Friday, November 17, 2006
Paying The Banksters Their Toll
PAYING THE BANKSTERS their TOLL The Financial Consequences of Funding the Halifax Harbour Bridges with Private Banking (An analysis by Dr. Jerry Ackerman, with lots of help from Ken Munro)
Q.Could the cost of financing the Macdonald and McKay bridges have exceeded the cost of building them?
A.Yes, it could.And, yes it did.Several times over.Let’s look at some numbers: Macdonald Bridge (1956) $10.6 million McKay Bridge (1970) 32.9 McKay ramp (1987) 4.0
Total contract costs $47.5 million
Financing costs for the first 40 years (thru 1995) have totaled $169 million (see graph showing annual debt charges).At the end of that time, the bridge commission still owed $100 million, and was paying 11% interest on a loan from a chartered bank that was guaranteed by the Province.
Still to happen was a 3rd lane for the Macdonald Bridge -- in 1999, costing $55 million.The 50% increase in the toll rate (1992) helped considerably.Refinancing in 1997 @ 5.97% interest for the $100 million still owing cut the annual debt servicing cost nearly in half.
But when those bonds come due, in December of 2007, the bridge commission will still owe $55 million.
Summarizing these numbers: First forty years $169 million 1996 thru1997 22 million 1997thru 2007 60 million Still owing then55 million $306 million of bank charges to pay for $103 million of infrastructure crucial to the convenience, development, and well-being of the Halifax- Dartmouth region.
Q.Was there a better way of funding this essential link between the two communities?
A.Yes, emphastically, YES! We Canadians have our own bank.That’s the Bank of Canada.Formed in 1938, it funded Canada’s role in World War II along with post-war developments through 1972 by creating interest-free debt.Had it been in place at the start of the Depression, the country could have avoided the terrible toll of failing businesses, farm foreclosures, and unnecessary unemployment.
Our bank can lend to provinces and municipalities to fund any public goods or services -- health, education, infrastructure, even debt! Until 1973, the chartered banks of the country were limited by the Bank Act and its regulations regarding both the amount and the duration of loans as well asinterest charges.Since then, each of these restrictions has been removed, so that our chartered bank system can now create endless debt in any amounts, subject only to a maximum interest rate and a minor restriction on cross-border lending.
The consequence for Canada’s well-being has been devastation of our currency with major inflation into the 1980s, the selling off of control of our major businesses, unaffordable rates of interest, and little betterment of incomes and livelihoods for any but those already wealthy.Our health, our education, some of our roads and bridges are no longer affordable to everyone.Never mind that we pay plenty of taxes to provide these services.The taking over from our central bank of the money-creation role has brought us a national debt approaching $500 billion (over 90% compound interest) requiring $36 billion annually from the taxpayers.
And, for the foreseeable future, we will be “in debt” to the private banks, unless we return to making full use of our “family bank” -- the Bank of Canada.Some major examples of how it could be used:the Toronto bypass highway 407 (99 years of tolls guaranteed to happen), the P.E.I. bridge, the Halifax-Dartmouth bridges, and possibly the Digby-Saint John ferry.
Q.In whose interest do our municipal, provincial, and federal governments make these financing decisions?
A.There can be only one correct answer:The private bankers.
While the label “Banksters” may sound a bit harsh, it becomes appropriate when one crunches the numbers and connects the dots. Serious students of global and national financial institutions can only marvel at the deft, effective, even sinister ways in which the private banks have taken over complete charge of money creation and acted forcefully to discourage or disallow our central bank from acting in our national interest.
The so-called “think tank” institutes like Howe and Fraser serve those that fund them, and the lazy news writers are quick to quote them.The financial institutions themselves are major contributors to those politicians they wish to have elected.What campaigner dares to point out and decry the involvement of the three Canadian private banks involved in the Enron fraud?Or the CEO of one of these who left with $65 million while his bank was reaching a settlement of $2,500 million? How have the fourteen partner banks of Long Term Capital Management, L. P. survived their $100 billion shortfall of September 1998? Their names were, and still are, the best known names on Wall Street and in Europe.Their profits have only increased.
Now that all the semblance of independent and objective advice has been removed, investment banking has been extended to investment management, fund management (mutuals and hedgers), and advisory services along with trusts, securities they wish to sell you, and insurance they want you to buy.The result is that the customer faces an incestuous array of conflicted interest without nearly enough understanding or information.He/she is unlikely to find simple or accurate explanations of this money system that allows the endless creation of money for destructive enterprises like war-making but shortchanges schools, hospitals, roads, subways, ferries, and bridges. In Charlottetown, PEI, October 2006, at a weekend conference of Council of Canadians (advocates for decisions in the best interest of ordinary Canadians), discussion focused on the impending “DEEP INTEGRATION” — a secret deal to bring the three countries of Canada, USA, and Mexico into a North American Union.This is reflected in such actions as The 2001 Smart Border agreement, the 2004 Partnership, the 2005 Task Force, the 2006 Competitiveness Council, and numerous summit meetings which have formalized plans for a singular border, a unified military, harmonized laws and regulations, and a common currency “amero”, all developed with no public debate, discussion, or legislation.
In September 2006 at Banff, Peter Lougheed, Anne McLellan, Stockwell Day, Gordon O’Connor, Rick Hillier and others met with their US counterparts in total secret to speed up the integration.Present was the American president of Lockheed Martin -- the world’s #1 manufacturer of war equipment and the supplier of hardware and software for the 2006 Canadian census.
The “banksters” were not there.Just a writer for Wall Street. Why not?
The simplest explanation:They didn’t need to be.It has already been decided that Canada’s central bank (the Bank of Canada) will only be in the way of the gobbling of our nation.No more interest-free money creation for wasteful projects like infrastructure, pollution cleanups, health facilities, universities, and international non-military aid.
The banksters will know how to fund all projects that they deem priority, and they already know how to make the user pay. When the citizens of the HRM realize the consequences of this integration, along with the emasculation of our central bank, it will be too late.No more dreaming about a third bridge or a cleaner harbour.Any loans will be in Ameros.Terms and interest rates will be set by the Federal Reserve System of the United States -- the largest private bank in the world.
October 27, 2006
The financial numbers were very generously provided by Ken Munro, Treasurer, Halifax-Dartmouth Bridge Commission.The analysis, understanding of money creation, and resulting anxieties are the work of Dr. Jerry Ackerman, retired professor, analyst, investor, and finance chair on the executive of the Canadian Action Party.