Money Problems?

"Money doesn't grow on trees!" (My father)

Where does money come from? Paul Hellyer, as one of the most senior politicians in Canadian political history, decided to ask the most educated and highly esteemed politicians, businessmen, publishers, lawyers, doctors, etc. in the land the question: Where does money come from?

No one knew.

Mr. Hellyer wrote a book about it: "Funny Money: A Common Sense Alternative to Mainline Economics." (1994) It's available in your local library.

The interested reader is warned: the truth, so it's been said, will set you free -- but first it will make you violently ill. Regarding the money system, Henry Ford, the great American industrialist, had the following to say, "If the people of the nation understood our banking and monetary system, I believe there would be a revolution before tomorrow morning."

In his book "The Evil Empire: Globalizations Darker Side" (also available in your local library), Paul Hellyer unleashes one of the biggest secrets of our society:

"Banks are unique amongst commercial institutions in that they are the only corporations with licenses to print money." (Chapter 6)

The word "license" means permission. Who grants the banks permission to print money? (NB. the word "print" really should be interpreted "create" -- but, more on the actual mechanics of money creation in a later section) Answer: the federal government. As Paul Hellyer continues (still Chapter 6)

"The patent for the creation of money is owned by the federal Parliament on behalf of the Canadian people."

We should allow Paul Hellyer to continue,

"... for reasons that have much more to do with historical precedent than any kind of logic, Parliament has licensed its patent to the commercial banks. The licenses are called bank charters issued under the authority of the Bank Act. The charters are renewed each time the Bank Act is renewed -- usually about every five years."

Just so we're clear thus far, a "chartered bank" -- like RBC, ScotiaBank, or TD -- is a bank that has been issued a license by the federal government to create money.

So, why would our federal government grant private corporations licenses to create money? To provide the ostensible, 'historical' reason Paul Hellyer explains, "To the extent that there is any logic in allowing banks to create money, it is that they will ration the money more wisely than government would. Their branch managers have been well positioned to get to know the farmers, business people, and small entrepreneurs in need of financial assistance and to determine their creditworthiness."

Paul Hellyer, goes on, however to explain how the "public trust" aspect of the banks' charters have been completely subverted. How so?

"It began making less sense [to allow banks to create money] when banks got tired of the work involved in servicing their small customers, the ones who create the jobs, and turned their attention to wholesale large-loan banking -- including buyouts which resulted in bidding up the price of assets (causing inflation) and then the elimination of redundant personel (adding to unemployment)."

Inflation and Unemployment

Here we should pause to reflect on the two effects of large-loan banking mentioned by Mr. Hellyer, namely inflation and unemployment. All the while, we should remember that the practice of large-loan banking constitutes the principal betrayal on the part of the banks of the trust implicit in the granting of their charters by the federal government.

Inflation is a hidden tax. Inflation is the direct result of large-loan banking because such loans involve the creation of massive amounts of new money (cf. the section on the mechanics of money creation: all money is created as 'debt') which dilutes (i.e. debases) the existing money supply, thus driving up prices.

Inflation diminishes the value of money savings at an astounding rate and thus ensures that most of us in our lifetimes will be excluded from the prospect of owning our own business (thus we have to work for money all our lives rather than having
money work for us), and makes retirement a dream rather than a reality for many of us. On the subject of inflation, G. Edward Griffin, historian and author of "The Creature From Jekyll Island" puts it succinctly, "Inflation has now been institutionalized at a fairly constant 5% per year. This has been determined to be the optimum level for generating the most revenue without causing public alarm. A 5% devaluation applies, not only to the money earned this year, but to all that is left over from previous years. At the end of the first year, a dollar is worth 95 cents. At the end of the second year, the 95 cents is reduced again by 5%, leaving its worth at 90 cents, and so on. By the time a person has worked 20 years, the government will have confiscated 64% of every dollar he saved over those years. By the time he has worked 45 years, the hidden tax will be 90%. The government will take virtually everything a person saves over a lifetime.".

The second result of large-loan banking is the exacerbation of the phenomenon of unemployment. As stated by Paul Hellyer, the phenomenon of "buyouts" or corporate "mergers" -- which only began when the practice of large-loan banking became common practice -- results in the reduction of redundant personnel, i.e. unemployment.

For those who are fans of George Orwell's novel 1984 -- the term "merger" is classic Orwellian double-speak, for a "merger" is nothing more than a take-over of the many, i.e. the small fish, by the few, i.e., the big fish. So, not only does large-loan banking exacerbate unemployment, but it serves also to concentrate power and resources in the hands of fewer and fewer people.

Globalization

That brings us to the phenomenon of "globalization." The corporate "merger" is a major force behind the phenomenon innocuously referred to by mainstream media and education as "globalization". "Globalization" (another classic term of Orwellian double-speak) is nothing less than the concentration of power, wealth, resources, of the world in the hands of fewer and fewer people -- i.e. the creation of transnational corporations that control all of the world's resources.

A critique of globalization forms the crux of Paul Hellyer's work "The Evil Empire". He characterizes the phenomenon in the preface to his book,

"Globalization is simply a code word to camouflage what is really going on. Globalization is not about trade, as its promoters would like us to believe, it is about power and control. It is an attempt by the largest international banks and multinational corporations to run the world their way, for their own benefit and by their own set of rules, rules that would allow them to undo a century of social progress and to alter the distribution of income from inequitable to inhuman. In fact the empire they plan would be an evil empire in the truest sense. It would be an empire where individual countries, especially the small ones, would lose the flexibility to pass good and humane laws in the interests of all the people. Gold would be the absolute monarch and goodness a mark of disloyalty. This evil empire is not a figment of the imagination. Plans are well advanced and it will become a reality unless we take immediate steps to stop it."


No Royalties

No owner of a patent will allow use of his product unless he or she collects hefty royalties on the patent's use. In fact, that is the whole idea behind acquiring a patent in the first place!

No sane individual would simply give away what Paul Hellyer rightfully refers to as "... the most lucrative of all monetary windfalls ...", i.e. the money-creation patent, for free. Add to this that, even more so than the average patent holder governments the world over -- including our own -- are racked with massive, insurmountable debt that each generation inherits from the previous. In addition, mainstream media is filled with stories of how there is no money for social programs and spending cuts constantly have to be made -- all the while taxes are increased little by little (where I live in Brampton, property taxes were increased this year by 100$). The Fraser Institute reports that all taxes municipal to federal amount to 50% of everybody's paycheck (i.e. if you really want to know how much you make, divide your hourly salary by 2).

So, what hefty royalties does our own federal government charge the chartered bank for use of the money-creation patent, which, again, Paul Hellyer calls "... the most lucrative of all money windfalls ..."?

Zero dollars and zero cents.

If that number didn't make you physically ill, the following is bound to. In the words of Paul Hellyer, "The federal government, rather than use its own most valuable asset -- the patent on money-creation -- pays handsomely for the periodic use of the licenses it has issued and lines up meekly at the banks like a sheep at the shearers."

If that doesn't convince you that "governments" -- including our own -- are nothing more than front groups for the money creators that wield all the power in our society then nothing will.

The Mechanics of Money Creation

For those of you who are still with me, I will now explain exactly how all money gets created in our society. Paul Hellyer also, in chapter 4 of "The Evil Empire" succinctly explains the mechanics of money creation.

"A builder needs to borrow $150,000 to build a house. Once sufficient collateral has been agreed upon with the bank, a note will be signed and, presto, $150,000 is put in the builder's account. The important point is that just minutes earlier the $150,000 didn't exist. It was created out of thin air based on nothing more than a small capital reserve required by the Bank Act."

But, that's not all, Paul Hellyer continues,

"The money is then used to pay the people who dig clay from a pit and make bricks, the bricklayers who lay the bricks, the woodsmen who cut tres to make lumber, the carpenters who use it to build the frame, the miners who extract the metals for the hardware and the manufacturers who turn out the plumbing, wiring, and fixtures. But when they are all finished it is the bank which owns the house."

Conclusion

I will conclude with an insightful and revealing statement by Sir Josiah Stamp (1880-1941), Director of Bank of England,

"The modern banking system manufactures money out of nothing. The process is perhaps the most astounding sleight of hand that was ever invented. Banking was conceived in iniquity and born in sin. As a result, the Bankers own the earth.

Take it away from them, but leave them the power to create money and control credit, and with the flick of a pen, they will create enough money to buy it back again.

Take this great power away from the bankers and all the great fortunes like mine will disappear, and they ought to disappear, for this would be a better and happier world to live in.

But if you want to continue as slaves of bankers and pay the cost of your own slavery, let them create (your) money and to control credit (and lives)."

- Sir Josiah Stamp, Director and President of the Bank of England during the 1920's.