From this article, apparently the political State of Canada is having issues.  As usual, the core of the problem is not being honed in on, but deflected to the standard, “Well at least it wasn’t as bad as last month!” which is now considered good news.

One statement made me LOL: “We jumped into this recession totally unprotected.”. Nope.  Central banks manipulating monetary policy led us by the nose into this recession.  Signed.  Sealed. And delivered.  As usual, the government/banking cartel is not to blame.

What we are witnessing here is the results of the structural defects in the way our monetary system operates.

Some call it the Debt Virus. Others call it the Compound Interest Paradox.

Since every dollar in circulation is backed by one “anti”-dollar of debt, it eventually must be paid back to those privileged to issue it. Who are they? Well, the BoC is one. The chartered private banks are another. Paper money represents about 5% of the total money stock; the other 95% is bank created credit, created via a few computer keystrokes when a loan is created; the loan ends up as a deposit in an account.

By way of a simple accounting trick, the loan is an interest-bearing asset and the deposit a liability. Thus the books balance.

Over time, old loans (plus interest) are paid off. However, only the principle was created. The interest was not. Where does that come from? From new loans created *AFTER* the old ones. A loan, once paid off, actually *DEPLETES* the total money stock by the amount of the interest.

This is pure Ponzi requiring infinite economic growth (i.e. the rate and amount of new loans *MUST* be equal to or greater than the rate and amount of loans being retired.

In order to incent us to take out more loans, our central planners via the BoC, artificially lower interest rates, in hopes of stimulating loan creation. Trouble is we are not responding the way they want us to. If this process continues, the collapse of the Bank of Canada Loyalty Points (dollar) in hyper-deflation of the dollar is inevitable.

What this means is that more and more businesses and people must compete harder and harder for the remaining dollars in circulation to pay off their outstanding debt (as well as live). Businesses must sell at lower prices to pay off loans that are becoming increasingly difficult to service. Jobs are lost. Salaries reduced. Some strain. Some struggle. Some lose to bankruptcy.

We have to reinvent what money should have been before the government/banking cartel hijacked it.

Advertisements