to municipal, provincial and federal governments for “human capital” expenditures (education, health, and other social services) and for infrastructure. The plaintiffs state that since 1974, the Bank of Canada and Canada’s monetary and financial policy have been dictated by private foreign banks and financial interests led by the BIS, the Financial Stability Forum (FSF) and the International Monetary Fund (IMF), bypassing the sovereign rule of Canada through its Parliament. Today this silent usurpation has been so well obscured that governments and voters alike are convinced that the only alternatives for addressing the debt crisis are to raise taxes, slash services, or sell off public assets. We have forgotten that there is another option: cut the debt through the use of publicly-owned banks that return the interest to public coffers. Cutting out interest has been shown to reduce the average cost of public projects by about 40%. Game over: we win.

One other important point... If the government had not created a 614 billion dollar debt your taxes would be lower now, 14 percent of your taxes are going into the debt hole now, being used to service the debt.

Hi Pliny, My comments are in red below.... Hi Russ, I have a few questions about your post. I read a little bit of Mr. Armstrong's website but maybe you can point me to the place where my questions are answered. Firstly, you say Mr. Trudeau moved Canada from "having a public debt (printed money from the Bank of Canada) to borrowing money from private banks and issuing bonds (money) that pay interest?" As far as I know the Government has always sold bonds to Canadian Citizens and private interests that have paid interest to the holders of those bonds - Canada savings bonds and such? Is that not true? Below text taken from: http://occupyourbank.ca/Money-The_Canadian_Experience.php This information is from a few years ago.... PLEASE NOTE IN THE TEXT ABOVE: - National debt shown as $494.4Billion Our FEDERAL FINANCE MINISTER, JAMES FLAHERTY, will have given away JUST IN INTEREST: 2004-05 $34.1 B, 2005-06 $33.7B, 2006-07 $34.8B, 2007-08 $34.8B TO PRIVATE MONEY LENDERS. In four years a total of 137.4 BILLION of our tax dollars. This is money STOLEN from the taxpayers of CANADA! This is a violation of the Canadian Constitution of 1867, article 91 It is also a violation of the Bank of Canada Act of 1934, Article 18, ©, (i), & (j) **What makes out Politicians be complicit in this great theft? Here is the history of Canadian Bonds... History1939-45 – Victory Bonds Bonds first made their appearance in Canada during the First and Second World Wars as War Savings Certificates and Victory Bonds. They were used to fund the war efforts. 1946 – Launch of the CSBs and the original Payroll Program. CSBs are introduced as part of Canada’s Postwar Financing Program. • Certificated CSBs were purchased through payroll deductions • Customers received bonds upon full payment • Up to 16,000 employers participated in this plan 1953 – Fully registered bonds Acting as an agent of the Government of Canada, the Bank of Canada paid the annual interest directly to the bond holder. 1956 – Escalating coupon bonds were introduced. 1977 – Regular-Interest “R” Bonds and Compound-Interest “C” Bonds replaced old style coupon bonds. Direct deposit of interest payments was also made possible with the introduction of the new bonds. 1996 – New Payroll Savings Program 1997 – Introduction of The Canada RSP and The Canada RIF CSBs were allowed to be purchased directly as an RSP without a Self-Directed Plan, and without fees. Existing bonds could also be transferred into The Canada RSP/RIF without fees or new cash investment. 1998 – Introduction of the Canada Premium Bond (CPB) The CPB was introduced with the same general features as the Canada Savings Bond (CSB), but with a higher rate of interest at the time of issue than a CSB on sale at the same time, and is cashable once a year. 2010 – Program Changes Campaign sales period is changed from 6 to 2 months. Canadians can no longer open new Canada RSP or Canada RIF accounts. Bonds will mature at the end of their individual term. 2012 – Product Changes CSBs offered exclusively through the Payroll Savings Program. Only CPBs are available through financial institutions, dealers and by phone. CPBs become cashable anytime with interest paid up until the last anniversary date of issue. Term to maturity for all bonds shortened to three years from 10 years. The chart below shows that Trudeau changed the debt from a public debt to a private bank debt, this chart is taken trom the two websites listed here, these sites have a great deal of information about Canada's debt, they state that taking the debt private was illegal according to our constitution and several people actually sued the Canadian Government over this issue. I don't fully understand the mechanisms as to how the debt was moved from a public debt to a private bank debt but that seems to be the case. http://www.occupyourbank.ca/images/cnb.jpg http://occupyourbank.ca/Money-The_Canadian_Experience.php http://www.occupyourbank.ca/images/cnb.jpg http://occupyourbank.ca/Money-The_Canadian_Experience.php Cowichan Citizens CoalitionBill Abram. Chair of the 'Duncan Initiative' 6668 Genoa bay Road, Duncan, B.C. V9L 5Y7 E-mail [email protected] 24, 2006 Honorable Jim Flaherty, Minister of Finance, House of Commons, Parliament Buildings, Ottawa, Ontario K J 2A OA6 Dears Sir: Re: The Bank of Canada & why it was created The purpose of the Cowichan Citizens Coalition's 'Duncan Initiative' is to remind elected officials that: The Canadian Constitution Act of 1867, Article 91, gives the Government of Canada the "exclusive" right to create the nation's money. The Statutes of the Bank of Canada Act of 1934, Article 18 (1), © (i) & (j) spell out clearly how governments, Federal, Provincial or Municipal, borrow from the Bank of Canada for public projects and services with little or no added interest. Sir, "money exists not by nature but by law" as Aristotle stated 2300 years ago. Article 14 (2) places you, an elected official of Canada, as final authority for Bank of Canada policy. You hold all the shares of the BoC on our behalf. Your duty is to uphold that BOL law. On September 30th you declared a [budget] surplus of $13 billion which you would use to pay down the debt. Why would you not borrow that $13B to pay down the debt from the, Bank of Canada, interest free, and use the $13B budget surplus to provide urgently needed social services like child care or housing, for the thousands of homeless Canadians? Elected officials did use our Bank of Canada effectively from 1935 to 1974. In 1974 our national debt, dating back to 1867, stood at a mere $18B.According to the Auditor General's report of November 1993, that debt had risen to $423 billion, of which $386 billion was entirely interest on interest. (please refer to attached graphs). Please note Economist, Jack Biddell's figures: Income Taxes paid by Canadians from 1981 to 1995 totaled $619B. Interest paid to private banks during that same period totaled $428B. On November 14. 2006, the Fraser Institute stated that our current direct governmental debt stands at $798 billion. As elected lawmakers of Canada, how do you and your fellow elected lawmakers justify the abdication of this “most conspicuous and sacred responsibility” as stated by Prime Minister William Lyon Mackenzie King, in 1938. Please be honest and thoughtful with your reply. Note the words of Economist, John Kenneth Galbraith, “The study of money, above all other fields in 'economics, is one in which complexity is used to disguise truth or 10 evade truth, not reveal it”. Sincerely, William E. Abram, Chair of the CCC, 'Duncan Initiative' Cc. Jean Crowder, MP Nanaimo - Cowichan I have read more about the Federal Reserve system in the States than I have the Bank of Canada and its role here. The global central banking system is more or less all tied together now and they seem to be operating from the same play book. They didn't always but, the US dollar, which was brought into being as the world's reserve currency after the demise of Bretton-Woods in 1971, the system over time became more centralized and the IMF and World Bank became more influential and the Federal Reserve more powerful. We see today where that system has taken us, essentially to the edge of an economic abyss, where Greece is laying off 25,000 public employees, major cities in the US are filing for bankruptcy and economic indicators are being anemically propped up with more credit. Basically, after the end of Bretton-Woods, the soveriegn national governments of the world could create "money" out of thin air as the only thing backing it was basically the production of the country and a confidence in the stability of the issuing government. You will notice that shortly after 1971 the "money supply" of most nations started to rise quite quickly and has not stopped and has most recently spiked - especially the US dollar. My second question is why would a system that just prints money or creates it electronically be any better than one thatprints it and charges interest? Certainly, compound interest does add substantially to the total but really if a government creates the "money" interest is irrelevant. They could just print enough to pay the interest. Now that would create a devaluation of the currency raising prices and such and they couldn't go so far as to destroy the value of the currency entirely by flooding it into society. The reason it would be better to print money is because bonds are a form of money - money that pays compounding interest which is like a cancer that just keeps growing until it leads to a collapse. The government has not intention of paying anything back, there is no long term plan, its the next guys problem. We are like a train racing down the mountainside with no engineer while politicians are saying everything is fine. This is wholesale theft from Canadian taxpayers. Approximately 400 Billion Dollars of the 614 Billion Dollar debt is from interest payments, i'm pretty sure that Canada would be much better place if that 400 billion had stayed in taxpayers pockets. To me, the problem today is first world economies need to donw-size and that means governments need to down-size but they seem intent on maintaining themselves at their current size and look for ways to also maintain their revenue level. They can't do this in a stagnant economy As Martin Armstrong says, we are in a stagflation era now, rising costs for government and citizens with stagnant to shrinking revenues, we have painted ourselves into a debt hell. Politicians do not want to give up their power and willl fight to hang onto it at taxpayers expense, this is all the legacy of Karl Marx who preached intervention in the economy by the government and the bankers have gone along with it as they have been able to extract great wealth from the taxpayers. It is Armstrong's view that Government is the enemy of the people, it always has been for thousands of years.

AlienB: Some interesting ideas, death penalty for voting fraud is a little extreme though. Perhaps Justin Trudeau can pay down the debt his father started...good luck on that one. Armstrong is also opposed to property taxes btw. It is worth studying what he says since he is the guy that predicted all this trouble 3 decades ago. None of our ideas will be implemented though, as Martin Armstrong says the whole system is going to crash and burn. Just look at what recently happened in Detroit, they filed for bankruptcy after racking up 18 billion dollars in debt, that debt could have easily been paid off with the over 1 Trillion spent on the Iraq war. Politicians are all gutless and will just keep passing the ball over to the next guy instead of cleaning up the mess. They are only interested in themselves and getting re-elected. Crash and burn is coming to Europe, Japan USA and Canada by 2020 they system will have collapsed. China will be the new power. Its all very sad, but historically inevitable for the power to shift from the west to the east where they are hungry, disciplined and smart as well as having large numbers of people.

Voltaire's Bastard (whoever you are): Your arguments are nonsense, it was Elizabeth Cull the British Columbia finance minister under the NDP in the 1990's that said government debt is like a mortgage, a morgate does not keep growing like our national and provincial debts are. Cull was eventually discredited after British Columbia got into trouble with its bonds as Economist Martin Armstrong had predicted they would. In case you have not noticed Europe is starting to fall apart, what you see happening in Greece is going to sweep through all the western countries, like a bunch of dominoes. Suicides are moving up in Greece and other European countries now, the real victims of governments going into debt. People like you are being selfish, lets party now and let our children and grandchildren pay the price. Chritien and Martin's attempt to reduce the debt has now been totally blown away, a wasted effort and the debt continues to grow. Note the chart below, before Trudeau and his liberal lawyers and banking buddies, Canada's debt was public and managable, now it is over 600 billion dollars and there is great danger that it can now have a 'phase transition' as interest rates rise leading to what Greece is going through...bankrupcy. Albert Einstein said compounding interest is the eighth wonder of the world, unfortunately when it is government debt that is compounding it becomes a nightmare. Right now 11% of working Canadians taxes are going to pay interest on the 614 billion dollar debt, when interest rates go up that 11% could double or triple, meaning there will be less money for important things, like health care, welfare, education etc. So the bankers get all the money and everyone else can be their slaves.... WRONG!! HIstory is now going to show that people like you are wrong, that the trees cannot grow to the sky and neither can government debt. Between 2016 and 2020 the system will collapse, then it will be too late and great suffering will happen.

http://www.debtclock.ca/ Why did Pierre Elliot Trudeau move Canada from having a public debt (printed money from the Bank of Canada) - Edit - this should state that the bank of Canada loaned money to the government before 1974, this was very manageable as the public debt was only 18 billion dollars in 1974 before Trudeau drove it to over 100 billion dollars which got the compounding private bank monster rolling) to borrowing money from private banks and issuing bonds (money) that pay interest? This was essentially a criminal act, there was never any referendum of Canadian taxpayers that agreed to let the government start borrowing money from banks and investors. Approximately 70% of the 600+ Billion dollar federal debt is from compounding interest. If they had just printed the money from the Bank of Canada we would only have a 200 billion dollar excess currency in circulation instead of this monsterous 600 billion debt that is compounding and threatening to destroy our civilization. The whole mess was started by the Liberals, a bunch of lawyers who know how to pass laws and spend money but cannot run a business, no business can just pile up debt with no intention of paying anything back and neither can a country, it just takes longer for a country to finally go bankrupt. With interest rates at record lows now there is great danger that as rates swing back up (like a pendulum that has built up momentum) Canada's debt service charges will become overwhelming, taking from vital government services, just when the demand for those services will be rising as the baby boomers retire. Currently 14% of tax dollars are going to service the debt as interest rates rise that number could double, triple or worse until the system collapses. Government cannot continue to raise taxes and inhibit the productive members of society from creating wealth so that the capital can be wasted on debt and overpaid civil servants, including Pierre Trudea's offspring Justin who has now moved up to the trough. The solution as detailed by Economist Martin Armstrong is: 1) Stop all payments to the bondholders and issue local spending credits (probably based on the 200 billion initial loans, not the compounding level of 600 billion since Canadian taxpayers did not vote or approve these loans. 2) Make it illegal for politicians to borrow money 3) Term limits (one term) for all politicians at all levels of government. A permanent privileged class of politicians that get used to having far more money than most Canadians must not be allowed as this makes then out of touch with the problems that the taxpayers who elected them have. It should be an honour to serve your country not a way to get rich. Canadian business people with strong experience in running businesses efficiently should be encouraged to step forward and give 1 term of service to running the country (this principle should apply to all levels of government). 4) Change all pensions and pay levels for politicians and public servants retro-actively to be more in line with private pensions, amounts given out are to be based on number of years served just as in the private world. The average federal civil servant total cost according to the Canadian Taxpayers Federation is over $114,000 dollars per year, this is far above what most Canadians get and is not right. 5) Eliminate the Income Tax and replace it with a sales tax and small property transfer tax. Mr. Armstrong did a study showing government would actually get more money if this was done. Income tax inhibits the formation of capital required by business to expand and hire more people. This would also help working Canadians save for buying house or a business. It is better to let those who know how to create wealth direct the money instead of government bureaucrats wasting a great deal of tax dollars. Government in Canada now gets a total of 43% of Canadian's income according to the Fraser Institute, this is way too much and a great deal of it is going to those at the top, not the poor. Prime Minister Harper and his gang are no different than the Liberals or NDP, these politicians set themselves above everyday taxpayers and above all are more concerned with their own power and money than the concerns of working Canadians. The tragedy of a debt crisis is that the people at the bottom, the poor people are the ones that get hurt the most, it is always government's duty to help those who cannot help themselves. Martin Armstrong and his AI supercomputer model predicted the world-wide debt crisis we are in now back in the 1980's when he warned the Reagan administration of the dangers of compounding interest but was ignored. Europe and Japan are predicted to collapse followed by the core economy the United States between 2016-2020, the debt party started by FDR in the 1930's will end, Socialism will collapse as its big brother Communism did in 1989 as was predicted by Armstrong's computer, it was after this that the CIA took notice and requested a copy of Armstrong's model. In Armstrong's veiw Karl Marx is the most influential economist of our time and has given legitimacy to western governments to interene heavily in the economy with no intention or long term plan of every paying anything back. I believe we need a new political party, the Taxpayers Party to set things right. My letters to Harper and his finance minister have been ignored. Read more from Economist Martin Armstrong here... http://armstrongeconomics.com/sovereign-debt-crisis/ Russ Browne