To see Part One visit:
http://formulafordebt.blogspot.com/2010/12/bond-is-simply-promise-to-pay.html
There is a point here that I hope readers of Part One of this post noticed. Under our present economic system neither chartered financial institutions (local Banks and Credit Unions) nor the Bank of Canada has any money to lend. They need no money because they use the money you have promised to pay them at some specified future date.
Let's look at how this insane scenario works from our Federal Government's point of view.
- Let's say that the Federal Government sees the need for a new highway and this highway will cost 500 million dollars to build.
- Based on this need the Federal Government goes to a Bank that has no money and applies for a loan of five hundred million dollars ($500,000,000) at five percent (5%) interest for one year. Remember the application is the same as a promise to pay and the same as a bond.
- Because the Bank doesn't have $500,000,000 to lend it goes to the Bank of Canada and says, "The Federal Government will pay us $500,000,000 plus twenty five million dollars ($25,000,000) interest in one year if we will lend it $500,000,000. As you know, we don't have any money. We also know you don't have any money but will keep that knowledge to ourselves. But you do have the right to print money. If you agree to print $500,000,000 and let us use it for one year we will agree to split the $25,000,000 the Federal Government will pay in interest."
- The Bank of Canada, in considering this offer, knows, a) that only about 10% of the $500,000,000 will actually ever appear as physical notes; the rest will just be computer entries transferred from one account to another, b) that the number of notes needed to have 10%, or $50,000,000 in circulation will be about three million notes, c) that the cost of printing each note for this loan will be about four cents (0.04) and d) that the total cost to the Bank of Canada to print $50,000,000 will be 3 million notes times four cents, or one hundred twenty thousand dollars ($120,000). Based on these considerations the Bank of Canada agrees to "sell" the Chartered Bank $500,000,000 for one year at only three percent (3%) interest, or fifteen million dollars ($15,000,000).
- In one year when the Government repays the loan plus interest ($525,000,000) to the Chartered Bank it returns the promise to pay that was used to create the value behind the loan.
- The Chartered Bank now deposits $10,000,000 into its own account and returns $515,000,000 to the Bank of Canada.
- When the Bank of Canada receives the $515.000.000 from the Chartered Bank it deposits $15,000,000 into its own account and destroys the original $500,000,000.
On top of this, the Government was forced to collect $525,000,000 in taxes to repay this loan in one year. But maybe I'm being too harsh here. Both Banks are, after all, more than willing to bend over backwards if the Government fails to meet its obligation. All they will ever require is that compound interest be applied to the remaining balance.
I've heard of people getting shafted but never to this degree. Do you see what happens? Do you really see what happens? Two entities with no money get to split $25,000,000 and all that happened was a printing press ran for a few hours!! If you and a friend set up a scheme like this you would both be charged with fraud. But private banks do this and they become honoured members of our society.
The following is from section 5.41 of the Auditor General’s 1993 report.
“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
From 1867 to 1992 Canada borrowed 37 million dollars from private banks. The compound interest on this amount has added 386 million dollars to the original 37 million dollars. So in 1993 Canada owed 423 million dollars. And the interest on this debt, in 1991-92 was, 41 million dollars! Canada now pays more interest per year than was originally borrowed!!
If you want to know what our federal debt is at any given moment check out: http://www.debtclock.ca/.
As of 5:18 pm on December 5, 2010 this clock read, $550,038,968,000.00. It is necessary, it is important, it is essential, that you understand that all the banks did was print maybe 5 billion dollars of the maybe 50 billion Canada borrowed. The other 45 billion entered the economy as a computer entry and left the same way. The rest or 500 billion dollars of this debt is the compounded interest the Government was charged for the money it "borrowed".
It's a fraud folks. Banks do not lend money. They don't have any. Banks merely print what someone wants to borrow. If you don't believe me listen to what the bankers themselves tell you.
There are those who have been able to figure this banking and corporate scam out much better than I. They say that there is a remedy for us hidden in the Bills of Exchange Act and if we learn these remedies we need never worry about bills in the mail or money again. They may be right but there is a problem here as I see it. Whose money do you use to live? In Canada there is only one form of money; that which is printed by the Bank of Canada. Use a private bank's money and you create a debt that can never go away. It may seem to go away at times but that's only because it got transferred to another country when it purchased our natural resources. Study: http://formulafordebt.blogspot.com/2010/11/formula-for-debt_09.html. We can play the game and be able to avoid taxes but someone will suffer from the debt we create as we use the money of a private bank. As I see it, we cannot win until we all win.
In the beginning what is written here may seem impossible to understand. However, understanding will come as long as you don't give up. And when understanding finally comes, you will be amazed how something so simple and easy to understand, had avoided your grasp for so long.
So many are depending on our understanding how debt is continually created by our use of a private bank's money. Some of these are children who will never get the chance to grow old because of the poverty they live in today. We need to understand the part we play in the creation of their poverty. The system is corrupt and it must be abolished.
As of 5:18 pm on December 5, 2010 this clock read, $550,038,968,000.00. It is necessary, it is important, it is essential, that you understand that all the banks did was print maybe 5 billion dollars of the maybe 50 billion Canada borrowed. The other 45 billion entered the economy as a computer entry and left the same way. The rest or 500 billion dollars of this debt is the compounded interest the Government was charged for the money it "borrowed".
As an aside here, 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.
It's a fraud folks. Banks do not lend money. They don't have any. Banks merely print what someone wants to borrow. If you don't believe me listen to what the bankers themselves tell you.
"The modern banking system manufactures money out of nothing. The process is perhaps the most astounding piece of sleight of hand that was ever invented. Banking was conceived in iniquity and born in sin. Bankers own the earth. Take it away from them, but leave them the power to create money and control credit, and with the flick of a pen, they will create enough money to buy it back again. Take this great power away from the bankers and all the great fortunes like mine will disappear, and they ought to disappear, for this would be a better and happier world to live in. But if you want to continue the slaves of bankers and pay the cost of your own slavery, let them continue to create money and to control credit."
Sir Josiah Stamp: Director and President of the Bank of England during the 1920's and reputed to be the second richest man in England.
I guess the question is, "Do you want to remain the slaves of bankers and pay the cost of your own slavery?" I for one do not. I write this blog because I am tired of slavery. I write this blog so that my daughter and grand children don't live the rest of their lives in slavery. How many of you feel the same?There are those who have been able to figure this banking and corporate scam out much better than I. They say that there is a remedy for us hidden in the Bills of Exchange Act and if we learn these remedies we need never worry about bills in the mail or money again. They may be right but there is a problem here as I see it. Whose money do you use to live? In Canada there is only one form of money; that which is printed by the Bank of Canada. Use a private bank's money and you create a debt that can never go away. It may seem to go away at times but that's only because it got transferred to another country when it purchased our natural resources. Study: http://formulafordebt.blogspot.com/2010/11/formula-for-debt_09.html. We can play the game and be able to avoid taxes but someone will suffer from the debt we create as we use the money of a private bank. As I see it, we cannot win until we all win.
In the beginning what is written here may seem impossible to understand. However, understanding will come as long as you don't give up. And when understanding finally comes, you will be amazed how something so simple and easy to understand, had avoided your grasp for so long.
So many are depending on our understanding how debt is continually created by our use of a private bank's money. Some of these are children who will never get the chance to grow old because of the poverty they live in today. We need to understand the part we play in the creation of their poverty. The system is corrupt and it must be abolished.
~~~~~~~~~~~~~~~~~~~~~~~~~~~~~~
Comments to the author are welcomed.
