Tag Archives: Bank of Canada

Bank of Canada v Liberal Infrastructure Bank

To the Right Honourable Mr. William Morneau, 

Minister of Finance for Canada

Dear Mr. Morneau,

I thank you for the electronic letter 2016FIN428702 sent to me by Veena Bhullar (Senior Special Assistant –Operations) , in response to the section on The Bank of Canada from my letter to the Prime Minster of 25thNovember 2015.

First let me say that I do appreciate a response from your office but I have some serious problems with the content of the response.  I quote paragraphs two and three in particular to start with:

“It is sometimes suggested that the Government of Canada should fund part or all of its debt by borrowing from then Bank of Canada, rather than by borrowing in private sector markets. The Government does not support this approach, as it would require the Bank to create new domestic currency, which does not create any additional wealth.

In fact, the experience of many nations has demonstrated that relying on domestic currency creation to finance government expenditures results in excessive inflation.While some inflation is desirable to ensure price stability, too much inflation can adversely affect economic growth.  Furthermore, excessive spending and domestic currency creation often lead to a misallocation of scarce resources.”

Para #2

Are you seriously suggesting that the experience of “growth” in Canada between 1935 and 1974, including financing our part in WW2, the St. Lawrence Seaway, the Trans Canada Highway, CPP, Our National Heath system along with a myriad of social services among so many other things, did not lead to growth and wealth of the country and the Canadian people?   It is completely obvious the private banks and investors of the world were angry that we were doing so well and that they were not making a huge profit from it, thus the creation of the Bank of International Settlements and its accompanying Basel agreements; through the signing of these agreements we gave them the right to gouge us with compounding interest rates as we started to borrow on credit from them. Your suggestion that the creation of national debt in 1974 of $22 billion owed basically to ourselves through our own Bank of Canada creating money to be spent into the economy is not preferable to the over $1 trillion currently owed to international banks and investors at that aforementioned compounding interest rate, based I might say on a series of computer strokes credit.    But you are right, the creation of new domestic money printed by the Bank of Canada to be spent by the government for the benefit of the people of Canada does not make money for the banks and international investors, even though it will benefit all Canadians, and indeed all our businesses too.  Sad that you cannot accept the Bank of Canada as a good thing for Canada, and essentially for our sovereignty as well.

Para#3

Please provide me with the names of those countries which own their own bank and have fallen into the path of excessive inflation through government expenditures.  I could give you many examples of countries which do not own their central bank which have fallen into that trap, (the UK and USA to mention just two), and offer instead the example of North Dakota a state of the USA which owns its own bank and thrives with no compounding interest debt to outsiders and no deficit in their budgets.  It should also be mentioned that Libya owned its own bank and was threatening to help create a Bank of Africa to be jointly owned by the African Nations and as a result of this threat to the IMF  we helped to destroy that country completely and allowed the IMF to establish a private central bank in place of the Libyan people owned bank.  Libya is now in financial ruins and complete chaos politically and socially. That is what happens when  private central banks get mad at potential lost profits..

As I mentioned above the concept that creation of money by the Bank of Canada to be spent into the economy (particularly for the people’s benefit) did not create excessive inflation between 1935 and 1974 and, is not creating inflation even now in North Dakota so that argument is spurious and very weak.

How will using the bank of Canada to finance our needs lead to misallocation of scarce resources?

 I would refer you to Paras #4 and 5:

“Since 1991, the Government and the Bank have jointly agreed that the central objective of monetary policy should be for the Bank to target an inflation rate of 2%. This is the best contribution monetary policy can make to solid performance.

Canada’s policy of low, stable and predictable inflation has served Canadians extremely well. This policy has contributed to creating a more stable economic environment relative to that of previous decades and has allowed households and businesses to make better long-term financial plans.”

Surely this government cannot believe that increasing the national debt from 22 billion owed to ourselves at a low flat rate interest, to close to or over $1 trillion today at a compounding interest rate owed to outside and private interests is an improvement.  Do you really think that households can make long-term plans when they are not sure if the breadwinners will even have a good job job next week? Or that business can make those same long term plans when they have no idea how long they will be in business, or when they will be bought out by foreigners and closed down. When, during the last decade, our manufacturing was sacrificed for bitumen production from Alberta, and the price for that bitumen feel through the floor our economy became as unstable as is our looney leading me to question the concept of “a more stable economic environment.”

No Mr. Morneau, I cannot believe or accept that the best use of the Bank of Canada is to simply be an inflation watchdog.

To move to another topic, I understand that this government intends to create an Infrastructure Bank. I have some questions about this.

What will it be called?

Who will own the bank?

Who will finance it?

Will there be an Act of Parliament to create it? (If the answer is yes, why would it have any teeth as the Bank of Canada Act has been ignored since 1974 and your government shows no signs of obeying the mandate created in 1935, as clearly stated in Para#1)

Will this new bank be subject to the Basel agreements?

Will this bank’s activities cause us to be challenged by the investments agreements already in place through a myriad of so called free trade deals and the CETA and TPP? (Yes I know these are under a different ministry but they refuse to answer my questions) because those multi million/billion dollar awards will affect your budget.

Which Ministry will administer this new bank’s activities or will it be a joint venture?

Will there be consultations with Canadians to determine if this extra national debt is acceptable to us?

 

Finally what is the point of this new Bank when we already have the Bank of Canada mandated to do this work? And how will the activities of this new bank not adversely affect inflation as you claim would the use of the Bank of Canada?  Surely if this bank is to operate on credit only supplied by international banks and investors at compounding interest rates that will drive our national debt through to the $2 trillion mark very quickly.

 

I cannot condone what your government is planning as I do not believe it is in the best interest of Canadians or Canada.

 

Jeremy Arney

Interim Leader of the Canadian Action Party

 

 

Letter to Justin Trudeau about TPP and Bank of Canada

Dear Justin Trudeau,

 

May I as the interim leader of the Canadian Action Party congratulate you and your party on your success on 19th October 2015 due largely to the enthusiastic vision of hope and a bright future you portrayed for the country.

 

It was with great pleasure that I heard you say to your caucus:

“Regardless of the committee you’re on, the roles you have, regardless of party demands, regardless of everything else we do, your one job that you cannot ever forget is to be a strong voice in service of the people who sent you here.”

 

This was music to my ears as the Canadian Action Party has always agreed with this but have taken it a step further to say that we will represent all our constituents not just those who elected us. It was very refreshing to hear you say these words and this leads me to this.  On 19th October you and your party were elected to govern Canada on behalf of all of us not just those who voted for you, and therefore we as a whole country should be listened to and consulted on matters of national importance.

 

Since the government of New Zealand finally released the text of the Trans Pacific Partnership, I have been slogging though it paying particular attention to Chapter 28 which is entitled Dispute Settlement. 

What is particularly striking in this chapter, written largely by the international corporations that were invited to consult on this TPP, is that now any corporation within the TPP area can ‘pile on’ with any other corporation which makes a claim against perceived profit loss due to laws or regulations which might hinder that profit. This is done through something called third party:

“third party means a Party, other than a disputing Party, that delivers a written notice in Accordance with Article 28.13 (Third Party Participation)”

Article 28.13: Third Party Participation

A Party that is not a disputing Party and that considers it has an interest in the matter before the panel shall, on delivery of a written notice to the disputing Parties, be entitled to attend all hearings, to make written submissions, to present views orally to the panel, and to receive written submissions of the disputing Parties. Such delivery shall occur no later than 10 days after the date of circulation of the request for the establishment of the panel pursuant to Article 28.7.2 (Establishment of a Panel).

 

Whereas in previous investment agreements, disguised as  trade deals, dating back to the Free Trade Agreement between Mulroney’s Government and that of Ronald Reagan, only the corporations of the two countries in the agreement could launch a financial attack upon the taxpayers of the other country, now we have multiple corporations from multiple countries jumping on each claim.  This means that we simply cannot afford any laws or regulations that would offend any corporation anywhere in the Pacific Rim area.  Simply and astonishingly ridiculous.  Or as stated in the Vienna Convention On The Law of Treaties signed at Vienna 13 May 1959 Article 32 Supplementary means of interpretation, “(b) leads to a result which is manifestly absurd or unreasonable.”

 

It is also manifestly plain that this is nothing to do with a free trade zone as there are tariffs, quotas, import and export licenses, side deals, side agreements and many other impediments to a real free trade zone involved in this TPP agreement, all of which could lead to a dispute if a corporation (with third party hangers on) decides it can and should appeal to yet another monetary award panel due to perceived profit loss. Remember no court of law either domestic or international is involved here. Simply international corporate lawyers deciding how much should be awarded. This is simply a gold mine for corporations at the expense of tax payers of all the countries involved.

 

On page 1-3 of Initial Provisions and General Definitions, under Section B, Article 1.3 General Definitions there are three definitions which throw this entire agreement into the area of the ridiculous, even treasonous, typical of the last ruling regime in Canada.
national means a natural person who has the nationality of a Party according to Annex 1-A(Party-Specific Definition) or a permanent resident of a Party.

person means a natural person or an enterprise

person of a party means a national or an enterprise of a Party

 

To those of us who are aware that we are all actually natural persons, but with careful and considerable forethought that natural person state has been altered over the last few decades as Canadians have been, and are now being, created into artificial people by our government without the rights of natural persons. It is therefore somewhat disingenuous to expect us to accept that a corporate entity from one of the members of the TPP countries has been granted the status of a natural person with all the rights and privileges granted to natural persons, whilst we are not regarded in the same light by our governments. We are simply numbers expected to obey all laws and regulations without question and subject to fines and or imprisonment for failing to do so, but must also pick up the tab for those entities who attack our country for monetary gain..

 

The Canadian Action Party and I agree that this TPP scam should not be ratified and that all investment agreements dating back to and including the FTA with the USA should be scrapped and real trade deals signed in their place.

 

Point I am trying to make here Mr. Trudeau is that you will be globe trotting in the next few months to basically announce to the world that Canada is back as a sovereign country with the intent to be a real player for the people of the world, with the desire to help and be a country that can be relied on to be a good neighbour not a pugilistic war monger looking for a fight.   Is that your intent? I hope so.  Point is how can you do this if at the same time you are signing away our sovereignty and ability to make our own laws and regulations to corporations which care not one whit about people anywhere, only for their bottom lines.  This is what you will be doing by allowing Canada to be part of a faulty corporate investment deal called the Trans Pacific Partnership. 

 

The second point I want to bring up at this time is that both I and the Canadian Action Party applaud your intent to invest in Canada. Austerity never has been and never will be the way to prosperity in fact it leads to the opposite for the people of any country except those at the very top. 

I, and the Canadian Action Party, trust that as you will be using our own bank – the Bank of Canada – to finance these investments at a very low flat rate of interest rather than international banks and investors at a compounding interest rate.

As I am sure you are aware your new government is now under court attack by the Committee on Monetary and Economic Reform (COMER) due to the Bank of Canada not being used as mandated by the Bank of Canada Act of 1935; you could not do better than to use this incredible jewel we, the people of Canada, possess to return us to prosperity, and receive a dividend from our bank at the same time.   Of course by doing so we will be in line for review panel challenges from corporate banks and investors all over the world because they will lose a very lucrative golden egg.  This is another reason why the Canadian Action Party would excuse Canada from all those investment deals which would enable such challenges on how we finance our own country.

 

I wish you well, and trust that you will bring about that change you often talked about, scrapping TPP and using our Bank of Canada would be two excellent ways to start.

 

Jeremy Arney

Bank of Canada slips into its new niche.

So here we go again, not that it has really stopped since 2006, but since 2011 the Canadian administration BS and bafflegab has gone hip high to an elephant.

 

On Wednesday 21st January 2015 the Bank of Canada confirmed again that it is now nothing more than an inflation watchdog. The Governor of the Bank of Canada has even proudly claimed that that is the Bank’s #1 priority  when he said on November 4th 2014, Standing Committee on Finance in response to a long garbled question by James Rajotte, and I quote from Hansard

 

“Tying that to the second half of your question is very important. The Bank of Canada has only one goal, and that’s to keep inflation on its target within a timeframe of around six to eight quarters. That’s our horizon of flexibility.”…..Hansard with my highlights.

 

 

Any economist, or for that matter teenager, knows that if you reduce your income and increase your expenditures you are heading for financial disaster. Regretfully there does not appear to be an economist (or anyone even with the acumen of a teenager) in the ranks of the present administration as they have from day one reduced Canada’s income by drastically cutting corporate tax rates, minutely cutting personal tax rates, reducing GST absolutely unnecessarily, increasing personal taxes by a thousand mini cuts such as  tariff increases etc., and their lavish expenses have skyrocketed. We need 30 more very expensive MPs , $16 dollar glasses of orange juice or million dollar ferrying of a security limo for presidential PM use in India to give just a few examples, in the same way we need holes in our heads. 

Well hold on Arney there was a melt down in 2008 wasn’t there?

 

Yes there was and it was categorically denied by the Harper government. During the 2008 election $75 billion was donated to our Canadian banks through the CMHA even while Harper and Flaherty were trying to say we were immune from the problems coming fast and hard at the rest of the world and claiming that our banks were rock solid!  This eventually topped out at a whopping $114 billion in 2009.

 

Two months later whilst still saying there wasn’t a problem Harper had to prorogue to avoid being defeated in the House and removed from power. He still could not see a problem!

 

So yesterday there he was answering questions about the economy and admitting that the price of oil was in fact costly to the Canadian bank account (Which bank are they using for their accounts by the way or are they all getting a piece of the pie)

 

So the price of oil has gone down substantially. Why? Not because it is now cheaper to extract it from the ground, transport the oil to refineries and turn it into a burnable fuel. No it’s because there is more oil available then there is a need for. A glut. Wonderful.

 

So will the price come up again? Most likely because the oil companies are too big to fail, and too blind to see the writing on the wall, and administrations such as that in Canada today will probably throw money at them that should be going to vets, seniors, the homeless, to help charities not cripple them, the infrastructure and the provinces.   Very likely that this is what will happen with Harper’s government because they are not interested in the health, fortune, wellbeing or standard of living of any Canadian who is not a card carrying CPC member and even they are often lumped in with the rest of us and told to fend for themselves.

 

Our manufacturing output is down because corporations like, CAT, Navistar (transport truck manufacturer), Kellogg’s, PACCAR( Kenworth and Peterbilt makers), Steelco, Alcoa, etc., have left the Canadian scene along with their lost jobs, union pensions and taxes.   I also understand that Bombardier are seriously contemplating moving lock stock and barrel to Mexico soon.   Now that one will really hurt.

 

So, is all lost?   Depends on how well the new ”UN”fair elections act works for the administratio with the extra tools they have given themselves to steal their 4th election in a row later this year.

 

If everyone in the country becomes registered to vote and obtains the necessary ID, then acts upon that right to vote no matter how much there is disruption at the voting places caused by the CPC scrutinizers who will try and create massive lineups and delays and make non CPC voters give up in disgust, we can get a real peoples’ government back. This distruption will be done with the aid of something called bingo cards which will tell them when their own supporters have voted and allow them to start causing a ruckus to prevent anyone else from voting.

 

If we believe that we all have the right to vote in spite of Harper’s government efforts to take that away from us, and exercise that right we can and will get rid of the worst Prime Minister, and his government, that Canada has ever had, and start the job of rebuilding what was once a nation to be believed in.

 

Of course I would want everyone to vote for the Canadian Action Party where we have Candidates as we are probably the only party which specifically wants to represent our constituents to the HOC not the HOC to our constituents. Where our MP votes will be free and caucus meetings an exchange of ideas not relaying dictums from above. Where the Bank of Canada will again be used to finance Canada’s needs at little or no cost and manufacturing jobs will return home instead of leaving for Mexico or somewhere else where labour is cheap and the products reflect that.

 

A country where once again Canadians can be proud to be part of it, and proud to help rebuild a country to help the world not cause wars, civilian deaths and destruction as in the case of Libya for instance. A nation whose standard of living was so far ahead of ours under Ghadafi until we destroyed everything he had built for his people from the safety of the air in the name of maintaining a no fly zone, turning them back into the stone age; where no government now exists and contestantly mercenary bands are fighting for control; where raping and civilian killings continue at pace, and their state owned bank has been replaced by  central bank sponsored by the IMF.

Some democracy we created there!

 So welcome Bank of Canada to your new role as inflation watchdog. Rest well for when we call on you to return to and fulfill your real role in Canada.

Join the movement to recover Canada in 2015.

Vote for CAP or anyone who will represent you to Ottawa, not Ottawa to you.

 

Jeremy Arney