Posts Tagged ‘bonds’

During the 2015 Canadian federal election campaign, Liberal leader Justin Trudeau, now Prime Minister, promised to borrow money (at interest) to pay for $60 billion in new infrastructure investments, as opposed to the NDP’s plan to balance the budget in their first year.

It was, and remains, a false frame of having to stay in a deficit and grow the debt by borrowing at interest for infrastructure investments when the government of Canada, all its provinces, and its municipalities, have the statutory authorization under the Bank of Canada Act to borrow money, effectively, or, in actuality, interest-free.

For instance, money can be borrowed effectively interest-free when the Bank of Canada issues bonds that are held by the government, and when it buys its own bonds, as the government of Canada is the sole shareholder of the bank, and all profits, after expenses, will go back to the government.

But even better, the federal government can borrow money, interest-free, by requesting interest-free money, to borrow for infrastructure investments today.

So, despite Trudeau seemingly one-upping the NDP in saying that he would invest in critical infrastructure by borrowing today, as opposed to putting off such investments in favour of immediately balancing the budget, he bought into the typical false frame that we have to borrow the money at interest as opposed to borrowing it interest-free.

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On his July 23, 2014 Real World of Money appearance on One Radio Network with Patrick Timpone, currency historian and financial analyst, Andy Gause, implied that there’s nothing to World Bank whistleblower Karen Hudes’ claims about 50-year gold-backed bonds (starting at 14m). Audio here:

Timpone: “We had Karen Hudes, the World Bank whistleblower, she was on the show, and she was talking about 50-year-old bonds, that uh, blah blah, right — gold-backed bonds.

Gause: “Yeah, I got ’em. You know, you can buy 600 million at face value, for, you know, 20 grand.

Timpone: “And supposedly the banks never paid interest the interest on them, and now they’re doing all this stuff. Could there be something to this?

Gause: “No.

It becomes immediately obvious in his responses when you listen to the audio that he doesn’t think much of these claims about any gold-backed bonds being worth much more than collector items.

For more on Karen Hudes, see my articles:

1) Andy Gause casts doubt on Karen Hudes’ gold claims

2) Joel Skousen’s critique of World Bank whistleblower Karen Hudes

3) I’m blowing the whistle on World Bank whistleblower Karen Hudes

and my July 2014 interview with SGT Report.

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United States NotesAccording to the December 2012 report by the U.S. Treasury Dept., out of the $450 million Greenbacks issued during the American Civil War, there is an estimated $239 million still outstanding.

In 2013 dollars, this would be at least $10 billion, according to this inflation calculator. While not significant today, it’s significant that such a huge percentage of the Greenbacks are still in circulation, given that they were ordered to be taken out of circulation in 1971, so there have been many that are being privately circulated or collected.

While there were $500 million in interest-bearing bonds that were issued as backing for them, the money supply grew by a total of $950 million, and the interest-free Greenbacks provided significant funding for the Civil War, when the total debt was $2.7 billion by 1865, and no interest was due, nor will ever be due, on the $450 million issued, and nothing is stopping the U.S. government from returning to directly-issued interest-free currency, other than lack of political will.

As for the validity of the American Civil War, I have publicly stated on my radio program and in a recent public presentation that the States had the right to secede from the Union, and that President Lincoln and the Union were in the wrong. The effectiveness of the Greenbacks, and of any interest-free currency, is something that can be independently judged.

For more on United States Notes, see my articles:

1) Gary North gives the false impression that interest-free United States Notes are no longer valid

2) Gary North deliberately omits the fact that United States Notes are interest-free

3) Michael Badnarik on issuing interest-free fiat money like Lincoln did: “That’d be a step in the right direction”

4) Don’t just blame Lincoln for a national legal tender law — Washington signed one, too

5) The Federal Reserve lies about United States Notes (Lincoln Greenbacks)

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John TurmelJohn Turmel, the Guinness Book of World Record holder for the most number of contested elections, is scheduled to be on Exposing Faux Capitalism with Jason Erb, September 2, 2012, at 2 PM Eastern.

Turmel is the leader of the Pauper Party of Ontario, and a candidate in the September 6, 2012 Kitchener-Waterloo byelection.

The corporate-controlled media has tried to keep him out of their forums, but they can’t keep him off of Exposing Faux Capitalism, where he will discuss his Argentine Solution for Ontarians, in issuing public sector pay with provincial bonds, as Argentina did in 2001, as a solution to their financial crisis.

Previously, I interviewed Ontario Libertarian Party K-W candidate, Allan Dettweiler.

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Sign of a mortgage centre in East London

In 2007, when the so-called subprime mortgage market was collapsing, the natural question was, “what is a subprime mortgage?”

I discovered that it used to refer to what it sensibly means. Namely, mortgages with an interest rate lower than the prime lending rate.

Since then, the definition has changed to refer to mortgages of subprime quality. However, “subprime” is highly misleading, in that anything less than the best quality is subprime.

In the case of bonds, a triple-A credit rating is prime. Anything less than that, by definition, is subprime. However, there is a significant difference between AAA bonds, and BB and lower-grade bonds, to the extent that the latter are called “junk bonds.” Yet, according to the strict definition of subprime, AA+ and BB+ bonds are “investment grade.”

Banksters love twisting the meaning of words. Like their Federal Reserve System, which isn’t federal, doesn’t have any of its own reserves, and was called a system to obscure the fact that it’s a private central bank.

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