We are all canadians. Out of the Mouths of Babes: Video of Twelve-Year-Old Money Reformer Tops a Million Views
By Ellen Brown (about the author)
youtube video of 12 year old Victoria
Grant speaking at the Public Banking in America conference last
month has gone viral, topping a million views on various websites.
reform–the contention that governments, not banks, should create and lend a
nation’s money–has rarely even made the news, so this is a first. Either the times they are a’changin’, or Victoria
managed to frame the message in a way that was so simple and clear that even a
child could understand it.
her message was that banks create money “out of thin air” and lend it to people
and governments at interest. If
governments borrowed from their own banks, they could keep the interest and
save a lot of money for the taxpayers.
her own country of Canada actually did this, from 1939 to 1974. During that time, the government’s debt was low
and sustainable, and it funded all sorts of remarkable things. Only when the government switched to
borrowing privately did it acquire a crippling national debt.
privately means selling bonds at market rates of interest (which in Canada
quickly shot up to 22%), and the money for these bonds is ultimately created by
private banks. For the latter point, Victoria quoted Graham Towers, head
of the Bank of Canada for the first twenty years of its history. He
Each and every time a bank
makes a loan, new bank credit is created — new deposits — brand new
money. Broadly speaking, all new money comes out of a Bank in the form of
loans. As loans are debts, then under the present system all money is
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.”
other words, said Victoria, “If the Canadian government needs money, they can
borrow it directly from the Bank of Canada. The people would then pay fair
taxes to repay the Bank of Canada. This tax money would in turn get injected
back into the economic infrastructure and the debt would be wiped out. Canadians would again prosper with real money
as the foundation of our economic structure and not debt money. Regarding the
debt money owed to the private banks such as the Royal Bank, we would simply
have the Bank of Canada print the money owing, hand it over to the private banks,
and then clear the debt to the Bank of Canada.”
solved; case closed.
But critics said, “Not so fast.” Victoria might be charming, but she was
was William Watson, writing in the Canadian newspaper The National Post in an article titled ” No,
Victoria, There Is No Money Monster .” Interestingly, he did not deny Victoria’s
contention that ” When you take out a mortgage, the bank creates the money by
clicking on a key and generating “fake money out of thin air.'” Watson acknowledged:
Well, yes, that’s true of any “fractional-reserve” banking system.
Even before they were regulated, even before there was a Bank of Canada, banks
understood they didn’t have to keep reserves equal to the total amount of money
they’d lent out: They could count on most depositors most of the time not
showing up to take out their money all at once. Which means, as any
introduction to monetary economics will tell you, banks can indeed “create”
What he disputed was that
the Canadian government’s monster debt was the result of paying high interest
rates to banks. Rather, he said:
We have a big public debt because, starting in the early 1970s and
continuing for three full decades, our governments spent more on all sorts of
things, including interest, than they collected in taxes. . . . The problem was
the idea, still widely popular, from the Greek parliament to the streets of
Montreal, that governments needn’t pay their bills.
contention is countered, however, by the Canadian government’s own Auditor General (the nation’s top accountant, who reviews
the government’s books). In 1993, the
Auditor General noted
in his annual report :
[The] cost of
borrowing and its compounding effect have a significant impact on Canada’s
annual deficits. From Confederation up to 1991-92, the federal government
accumulated a net debt of $423 billion. Of this, $37 billion represents the
accumulated shortfall in meeting the cost of government programs since
Confederation. The remainder, $386
billion, represents the amount the government has borrowed to service the debt
created by previous annual shortfalls.
In other words, 91% of the debt consists of compounded interest charges. Subtract those and the government would have
a debt of only C$37 billion, very low and sustainable, just as it was before
Mr. Watson’s final
argument was that borrowing from the government’s own bank would be
inflationary. He wrote:
Victoria’s solution is that instead of paying market rates the
government should borrow directly from the Bank of Canada and pay only token
rates of interest. Because the government owns the bank, the tax revenues it
raises in order to pay that interest would then somehow be injected directly
back into the economy. In other words, money literally printed to cover the government’s
deficit would be put into circulation. But how is that not inflationary?
Let’s see. The government can borrow money that ultimately
comes from private banks, which admittedly create it out of thin air, and soak
the taxpayers for a whopping interest bill; or it can borrow from its own bank,
which also creates the money out of thin air, and avoid the interest.
Even a 12 year old can
see how this argument is going to come out.
Ellen Brown is an attorney, president of the Public Banking Institute,
and author of 11 books. Her websites are http://WebofDebt.com,
http://EllenBrown.com, and http://PublicBankingInstitute.org. In her
latest book, “Web of Debt: The Shocking (more…).
Invitation to join us, every year, two periods, either March or August-September.
The next week of study in 2012 will be held in Rougemont, Canada in four languages from August 22 up to the 31 followed by the Congress in September 1-2-3, with a pilgrimage on September 4.
So there must be at least one trip from August 21 to September 5.
Free meals and rooms for all our guests from countries outside of Canada.
La prochaine semaine d’étude 2012 aura lieu à
Rougemont au Canada en 4 langues du 22 au 31 août suivie du congrès les
1-2-3 septembre, avec un pèlerinage le 4 septembre. Donc il faut prévoir
un voyage au moins du 21 août au 5 septembre. Repas et couchers
gratuits pour tous nos invités des pays hors du Canada.
Comment créer et partager les surplus:
Avec mes meilleurs voeux notamment pour une bonne santé
bonne idée reçue. A l’origine de tout message, il y a un homme ou une
femme, qui a pris le temps et la peine de nous écrire. Il nous est très
agréable de lui confirmer l’avoir bien reçu. Autrefois, cela se faisait
par une poignée de main ou un sourire de remerciement.
François de Siebenthal
Economiste MBA HEC Lausanne et lic. és sc. iur.
14, ch. des Roches
CH 1010 Lausanne
Jean-Paul II a notamment comparé le rapport sexuel chaste entre les époux chrétiens à l’adoration eucharistique.
Krach ? Solutions…
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