The world’s indebtedness mirrors the situation in Canada…that being…national public debt is 90% compounding interest.
Graham Towers, the first Governor of the Bank of Canada was asked:
Will you tell me why a government with power to create money, should give that power away to a private monopoly, and then borrow that which parliament can create itself, back at interest, to the point of national bankruptcy? He replied, If Parliament wants to change the form of operating the banking system, then certainly that is within the power of Parliament.
Why would any government prefer to pay interest to private investors when a government can create currency at no interest?
Ellen Brown stated:
A government oppressed by “sovereign” debt is not really sovereign. A sovereign government has the power to issue money and need not go into debt at all. WEB of DEBT, July 1, 2016
Our experience in Canada is proof of Brown’s hypothesis of the loss of sovereignty.
In 1962 shortly after the Government ‘fired’ James Coyne, the second Governor of the Bank of Canada, in what is called ‘the Coyne Affair’ – Donald Fleming, the Finance Minister, attempted to “talk down” the high Canadian dollar. His statement started a run on the Canadian dollar.
Drastic measures had to be taken to stop the capital flight – including – pegging our currency to the US dollar, massive foreign currency borrowings from governments, central banks, and the IMF along with drastic expenditure cuts and tax increases to stop the currency rout the Minister had created with his – “talking down” – of the Canadian dollar.
Our dollar remained pegged to the US dollar until 1970. John Crow, former Governor of the Bank of Canada, stated:
Simply put, the Bank’s job now was not to manage Canadian monetary expansion, but rather to make sure that our fixed exchange rate against the US dollar was not threatened. In other words, interest rates would be determined by the need to protect the exchange rate rather than, for example, by the desirable course of spending and inflation in Canada.
When we borrow from private bankers we put the private bankers in control of our government. As the saying goes…
He who pays the piper…calls the tunes.
The ‘firing’ of James Coyne, is evidence of Tower’s statement in action,
“If Parliament wants to change the form of operating the banking system, then certainly that is within the power of Parliament,”
establishing the fact of the superiority of the Government of Canada over the Bank of Canada.