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In Canada too, clamor for the banks to get out of the governing business

By: Chris Powell, Secretary/Treasurer, GATA

 -- Published: Wednesday, 11 February 2015 | Print  | Disqus 

Dear Friend of GATA and Gold:

What's left of Canada's Social Credit movement has brought a lawsuit challenging the operation of the country's monetary and banking systems, and apparently the powers that be are having a hard time getting the lawsuit dismissed.

The lawsuit argues that the Canadian central bank's enabling act authorizes the bank to create and lend money without interest to government agencies, bypassing the commercial banking system and all the income and advantages commercial banks extract from the central bank at the public's expense, and that the central bank should start financing the government that way.

Reporting on the lawsuit at the Internet site of the Clifford Hugh Douglas Institute, which expounds Social Credit political and economic philosophy, M. Oliver Heydorn writes:

"The plaintiffs state that the Bank for International Settlements, the Financial Stability Forum, and the International Monetary Fund were all created with the cognizant intent of keeping poorer nations in their place, which has now expanded to all nations in that these financial institutions largely succeed in overriding governments and constitutional orders in countries such as Canada over which they exert financial control. The plaintiffs state that the meetings of the BIS and Financial Stability Board (successor of FSF), their minutes, their discussions, and their deliberations are secret and not available nor accountable to Parliament, the executive, nor the Canadian public, notwithstanding that Bank of Canada policies directly emanate from these meetings. These organizations are essentially private, foreign entities controlling Canada's banking system and socio-economic policies."

Insofar as the plaintiffs are seeking to assert the supremacy of democracy over central banking as it is currently practiced -- largely in secret and without accountability -- GATA has to be sympathetic, just as we must join the growing clamor in the United States to audit the Federal Reserve, which, far more than the Bank of Canada, distributes vast financial patronage and intervenes in markets largely in secret and without accountability.

While, as a practical matter, the Federal Reserve serves primarily the financial class, as a matter of law the Fed is very much a creation and part of the U.S. government, not a privately owned corporation, the latter being a misapprehension by many on our side arising from the Fed's peculiar share structure.

Yes, commercial banks own shares in the Fed, but these shares don't control the Fed's management. Rather, the members of the Fed's Board of Governors are nominated by the president and appointed by the Senate.

Besides, the financial class controls far more than the Federal Reserve. It controls most of the U.S. government. This is in part the political phenomenon of "regulatory capture." But more so it is just the current manifestation of the old struggle between the producing and financial classes.

As the late New York Times editor James Reston wrote long ago, "All politics are based on the indifference of the majority." Special interests take control of government because they are the most motivated, having the most lucrative stake in government operations. The public generally can't be bothered to defend its own interests.

The public could reclaim the Fed for the public interest any time it wanted to do so by mobilizing its democratic institutions. Of course it would help if more Americans could read and write and if they spent more time on civic engagement than on sending text messages to each other about what they plan to watch on television when they're done celebrating themselves on Facebook. But it could be done.

Money creation and distribution may be the oldest and most important political issue, since it defines democracy. In his "Cross of Gold" speech at the Democratic National Convention in Chicago in 1896 --

-- William Jennings Bryan argued for the remonetization of silver to reflate the economy and subordinate Wall Street to democracy, putting it this way:

"Those who are opposed to this proposition tell us that the issue of paper money is a function of the bank and that the government ought to go out of the banking business. I stand with Jefferson rather than with them and tell them, as he did, that the issue of money is a function of the government and that the banks should go out of the governing business."

Oh, well: Plus ca change, plus c'est la meme chose. It's our turn to play a part in this struggle.

The Clifford Hugh Douglas Institute's report on the lawsuit about the operation of the Bank of Canada is posted here:

CHRIS POWELL, Secretary/Treasurer
Gold Anti-Trust Action Committee Inc.

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