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I would like, at this point, to emphasize the last line of the above quotation: "THUS PROVIDING THE BANKS WITH THE MEANS OF INCREASING THEIR LEGAL TENDER CASH RESERVE AT WILL."
This is a most astounding statement. What it says is that the banks can create their own reserves, and then issue BANK CREDIT MONEY against these reserves that they themselves have created. In other words, they now need no gold, no silver, not even paper money, but all they need are government securities (bonds) as reserve for CREDIT MONEY and furthermore, they can buy these reserves (bonds) with the CREDIT MONEY that they have created. Did someone once say you can't get something for nothing? Let him investigate our monetary system and I am sure he will change his mind!
WE BORROW IT AND PAY THEM INTEREST
We shall start with the need for money. The Federal Government, having spent more than it has taken from its citizens in taxes, needs, for the sake of illustration, $1,000,000,000 (1 BILLION DOLLARS). Since it does not have the money, because it has given away its authority to "create" it, the Government must go to the "creators" for the $1 billion. But, a private banking corporation doesn't just give its money away! The Bankers are willing to deliver $1,000,000,000 in money or credit to the Federal Government in exchange for the Government's agreement to pay it back - with interest! The government authorizes the Treasury Department to print $1,000,000,000 in Canadian bonds which are then delivered to the BANK OF CANADA. The BANK OF CANADA sells the BONDS to the privately owned banks. The privately owned banks pay for the bonds by creating a bank deposit of $1 billion on behalf of the federal government. This means that the private banks have created a billion dollars that did not exist before. This creation cost the private banks nothing except the cost of cancelling out the government cheques as the government spends the deposit by writing cheques against it. The private banks now own the billion dollars worth of bonds and at the present rate of 10 1/2% the FEDERAL GOVERNMENT TAXES THE PEOPLE OF CANADA year after year to pay the interest. The federal government has to date piled up a mountainous debt of $519,845,000,000 and the interest on this debt this year is $44,000,000,000+ or a per capita debt of $1,513. This means a family of four is taxed $6,052 a year just to pay the interest.
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