Oh Canada! Imposing Austerity on the World’s Most Resource-rich Country

Even the world’s most resource-rich country has now been caught in the debt trap.  Its once-proud government programs are being subjected to radical budget cuts—cuts that could have been avoided if the government had not quit borrowing from its own central bank in the 1970s. 

Last week in Ottawa, the Canadian House of Commons passed the federal government’s latest round of budget cuts and austerity measures.  Highlights included chopping 19,200 public sector jobs, cutting federal programs by $5.2 billion per year, and raising the retirement age for millions of Canadians from 65 to 67.  The justification for the cuts was a massive federal debt that is now over C$ 581 billion, or 84% of GDP.

An online budget game furnished by the local newspaper the Globe and Mail gave readers a chance to try to balance the budget themselves.  Possibilities included slashing transfer payments for elderly benefits, retirement programs, health benefits, and education; cutting funding for transportation, national defense, economic development and foreign aid; and raising taxes.  An article on the same page said, “The government, in reality, doesn’t have that many tools at its disposal to close a large budgetary deficit. It can either raise taxes or cut departmental program spending.”

It seems that no gamer, lawmaker or otherwise, was offered the opportunity to toy with the number one line item in the budget: interest to creditors.  A chart on the website of the Department of Finance Canada titled “Where Your Tax Dollar Goes” showed interest payments to be 15% of the budget—more than health care, social security, and other transfer payments combined.  The page was dated 2006 and was last updated in 2008, but the percentages are presumably little different today.

Penny wise, Pound Foolish

Among other cuts in the 2012 budget, the government announced that it would be discontinuing the minting of Canadian pennies, which now cost more than a penny to make.  The government is focusing on the pennies and ignoring the pounds—the massive share of the debt that might be saved by borrowing from the government’s own Bank of Canada.

Between 1939 and 1974, the government actually did borrow from its own central bank.  That made its debt effectively interest-free, since the government owned the bank and got the benefit of the interest.  According to figures supplied by Jack Biddell, a former government accountant, the federal debt remained very low, relatively flat, and quite sustainable during those years.  (See his chart below.)  The government successfully funded major public projects simply on the credit of the nation, including the production of aircraft during and after World War II, education benefits for returning soldiers, family allowances, old age pensions, the Trans-Canada Highway, the St. Lawrence Seaway project, and universal health care for all Canadians.

 

The debt shot up only after 1974.  That was when the Basel Committee was established by the central-bank Governors of the Group of Ten countries of the Bank for International Settlements (BIS), which included Canada.   A key objective of the Committee was to maintain “monetary and financial stability.”  To achieve that goal, the Committee discouraged borrowing from a nation’s own central bank interest-free, and encouraged borrowing instead from private creditors, all in the name of “maintaining the stability of the currency.”

The presumption was that borrowing from a central bank with the power to create money on its books would inflate the money supply and prices.  Borrowing from private creditors, on the other hand, was considered not to be inflationary, since it involved the recycling of pre-existing money.  What the bankers did not reveal, although they had long known it themselves, was that private banks create the money they lend just as public banks do.  The difference is simply that a publicly-owned bank returns the interest to the government and the community, while a privately-owned bank siphons the interest into its capital account, to be re-invested at further interest, progressively drawing money out of the productive economy.

The debt curve that began its exponential rise in 1974 tilted toward the vertical in 1981, when interest rates were raised by the U.S. Federal Reserve to 20%.  At 20% compounded annually, debt doubles in under four years.  Canadian rates went as high as 22% during that period.  Canada has now paid over a trillion Canadian dollars in interest on its federal debt—nearly twice the debt itself.  If it had been borrowing from its own bank all along, it could be not only debt-free but sporting a hefty budget surplus today.  That is true for other countries as well.

The Bankers’ Silent Coup

Why are governments paying private financiers to generate credit they could be issuing themselves, interest-free?   According to Professor Carroll Quigley, Bill Clinton’s mentor at Georgetown University, it was all part of a concerted plan by a clique of international financiers.  He wrote in Tragedy and Hope in 1964:

The powers of financial capitalism had another far-reaching aim, nothing less than to create a world system of financial control in private hands able to dominate the political system of each country and the economy of the world as a whole. This system was to be controlled in a feudalist fashion by the central banks of the world acting in concert, by secret agreements arrived at in frequent private meetings and conferences. The apex of the system was to be the Bank for International Settlements in Basel, Switzerland, a private bank owned and controlled by the world’s central banks which were themselves private corporations.

Each central bank . . . sought to dominate its government by its ability to control Treasury loans, to manipulate foreign exchanges, to influence the level of economic activity in the country, and to influence cooperative politicians by subsequent economic rewards in the business world.

In December 2011, this charge was echoed in a lawsuit filed in Canadian federal court by two Canadians and a Canadian economic think tank.  Constitutional lawyer Rocco Galati filed an action on behalf of William Krehm, Ann Emmett, and COMER (the Committee for Monetary and Economic Reform) to restore the use of the Bank of Canada to its original purpose, including making interest free loans to municipal, provincial and federal governments for “human capital” expenditures (education, health, and other social services) and for infrastructure.  The plaintiffs state that since 1974, the Bank of Canada and Canada’s monetary and financial policy have been dictated by private foreign banks and financial interests led by the BIS, the Financial Stability Forum (FSF) and the International Monetary Fund (IMF), bypassing the sovereign rule of Canada through its Parliament.

Today this silent coup has been so well obscured that governments and gamers alike are convinced that the only alternatives for addressing the debt crisis are to raise taxes, slash services, or sell off public assets.  We have forgotten that there is another option: cut the debt by borrowing from the government’s own bank, which returns its profits to public coffers.  Cutting out interest has been shown to reduce the average cost of public projects by about 40%.

Game over: we win.

________________________

Ellen Brown is an attorney and president of the Public Banking Institute, http://PublicBankingInstitute.org.  In Web of Debt, her latest of eleven books, she shows how a private cartel has usurped the power to create money from the people themselves, and how we the people can get it back. Her websites are http://WebofDebt.com and http://EllenBrown.com.  The Public Banking Institute’s first conference is April 26th-28th in Philadelphia.

84 Responses

  1. if we talk about canada it seems that we belong to the system of debt:).
    and we are directly linked to us market :))

  2. Where do we get updates on Galati’s case or otherwise when can we expect to know the outcome?

  3. Tell me how all of these debt ridden nations who hawk oil are going to generate enough revenues when the all electric car is brought on line.

    The repression of this technology for over 100 years has the internal combustion engine morphing into the ” ETERNAL COMBUSTION ENGINE”. Go ahead and look under the hood, everything in the world has changed except this last hold out of the sick brains running the perto/dollar central banking scam. In order to keep this largest cash monster in the world alive, they will kill your mother, commit nations to war, torture babies. loot national treasuries, bail out their partners and feed you a shit sandwich till the end of time

    Austerity is nothing compared to what they have done , they are doing now and will do in the future to keep the game the same.

    To get the snapshot of this disease and cure follow the link;

    http:www.zerohedge.com/print/365866

    We need oil like we need cancer.

    We need corrupted central banks like we need syphilis and aids.

    • With cold fusion technology, all that would be need to supply power to large city like los angeles is a bit of palladium the size of a thumbnail and a pickup truck full of heavy water, tritium. Imagine the scale of savings that would ripple through every facet of the national and global economies! But no, it’s better for us to have manufactured scarity and debt according to the experts.

  4. WOW!!!
    Please, read “Great News,Zero Income Taxes Solves Worldwide Economic Crisis” by justaluckyfool.wordpress.com.
    CHALLENGE IT.CHANGE IT FOR THE BETTER.POST IT !
    WHERE AMERICA WENT WRONG:
    It allows private banks to print our currency and charge us interest.
    HOW WE CAN FIX IT :
    End fractional reserve banking,go to 100% reserve.
    Become the direct lender of our own currency and charge interest instead of income taxes!

  5. Austerity and privatization. Here is why the suffering won’t stop. We hear this over and over again, throughout the states, and the world. Is this part of some sinister plan by the muppeteers who are not only pulling our strings, – but yanking our chains. For we are in chains, and are slaves.

    Why are governments paying PRIVATE FINANCIERS to generate credit when THEY could be issuing it themselves, INTEREST-FREE? Here is the answer. A plan has indeed been concocted. …”a concerted financial plan by a clique of international financiers…”

    But the powers of financial capitalism weren’t content to control just a few countries. They apparently had more “far-reaching aims”. Today, the U.S. and Canada. Tomorrow, the world.

    What more could they get their paws on? Perhaps “financial control in private hands able to dominate the political system of each country and the economy of the world as a whole”. would appeal more to their omnivorous appetites. They must have a feudalistic system no less, to be controlled by the CENTRAL BANKS OF THE WORLD acting together, by secret agreements a plan arrived at… in frequent private meetings and conferences. And the heart of this serf-based system, although they really have NO HEART AT ALL, was supposed to be the Bank for International Settlements in Basel, Switzerland, a PRIVATE OWNED and CONTROLLED world central bank, a behemoth private corporation?

    Oh. I’m simply outraged. No, not Canada. I thought they were way smarter than we dimwit muppets in the U.S What? They fell for the same bullcr#p we did? I thought the Canadians were way above this.

  6. Not a single word on who these private bankers, who control these central banks, are. Let’s see, could one of them be Queen Elizabeth who’s mug shot is on Canada’s money? How about the Rothschilds, Rockerfellars, Queen Beatrix of Holland, maybe the Harimans, Warburgs, and a few others, you know, those guys and gals who control the Federal Reserve in the US. I wonder why these guys and gals always choose a Jew as the chairman of the Federal Reserve? Must be because the rest of us are too stupid to figure out the complexities of money. Well boys and girls, what do you think we should do about this situation, beside work until death do us part with these banksters?

    • Ha ha. I like your comment. Perhaps we all need to wear an OY VEY badge like the one Sheldon proudly displays.

  7. I thought Canada had a fiat money system. Apparently not. With a fiat money system, the sovereign government has the power to create and issue its own money. That means that any national debt, like in the US, to the Federal Reserve Bank, can be cleared by the Secretary of Treasury issuing a $10 Trillion platinum coin and depositing several of them at the Fed. The the Fed credits the account (because the coin is legal tender) with Federal Reserve Dollars and the Treasury then redeems all the securities with FR dollars drawn from the account. The money never enters into circulation but is simply a bank transfer between accounts at the Fed. So it is not inflationary.

    We should go to war against any who would take away our right to fiat money.

  8. Ellen, are you yet allied with the Modern Monetary Theorists like
    Scott Fullwiler, L. Randall Wray, Cullen Roche, Pavlina Tcherneva
    James Galbraith (son)? They advocate a theory of fiat money that conforms to what our monetary system is now. I first learned about fiat money from your Web of Debt book. The $10 Trillion platinum coin is Scott Fullwiler’s idea and several others. I have seen the law governing the platinum coin option and it is real. Getting the President to see it and understand that it is not just a joke but a radical yet legal solution to our money problems with “borrowing” money with Treasury securities ending up at the Fed. Suppose we deposit 100 $10 Trillion
    platinum coins at the Fed. Get credit in the account for $1000 Trillion dollars in Federal Reserve notes, and continue in the future to draw from that account, after first redeeming the national debt, and then fund future deficits with money from the account. Of course, we will have the risk of inflation, and we will need to use taxes, bond sales, encouragement of imports to get money out of circulation and dampen the inflation. But mild inflation is no problem, and it encourages the economy to grow. We should continue floating the dollar to prevent any manipulation of our currency.

    BTW, the reference to the law on issuing platinum coins is to US Code
    Title 31, Subtitle IV, Chapter 51, Subchapter II >§5112 (k)

    (k) The Secretary may mint and issue platinum bullion coins and proof platinum coins in accordance with such specifications, designs, varieties, quantities, denominations, and inscriptions as the Secretary, in the Secretary’s discretion, may prescribe from time to time.

    The Fed cannot refuse the deposit, because the Secy of Treasury has overriding power at the Fed.

    • He may have power over the Fed in theory. Not in practice. Just look up Treasury secretaries and Goldman Sachs and cross check with Federal Reserve players. They are all in the same club and the world will be a better place when we all agree that they are.

  9. I should add that I’m not a fan of Adelman, lest anyone freak out – I just really like his badge.

  10. Save your pennies. Get rid of all debt (if possible). Wait for the revolution to clean house although I doubt it will ever come.

  11. Looking at things in the grossest, coarsest manner, it just does not matter whether a government like Canada issues “debt” (raises interest rates) or “borrows from its central bank” (lowers rates). What is important is that it can borrow, not that it does borrow. Or even more, that its debt, its borrowing can be used to pay for taxes, debts going the other way. Focusing on bonds, on debt, on finance, on central banking this way misses the point, misses the real robbery. It’s thinking that whose picture is on the currency matters to the economy, it’s rearranging deck chairs on the Titanic.

    If it had been borrowing from its own bank all along, it could be not only debt-free but sporting a hefty budget surplus today. This is the key observation, but not presented correctly. Government budget surpluses are BAD, government deficits are GOOD. The point is not that the Canadian debt has gone up, but who has gotten it. The wealth bond-holders. They’ve been getting all the lovely debt, the deficit spending.

    The real economy, ordinary people, have been getting – good and hard – the “hefty budget surpluses” which would exist if not for the interest payments which are keeping the economy on life support through trickle down from the rich. The “hefty budget surpluses” mean the real economy is being run on austerity, on overtaxing ordinary people. Without the trickle down debt, these budget surpluses would have wrecked the Canadian economy long ago. The #1 thing is to get rid of these implicit surpluses, the money being sucked out of the real economy, out of ordinary people’s hands. Then worry about bonds & debts and banking and secondary matters.

  12. Crazy Canadians…. In the U.S. Ron Paul and his establishement buddies has told us the best way to eliminate debt is to eliminate the poor. That’s right, get rid of all entitlements and all those food stamp hedge funds and off shore private medicaid cartels will not be able to siphon and speculate our hard earned compound interest fiat away. The poor are just a bunch of scheming socialists trying to overthow democracy and take all our our constitutional freedoms away…

    Still2012.com ,

    • Thaaat’s so funny!

      • Thanks. 🙂

        It just goes to show you how badly the public’s critical faculties can be put to sleep by someone’s kindly, paternal demeanor and vacuous mantra’s to “end the fed”, “end foreign wars” and such. People forget that the most insidious and deadly wars are waged economically; and that just as many, if not more, americans will suffer and die as a result of his free market austerity than foreigners will in any neo con warmongering.

        • I don’t see anything vacuous in “end the Fed” or “end foreign wars.” Pretty good mantras.

          • Ron Paul thinks that by ending the Fed without setting up a national bank and currency will solve our debt problems. We will still have to borrow money from private bank(s) and this will be just more of the same — except with a vengence under a commodity backed currency. It’s phony solution to a real problem.

            I like his foreign policy too, but only meant to state that wars are economic too. He stated as much many times in his opposition to embargoes against Iran. So how can he not care about the austerity “embargo” against the american people with his Restore American program? what’s his plan for the millions he cuts off of vital food and medical care abruptly? Go find a charity is his answer.

            • Ron Paul wants to end the Fed and, more importantly, get rid of legal tender laws and the Federal Reserve monopoly that everyone in the U.S. and much of the world is beholden to. Look up “Free Competition in Currency Act of 2011” and you will get a better idea of exactly where Ron Paul is coming from. Competitive currencies would drive down the cost of money because that is what real competition generally does and the biggest impediment to that competition in the financial, monetary and many other sectors is the Government. The best of both worlds would be to have the Government competing with the private sector creating the greatest amount of choice possible due to the innovation inherent in the private sector and the non profit and stringent oversight aspects of Government. Those two sectors, public and private, competing would be the best of both worlds with Government driving down cost due to being non profit and the private sector competing with the Government by increasing efficiency through innovation and entrepreneurship. Based on that view I think Ron Paul has a good grasp on creating a more beneficial environment for the average person, though, it is not the only way and what Ellen proposes would also be a step in the right direction. I find both acceptable and better than the dysfunctional system we are saddled with now but the greatest choice possible, such as what is proposed by Ron Paul, would be the better outcome in my view due to the fact it affords the greatest freedom of choice.

  13. […] Oh Canada! Imposing Austerity on the World’s Most Resource-rich Country (webofdebt.wordpress.com) […]

  14. It’s a show,nothing is going to change RE;
    (1) electronic voting NO RECORD
    (2) $ all sides controled doesn’t matter who wins
    (3) power will willingly give it up f/people they don’t give a shit about

    There is only one way to get the power back,& allmost all sheeple
    will not have the stomach for it.

  15. Great article! Keep up the good work, Ellen!

  16. I read Orwells 1984 some time ago. It occured to me that though Orwell was decrying communism he was also making a case against late stage “capitalism”. which today has very little capital, but lots of debt and credit, which are just accounting entries created by the magic of ether currency.

    Trapped economies with feudalist bankers. False flag attacks, War without end. Quigley and Orwell nailed it.

  17. While I respect an opposing view, I highly recommend you spend more time learning and understanding the issues surrounding the abuse of a fiat currency system before you write a book and spread poorly thought out these kind of ideas. The crux of your idea suggests simply inflating away our debt problems – real original. There are a number of missing items in this highly selective argument that are worth mentioning, for one, Canada has the longest standing free trading currency in the developed world as we broke free of Bretton Woods very early in the game. This has enabled us to learn how to manage a free floating currency under very different circumstances and has positioned us as leaders in understanding how to ensure ‘good government’ principles in our currency and economy (which includes inflation management). Further, do you realize what the penny issue is about? Seigniorage revenue, plain and simple (something the Weimar Republic and China in the 11th century as examples). By the way its the Royal Mint that makes coins, not the Bank of Canada, you might want to look at that too.

    • You might want also to consider the possibility that you don’t know or understand the issues as well as you think. Ellen Brown’s book Web of Debt is a good place to start.

  18. […] Web of Debt Blog: Oh Canada! Imposing Austerity on the World’s Most Resource-Rich Country […]

  19. “if the government had not quit borrowing from its own central bank in the 1970s. ” I am not sure what the basis for this assertion is. Ever since the Bank of Canada was created, the Canadian government has borrowed from both the private sector (individuals. financial institutions, pension plans, and foreigners) and the Bank of Canada. It still borrows from the private sector and from the Bank of Canada. It never quit. The federal government currently owes the Bank of Canada over $60 billion. Check out page 3 at the most recent issue of the Bank of Canada’s weekly financial statistics.
    http://www.bankofcanada.ca/publications-research/periodicals/wfs/

  20. Factcheck: The “quit borrowing from its own central bank” is the removal of interest rate ceilings. (Putting aside the fact that a government “borrowing” from its central bank, or selling bonds for its currency is NOT borrowing from the bank or the private sector. The same word “borrowing” just happens to be used for a completely different transaction from private lending.)

    What Ellen means is the central bank ceased to systematically buy bonds from the state, which kept bond prices high / interest rates low. In effect, the state stopped spending by “printing money” (mostly) and now spent by “printing bonds” (mostly). Although centuries of evidence and simple logical argument unequivocally shows that for a given level of spending, “printing money” tends to be less inflationary than “borrowing”/ selling/printing bonds, mainstream quackonomics, like the Basel Committee’s recommendation, holds the reverse. The crazy belief that “borrowing” must fight inflation has become particularly widespread, rising to the level of an axiom so unchallenged it is hardly ever stated or noticed.

    In other words, the Canadian economic machine has been kept going, since the 70s-80s, very poorly in comparison to before, by massive welfare for the rich, massive trickle down injections of money, massive Robin-Hood-In-Reverse. My previous post, which I don’t think others understood, was not disagreeing with Ellen. It was that even worse than this massive welfare for the rich was the massive theft, the austerity, the taxation bleeding the 99% & the productive economy that would cause the “sporting a hefty budget surplus today” if not for this welfare-for-the-rich. The worst part of Robin-Hood-In-Reverse is the stealing from the poor, not the giving to the rich.

    • Calgacus: what do you mean by “removal of interest rate ceilings”? Can you point to any law or policy enacted in the 1970s that removed any ceilings related to interest on government debt? Can you show with actual data that the central bank ceased to systematically buy bonds from the state? The bank of Canada publishes this data. It is also reported by Statistics Canada. To start you off, the attached link shows government bonds and t bills held by the Bank of Canada by month since 1953. There are fluctuations in levels, but at no time did the Bank of Canada cease or even significantly alter its practice of buying bonds from the state. http://www5.statcan.gc.ca/cansim/a26

  21. Frankly, I’m more familiar with the US experience, the Fed-Treasury accord of 1951, or Australia’s tap system & its abandonment. The same story at different times. But Ellen’s “Canadian rates went as high as 22% during that period” and her references are all the data you need to point to, know or look up.

    A government & its central Bank can set interest rates wherever they want. It can keep them low. It didn’t. Making them as high as 22%, not having the central bank “QE” them down after the government pushed them up by the absurd practice of matching deficts with bond debt, is massive welfare for the rich & inevitably leads to debt-explosion and very likely to inflation.

    • Of course Canadian short term rates went as high as 22% in the early 1980s. I never disputed that part of Ellen Brown’s article. That is not the same thing as “removed interest rate ceilings”. Yes, the Bank of Canada could have kept interest rates lower in the early 1980s
      If you have any I would still like to see any evidence you have that “the central bank ceased to systematically buy bonds from the state” or that “the government quit borrowing from its own central bank in the 1970s. ”
      The Statistics Canada link in my previous post should have been http://www5.statcan.gc.ca/cansim/pick-choisir?lang=eng&p2=33&id=1760010#customizeTab

      • That is not the same thing as “removed interest rate ceilings”. Yes, it is. Who cares about official policies? Statements of which surely exist, and which Ellen gives clues to find. What counts is what actually happens & happened, not the formal policy. The insanely high interest rates were a decision of the Bank of Canada back then for massive welfare for the rich, combined with massive austerity for the poor.

  22. […] Comments factcheck on Oh Canada! Imposing Austerity on the World’s Most Resource-rich CountryCalgacus on Oh Canada! Imposing Austerity on the World’s Most Resource-rich CountryFactcheck […]

  23. […] Rather than ratifying the draconian ESM treaty, Europeans would be better advised to reverse article 123 of the Lisbon treaty.  Then the ECB could issue credit directly to its member governments.  Alternatively, Eurozone governments could re-establish their economic sovereignty by reviving their publicly-owned central banks and using them to issue the credit of the nation for the benefit of the nation, effectively interest-free.  This is not a new idea but has been used historically to very good effect, e.g. in Australia through the Commonwealth Bank of Australiaand in Canada through the Bank of Canada. […]

  24. […] Rather than ratifying the draconian ESM treaty, Europeans would be better advised to reverse article 123 of the Lisbon treaty.  Then the ECB could issue credit directly to its member governments.  Alternatively, Eurozone governments could re-establish their economic sovereignty by reviving their publicly-owned central banks and using them to issue the credit of the nation for the benefit of the nation, effectively interest-free.  This is not a new idea but has been used historically to very good effect, e.g. in Australia through the Commonwealth Bank of Australia and in Canada through the Bank of Canada. […]

  25. […] Rather than ratifying the draconian ESM treaty, Europeans would be better advised to reverse article 123 of the Lisbon treaty.  Then the ECB could issue credit directly to its member governments.  Alternatively, Eurozone governments could re-establish their economic sovereignty by reviving their publicly-owned central banks and using them to issue the credit of the nation for the benefit of the nation, effectively interest-free.  This is not a new idea but has been used historically to very good effect, e.g. in Australia through the Commonwealth Bank of Australia and in Canada through the Bank of Canada. […]

  26. […] Rather than ratifying the draconian ESM treaty, Europeans would be better advised to reverse article 123 of the Lisbon treaty.  Then the ECB could issue credit directly to its member governments.  Alternatively, Eurozone governments could re-establish their economic sovereignty by reviving their publicly-owned central banks and using them to issue the credit of the nation for the benefit of the nation, effectively interest-free.  This is not a new idea but has been used historically to very good effect, e.g. in Australia through the Commonwealth Bank of Australia and in Canada through the Bank of Canada.  […]

  27. […] Rather than ratifying the draconian ESM treaty, Europeans would be better advised to reverse article 123 of the Lisbon treaty.  Then the ECB could issue credit directly to its member governments.  Alternatively, Eurozone governments could re-establish their economic sovereignty by reviving their publicly-owned central banks and using them to issue the credit of the nation for the benefit of the nation, effectively interest-free.  This is not a new idea but has been used historically to very good effect, e.g. in Australia through the Commonwealth Bank of Australia and in Canada through the Bank of Canada. […]

  28. […] to very good effect, e.g. in Australia through the Commonwealth Bank of Australia and in Canada through the Bank of Canada.Today the issuance of money and credit has become the private right of vampire rentiers, who are […]

  29. […] Goldman Sachs and the financial technocrats have taken over the European ship.  Democracy has gone out the window, all in the name of keeping the central bank independent from the “abuses” of government.  Yet the government is the people—or it should be.  A democratically elected government represents the people.  Europeans are being hoodwinked into relinquishing their cherished democracy to a rogue band of financial pirates, and the rest of the world is not far behind. Rather than ratifying the draconian ESM treaty, Europeans would be better advised to reverse article 123 of the Lisbon treaty.  Then the ECB could issue credit directly to its member governments.  Alternatively, Eurozone governments could re-establish their economic sovereignty by reviving their publicly-owned central banks and using them to issue the credit of the nation for the benefit of the nation, effectively interest-free.  This is not a new idea but has been used historically to very good effect, e.g. in Australia through the Commonwealth Bank of Australiaand in Canada through the Bank of Canada. […]

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