(Book Two) Some Spurious Cause

SOME

“SPURIOUS”
CAUSE

Banking was conceived in iniquity and was born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create deposits.Josiah Stamp. Director of the Bank of England, 1928-1941, and the second richest man in England

By:
David Ealing

Copyright© October 2009
By: David Ealing

This book may be copied and freely distributed as long as it is copied and freely distributed completely and with no deletions and no additions. You can reach the author at: david.ealing@gmail.com.

Preface

Definition of, spu·ri·ous


1 Not genuine, authentic, or true; not from the claimed, pretended, or proper source; counterfeit.


2 Lacking authenticity or validity in essence or origin; not genuine; false.


Synonyms:
false, sham, bogus, mock, feigned, phoney; meretricious, deceitful.


Title


The Guardian, Tuesday 1 May 2001 08.22 BST

Tony Blair yesterday promised "absolute and total backing" for the police during today's anti-capitalist May Day celebrations and demonstrations in London, and dismissed the protests as a "spurious cause".

The prime minister said that protesters passed the limits of tolerance when they sought "to inflict fear, terror, violence and criminal damage" on people and property.

"I believe people in Britain are tolerant, outward-looking, inclusive," he said. I believe, too, that there are indeed limits to that tolerance.

"The limits are past when protesters, in the name of some spurious cause, seek to inflict fear, terror, violence and criminal damage on our people and property.

The content of Some Spurious Cause outlines just one of the many “spurious causes” expressed in London by some of the protesters over eight years ago. This cause is money and its effects as it exists in the world today. Understanding money as it exists today (October 2009) is the single most important thing anyone can do to help themselves understand what controls the global economy and ultimately, understand how that economy controls their life. We should ask why something that exerts so much control over our lives is so little understood.

This is the second book that I have written that focuses on the Private Debt Money System operating throughout the world today. The first one was The Insidious Coin. That title has since been changed to The Oblivious Ape as it more closely illustrates the truth of the following quote.

The few who can understand the system [the Private Debt Money System] will either be so interested in its profits, or so dependent on its favours, that there will be no opposition from that class, while on the other hand, the great body of the people mentally incapable of comprehending the tremendous advantage that capital derives from the system, will bear its burdens without complaint, and perhaps without even suspecting that the system is inimical to their interests.Rothschild brothers of London

We are lead to blame political parties or the Government in general, unions or management, CEOs, global warming, sub-prime mortgages and a myriad of other “causes” for the present global economic recession. Most of us have become oblivious to the cause of what is really doing more harm to this world and its inhabitants than any other single mechanism. Those who have become aware of the cause have become so interested in its profits that they have joined with the worlds private bankers. It seems that most of our politicians have joined them as well. For their response when told of the effects of the Private Debt Money System on the constituents they have sworn to represent was silence. It’s not that they have not been told for I have told them. I will tell them once more by sending each of our Members of Parliament a copy of this book. Please feel free to make one copy and send it to your Member of Parliament. Then they will know it is not just me who knows what they’re not telling us about our ever increasing debt. Maybe Tony Blair should get a copy as well.

It is my hope that you take the time necessary to gain a solid understanding of the Private Debt Money System. It is also my hope that this book adds to that understanding and leaves you knowing that some protests are the exact opposite of spurious. They are sincere, factual, honest, truthful and honourable.

David Ealing, October 2009



Table of Contents

Introduction………………………...............................


Part One
Chapter One
How Our Economy Works……………...……………


Chapter Two
The Cause of Poverty….…………………..…………


Part Three
Chapter Three
What Could Be………………………….………………


Part Four
Chapter Four
Constructing a Forum……………………………….


Introduction

Why is it important for each of us to have a realistic and honest understanding of money as it exists in the world today? Because if we don’t understand how our economy works, we will be buffeted by the comings and goings of inflation, recession and eventually, depression.

To this end the information presented in this book will be informative and factual. We will begin by presenting our formula for debt. Our challenge to all each time it is presented is – prove it wrong if you can. To date, our current Federal Finance Minister and Prime Minister have not offered any proof of errors that can be found in it. It’s not that they have not been asked for their opinion as they were asked specifically for this in a NOTICE dated November 6, 2008. A portion of that notice follows.

NOTICE

November 6, 2008

The Principle of, “notice to one is notice to all” applies.

To:
Steven Harper, Prime Minister of the Corporation of Canada

And,

Jim Flaherty, Finance Minister of the Corporation of Canada

Attached please find a copy of The Oblivious Ape. I, David: Ealing, a human residing on the land mass known as Canada wrote The Oblivious Ape after learning of the deceptive practices perpetrated by the Government of the Corporation of Canada against the human population residing upon the land mass known as Canada. You will notice that The Oblivious Ape contains comments of many differing topics. All of these comments, I believe, are true. Based on that belief I will be distributing The Oblivious Ape to as many other humans as possible.

Because I do not wish to distribute anything that is untrue I am directing you, as my servants, to inform me of any such errors you find in The Oblivious Ape within Thirty (30) days. You are directed also to provide proof of the error(s) you may claim to find. Your failure to respond to this notice will be taken as your tacit agreement that there are no errors.

I await response from you all.

David: Ealing

I still await their response.

The Formula for Debt

Although not as pretty as Einstein’s E=MC2 the formula for debt may one day be understood as offering its own form of enlightenment. This may be the first time that you’ve been presented with this information so it may not be clear in your mind for some time. This formula will be presented again later. By then it will be much clearer. Once you thoroughly understand this formula our present economic system will become very transparent and no amount of wool pulled over your eyes will hide the truth.

The important part to understand now is that all money circulating within our economy has been borrowed either directly or indirectly from Canada’s Central Bank, the Bank of Canada. There has not been – at least not in the last 50 years – a time when the Bank of Canada lent money at zero % interest, nor has it ever just given money into circulation. That being the case every dollar circulating within our economy – being a borrowed dollar – fits into the formula for debt.

An equally important fact to keep in mind is that because only the principal is lent by the bank, the interest must be paid with money from the loan. There is no other money in our economy. All money has been borrowed and all interest must be paid with this borrowed money. You will see that the result of this insane system of finance must be a debt.

P – (P + I) = D

We start from the point of this formula as it applies to our world economy because more than any other device its effect determines the conditions of every human life in the world. The belief (or truth) that our present economic system can and will create abundance for all is a provable myth. We can prove this by applying this formula to every unit of currency (the yen, the euro, the dollar, etc.) circulating within our global economy today. I am a Canadian so will apply this formula to the Canadian dollar. Those who chose to can apply it to their own unit of currency and find the same result.

To understand this formula it is necessary to grasp two facts:

1. Every dollar circulating within our economy has been borrowed from a private bank.
2. Each dollar is borrowed for a specified time and must, at the end of that time, be repaid to the bank with interest.

Knowing these two facts we can now replace the symbols within the formula for debt with actual numbers. The symbols in the formula stand for:

The “P” stands for the Principal – the amount borrowed from a private bank.

The “I” stands for the Interest charged on the borrowed dollars.

The “D” stands for any Debt resulting from the process of borrowing dollars from a private bank.

Basically the formula states that the borrower has received the principal (indicated the first P). Subsequently the borrower must repay the principal plus interest (indicated by the P + I within the parentheses)

As an example let’s use a loan of $1,000 borrowed for one year at an interest rate of 5%.

P – (P + I) = D

$1,000 – ($1,000 + $50) = D

There is a precedence rule in mathematics requiring that whatever is found in parentheses be calculated first. Therefore, in our formula the $1,000 and the $50 must be added first. Doing this operation reduces our formula to:

$1,000 - $1,050 = D

Now our formula states that the borrower has received $1,000 and must return $1,050. Doing this we arrive at the following:

- $50 = D

In other words, borrowing $1,000 from a private bank at 5% interest results in a debt of $50.

Try any numbers you wish and the debt will always equal the exact amount of the interest charged. When you think about it this makes perfect sense. Plus, once you realize that every dollar circulating within our economy has been borrowed from a private bank, it doesn’t take much to see that there is a debt attached to every dollar and that there will always be more owed than was originally borrowed.

Also, if every dollar has been borrowed it must, eventually, be paid back. If every dollar would/could be paid back there would be no money circulating within our society. In order to continue any kind of trade or commerce all countries are forced to continue to borrow more money as the existing money within the economy is used to repay old loans.

Inflation is a built in and controlled part of our present day economy. Prices must go up in order to have more money to pay the interest charges on old loans. That way it will always seem that the economy is working to create wealth. Inflation ensures that there will always be more money circulating within our economy thus giving the impression that things are improving.

In order to determine if any economy is creating more wealth we need to look at the buying power of our money. The number of millionaires in any particular country is used to infer that wealth is increasing. [In 2008 the number of millionaires in the world actually dropped world wide from 11 million to 9 million.] But instead of looking at the number of millionaires lets look at the buying power of a million dollars over time.

As an example I’ll use my grandfather. My grandfather was not a millionaire. But in 1925 he bought a full basement, two-level home in St Vital, a suburb of Winnipeg, Manitoba. The purchase price was somewhere around $750. But to keep things in easy to figure numbers let’s agree the purchase price was one thousand dollars ($1,000).

If, in 1925 a full basement two level home could be purchased for one thousand dollars, a millionaire could take ten percent of his wealth (or $100,000) and purchase one hundred homes. Checking the internet for home prices in Winnipeg today one will see that a millionaire could not buy one home in St Vital with ten percent of his wealth. The average price seems to be somewhere around $140.000. This means that when considering the price of St Vital homes, one thousand dollars in the 1925 was equal to $140,000 today. Or, put another way, you need $140 dollars today to buy what one dollar bought in the 1925. However one looks at it, the buying power of a dollar today is a small fraction of what it was in 1925. That’s the magic of inflation. As a result, being a millionaire today is not the same as it was in 1925. To have the same buying power today as a 1925 millionaire one would need to have just under $150,000,000! If we remember that the actual price of my grandfather’s house was $750 a millionaire could have bought 1333 houses in St Vital in 1925. At $140,000 per house today one would need $186,620,000 today to purchase 1333 houses!

Here’s the shocking figure in all of this. If you are a millionaire dealing in Winnipeg real estate today you have the same buying power as a person with $5,359 in 1925! This is the wonders of inflation and the magic of the word millionaire. Makes you feel warm all over, doesn’t it?

The following was taken from: http://www.economist.com/.

Money illusion

When people are misled by inflation into thinking that they are getting richer, when in fact the value of money is declining. Whether, and how much, people are fooled by inflation is much debated by economists. Money illusion is used by some economists to argue that a small amount of inflation may not be a bad thing and could even be beneficial, helping to “grease the wheels” of the economy. Because of money illusion, workers like to see their nominal wages rise, giving them the illusion that their circumstances are improving, even though in real (inflation-adjusted) terms they may be no better off. During periods of high inflation double-digit pay rises (as well as, say, big increases in the value of their homes) can make people feel richer even if they are not really better off. When inflation is low, growth in real incomes may hardly register.

Inflation: The Central Bank’s tool that gets you to feel good about having less.

When you truly understand the operations of the world’s Central Banks you’ll see that they’re not really interested in building profits for themselves as much as they are aiming at control by indebting countries to them. They are truly debt farmers. The seed they plant is usury (interest) and the crop they reap is debt. Debt is the lever they use to exercise control over Governments, corporations and individuals. Who can say that they have not felt this lever?

The following was taken from:
http://www.members.shaw.ca/theultimatescam/provincialcredit.htm.

A few short years ago, The World Bank published a report in which they estimated the worth of Canada’s natural resources at 2500 trillion dollars! This figure did not include our water resources or the resources of the northern territories.

Canada is without a doubt, one of the richest countries in the world. Based on the value of our resources, see if you can come up with good answers to the following:

1. Canada has over $2,500,000,000,000,000 trillion dollars worth of resources.

2. Canada’s population since 1960 (50 years) averaged about 25,930,140.

3. The vast majority of Canada’s population during these 50 years worked diligently, “earned” money and paid their taxes.

4. During these 50 years Billions of dollars worth of resources were extracted and marketed throughout the world. Farmers produced billions of dollars worth of crops that were marketed throughout Canada and the world. And thousands of small businesses throughout Canada contributed to the economy of their local area as well as paid their share of the tax bill.

The questions are:

1. Based on the above how is it possible that as we approach 2010, the average debt carried by Canadian households is $90,700 and growing six times faster than the average household income?

2. How is it possible that as of October 8, 2009 our Federal Government debt has risen to close to $492,000,000,000 – over $14,500 per Canadian?

3. Add the total government liabilities to the above figures and we’re over 2.4 trillion dollars in debt. How can this be possible in such a wealthy country?

4. How is it possible that here in British Columbia our provincial debt now stands at over 38,000,000,000 – over $8,500 per citizen?

5. Why can such a rich country as Canada not provide its citizens with adequate schools, hospitals, highways, etc.? Don’t they work hard enough?

6. Why is homelessness increasing at such an alarming rate.

7. Why do we have to consider tolls on bridges and highways?

8. How can the following be true in such a rich country?

-In 2007, 788,000 Canadian children, or nearly one in eight, are poor. First Nations children are disproportionately affected, with one in four children living in First Nations communities living in poverty.

-Canada’s child poverty rate of 11.7% is two to three times as high as the rates of Sweden, Norway or Finland.

-Every month, 770,000 people in Canada rely on food banks-40% of whom are children.

There is a simple two word answer to all of these questions – interest charges. Don’t believe it. Consider to following from section 5.41 of the Auditor General’s 1993 report.

The cost of borrowing

“The cost of borrowing is the third area that affects the annual deficit. In 1991-92, the interest on the debt was $41 billion. This cost of borrowing and its compounding effect have a significant impact on Canada’s annual deficits. From Confederation up to 1991-92, the federal government accumulated a net debt of $423 billion. Of this, $37 billion represents the accumulated shortfall in meeting the cost of government programs since Confederation. The remainder, $386 billion, represents the amount the government has borrowed to service the debt created by previous annual shortfalls.”

Translated into Math, that means this:

Actual loans to government……. $ 37,000,000,000

Usury by banking system……… $ 386.000,000,000

Total debt (1993)………………. $ 423,000,000,000

If Canada and its citizens end up buried in debt after 50 years of hard, dedicated work, how can any other country end up with anything but debt?

Consider Africa.
Between 1970 and 2002 the poorest African countries received $294 billion in loans, paid back $298 billion in interest and principal, but still owed more tan $200 billion.

Part One

This is a direct quote from an edition of the American bankers Association magazine in 1924 which clearly illustrates their true intent;

Capital must be protected in every possible way. Debts must be collected, mortgages foreclosed as rapidly as possible. When through the process of law, the common people lose their homes, they will become more docile and more easily governed through the strong arm of Government applied by a central power of wealth under leading financiers. These truths are well known among our principal men who are now engaged in forming an imperialism to govern the world. By dividing the voter through the political party system, we can get them to expend their energies in fighting for questions of no importance. It is thus by discreet action we can secure for ourselves that which has been so well planned and so successfully accomplished.

Things are not different today

Chapter One

How Our Economy Works

Give me control of a nation’s money and I care not who makes it’s laws.Mayer Amschel Bauer Rothschild
1744 – 1812

Much has been said of this oft cited quote. Its main use seems to be to validate that there has been a conspiracy amongst private international banker to gain control of the central banks of the world. Many argue that this has occurred. The point of this little book is not to enter that argument, but rather to demonstrate that no matter who controls a nation’s money, debt will be the result if it is lent into circulation at interest. As the formula for debt illustrated in the Introduction, if more has to be paid back than was originally borrowed, debt must be the result.

If people understood the banking system today, there would be a revolt in the streets tomorrow.
Henry Ford

If Henry Ford was right with the above quote, and there has never been a revolt in the streets of America over the banking system, then we would be safe to assume that the people still do not understand the banking system that operates the economy of the United States. We can also assume that the same situation exists in virtually all nations of the world. Although the ideas expressed in this book can be used to illustrate the workings of most national economies, they are put forth by a Canadian and are used to demonstrate that nation’s economy more that any other. The following link can be used to visit an excellent site to aid in the understanding of the Canadian banking system.

http://www.members.shaw.ca/theultimatescam/index.htm.

Once there click on The Private Debt Money System to read a more in depth article than what is presented below. If you would rather watch an excellent 47 minute animated video on the subject, the following link will take you to Money as Debt.

http://video.google.ca/videoplay?docid=-2550156453790090544.

Finally, http://www.michaeljournal.org/myth.htm, presents a story written in the 1930s illustrating the same point. A great story, simply told, that will leave you amazed at the simplicity of the ruse.

THE GOLDSMITHS

This is a short and simple story. It could be called a fable except that it is founded on fact. It is true in its portrayal of how our present money system evolved.

Many years ago, a certain rich man wanted to go abroad for a two-year vacation. He owned, in cash, ten thousand shekels of gold. He could not take the gold with him because of its weight and the danger of being robbed; so he went to a goldsmith to ask if he could leave his gold with him for safekeeping. The goldsmith, who had a large secure storage facility similar to a vault, wanted to be paid to keep the rich man’s gold. He asked for 10% or 1000 shekels to which the rich man agreed. The rich man “deposited” his gold with the goldsmith, obtained a “receipt” for it and then left on his trip abroad.

As soon as the rich man had left his gold and departed, the goldsmith told his helper to go and spread the word that his master had a few shekels of gold to loan to financially secure customers at 15% interest. Soon the borrowers came. One wanted 50 shekels; another wanted 100 shekels and so on. To the goldsmith’s surprise, most borrowers did not take delivery of the gold. Instead, all they wanted was the goldsmith’s receipt saying, “I owe you X number of gold shekels” which could be used to claim the gold when they wanted it. In modern terms, they had what we call a demand deposit.

As the days proceeded, the goldsmith had loaned out all of his 1000 shekels, which were drawing 15% interest. Yet, nearly all of the shekels were still in the vault. The only people who took their gold were a few of the small borrowers, the others only wanted receipts (IOU’s) showing the goldsmith held their gold and that they could have it whenever they needed it.

As time went on, the goldsmith found that the people were accepting his receipts in payment of goods and services rather than using the gold. When the occasional person did claim his gold and used it in payment of goods etc., the one who received the gold brought it back to the goldsmith for safekeeping and accepted an IOU.

This gave the goldsmith a “terrific” idea.

Fiat Currency

From Wikipedia, the free encyclopedia

Fiat money is money declared by a government to be legal tender. The term derives from the Latin fiat, meaning "let it be done". Fiat money achieves value because a government accepts it in payment of taxes and says it can be used within the country as a "tender" (offering) to pay all debts. In effect, this allows it to be used to buy goods and services and to pay tax. Where fiat money is used as currency, the term fiat currency is used. The most widely-held reserve currency, the US dollar, is a fiat currency, as are other widely held currencies like the Euro, Pound Sterling and the Yen.

Basically, fiat currency is any piece of paper that a government decrees will be used for money. There is nothing backing these pieces of paper – not gold, not silver, nothing.

The first thing to grasp - and maybe the hardest - is that central banks have no money. That is, they have no money until some entity (individual, business, government, etc.) agrees to pay them more than they have asked to borrow. It is the entity’s signature on the loan application form that actually creates the necessary value that the fiat currency represents. For the Central Banks then, the value is never in the fiat currency. It is always in the signature. The application form thus becomes an asset, an IOU or bond.

You may ask. “How can central banks lend money if they don’t have any money?” The simple answer is, they “create” it out of thin air.

Banking was conceived in iniquity and was born in sin. The Bankers own the earth. Take it away from them, but leave them the power to create deposits, and with the flick of the pen they will create enough deposits to buy it back again. However, take it away from them, and all the great fortunes like mine will disappear and they ought to disappear, for this would be a happier and better world to live in. But, if you wish to remain the slaves of Bankers and pay the cost of your own slavery, let them continue to create deposits.
Josiah Stamp. Director of the Bank of England, 1928-1941, and the second

richest man in England

This is quite a statement from a Director of a Central Bank. Even when they come right out and tell us the truth about what they do we don’t listen. In Canada, The Bank of Canada is our Central Bank. Try to understand the following, taken from:
http://www.members.shaw.ca/theultimatescam/The%20Bank%20of%20Canada.htm.

Most Canadians are aware of the existence of the Bank of Canada (BoC) but beyond that, very few know little more. It is assumed that the BoC is owned by the federal government, i.e. a public asset. Under Section 3(2) of The Bank of Canada Act, the BoC is described as a “body corporate”. Black’s Law dictionary, 6th edition (page 175) defines a body corporate as “a public or private corporation”. In a recent communication received from the BoC, a representative stated that the BoC “is not a public corporation.” The BoC is, therefore, a private corporation! But who owns it?

The Bank is made up of a Governor, Deputy Governor and twelve directors. The directors are chosen by the Minister of Finance with the approval of the Governor in Council and the twelve directors are responsible for the appointment of a Governor and Deputy Governor with the approval of the Governor in Council. The Deputy Minister of Finance is a member of the board but he has no vote!! There is no provision in the BoC Act for the appointment of elected representatives to the board of the Bank. (I think it is safe to assume from this set-up that the duly elected Parliament has no say in the policies and operations of the BoC). The capital of the bank is divided into one hundred thousand shares with a par value of $50.00 each. (Section 17.1 and 17.2) and the shares are held by the Minister on behalf of Her Majesty in right of Canada! (Section 17.3 of the BoC Act.) It would seem that the BoC is owned by the Queen, a foreign head of state and not owned by the Government of Canada. (This fact was also confirmed by an official of the BoC) It is certainly clear however, that the Federal Parliament and the people of Canada do not own it or benefit from its activities.

Notice that the shares are not owned by the Government but are held by the Minister on behalf of Her Majesty. They are definitely not held on behalf of, or for the benefit of, the citizens of Canada. But whether the Bank of Canada, or any other Central Bank in the world, is a privately owned bank or a publicly owned bank is not the argument here. The same result would occur if either lent money at interest. Interest produces debt simply because interest charges reduce the money needed to repay the original loan. The formula for debt still applies.

Now don’t call me crazy for what comes next. You have no less an authority than Josiah Stamp Director of the Bank of England himself telling you it’s true.

What Josiah Stamp called the flick of the pen, would today be called the click of a computer key. That is all it takes for the Bank of Canada to “create” money. The money does not exist before the click of the computer key. However, some event must occur before the computer key is clicked. Someone must first sign a loan application form. Once that occurs and the application is accepted the simple click of a computer key “creates” the deposit that now magically appears in someone’s account. It really is that simple.

The Central Bank now prints the money necessary to facilitate the spending of that deposit. The actual money necessary is only a small portion of the total deposit. Today the majority of most deposits are spent by the use of cheques, credit cards and debit cards.

Keep in mind that this money is fiat money. There is no gold, silver or even lead backing this money. The Bank of Canada doesn’t even have a barrel of rocks backing the money they print. It is simply created out of thin air.

The down side of our present fiat money system is the interest charged. Charge interest on money and debt will be the result. The above formula for debt [P - (P + I) = D] shows this very clearly. How can anything but debt be the result if more has to be paid back than was originally borrowed. Keep in mind also that every dollar circulating within our economy is a borrowed dollar and virtually every form of currency in the world is borrowed at interest from a private Central Bank.

The following link will take you to a list of the Central Banks of 165 countries of the world. http://www.bis.org/cbanks.htm. The Bank for International Settlements home page states the following

The Bank for International Settlements (BIS) is an international organisation which fosters international monetary and financial cooperation and serves as a bank for central banks.

The Bank for International Settlements is a private bank. It’s like the head office for 165 Central Banks from around the world. It “fosters international monetary and financial cooperation…” amongst all other Central Bank with the aim of creating (farming) debt. The amount of debt throughout the world illustrates its success.

We have all heard of the massive bailouts or “injections” of capital that has occurred in the United States over the last year. What follows is taken from my book, The Oblivious Ape, and is an accurate picture of these “injections”. Before the US Government could “inject” money into their economy, two things needed to happen. First the US Government gave the Federal Reserve the money in the form of a Government bond. Then the fed gave the money back to the US Government in the form of a loan with an interest charged attached. In what follows, replace the Federal Reserve with the Bank of Canada and you will have a clear understanding of our situation in Canada. Again, notice that the Central Bank, whether The Federal Reserve or the Bank of Canada, has no money until they are given an asset of some form. That asset can be in the form of a loan application or in the form of a Government bond. Would you lend me $1000.00 so that I could lend you $1000.00 at 10% interest over the next year? I didn’t think so. That is what your government representatives are doing with your money. No wonder you’re in debt. As good neighbours we should tell our American friends what’s really happening. Email them this book.

The United States Private Debt Money System

In the United States the creation of money starts with the federal government’s creation of government bonds that are basically given to the Federal Reserve. These bonds or government IOUs represent a government debt. When these bonds reach the Federal Reserve (Fed) they become an asset of the Fed. The Fed now balances this asset by creating a liability in the form of a check made out to Congress. How insane is this system? The government actually gives money to a private bank so that the private bank can lend it back to the government at interest. Don’t you get the feeling that something is wrong with this picture?

Now that the Fed has given congress the check, congress endorses and deposits it in their account with the Fed. Now, based on this deposit, congress writes checks to its contractors. These government checks are deposited in the bank accounts of the government contractors and become commercial bank deposits.

G. Edward Griffin in his book, The Creature from Jekyll Island states:

Commercial bank deposits immediately take on a split personality. On the one hand, they are liabilities to the bank because they are owed back to the depositors. But as long as they remain in the bank, they also are considered as assets because they are on hand. Once again, the books are balanced: the assets offset the liabilities. But the process does not stop there. Through the magic of fractional-reserve banking, the deposits are made to serve an additional and more lucrative purpose. To accomplish this, the on-hand deposits now become reclassified in the books and called bank reserves.

Reserves for what? Are these for paying off deposits should they want to close out their accounts? No. That’s the lowly function they serve when they were classified as mere assets. Now that they have been given the name of “reserves” they become the magic wand to materialize even larger amounts of fiat money. This is where the real action is: at the level of commercial banks. Here’s how it works. The banks are permitted by the Fed to hold as little as 10% of their deposits in “reserve.” That means, if they receive deposits of $1million from the first wave of fiat money created by the Fed, they have $900,000 more than they are required to keep on hand ($1million less 10% reserve). In bankers’ language, that $900,000 is called excess reserve.

The word “excess” is a tip-off that these so-called reserves have a special destiny. Now that they have been transmuted into excess, they are considered as available for lending. And so in due course these excess reserves are converted into bank loans.

But wait a minute. How can this money be loaned out when it is owned by the original depositors who are still free to write checks and spend it any time they wish? The answer is that, when the new loans are made, they are not made with the same money at all. They are made with brand new money created out of thin air for that purpose. The nations money supply simply increased by ninety per cent of the bank’s deposits. Furthermore, this new money is far more interesting to the banks than the old. The old money, which they received from depositors, requires them to pay interest or perform services for the privilege of using it. But, with the new money, the banks collect interest, instead, which is not too bad considering it cost them nothing to make. Nor is that the end of the process. When this second wave of fiat money moves into the economy, it comes right back into the banking system, just as the first wave did, in the form of more commercial bank deposits.

The process now repeats but with slightly smaller numbers each time around. What was a “loan” on Friday comes back into the bank as a “deposit” on Monday. The deposit then is reclassified as a “reserve” and ninety per cent of that becomes an “excess” reserve, which, once again, is available for a new “loan.” Thus, the $1million of first wave fiat money gives birth to $900,000 in the second wave, and that gives birth to $810,000 in the third wave ($900,000 less 10% reserve). It takes about twenty-eight times through the revolving door of deposits becoming loans becoming deposits becoming more loans until the process plays itself out to the maximum effect, which is bank fiat money = up to 9 times government.”

To summarize:

United States money (Debt) Creation

Basically, money circulating in the United States was created by the following steps:

1. The government issues a bond (Basically an IOU).

2. This bond is then given to the Federal Reserve.

3. This bond now becomes an asset of the Federal Reserve.

4. The Federal Reserve now issues a check to the congress to enable them to conduct all government business. [The Federal Reserve has just given the government back its own money and now begins to charge the government interest on it!]

5. Congress now deposits this check in the Federal Reserve. [Are you getting dizzy yet?]

6. Congress can now issue checks to its contractors.

7. Government contractors deposit their government checks in their commercial bank accounts.

8. These commercial bank deposits are first a liability because they are the property of the depositor. But they then become an asset by way of a name change.

9. These deposits go through a name change and become a “reserve”.

10. 90% of these “reserves” then become an “excess reserve”.

11. This “excess reserve” becomes the source of all bank loans to corporations and to the public.

12. These corporate and public loans in turn become more bank deposits.

13. These commercial bank deposits start as a liability but become assets by changing their name to “reserves”.

14. 90% of these “reserves” then become an “excess reserve”.

15. Steps 9 to 14 can then be repeated over twenty times before the process plays itself out.

Commenting on this absurd system Thomas Edison said:

"If our nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good also. The difference between the bond and the bill is that the bond lets the money brokers collect twice the amount of the bond and an additional 20 percent, whereas the currency pays nobody but those who contribute directly to production in some useful way. It is absurd to say that our country can issue $30 million in bonds and not $30 million in currency. Both are promises to pay, but one fattens the usurers and the other helps the people. If the currency issued by the Government was no good, then the bonds would be no good either."

And he was right.

In the United States, for every dollar of debt the government creates, the banks can create an additional nine dollars of debt. Don’t let them know down south but we actually have the Americans beat on this craziness scale. You see, whereas the Fed permits the banks to hold as little as 10% of their deposits in reserve, we in Canada do not require our banks to hold any reserve. They have total freedom to create as much debt out of nothing as will benefit them the most.

Don’t believe that our politicians would agree to something that absurd? On page 257 of the Canadian Bank Act, Section 457 (4) states the following:

"On the first day of the first month following the month this section comes into force, the primary reserve referred to in subsection (2) shall be reduced by 3 per cent, and thereafter on the first day of the first month of each of the next three succeeding six month periods, the primary reserve as modified by this subsection shall be reduced by 3 per cent, and on the first day of the twenty-fifth month following the month in which this section comes into force, the primary referred to in subsection (1) shall be NIL."

The Canadian Private Debt Money System

Taken from: http://www.members.shaw.ca/theultimatescam/pdms.htm.

Virtually every country in the world functions (or attempts to) under some variation of the Private Debt Money System (PDMS). To put it simply, under this system, the private banks have been given license to “create” money out of nothing, lend it to individuals, large and small businesses and governments and charge all borrowers interest for the privilege. Banks do not lend out depositors money and they do not lend out their own money (profits). They simply “create” a book entry (deposit), either manually or electronically in the borrowers account for the amount of the loan. Here is how it works.

All money in existence today is created as a debt owed by a borrower to a lender (bank). This money flows into the economy and remains in circulation until it is eventually paid back to the lending institution. However, when the principal is due to be paid back, interest must also be paid back. The flaw in this system is that more money must be paid back than was originally created when the loan was made. As an example, if an individual borrowers $1000 at 10% repayable in one year, the bank creates a “deposit” of $1000 and credits the borrowers account. The borrower then spends the money for his required purpose and thus begins the trail of these “funds” circulating throughout the economy until one year later when it must be paid back.

See original illustration at:

http://www.members.shaw.ca/theultimatescam/pdms.htm

In one year, the borrower must pay back $1000, but he must also pay back another $100 in interest. This means that the total amount of money circulating in the economy is reduced by an additional $100.(All payments of principal and interest are taken out of the economy forever and the only way new money goes back into the economy is when a borrower takes out a new loan.) Because all money is created as a debt, the money circulating in the economy would eventually be reduced to zero as the existing loans are repaid along with the interest owing. In fact, a large number of loans could not be paid back because, as you realize, there is not enough money in existence to repay all the outstanding principal plus the interest owing. Of course, the supply of money is not being reduced to zero because new deposits (money) are being created in the form of new loans (debt) on a daily basis.

To follow the illustration, new money is created by the banks in the form of loans to individuals and governments. The new money flows into the economy (circulating) and eventually is extracted in the form of payments of principal and interest (usury) back to the banks. Because more money must be paid back than was originally created, a shortage of money will constantly exist and that shortage will fluctuate with the amount and rate of flow of new money into and out of the economy. This varying shortage leads to either more borrowing to cover the repayment of interest owed or to the confiscation of the collateral (wealth) pledged to secure the loan(s). This un-payable usury causes debt to grow exponentially causing more of a shortage of money in the economy and the banks come out the winner every time as they confiscate more and more wealth from those who are the true creators….the people.

The banks use the rate of interest and their own lending policies to control the rate of flow of new money into and out of the economy. They can literally control the economy of any country and even the world with this power. With this power, the banks can create economic booms, recessions and even depressions with the stroke of a pen or a simple keyboard entry.

“Whoever controls the volume of money in any country is absolute master of all industry and commerce.” - U.S. President James A. Garfield

A prime example of this is the market crash of 1929 and the resulting depression. Just prior to the market crash, the economy was thriving. However, the banks made drastic changes in their lending policies by refusing new loans to stable and growing businesses. At the same time they demanded payment on existing loans so that money was quickly taken out of circulation and was not replaced. Canada was put in a “depression” and in deep trouble. There were plenty of goods for sale, jobs to be done but very little money. Workers were laid off and the banks took possession of tens of thousands of homes, farms and businesses through foreclosure. This “cycle” of boom and bust continues today through the same monetary manipulation by the private banking industry. A close examination of the past 89 years would show that through all of the recessions, depressions, untold personal and corporate bankruptcies, wars and human suffering, only one industry has consistently shown growth, and phenomenal growth at that…and that is the banking industry. And so they should because if you own the golden goose that lays the golden eggs, you can’t help but accumulate enormous wealth.

“Permit me to issue and control the money of a nation and I care not who makes its laws.” - Mayer Amschel Rothschild

So how did this all start here in Canada?

To begin, we must travel back to 1867, the year Canada “confederated”. Under the new “Constitution”, the British North America Act, the federal parliament had the EXCLUSIVE authority over “currency and coinage” (Section 91.14). That is, the government can set up its own mechanism for providing an adequate supply of money (credit), interest free, for the functioning of the Canadian economy and for the benefit of the people, all without creating debt.

Unfortunately, in 1913, the Federal Parliament literally gave this authority away (unlawfully) to the private banks when the Bank Act was passed into law. (The banking industry had convinced our MP’s that they would put an end to recessions and depressions and guarantee prosperity for everyone.) The federal government legislated away its greatest tool for bringing wealth and prosperity to Canada and all Canadians. What most Canadians do not know is that the federal government has no authority to delegate any of its powers to anyone. The bankers knew very well that this would bring them untold wealth, power and control and, at the same time, financially enslave all levels of government, business and individuals. The bankers were also aware of the fact that a system of servicing this debt had to be put in place. This was accomplished in 1917 when the federal government passed The War Income Tax Act which, was supposed to be temporary. Just long enough to pay off the war debt, which was accomplished in 1924. Of course, we all know it is still around but most don’t understand how it remains legal. This would be the mechanism for the banks to begin building their wealth and drive the people and the country into more and more debt. Tragically, this single act by a Canadian government has brought us to where we are today, trillions of dollars in debt (public and private) and still climbing. In 1914, the interest owing on the federal debt amounted to $1.64 per person. In 1964, it was $50.52 per person and in 1993, it was $1,513.00 per person. According to the Federal government’s own Annual Financial Report for 1999-2000 the debt servicing costs alone on the federal debt take up 27% of the federal budget. Remember, these figures do not include any payment of principal to the approximately $570 billion of federal debt or about $18,400 per person or $73,600 per family of four. (Anybody got some spare cash??)

The 1993 Report of the Auditor General (Section 5.43, exhibit 5.3) shows, graphically, how our federal debt has skyrocketed in comparison to the annual GDP. In that same report (Section 5.41), the Auditor General stated, “From Confederation up to 1991-92, the federal government accumulated a net debt of $423 billion dollars. Of this, $37 billion represents the accumulated shortfall in meeting the cost of government programs since Confederation. The remainder, $386 billion, represents the amount the government has borrowed to service the debt created by previous shortfalls.” In other words, 91% of the debt consisted of interest charges and only 9% represented actual spending on goods and services. This would not have happened if our elected representatives had not given away its exclusive authority to create the nation’s money interest free.

Again, remember that under this type of monetary system, THESE DEBTS CAN NEVER BE PAID OFF!! (See Billions For Bankers - Debts For The People.) It is mathematically impossible!

In order for this monetary system to continue to exist as it is, the ongoing creation of new money (debt) must also continue. Borrowers must be enticed to take out new loans (deposits created by the banks out of nothing) so that the supply of money in the economy remains adequate and the system continues to function. Banks will offer lower interest rates, zero interest grace periods and even cash rebates to lure people to take out new loans for purchases. So, when you see rates as low as they are presently, you can surmise that the amount of money in the economy is being reduced at an increasing rate as old debt is being paid off and the banks are attempting to replace it with new money (loans). At some point, the creation of new money through more borrowing will no longer be possible because people, small and large businesses and governments will no longer be able to finance any more debt because the costs will simply be too high for anyone. We will all realize that these debts cannot ever be paid back. Quite simply, we are heading for a global economic meltdown as this debt money system will ultimately implode!

The only answer to this root cause of most, if not all, of our financial woes is to rescind the Bank Act and the federal parliament reclaim its exclusive authority to create the nation’s money debt free and interest free. A system must be put in place, which will benefit all Canadians and not the private banks. One such system is the Public Credit Money System.

At a public meeting discussing economics, I once heard an economist state, “People do not understand economics.” In general the public is led to believe that economics is quite complicated and that only economists with masters or doctoral degrees can understand it completely. Actually it is quite simple to understand once all the smoke and mirrors have been taken away.

By studying the above steps that are taken in almost all countries in varying degrees one can see that enormous amounts of money (debt) are created out of nothing. And for the use of this money (debt) created from nothing borrowers must pay interest. The banks never lend the interest and because of this there is never enough money in circulation to pay all the debt and all the interest. As borrowers compete with each other for the existing money to pay their debt plus interest, someone must end up unable to do so. The system resembles a giant monopoly game.

The word “monopoly fits this scenario perfectly. And as in every game of monopoly there can be only one winner. We cannot play a game of monopoly and have everyone win. We cannot play the Private Debt Money System and have everyone win. In fact you cannot have 50% of the people win. In the end, whether in monopoly or the Private Debt Money System, only one will win. In the Private Debt Money System every individual, every business, every corporation and every government will eventually lose.

And, within the losing come unemployment, poverty, homelessness, starvation and finally death. These things are built into the system. They are, in an insidious way, assured, mandated and even guaranteed. This is not difficult to understand. It is also not difficult to understand that those who have temporarily amassed large amounts of wealth have contributed to this situation of unemployment, poverty, homelessness, starvation and finally the death of over 35,000 children a day.

If the above is still too complicated to understand, think of the game children play called musical chairs. One day only the banks will have a chair to sit on. Even if you are a CEO of a large corporation you will lose your chair unless you also have one at the bank. It is guaranteed!
The sad part is that people don’t know that whether they earn a daily wage or amass a fortune they contribute to the creation of the poverty that ends with death. We have all been told that with honest effort and dedicated labour we could have an abundant life. But that is mathematically impossible using the Private Debt Money System.

To prove that the above is false, all you have to do is prove the formula for debt results in a positive number. Every dollar circulating within our economy has been borrowed. And every one of these borrowed dollars has an interest charge attached to it. Ask our Federal Finance Minister or our Prime Minister if this is true or not. And ask them how anything but debt can be the result of this system of financing a country’s economy.

Consider this. In 2004 Ralph Klein, the then Premier of Alberta, proudly announced that Alberta would be debt free and that, “Never again will this government or the people of this province have to set aside another tax dollar to pay the debt. Those days are over and they’re over for good.”.

CTV.ca News Staff
Date: Tue. Jul. 13 2004 6:11 AM ET

Premier Ralph Klein says Alberta is the only province in Canada that can now declare itself debt-free.

"I've been dreaming about this day for some time now," Klein told reporters at a pancake breakfast at the Calgary Stampede Monday morning.

"Well, today I'm very, very proud to announce that Alberta has slain its debt," he said.

According the province's calculations, Alberta's final $3 billion in debt is to be paid by March 31, 2005, the end of the fiscal year. And to ensure the debt is paid off, Klein will introduce legislation this fall to declare that money can only be used to pay off the debt.

A decade ago, Alberta's $22.7-billion debt worked out to $8,400 for every man, woman and child in the province. Crediting soaring oil prices, Klein said Albertans should still feel proud of the accomplishment of whittling that down to zero.

"It's mostly due to the hard work of Albertans," the premier said.

"Never again will this government or the people of this province have to set aside another tax dollar to pay the debt," he said. "Those days are over and they're over for good... as far as my government is concerned."

In 2004 the Alberta’s future appeared to be nothing but abundant. Oil prices were at record highs and it seemed that the oil gravy train would just keep chugging along. But then in 2009 things changed and we read:

Alberta issues $500M in bonds

By Trish Audette, edmontonjournal.comOctober 8, 2009

EDMONTON — Alberta borrowed $500 million Wednesday as part of a three-year plan to finance capital projects and ride out a slowed economy.

The province has now made two trips to the open market in less than a month, borrowing $1.1 billion.

Issuing provincial bonds fits in with plans to borrow $3.3 billion over three years, but it’s the first time Alberta has taken on real debt in more than a decade.

Alberta Finance spokeswoman Robyn Cochrane said Wednesday more bonds could be issued this year depending on the borrowing rate.

Bonds issued Sept. 21, worth $600 million, carried a four per cent rate over 10 years, Wednesday’s were issued over a five-year term at 2.75 per cent.

“It’s equivalent to having a mortgage, compared to credit card debt,” Cochrane said. “We’re building things and we have assets.”

Despite an anticipated $7-billion deficit this year, the government has savings in the bank and a triple-A credit rating.

“As the highest-rated province in Canada, it’s fair to say there was tremendous appetite among buyers for the Alberta credit,” said Doug Bartlett, head of government finance for CIBC World Markets Inc.

CIBC was the lead manager on Alberta’s borrowing deal.

Notice how Alberta was able to borrow the necessary funds. Based on Alberta’s natural resources, they issued bonds. Basically Alberta gave the bank the money that the bank then lent back to Alberta. Compare this to the United States money (Debt) Creation found above.

Think on this

“People [private Federal Reserve Corporation stockholders] who will not turn a shovel full of dirt on the project (Muscle Shoals Dam) nor contribute a pound of material, will collect more money [usury] from the United States than will the People who supply all the material and do all the work. This is the terrible thing about interest …But here is the point: If the Nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good also. The difference between the bond and the bill is that the bond lets the money broker collect twice the amount of the bond and an additional 20%. Whereas the currency, the honest sort provided by the Constitution pays nobody but those who contribute in some useful way. It is absurd to say our Country can issue bonds and cannot issue currency. Both are promises to pay, but one [Federal Reserve Notes] fattens the usurer and the other [U.S. Notes] helps the People. If the currency issued by the People were no good, then the bonds would be no good, either. It is a terrible situation when the Government, to insure the National Wealth, must go in debt and submit to ruinous interest charges at the hands of men [International Bankers] who control the fictitious value of gold. Interest is the invention of Satan”.—Thomas A. Edison

Really Think on this.

In Chapter Three below, you will learn of the Provincial Credit System. It may surprise you to learn what the government of Alberta (as well as all the other provinces) could do to obtain any amount of funds they needed.


Chapter Two

The Cause of Poverty and our Present Global Economic Crisis

I’m not usually one to offer challenges, but in this case it seems like the appropriate thing to do; considering children’s lives may be (actually are) at stake. Let me get right to the crux of the matter. There are approximately thirty-five thousand (35,000) children starving to death each day in this wonderful world of abundance we happen to be occupying. And my difficulty seems to be that I know why, [At least, I think I know why.] and nobody’s willing to listen or prove me wrong. It’s not that I haven’t tried to find someone that’s able to show me the error in my thinking. Paul Martin, a past Finance Minister and Prime Minister of Canada declined my offer. Steven Harper has declined my offer in the past, but I’ve given him and our present Finance Minister a second chance. A Notice dated November 6, 2008 was sent to them requesting their response if they noticed any errors in my thinking. They were given thirty days to respond. December 4, 2008 has passed with no response as yet. So my challenge to any and all is to find the error in my thinking and prove me wrong.

There is a great effort throughout the world by many well-meaning people aimed at eliminating poverty and hunger. Entertainers like Bob Geldof and Bono as well as organizations like Make Poverty History encourage people to give so that the hungry can be fed. But still, the number of children starving to death grows. In 1997 there were only about ten thousand (10,000) children starving to death each day. With all the hundreds of millions of dollars (maybe even billions) that have been given to the cause of eliminating hunger so far, humanity has limited that daily number in this year of 2008 to only thirty-five thousand (35,000) a day.

Could it be that more money is not the solution? Could it be that there is no amount of money that could solve this problem? And, could it even be that money is the problem? I will argue that the answer to all three questions is: Yes. To understand how this could be, we first need to understand what our present form of money is.

It is commonly believed that money is an asset. It is not! Each paper note (and the coins as well) that you have ever had in your hand is a record of a debt. It’s basically an IOU that records the amount of the debt. A $5.00 bill is a record of a $5.00 debt owed by someone to the Bank of Canada. If you happen to have one of these notes, and you aren’t the borrower, then it seems to be an asset to you. You can now trade this note for some goods or a service. But no matter where this note travels or into whoever’s hand it may arrive, it is still a debt note. The person, corporation or government that borrowed it must one day repay it to the lender. And while it circulates within our society the borrower must pay the lender a fee for its use. This fee we all know as interest.

I know. You’re all saying, “Well of course. That’s how our economy works.”

To this I say, “Of course that’s how our economy works, and that’s the problem!”

Let me explain. Our economic system is called a Private Debt Money System. A Private Debt Money System is one in which all “money” circulating within a society has been borrowed from a private corporation. Some will argue that the Bank of Canada is not a privately owned corporation. I would argue otherwise but that is not the determining factor to my main argument. The determining factor is the interest charged on the money. If all the money circulating within the Canadian economy has been borrowed from the Bank of Canada, and an interest fee is charged, then more money must be paid back than was originally borrowed.

This formula of money creation MUST result in a debt. It’s not even complicated calculus folks.

It’s simple arithmetic. We all learned this in grade school.

Consider this:

1 Every dollar within our economy has been borrowed directly or indirectly from

the Bank of Canada.

2 All these dollars must be repaid directly or indirectly to the Bank of Canada.

3 Interest must also be paid to the Bank of Canada for the use of this money.

This means that more money must be repaid than was originally borrowed.

One way in and one way out

Money enters our economy in only one way; it is borrowed from the Bank of Canada. A Borrower may go to a chartered bank such as the Bank of Montreal for a loan but the money for the loan ultimately comes from the Bank of Canada. And just as ultimately, all money must be repaid to the Bank of Canada. Think of the Bank of Canada as a big building with a large conveyor belt running out of it. This belt carries one hundred percent of the money entering our economy. There is no other source of money. All money has been borrowed and at the time it is borrowed it is added to the outflow conveyor belt. Once this outflow belt leaves the Bank of Canada it splits into two. The size of these two belts varies depending on the interest rate at that time. For the sake of argument let’s agree that interest is at five percent. In that case one belt would be ninety-five percent as large as the original outflow belt and the other would be five percent the size as the original outflow belt. Both belts together would equal one hundred percent of the original outflow belt. The belt carrying ninety-five percent of the money now carries on into our economy. The smaller five percent belt now leaves the money supply and immediately returns to the Bank of Canada building. This is the first year interest payment being returned to the Bank of Canada.

At the end of every year that the remaining money circulates throughout our economy another Five percent belt is added to return the interest payment to the Bank of Canada. If the average loan is for four years the original loan money will have been reduced to eighty percent by the bank taking their yearly five percent interest payments. Now only eighty percent remains to repay one hundred percent of the loans. But even that is not a true number. Many billions of dollars have been accumulated by the wealthy, those with no loan payment to make. As long as these people hold onto “their money” other people will not be able to repay their loans. Again, it’s simple arithmetic. Somebody must fail the meet his or her payment obligations and bankruptcy is guaranteed.

Once money has entered our economy it is put to many different uses. It is used to pay wages, invest in mutual funds or the stock market, start a business, take a holiday, purchase cars, buy homes, etc. But all this must be done with money that has entered the economy via loans from the Bank of Canada. There is no other source of money. And, because this money is on loan it MUST return to its source. There is one way in and one way out.

The simple question is, “How can one hundred percent of all loans ever be returned when twenty percent is skimmed of the top as interest and the haves and the wealthy hold on to another large percentage of the original loans? The simple answer is, “It can’t.” There is a guaranteed shortfall built into the Private Debt Money System.

Once you understand this you will also realize that there hasn’t been a Finance Minister or a Prime Minister of Canada for the last one hundred years who did not know that debt was a result of this system. And none of them told us. Well maybe some did but we didn’t listen, – Mackenzie King was on of these.

Once a nation parts with the control of its currency and credit, it matters not who makes the nation’s laws. Usury, once in control will wreck any nation. Until the control of the issue of currency and credit is restored to government and recognized as its most sacred responsibility, all talk of the sovereignty of parliament and of democracy is idle and futile.William Lyon Mackenzie King
Prime Minister of Canada, 1921 – 1930, 1935 – 1948

Many have said that under this economic system the interest can never be paid because the money to pay it is never lent. The truth is that the interest is the first thing to be paid. That guarantees that there will never be enough money left to repay the principle of the original loan. This is why banks love mortgages so much. Under the Private Debt Money System poverty is an assured result, poverty, unemployment and homelessness.

Study this system long enough and you’ll also see that inflation too, is a guaranteed result. Inflation lowers the buying power of the existing money supply and increases the amount of new borrowed money needed to buy the now higher priced items. Now part of the newly borrowed money can be used to pay the principle on the old loans, thus giving the appearance of a strong economy. The end result of this continued practice could best be understood by studying the exponential function.

No money is ever created within our society. Producing a product and selling it for a profit does not add one penny to the existing money supply. Investing money and receiving a larger return adds not one penny to the existing money supply. Hiring employees and paying good wages adds not one penny to the existing money supply. All these activities merely rearrange where the existing borrowed money is located. It merely moves from one pocket to another. The final result will always be an over-all debt to the central bank. And this debt the central bank uses to increase its control over our government. Central banks are not concerned with monetary profit. They are debt farmers. Debt is their avenue to control.

Formula for Debt

Based on the above facts it is possible to create a formula that proves that debt is the result of every dollar circulating within our economy and how we, as wage earners contribute to that debt. This formula holds true not only in our country – Canada – but in every country were interest is charged on money. Today that is basically every country in the world.

In creating this formula we need to remember that all money circulation within our economy is borrowed and must be returned to the lender at some specified future date. If this were the only factor involved the result of this transaction would be zero. A loan (or principle) of any amount repaid in full equals zero. If I were to borrow $10.00 from you today and repay you the $10.00 next Friday, I would then owe you nothing. A formula for this were “P" represents the Principle and “D" represents any residual Debt associated with this Loan would look like this:

P - P = D
$10.00 borrowed minus $10.00 repaid = 0

One hundred percent of what was borrowed has been repaid and the result is zero.
Now, if we were to add an interest charge the result must change and that formula would look like this:

P - (P + I) = D

The I in this formula represents the Interest charged. If I borrowed $10.00 from you today and had to repay it with 10% interest next Friday our formula would look like this.

P - (P + I) = D
$10.00 - ($10.00 + $1.00) = D
$10.00 - $11.00 = D
-$1.00 = D
The result is a debt of $1.00

Interest guarantees that a debt will result from any loan were a usury fee is charged. Because every dollar circulating within our economy has been borrowed from a private bank, and every one of these dollars has an interest charge attached to it, a debt must be the result. Our use of a private bank’s money has created all the debt within our society. Our use of a private bank’s money will guarantee our debt increases year by year. The higher the interest the faster the debt increases.

With this formula it is also possibly to calculate the amount of debt we create with the amount of money we earn. Even these dollars have been borrowed by someone and carry an interest charge. Here are some examples.

Example one: Let’s take someone earning just $25,000 per year, when interest is 5%.

P - (P + I) = D
$25,000 - ($25,000 + $1,250) = D
$25,000 - $26,250 = D
- $1,250 = D
The result is a debt of $1,250.

Example two: Let’s take a CEO earning $5,000,000 per year when interest is 5%.

P - (P + I) = D
$5,000,000 - $5,000,000 + $250,000) = D
$5,000,000 - $5,250,000) = D
- $250,000 = D
The result is a debt of $250,000.

Example three: Let’s take someone on welfare receiving $12,000 per year when interest is 5%.

P - (P + I) = D
$12,000 - $12,000 + $600) = D
$12,000 - $12,600 = D
- $600 = D
The result is a debt of $600.

Notice that the interest charged always equals the debt created. Notice also that the more someone earns the more debt that person creates. Remember this the next time you ask your boss for a raise. Prove this wrong if you can. This should be easy for all you bright economists and financial advisers.

It will be argued that there are many businesses and individuals who do manage to repay their loans and the interest on these loans. And that is true. But this can only be accomplished by obtaining some of the money that others have borrowed. This reduces the existing pool of money within our economy and ensures that others will fail to acquire sufficient funds to repay their loan. Keep in mind that 100% of the money circulating within our economy has been borrowed. Removing 5% of that money to pay interest guarantees a 5% shortfall and the inability of some to repay what they borrowed.

How the wealthy contribute to the poverty of others

We are encouraged from a young age to, “Get a good paying Job.” or, “Start a small business that will offer us all the abundance we would like.” Many have followed this advice with positive results. Positive that is, for them. Few wealthy people would believe that in realizing their dream of abundance for themselves, that they inadvertently created poverty for others. I would argue that under our present Private Debt Money System there is no other result possible.

Again, it’s simple arithmetic. Every dollar has been borrowed and every one of these dollars must eventually be repaid. Now let’s say that someone invented a much needed devise and opened a very profitable business selling this devise. Let’s consider for example Bill Gates. Bill may have borrowed some small amount of money to start his business but the need to borrow money in order to maintain his business has far since passed. He has now amassed many billions of dollars that he now claims his sole property. But, each and every dollar that Bill now holds is a borrowed dollar. The bank, whether the Federal Reserve in the United States or the Bank of Canada demand these notes be repaid by those who borrowed them. As long as they remain in Bill’s possession they cannot be returned to the bank, and somebody’s debt goes unpaid.

Whether it’s Bill Gates or someone with five hundred dollars in a savings account, the result is the same. Borrowed money that must be repaid is now removed from circulation. The more money the wealthy hold the less money in circulation to repay the original loans. Keep in mind that the money the wealthy hold is part of the original loan.

We have all been told that we need to “earn” money and by doing so we contribute to the economy. Hearing this one would assume that earning money means adding money to the economy. We don’t add money to the economy by earning money. We merely accumulate money that someone else borrowed. Whether we have an income of $8.00 per hour or $100.00 per hour the story is the same. Whether we have a bank account with a balance of $100.00 or a balance of $100 million, the story is the same. We have just accumulated dollars that someone else borrowed.

Once we fully understand how debt is created we need to demand that our Government take back control of the issuing of our money at no interest and thus no debt. If that does not happen, the number of people living with the experience of poverty is guaranteed to increase. The solution will appear only when countries take back control of their money. Benjamin Franklin knew this. While visiting England in 1763, Benjamin Franklin was asked how he accounted for the prosperous condition of the colonies while England was experiencing a bust. His reply was:

That is simple. It is only because in the colonies we issue our own money. It is called Colonial Scrip – and we issue it in the proper proportion to the demands of trade and industry.

Soon after, that information was brought to the private Bank of England, which coerced the English Parliament to pass a bill providing that no colony could issue its own money. Franklin later said:

Within one year from that date the streets of the colonies were filled with the unemployed.

Franklin later said that this was the direct cause of the revolutionary war.

The colonies would have gladly borne the tax on tea and other matters had it not been that England took away from the colonies their money, which created unemployment and dissatisfaction.

Now that you know how debt is created, in fact, guaranteed, it’s easy to realize that the 850 billion dollar bailout of 2008, even at 1% interest, immediately created an additional debt for the American people of $8,500,000,000. The term “injected” is synonymous with “borrowed”. The US Government first had to “borrow” the money from the Federal Reserve before it could “inject” it into corporate accounts. The insane part is that they first gave that money (in the form of a bond) to the Federal Reserve.

Part Two

An 1865 quote from The London Times.

“If that mischievous financial policy which had its origin in the North American Republic, should become indurate down to a fixture, then that government will furnish its own money without cost. It will pay off its debts and be without debt. It will have all the money necessary to carry on its commerce. It will become prosperous beyond precedent in the history of the civilized governments of the world. The brains and wealth of all countries will go to North America. That government must be destroyed or it will destroy every monarchy on the globe.”

That “mischievous financial policy”, a form of the Public Credit Money System, sure sounds like a great idea today. Let’s talk about it.


Chapter Three

What Could Be

Don’t you think it’s time to stand up and say, “Enough”? Now that you know the truth the ball really is in your court. What’s your next step?

Mine is to encourage people to demand our Government take back control of the issuance of our money with no interest and no debt. This can be done simply by adopting a form of the Public Credit Money System. The following was taken from the Internet.

Alternative Monetary system: Republic of Salt spring Dollar
Robert McGinn bobmcginn@saltspring.com

Thursday, December 27, 2001 7:59 PM

Season’s Greetings to All and a Prosperous 2002: Let me add my 2 cents worth:
I had occasion to write an article for the Monetary Reform Magazine on the Guernsey Monetary System on the Island of Guernsey in the English Channel, just off the French coast. Both Guernsey and Jersey, famous for their dairy cows, are what is called a ‘Bailiwick’ or territory under the authority of a Bailiff or sheriff. This all goes back to the 13th century and before to 1066 and the Norman Conquest.

These islands are semi-independent and are not actually part of the UK and not responsible to parliament. They are directly responsible to the Crown and Privy Council. They do have a defence agreement with the UK.

Back in 1816, they were bankrupt due to the Napoleonic Wars and were in a desperate situation. High unemployment, extremely high debts, poverty, large emigration, no services or public infrastructure and worst of all, the island was being washed into the sea due to the deteriorating dikes and sea walls.

Desperation has a way of broadening one’s vision and the Council decided to strike a committee to look into this situation. The committee reported that there was only one way out and that was to print their own money, hire contractors and repair the sea walls immediately. This was all well and good except that the merchants wanted to know how they were going to get rid of this money if they accepted it. The Council agreed that all taxes could be paid in this currency. Thus, a circular system was created from creation of the bank notes to eventual destruction. This all worked well and all notes were recovered and burned as agreed. In the process, a church, a war monument and some repairs to sea walls and dikes were completed.

Then, in 1822, they once again printed 4500-One Pound notes to construct a covered market building. This was completed and every year 450 notes were burned. At the end of ten years all the notes were gone and the building was debt free at zero interest. This building still stands to this day with two additions all paid for with ‘printed’ money. The Council still owns these buildings and I estimate that they have returned at least $5 million or more in today’s money to the treasury over the past 179 years This profit has, of course, been used to finance other public projects and today Guernsey has a flat income tax of 20% and no other taxes. They are not needed.

The circulation is about 17 million Pounds and this in effect is an ‘interest-free’ loan to the Treasury from the note holders. The benefit to all citizens of Guernsey are very low taxes, excellent public infrastructures and lower prices compared to the UK, which is still paying for the War of Independence against the Americans, plus all other war debts.

This massive public debt, which is totally unnecessary, causes both inflation in prices as the interest must be paid by taxing everything and immense poverty, not to mention vast lost opportunities to create all manner of beautiful public works and infrastructure.

It boggles the mind that the solution to our economic problems is so simple and authorized by our Constitution. In Canada, we are very fortunate to own our central Bank of Canada, which is NOT the case in the US or UK. We could simply issue all the money needed for federal, provincial or municipal public works at whatever interest we decided was reasonable or at zero interest if we were really smart. The interest goes back to the Bank of Canada and is then paid as a dividend to the Federal Treasury at year-end. They do this now on their excess profits. Furthermore, the Bank of Canada could charge a ‘royalty’ on all commercial bank loans of say 0.5%. This ‘royalty’, which is for the privilege of creating money out of nothing, which is how 95% of all ‘money’ is created by the chartered banks, would bring in billions of extra revenues and do away with all manner of idiotic taxes.

The Republic of Salt Spring could do the same. Issue SS Dollars for all manner of public works charge a ‘royalty’ on all commercial loans issued by banks under SS Charter, tax land (not improvements) at say 1% of its assessed value. There would be no need for any income or sales taxes and we could probably issue a ‘national dividend’ to all citizens of any excess revenue.

The State of Alaska does this now with excess oil revenues. Each resident gets US $1,000 - $1,500. The penalty for fraud is severe: jail, total loss of all future dividends and repayment of all past dividends. BUT, some still try it and a few get caught and loose everything.

Needless to say, the banks and the wealthy won’t like it because they ‘print’ the money and run the nation for their own benefit.

Had enough yet?

Best regards,

Baron Fowler

The above letter mentions the fact that, “the Republic of Salt Spring could do the same. Issue SS Dollars…” Well, the Island of Salt Spring has issued SS dollars. Their web site can be found here: http://saltspringdollars.com/ss-in-the-press/. I feel that some explanation regarding this and other “public” financing organisations such as the Alberta Treasury Branches found at: http://www.atb.com/Dev/home/index.asp, is necessary. These and other forms of community or Provincial financial institutions have been sited as examples of a Public Credit Money System or something that “competes” with our Bank of Canada Dollars

The Salt Spring dollar is backed by Bank of Canada dollars. People on Salt Spring Island deposited Bank of Canada dollars into a fund. This fund became the backing for the Salt Spring Island dollars. Salt Spring Island dollars are accepted at chartered financial institutions on the island only because they are backed by Bank of Canada dollars. Alberta Treasury Branches, now known as ATB Financial uses Bank of Canada dollars. All of these Bank of Canada dollars are borrowed dollars and are subject to the same interest charges as any other Bank of Canada dollar. They are thus not a true example of a Public Credit Money System. The Guernsey Monetary System on the Island of Guernsey on the other hand is an example of this monetary system. There, money was printed and spent into circulation with no debt or interest charges attached. Interest is charged on each Bank of Canada dollar that backs the Salt Spring Island dollar. An interest charge is attached to each of the: $23.8 billion deposited with ATB Financial. Interest charges equal debt.

The following is a true example of a Public Credit Money System. It comes from:
http://www.members.shaw.ca/theultimatescam/pcms.htm.

The Solution: The Public Credit Money System

Under The Private Debt Money System, there is a constant shortage of money which causes re-occurring inflation-depression cycles. The Public Credit Money System is designed so that this shortage of money never occurs.

Under the Public Credit Money System, a publicly owned national treasury (Bank of Canada) under the direction and control of the Federal Parliament would have the sovereign and exclusive authority over all money creation in Canada, not the private banks! This is absolutely crucial to putting the brakes on escalating public and private debt and putting wealth back in the hands of the real creators…. the people. As the illustration below shows, the Bank of Canada would create all the nation’s money for their legislatively approved expenditures, interest free. So, instead of paying for a project two or three times over (principal and interest under the present system), the taxpayers would only have to pay for it once. As an example, a one billion dollar expenditure for upgrading the national highway system would only cost one billion dollars, not two or three billion dollars. The federal parliament would authorize the Bank of Canada to “create” one billion dollars and spend it into circulation in the economy for the highway improvements. Once the project is finished, the repayment of the “loan” would be accomplished through some form of taxation or user fee. Once the “loan” is paid off, the tax or fee is abolished, leaving the asset - the new road - free of any debt.

See original illustration at:

http://www.members.shaw.ca/theultimatescam/pcms.htm

Of course, we, as individuals, still do need banks from which to operate in carrying out our daily financial activities. This includes consumer loans to the general public and loans to small and large businesses. Under the PCMS system, the private banks can borrow funds from the Bank of Canada at a set rate of interest for the purpose of re-lending the money to individuals and businesses. The bank's interest rate is then set above the BoC rate in order for the banks to make a reasonable profit.

As we can see, under a Private Debt Money System, there is a constant shortage of money in the debt money sink. The public credit money sink is designed so that this shortage never occurs.
In a Public Credit Money System, the national treasury (a publicly controlled Bank of Canada) is the only source of money creation, not the private banks. Through the elected Parliament, it is the Bank of Canada which is charged with monetary authority; the exclusive authority to create money. The public credit money sink has two faucets and three drains.

This is how it works.

For our example, we will assume that the economy can function on a money supply of $1,000.00. The Bank of Canada exercises its monetary authority and creates $1,000 out of nothing and, in this case, lends it to the private banking system at a rate of 6%. The private banks, in turn, use the money to make loans to businesses and individuals. The banks' interest rate is set above the BoC's rate so that the banks can make a profit. In this example, the banks lend it at 10%. The treasury (BoC) faucet opens and $1,000 flows into the economy (sink) (via the private banks).

At the same time, the government is approving its annual budget for public expenditures and in this example, we will assume the cost for this year's needed, achievable and authorized projects comes to $200. Exercising its monetary authority, the treasury (BoC) creates $200 to pay for its approved expenditures. The treasury's second faucet opens and this $200 of debt free money pours into the economy.

A year passes and the private sector's debt of $1,000 is due for repayment. The principal drain opens up as the people and businesses repay the private banks and the banks repay the treasury. The private banks borrowed the $1,000 at 6% and lent it at 10%. Therefore, the borrowers pay $100 of interest to the private banks (10% of $1,000). The private banks pay $60 of this to the treasury (6% of $1,000). The $60 flows out of the interest drain and disappears - is extinguished. The private banks keep $40, to which are entitled. This $40 that the banks have earned stays in the economy and is not extinguished.

Because $200 of debt-free money came into the economy, it was not necessary to borrow any money to pay the interest due on the $1,000. You see, both this principal ($1,000) and the money to pay the treasury interest on it ($60) flowed into the economy (through the creation processes explained above) and then flowed out again (the amounts were taken out of circulation) when the loan became due.

The third drain is the government's tax drain which is used whenever government expenditures are greater than the amount of money that is extinguished through the interest drain within a given time. In this example, the treasury extinguished $60. of debt-free money when it received the interest payments from the private banks. The banks retained $40 as their profit and to cover their overhead. These two amounts add up to $100.

The government created and spent $200 (debt free) into circulation and so, subtracting the interest the private banks owed and paid the treasury ($60) and the profits retained by the private banks ($40), from the $200 of debt free money issued, we find that there is $100 of excess purchasing power in the economy. In order to keep the system in balance, this excess $100 will have to be removed from the money supply. The simplest way to do this is to tax it out. (a sales tax or gas tax for example) The $100 is gradually collected by the treasury and extinguished (taken out of circulation) Once the money is extinguished, the tax is repealed or reduced in order to maintain a constant balance of purchasing power in the economy. Thus, permanent taxes are not always necessary.

To summarize how the money flowed in and out of the economy;
$1,000 loan from Treasury to Private Banks at 6%

Private Banks charge 10% interest = $100.00
Treasury receives interest (6%) = -60.00
Private Banks keep their earnings = $ 40.00

Approved public expenditures $200.00
Treasury extinguishes $-60.00
Private Banks retain $-40.00
Remaining in circulation $100.00

In order to balance the system, the Treasury must
tax $100.00 out of the economy.

As the economy grows, more money is required to meet the increased demand within the economy. This is done by simply plugging the tax drain and if necessary close off the interest drain a bit. This will allow more money to flow into the economy. The prosperity of the people will grow and the amount of money in the economy will be kept in balance with its demand within the economy and this balance will virtually eliminate any risk inflation.

In a free society where justice and humanity characterize the people's idea of good government, monetary authority must always be the servant of the people and not the reverse as it is today. The monetary authority - that is the national treasury - must make money available for all needed, achievable and duly authorized public services and projects. Equally, the treasury must see to it that money is readily available for all worthy private enterprise. Money for the private sector is made available through: recycling the people's savings within the banking system; bank-borrowing from the treasury; and, as a last resort and in special cases, via direct loans from the treasury to individual business enterprises.

A Public Credit Money System is free from inflation because the money supply is always greater than the amount of debt in the system and all new money is created usury free. Interest rates and government revenues are regulated to keep the flow of interest and taxes in balance with the flow of debt-free public expenditures. Because of this mathematical balance, inflation cannot occur.

There are many benefits under this Public Credit Money System:

1. Money becomes permanently available at reasonable interest rates.

2. Business activity and employment surge forward.

3. Inflation is halted, protecting wages, savings, and those on fixed incomes.

4. Bankruptcies are no longer necessary to balance successes.

5. Private debt is made payable at all times.

6. Prices fall along with debt and stabilize when debt becomes payable.

7.Cycles of boom and bust are eliminated.

8. All existing primary debt, both public and private, diminish and ultimately reach a level below that of the money supply.

9. Federal government borrowing ceases entirely.

10. Federal taxation is drastically reduced immediately.

11. Provincial and local taxes are gradually reduced to less much lower levels.

12. The national debt is reduced and eliminated, never to grow again.

13. Working people at all levels can afford to buy homes and enjoy comfortable and prosperous lives.

14. Constitutional government rises superior to and replaces private monetary authority, power and influence.

15. The present practice of usury by the private banks is eliminated.

16. No more scrambling for reserve funds by the private banks.

As Canadians, each of us is responsible for learning the truth about why we are buried under this mountain of public and private debt. A debt which we will leave to our children to suffer with; a debt which will drive us to a total economic collapse unless we make the necessary changes NOW! Here is a short list of a few of the basic and necessary changes which need to happen.

Basic Elements of a Public Credit Money Bill

A Canadian Treasury (a publicly owned and controlled Bank of Canada) shall be the sole and exclusive source of all original monetary issue.

1 The Bank Act of 1913 and all of its amendments, codes and regulations are repealed. All assets of the private corporation, Bank of Canada, shall be transferred to the Canadian treasury, a publicly owned Bank of Canada.

3 Private banks and other financial institutions are prohibited from creating money or money credits in any form.

4 As designated under the BNA Act of 1867, the Federal Parliament shall have exclusive authority over currency and coinage and the issue of paper money and credit. In addition, the Federal Parliament shall also have exclusive authority to provide and regulate money and money credits for all the requirements of Canada, both public and private.

5 Money and credit needed to pay obligations of the national government shall be spent into circulation debt-free.

6 The BoC shall service the financial needs of the private sector through loans to banks and other private entities.

7 The interest rate charged by the BoC on all loans to the private sector shall be regulated mathematically to withdraw money from circulation at a rate that will maintain a balance with public expenditures. Taxes will be levied only if and when authorized expenditures would call for a BoC interest rate greater than a reasonable statutory ceiling rate.

8 Provincial and municipal levels of government will qualify for interest-free loans direct from the BoC to finance their respective duly authorized and voter approved projects.

9 All legitimate financial obligations in effect when the PCMS Bill becomes law shall remain in force until paid.

10 And most importantly, federal government borrowing is prohibited in all its forms.

It isn’t just the Federal Government that can issue its own money. The Provincial Governments can do the same. The following is an explanation if this little known fact. It was found at: http://www.members.shaw.ca/theultimatescam/provincialcredit.htm. Keep this in mind the next time you hear that our Premier is selling off more of British Columbia. Maybe he doesn’t know of this possibility. Maybe we should tell him. Let’s all email him a copy of this book so that we can be sure he knows.

Provincial Credit System

A second option available to the provinces, failing action by the federal Government, is to set up its own mechanism to provide additional credit to British Columbians based upon the wealth of the province. The BNA Act of 1867, our Constitution, Section 92.3, the province is allowed to "borrow on the sole credit of the Province", that is to say, upon the real wealth of the province. A few short years ago, The World Bank published a report in which they estimated the worth of Canada's natural resources at 2500 trillion dollars! This figure did not include our water resources or the resources of the northern territories. Based upon the size of British Columbia and its known resources, B.C.'s wealth could be conservatively estimated at 150 to 200 trillion dollars; more than enough to make all British Columbians very wealthy. Under the BNA Act of 1867, the provinces or more precisely, the people, hold exclusive authority over their natural resources. Presently, governments borrow from private banks and other sources because these lenders recognize this natural wealth and lend against it. Therefore, there is no doubt that there is actually a provincial credit and the province can certainly establish its own mechanism to use this credit directly, without mortgaging its wealth nor going into debt and paying unnecessary interest charges to individuals or corporations, like the private banks.

What is needed in B.C. as well as the other provinces, because they face the same problem, is a Provincial Public Credit System. A mechanism whereby, the province can provide credit within the province of B.C. for its own legislatively approved expenditures, including health, education, highways, bridges, resource development and other concerns. This credit would be interest free and repaid through taxes or user fees to keep the system in balance. The key here is "interest free". Interest charges amount to a growing, significant expenditure for government, business and individuals. These interest expenditures are absolutely unnecessary!

A prime example as to how this can be utilized, would be mortgages for principal residences in B.C. The province, through a system of "public" banks or credit unions, can issue "credit"(loans) to British Columbians for the purchase of a principal residence within B.C., interest free! The only necessary charge would be a nominal administration fee to monitor and process payments. (We don't need to borrow from the private banks and pay them interest!!) This single action alone would allow every British Columbian to own their own home within a few short years. No more paying for a home 3,4 or 5 times over because of burdensome interest charges levied by private banks. This single act alone would also free up hundred's of millions of dollars for consumers to spend on other goods and services, creating thousands of new jobs and giving the economy an enormous boost. Another example would be resource development. The province, through a Provincial Credit System can advance credit to companies to develop our natural resources. For example, if we needed to increase our natural gas production, the province can provide the credit needed for the private sector to construct the facility. By charging a nominal rate for the use of the Provincial Credit plus a royalty percentage based on production, the province would earn revenues to repay the credit advance and support some of the other needs of the province. In Alaska, the state collects royalties from the producers, who develop their natural resources, and then pass some of this revenue on to each and every citizen of the state in the form of a state dividend. There is no reason why this cannot be done here.

In 1939, the Provincial Government of Alberta under William Aberhart passed a law, which was to provide exactly this. The Alberta Credit House Act was passed with the intention of providing additional credit to Albertans. This is where the network of "Treasury Branches" originated. It was the intention of the Alberta Government to provide interest free credit to Albertans and get away from the debt money system operated by the private banks. Unfortunately, World War II brought about a suspension of this Provincial Credit System and in 1943, William Aberhart died in a car accident. The Act is still on the books but it has never been implemented.

This system would operate similar to the pictorial example of the Public Credit Money Sink. The only difference would be that the province would create credit and issue it within the province to meet our provinces needs and extinguish the advances (loans) as payments came in. The Provincial Credit Office would extend credit for authorized provincial public and private expenditures. Payments would come back in the form of a regular payment schedule (in the case of credit advances to the private sector for development of provincial natural resources) or through taxes and fees for public services to keep the system in balance.

To summarize, governments at all levels, private industry and the public at large are all under financial pressure. We see, on a daily basis, government cutbacks, budget shortfalls, reduction in services, pressure to either raise taxes or find other means to raise revenue and an increasing public debt which cannot ever be paid back under the present debt money system. Businesses either moving out of province or going under, leaving thousands of our citizens unemployed, unions striking for higher wages and benefits, injured workers fighting for support payments which are harder to come by or are reduced. More and more, wives are forced to work to provide a second income in order for families to survive. Husbands are taking on second jobs, part time work or working overtime and weekends just to make ends meet. And on top of all this, personal debt has climbed to an all time high and shows no sign of stopping.

The problems are daunting but not impossible to overcome. But the promises and the remedies offered by past and present governments and politicians will not solve the problems. Provincially, we have the power to make the necessary changes. All that is required is the will to do what must be done. We need to establish our own mechanism for providing credit within the Province. A growing and expanding economy requires a growing and expanding supply of money to meet the needs of society. Under our present system, the banks supply the "money" to meet demand but extract more back in the form of principal and interest payments. This causes the constant shortfall of the money supply in the economy and results in problems such as those referred to above. Under a Provincial Credit System, the supply of "credit" will always be adequate enough to meet the needs of the people and provide for a prosperous future for all of us.
Think on this

“People [private Federal Reserve Corporation stockholders] who will not turn a shovel full of dirt on the project (Muscle Shoals Dam) nor contribute a pound of material, will collect more money [usury] from the United States than will the People who supply all the material and do all the work. This is the terrible thing about interest …But here is the point: If the Nation can issue a dollar bond, it can issue a dollar bill. The element that makes the bond good makes the bill good also. The difference between the bond and the bill is that the bond lets the money broker collect twice the amount of the bond and an additional 20%. Whereas the currency, the honest sort provided by the Constitution pays nobody but those who contribute in some useful way. It is absurd to say our Country can issue bonds and cannot issue currency. Both are promises to pay, but one [Federal Reserve Notes] fattens the usurer and the other [U.S. Notes] helps the People. If the currency issued by the People were no good, then the bonds would be no good, either. It is a terrible situation when the Government, to insure the National Wealth, must go in debt and submit to ruinous interest charges at the hands of men [International Bankers] who control the fictitious value of gold. Interest is the invention of Satan”.—Thomas A. Edison

Really Think on this

If, as Thomas A. Edison said, our government took back control of our money and issued Canadian dollars instead of Canadian Bonds, our Canadian governments (Federal and Provincial) would never operate under a debt. They would simply spend the needed money into our economy. They would do this each time a need was noted. If a hospital was needed our governments would simply spend the necessary funds into our economy by paying architects and contractors to design and build a hospital. Contractors would pay trades people and labourers. All people involved in the construction of the hospital would then spend the money they earned with small businesses in their area. In this way money is dispersed throughout our society. Once the hospital is constructed it would be staffed with the necessary nurses, doctors and other medical staff who’s wages would be paid by the governments. There would no longer be long wait lists for medical services. If wait lists developed it would be a sign that more hospitals are needed. And more would be built.

The same process would be followed with schools. Education would be free to all for we would realise that an educated people signifies the real wealth of a society. Crowded classrooms, overworked and underpaid teachers would be things of the past.

Roads and highways would be kept in pristine condition. Toll roads and bridges would disappear.
Things like homesteading would return. The wealth of the people would take president over the wealth of the corporation. The wealth of Canada would cease being dependant on global events. Canada would become what United States was in the beginning. And the Central Banks would now say of us what they said of United States during their Civil War:

If that mischievous financial policy, which had its origin in the North American Republic should become indurate down to a fixture, then that Government will furnish its own money without cost. It will pay off debts and without debt. It will have all the money necessary to carry on its commerce. It will become prosperous beyond precedent in the history of the civilized governments of the world. The brains and wealth of all countries will go to North America. That government must be destroyed or it will destroy every monarchy on the globe.Printed in The London Times during the Civil War:

This was not Socialism. Abraham Lincoln was not a Socialist and it was his financial policy that the above was written about. The Public Credit Money System in not a system of Socialism. It is a system a society uses to look after itself. We are a society capable of looking after our own finances. We are not children who need to have our allowance controlled by our parents. The question is, “Do you wish to remain a child whose life is under the control of a Central Bank or would you rather take control of your own destiny?”

What inheritance do you wish to leave your children and all those who follow in years to come? They will look back on us and know what decision we made on this matter. They will know whether we were brave and decided to stand on our own two feet or whether we were afraid and bowed to the Central Bankers.

They will know. And you can no longer say that you did not know.

Part Three

First They Came For
…By Reverend Martin Niemoeller…
In Germany,
the Nazis first came for the communists, and I didn’t speak up
because I wasn’t a communist.
Then they came for the Jews, and I didn’t speak up
because I wasn’t a Jew.
Then they came for the trade unionists, and I didn’t speak up
because I wasn’t a trade unionist.
Then they came for the Catholics, but I didn’t speak up
because I was a Protestant.
Then they came for me, and by that time there was no one
left to speak for me.

Reverend Niemoeller, a German Lutheran pastor, was arrested by the Gestapo and sent to Dachau in 1938. The allied forces freed him in 1945.

Maybe it’s time for us all to start to speak – maybe it’s time.


Chapter Four

Constructing a Forum
(An assembly, meeting place, television program, etc., for the discussion of questions of public interest)

So, what now? Shall we talk some more or shall we take some action. It seems to me that we have been talking for hundreds of years. As long as that’s all we do, what changes? What changes is the amount of debt we’re living under. It has increased over the last few hundred years and it is guaranteed to continue to increase as long as we keep talking. My grandfather who purchased a home for his family for $750 can honestly say he did not know the truth behind our economic system. My father who died in the 1960s can honestly say he did not know either and most of our ancestors can say the same thing.

But we can’t. If you have read this far you at least have some awareness of the problem. And you have the tools to find out more and assure yourself that what you have learned is true. If you’re like most of us you have felt the lever of debt. You see without a doubt that it is stronger today than at any other time in your lifetime. You must now realize that it can only get worse. The economy may take on the appearance of improving, but that will be only an appearance.

I am ready for action. Who else is ready? I’m not talking about violent action. I’m talking about taking lessons from those who have gone before us – those who saw injustice and dared to make a stand. Mahatma Ghandi and Martin Luther King Jr. are just two such individuals.

But rest assured that action of a non-violent nature will be necessary. We can know from the past that our governments, both Provincial and Federal will do nothing on their own to change things. The Bank of Canada, if it were a public bank, would change its monetary policies to benefit every Canadian, but it seems that they take their direction from the Bank for International Settlements rather than the people of Canada. There are also many more movements with, as Tony Blair said, “spurious” causes. As I see it none of these can succeed until the monetary issue is solved no matter how honourable they are.

So let me suggest that we talk just a little more. But let our talk be directed towards taking a unified stand. A unified stand aimed at our government taking back control of our money by truly nationalizing the Bank of Canada and taking full control of the issuing of money and the spending of that money into circulation with no debt and no interest charges attached.

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Comments to the author are welcomed.
david.ealing@gmail.com