Banker/Wall Street Governance

[PolyNewbie]

Riverwind:Banks have to pay interest on the money they create which means it would not be economical to finance the purchase of a low interest gov't bond with a loan.

They do pay interest on a small fraction of what they create - they pay it to the central banker who is another private banker !

[Riverwind]

They do pay interest on a small fraction of what they create - they pay it to the central banker who is another private banker!

You need to get your facts straight:

3. Who owns the Bank of Canada?

The Bank was founded in 1934 as a privately owned corporation. In 1938, the Bank became a Crown corporation belonging to the federal government. Since that time, the Minister of Finance has held the entire share capital issued by the Bank.

The BOC controls what interest rate banks can charge on loans. If the BOC raises rates then banks are forced to raise rates too or they will start losing money. The connection between the BOC interest rate and the rates charged by banks is not direct which would explain why you have a difficult time understanding it.

For example:

A deposits $1000 at Bank 1

B borrows $1000 from Bank 1 (i.e. Bank 1 just created $1000 from nothing).

A writes a $500 check to pay C

B writes a $1000 check to pay D

C and D deposit their checks in Bank 2

Bank 2 asks Bank 1 for the $1500 - Bank 1 must borrow $500 from the BOC to cover the transaction.

No bank can create money with impunity - if they create too much money then they will have to borrow money from the BOC to cover the cost of settling transactions related to the money they created. This is why bank loan rates go up when the BOC increases the bank rate.

This also illustrates why a bank would never create money to buy gov't bonds - they would end up losing money in the end because the bond interest rate would be too low to cover the costs required to settle transactions that occur as a result of the money creation.

[PolyNewbie]

Riverwind:No bank can create money with impunity - if they create too much money then they will have to borrow money from the BOC to cover the cost of settling transactions related to the money they created. This is why bank loan rates go up when the BOC increases the bank rate.

Private banks do not borrow money from the Bank Of Canada !

The Bank Of Canada got us out of the depression and allowed us to recover from ww2 very quickly. It is now largely irrelevant and is used to print only hand held currency. Electronic money is created by private banks.

Why don't you investigate this instead of assuming what you think is fact ?

[Riverwind]

Please explain to me about RRSPs. I only get back what I put in it seems and I have to pay full income tax on that. My Old Age Pension is cut if I cash in RRSPs so who is benefiting?

You are supposed to invest the money you put into your RRSPs which means you are supposed to get a lot more out than you put in. If you find that this is not the case then you need to fire your financial advisor.

If you invested yoru RRSP money in bond mutual funds or if you bought gov't bonds directly then the interest paid by the government would go back into your RRSP. The tax you pay on the RRSP money when you withdraw it is simply the income tax that you have to pay on the money you earned on your investments.

[PolyNewbie]

Riverwind: You are the most dedicated government/financial oligarchy apologist I have ever met. You should do some research in alternative media instead of thinking conglomerated corporate media has your interest in mind.

[Riverwind]

Private banks do not borrow money from the Bank Of Canada !

Yes they do - when necessary. Most of the time they will borrow money from each other but only at the rates set by the the BOC. You can read the facts on the BOC website:

For example, if a commercial bank that is a member of the LVTS needs funds to cover its transactions during the day, it can borrow from the Bank of Canada at the Bank Rate, or it can borrow from another financial institution that has excess funds.

http://www.bank-banque-canada.ca/en/backgrounders/bg-p2.html

However, it does not make a difference whether a bank borrows money from another bank or the BOC - it still takes a risk by creating money and will likely have to borrow money to cover transactions that occur as a result of creating that money.

[geoffrey]

Riverwind: You are the most dedicated government/financial oligarchy apologist I have ever met. You should do some research in alternative media instead of thinking conglomerated corporate media has your interest in mind.

What exactly do you propose? A system where the power is out of the hands of a few, where we all print our own money, or a return to the gold standard where I'd send you a few bricks to stop this madness?

[PolyNewbie]

What exactly do you propose? A system where the power is out of the hands of a few, where we all print our own money, or a return to the gold standard where I'd send you a few bricks to stop this madness?

The government of Canada should finance its own debt by lending the country money through the Bank Of Canada and recovering through taxation. No private bankers involved.

[Riverwind]

The government of Canada should finance its own debt by lending the country money through the Bank Of Canada and recovering through taxation. No private bankers involved.

Doing so would significantly increase the money supply which would trigger hyper inflation and a rapid drop in the Canadian dollar.

Your problem is you are obsessed with these malevolent entities that simply do not exist. The interest on Canadian debt goes to the bond holders. Even if some of these bond holders are banks the profits from these banks go to shareholders. I just got a check yesterday from CIBC for my share of the bank's profits. Does that make me one of those 'private bankers' that you are so scared of?

[stignasty]

Please explain to me about RRSPs. I only get back what I put in it seems and I have to pay full income tax on that. My Old Age Pension is cut if I cash in RRSPs so who is benefiting?

You should get back more than you put in. It depends where you have them invested, but RRSPs are an accumulating asset. RRSPs can be invested into funds that are more or less risky, and the performance will vary. You will have to pay full income tax on them at the time they are cashed. The theory here is that at retirement (or age 69) you will have a lower income than you do at the time of contribution. Because we have a progressive tax system your tax burden will be less when the RRSP is withdrawn. Even if your OAS decreases because of the RRSP income, you are still coming out ahead.

[guyser]

These detention centers can be found where rails link. Its an efficient way of moving large numbers of people. The dention centers have funny looking buses in some (like the ones in China) and asphixiation facilities in others. These are in virtually all countries all over the world. Who is going to feed all these people ?

From the quotes you can learn that there will be a new language and a new religion. Old dogs don't learn new tricks. Have you got your instructional tape for the new language yet ?

So now there are detention centres with asphixiation facilities? And I suspect that , like the 9-11 people , there are only a few, or a handful who know about this? (a la your post about very few knowing)

Remiel is right , you are well informed, just wrongly. Your passion is admirable, but your message is a complete turnoff full of holes one could drive a Mac through.

Try this again, think of how many thousands would have to be in on it. And then think about their immediate families that would be either A) not told and then sacrificed in time or the tenfold knowledge that the families would possess.

For every conspiracy to be successful means the minimum number of people would have to know. To entertain that the banks have been in collusion since the days of the Flapper dress defies any semblance of truth . Someone, somewhere , somehow would be world famous for blowing the lid off this "shenanigan" .

But alas , know one has. And then we are asked why they haven't. Pretty rudimentary poly , and the simple reason is that your ideas go far beyond any credible and/or reasonable thought process.

Do you have kids?

[PolyNewbie]

Riverwind:Doing so would significantly increase the money supply which would trigger hyper inflation and a rapid drop in the Canadian dollar.

No, money borrowed by the government would be paid back through taxes the same way as money borrowed from private bankers gets paid back through taxes. No difference except the money spent on interest could be spent on capital works projects, education and hospitalization that would justify the increased money supply.

Why can't you understand this ? You just keep repeating what banker bought politicians say and its easily shown to be stupid.

Taxiation would be an inflationary control device rather than an opressive device. Private bankers wouldn't profit so much from wars and would be less involved in politics.

Your problem is you are obsessed with these malevolent entities that simply do not exist. The interest on Canadian debt goes to the bond holders. Even if some of these bond holders are banks the profits from these banks go to shareholders. I just got a check yesterday from CIBC for my share of the bank's profits. Does that make me one of those 'private bankers' that you are so scared of?

You do scare me, but not because of your small share in bank profits. Your complete and absolutely determined stupidity scares me because there are so many like you.

[geoffrey]

Please explain to me about RRSPs. I only get back what I put in it seems and I have to pay full income tax on that. My Old Age Pension is cut if I cash in RRSPs so who is benefiting?

You should get back more than you put in. It depends where you have them invested, but RRSPs are an accumulating asset. RRSPs can be invested into funds that are more or less risky, and the performance will vary. You will have to pay full income tax on them at the time they are cashed. The theory here is that at retirement (or age 69) you will have a lower income than you do at the time of contribution. Because we have a progressive tax system your tax burden will be less when the RRSP is withdrawn. Even if your OAS decreases because of the RRSP income, you are still coming out ahead.

The tax savings in most cases from RRSP's make them definitely worth while. Being said, I personally would recommend people keep a sizeable chunk of case outside of registered investments as well, as sometimes that money does become cheaper to withdraw once you've reached a certain income level. When your real young, say 20's and working at the lower end of your income potential, put more money into non-registered funds and pay the tax now. Once you hit your 30's start stashing the cash in RRSP's as the tax savings in your earnings prime (30-50) is going to be much higher.

It's possible to lose money on RRSP's, like any investment. Depends on how you choose to have it invested (or invest it I suppose if you do it yourself). If your just in bonds as your a very conservative investor, it's going to take forever for you to get any gains. It's the rule of 72... 72 divided by your interest rate is how long it takes for your money to double, at least in nomial terms. If your only get 2 or 3 percent interest from CSBs, then it's going to take 30-40 years for you to double on interest. I'm currently heavily loaded into Canadian aggressive growth and European aggresive growth funds, and a handful of risky stocks. I made 14.5% in 2006... so that's only 5 years for my investment to double. But I stand to lose alot at a market downturn, not that I care since I'm decades away from needing the cash.

I think margrace has said before she's retired?? Not sure if I remember correctly. But someone at that stage of the game you should focus on stability of bonds and fixed income investments... if a retired person's portfolio drops 20% in a year and they require withdrawls to stay alive, it's trouble. But for someone like me, who's got tons of time for market flucations, I load into some really high risk ventures... I've even been involved in a venture capital investment. I can lose tons and not really be effected as I've got another ~40 years until retirement.

So ya, if your RRSP's don't make much margrace, then I'd say your financial advisor is doing a decent job, for if your retired or nearing retirement they should be in really low risk investments. If your portfolio is making over 6 or 7% per year, I'd be asking "am I into far too risky investments at this stage?"

[Riverwind]

No, money borrowed by the government would be paid back through taxes the same way as money borrowed from private bankers gets paid back through taxes.

Creating the debt in the first place will cause a huge increase in the money supply. The current mechanism does _not_ increase the money supply because bond holders give the gov't existing cash to cover the cost of the bonds.

In fact, gov't bonds are the primary means to balance the US trade deficit. The Japanese and the Chinese buy US gov't bonds wih the real money they make selling stuff to Americans. This ensures that the US dollar does not collapse due to the trade deficit.

You cannot use the BOC to underwrite gov't debt without triggering inflation - this is a fact that has been proven in the past over and over.

Why can't you understand this ? You just keep repeating what banker bought politicians say and its easily shown to be stupid.

As usual you have no facts - you just make thing up as you go along and point to websites run by kooks to support your theories. You resort to insults as soon as your are faced with someone who points out the obvious flaws in you pet theories.

[PolyNewbie]

Riverwind:You cannot use the BOC to underwrite gov't debt without triggering inflation - this is a fact that has been proven in the past over and over.

Government can keep selling bonds as they do now. When they need to borrow money they can go to the Bank Of Canada and not the private banks. They pay back the loans from The Bank Of Canada the same way they do with private banks.

Going to the private banks vs bank of Canada is no different wrt inflation. This is common BS that is used by politicians. Money is money and if BOC lends it interest free rather than having private bankers print it off and charge interest then our economy is working less for private bankers and more for us.

I've heard people give arguemnt to my 911 conspiracy theories, there are still people around that think Oswald shot Kennedy, but I have never heard anyone give any arguement in favour of private bankers collecting our tax dollars and giving nothing in return.

This is common sense and to argue in favour of private bankers financing government is really rediculous.

You are a complete fool. Is there anything you have heard from politicians or seen on TV that you do not believe ?

Riverwind:As usual you have no facts - you just make thing up as you go along and point to websites run by kooks to support your theories. You resort to insults as soon as your are faced with someone who points out the obvious flaws in you pet theories

Yopu have pointed out nothing in terms of facts you have repeated the same crap we hear from politicians and anyone with a few brain cells can easily see through that.

You must be working for the establishment to argue this nonsense.

[PolyNewbie]

What exactly do you think that you are getting in return for the 28% of your income tax that goes to the private bankers ?

Would that money not be better spent on education, hospitals, roads or other infrastructure ? Would that not create more jobs and be beneficial to the economy and Canadian life in general ?

Did you ever think that doing this didn't work before because some people didn't want it to work - ie the people that get to keep this money for themselves ?

[Riverwind]

Government can keep selling bonds as they do now. When they need to borrow money they can go to the Bank Of Canada and not the private banks. They pay back the loans from The Bank Of Canada the same way they do with private banks.

You don't seem to listen - Banks usually do not create money to finance gov't debt because they can't make money on the difference between the gov't bond rate and the BOC rate. The vast majority of bonds are purchased by non-bank institutions such as pension funds. This means that issuing gov't bonds does NOT increase the money supply. However, if the BOC purchased those bonds then the money supply DOES increase. That is why the current system produces low inflation and your system would lead to hyperinflation.

This is common sense and to argue in favour of private bankers financing government is really rediculous.

It is not private bankers - our gov't is financed largely by the personal savings of Canadians that are invested in pension funds or RRSPs.

Unlike you I can actually produce facts that back up my claims. Here is a report by the gov't that lists exactly who holds gov't bonds. If you scroll down and find the table called:

Reference Table IV (cont’d)

Distribution of Domestic Holdings of Government of Canada Securities

PART B —Treasury Bills, Canada Bills, Bonds,1 and Canada Savings Bonds and Canada Premium Bonds

For the year 2003:

Life insurance companies and pensions funds hold 23.30%

Persons and unincorporated businesses hold 5.10%

Chartered banks hold 15.54%

68% of the Canadian gov't debt is held directly by Canadians (via savings, pensions and mutual funds), by the government itself (CPP, QPP), the BOC or by insurance companies. None of these entities has the power to create money to buy those bonds. In all of these cases the interest paid by the gov't directly benefits a broad cross section of Canadians.

[PolyNewbie]

The government does borrow money from private banks. It doesn't borrow all of its money from private banks but does borrow in time of need.

The Bank Of Canada got Canada out of the mess that ww2 and the depression brought on. Canada was doing extremely well economically until Truedeau started financing using private banks.

There is an unmistakable decline in the economy after Truedeau cut back on using the Bank Of Canada. You can see the decline in the economy and the rising national debt since the 70's.

What is the advantage of going to private banks over the Bank of Canada when they need money ?

[PolyNewbie]

I admit that I do not know a lot about Canadian finance, most stuff that I read is about the USA.

My point is that the government still uses private banks. Cities and provinces use private banks. There would be no disadvantage to using the Bank Of Canada instead unless cities & provinces prefer to make private bankers rich on the bgacks of Canadians.

[Riverwind]

My point is that the government still uses private banks. Cities and provinces use private banks. There would be no disadvantage to using the Bank Of Canada instead unless cities & provinces prefer to make private bankers rich on the backs of Canadians.

Why won't you listen? Gov't goes to the open market to finance debt today. That means they do not increase the money supply when they borrow. If gov'ts borrowed from the BOC then money supply would increase. Increasing the money supply leads to inflation as we saw in the 70s.

Furthermore, the picture in the US is not much different than in Canada. Here is a report that shows that close to 40% of the US federal debt is held by other gov't agencies in various gov't sponsored pension funds. If you looked you probably could find a detailed report similar to Canadian gov't report that I linked earlier.

So please stop with your 'private banker' nonsense. There is no such thing. Publically traded banks only hold about 15% of the outstanding debt in Canada and I believe these holdings are part of the banks reserves which means they were purchased with money they received from customers. This means the banks are no different than any other bondholder who loans their savings to the gov't in return for interest.

Your entire thinking on this issue is based on the presumption that it is possible to get something for nothing (i.e. government debt without interest). Anyone past the age of 20 knows that the world does not work that way - there are no free rides and there is always a cost even if you don't know what that cost is. In this situation the cost is high inflation and a declining dollar.

[PolyNewbie]

Riverwind:Your entire thinking on this issue is based on the presumption that it is possible to get something for nothing (i.e. government debt without interest).

Thats exactly what I think. Its not equivalent to getting something for nothing, its just not paying for nothing.

As far as your linked report goes, I wouldn't believe a word of it without the comprehensive annual financial report. They really play with numbers to make these reports look legitimate but most of the people that run governments these days are both traitors & criminals.

Too see this, you just have to be a little bit aware of the North American Union and the war profiteering that goes on in political circles.

If corporations, business, governments & individuals are all in debt then who could be the debt holder ?

But as far as getting something for nothing goes, it is certainly possible when you have a fiat based money supply. You just print it off if you want it and that is something for nothing.

[PolyNewbie]

Riverwind:Why won't you listen? Gov't goes to the open market to finance debt today. That means they do not increase the money supply when they borrow. If gov'ts borrowed from the BOC then money supply would increase. Increasing the money supply leads to inflation as we saw in the 70s.

You can get interest free money without increasing the money supply. You can tax it back. Of course it is possible for the government to get interest free money. The private bankers can print money for nothing so why can't the BOC do it and lend it to the country at 0% or very small interest ?

What is the benefit of paying interest on money when you don't have to ? Who prints off this extra money needed to pay interest ?

What if this money for nothing is used to expand the economy then the extra money in the economy doesn't cause inflation because there is a larger economy to absorb it.

Consequently the government can actually print money and give it away for capital works projects without it being paid back and without it causing inflation. An expanded economy requires more money. It depends on what the money gets spent on as to whether or not it gets paid back in order to manage inflation.

[Riverwind]

As far as your linked report goes, I wouldn't believe a word of it without the comprehensive annual financial report. They really play with numbers to make these reports look legitimate but most of the people that run governments these days are both traitors & criminals.

I see you are off your meds again. Why do you waste your time posting when you are always reduced to such rediculous arguments? The reports I provided have been audited and are posted on gov't websites. You can deny if you like, however, your basic arguement has been shredded. Government debt is not held by mysterious 'private bankers' profiting on the backs of taxpayers. It is held by a broad cross section of Canadians who loan their savings to the gov't in return for interest.

But as far as getting something for nothing goes, it is certainly possible when you have a fiat based money supply. You just print it off if you want it and that is something for nothing.

No you don't - printing money creates inflation and hyper inflation. In the long run inflation harms the economy and the average person more than paying interest on gov't debt.

[Riverwind]

You can get interest free money without increasing the money supply. You can tax it back. Of course it is possible for the government to get interest free money. The private bankers can print money for nothing so why can't the BOC do it and lend it to the country at 0% or very small interest ?

You don't understand the banking system at all. Bankers cannot create money for nothing. Whenever a bank creates money it assumes a liability that will show up in different ways depending on what happens to the money it created. For example:

- if this money is deposited into the same bank then the bank must pay the depositor interest on that money.

- if this money is deposited into another bank then the bank must pay the other bank interest on that money.

This is why a bank can never lend money for less than current bank rate unless it is willing to lose money.

The gov't and the BOC could try to compensate for the increase in money supply by taxing more and increasing interest rates but this would hurt the economy and leave the average person with less money even if the gov't 'saves' some money on interest. It is not possible to get something for nothing. If are really bothered by the money spent on interest payments on the debt then you should be demanding that the gov't pay back the debt and never borrow moeny in the future.

[PolyNewbie]

Riverwind:I see you are off your meds again. Why do you waste your time posting when you are always reduced to such rediculous arguments? The reports I provided have been audited and are posted on gov't websites. You can deny if you like, however, your basic arguement has been shredded. Government debt is not held by mysterious 'private bankers' profiting on the backs of taxpayers. It is held by a broad cross section of Canadians who loan their savings to the gov't in return for interest.

Governments always keep two sets of books, one for the public and one for themselves. All criminals operate this way when they operate under the guise of legitimacy.

Riverwind:No you don't - printing money creates inflation and hyper inflation. In the long run inflation harms the economy and the average person more than paying interest on gov't debt.

First of all in the long run some inflation is justified. Secondly money put into the economy does not create inflation immediately and if it is interest free every payment works off the priciple and the money gets paid back quickly. Thirdly both the US government and Canadian governments are working very hard to destroy both countries through the formation of the North American Union. Public assets are being sold to private corpoations at discount rates while police forces are being expanded to implement the police state so that you can't do anything to stop it once you figure it out.

This is why the North American Union is never discussed on the corporate controlled media. The corporations that are buying up public assets do not want you to know about it.

Riverwind:- if this money is deposited into the same bank then the bank must pay the depositor interest on that money. - if this money is deposited into another bank then the bank must pay the other bank interest on that money.

First: No one borrows money to deposit it in a savings account, secondly if the money is put into the savings account it becomes a bank asset - money created from nothing. The interest paid is not the same as the interest owed and the bank can use the money to pay off the politicians for the next election or whatever else they want to do with it.

Is there anything that a politician has ever said that you did not believe ? Have you ever heard anything on corporate mainstream media that you didn't believe ?