Debt Money, Banking Profits and Canadian Sovereignty

I happened upon an interesting story on a website called Collective Evolution entitled, “Canadians Sued The Bank Of Canada & Won. Mainstream Media & Government Blacks Out Story.” The report stated:

“The truth is, The Bank of Canada used to issue debt free loans to the government, which meant that the nation would not go into debt to private banking institutions. When that changed, private bankers/corporations essentially gained control and ownership of the country.”

This struck me as a potentially conspiratorial piece on a sketchy website but certainly intriguing enough that I wanted to know more. So I’ve been poking around trying to find out more about the veracity of this case.

It turns out that this is constitutional lawyer Rocco Galati’s latest legal battle. Galati specializes in suing the Canadian government and in this case he’s representing William Krehm, Ann Emmett, and COMER (Committee for Monetary and Economic Reform). Their fight is to restore the role of Bank of Canada to its originally mandated purpose: providing interest-free loans to the federal, provincial, and municipal governments, as laid out in the Bank of Canada Act.

Loans from the Bank of Canada financed “nation building projects” like the St. Lawrence Seaway, the TransCanada Highway, and many other infrastructure projects that helped “develop our natural resources, power our cities, and connect with each other and the world.” But in 1974 the Bank of Canada stopped providing these loans.

Writing in the Watershed Sentinal*, freelance writer/researcher Joyce Nelson characterizes this case as “one of the most important legal cases in Canadian history” and describes the crux of the issue as follows:

“After 1974, the Bank of Canada stopped lending to federal and provincial governments and forced them to borrow from private and foreign lenders at compound interest rates – resulting in huge deficits and debts ever since.”

She concludes by saying that borrowing from the Bank of Canada is necessary to reestablish a responsible fiscal policy in Canada and will “keep policy decisions out of the hands of foreign lenders.” Or as Galati puts it: “We effectively, through the Bank of Canada, have relinquished are sovereignty to private banking interests. We are saying to private individuals abroad, you can control our public bank …”

It’s amazing that this court case did not surface during our recent election campaign. This may be, as Bill Still reports and Galati has a “firm basis to believe”, that the government somehow instructed the mainstream media not to report on this case because it “strikes at the heart of the debt money system.”

Despite this alleged and unbelievable government interference, Amanda Lang did provide us with a nice interview with Galati last May on the CBC program Exchange. And for more information there’s also a lengthy and detailed presentation featuring Ann Emmett and Galati on the Occupy Our Bank blog that’s worth checking out.

If the Bank of Canada was set up to provide our government interest free loans that support infrastructure projects, education, health care, and other social programs, then why have we signed on to pay “$30 or $40 billion a year in useless interest”?

* Reprinted in the November-December issue of the Journal of the Committee on Monetary and Economic Reform.