Banking 101

Recent discussions about the financial conundrums we face ignore a reality of our times:

See the 2014 Werner files for the real information about how credit and currency is created. This needs to be related to the strategic control that private financial interests have in deciding what part of our ecosystem can be maintained and what must be mined for the liquidity to just keep it!

See the Simple Message sections of The Common Good Dialogue blog site at the lower left of the side bar for more information and the currency page 5/5/12.

Ellen Brown has provided some clarity about what is actually happening!  The file added below on May 13, 2011 lays out the latest hope for constructive action.



The power of the banking industry is out of control and there are legal instruments now in place that guarantee this situation.  Tim Madden has looked in some detail at how this came about in Canada and suggests that this legal framework has been copied throughout the developed world.

Regarding the Implications of the Canadian Bank Act (and all others):

(D)on't be put off that (this information) is in the Canadian Bank Act because all banks everywhere have to play by the same(grossly one-sided) rules through the BIS in  Switzerland. If it is in the Canadian Bank Act and is important, then invariably you will find the same provision in all such Acts worldwide (and usually verbatim).

Firstly, under the definition/interpretation section provided under s. 464(1) (emphasis added):

"*loan*" *includes* an acceptance, endorsement or other guarantee,

*a deposit*, a financial lease, a conditional sales contract, a repurchase agreement and any other similar arrangement for obtaining funds or credit but does not include investments in securities;

When a bank makes a "loan" it simply creates/issues a deposit account in favour of the nominal borrower.

As far as the discussion on borrowing at 2% and receiving 6% on a deposit goes, consider ss. 458(2):

458 (2) Except by express agreement between the bank and the borrower, the making in Canada of a loan or advance by a bank to a borrower shall not be subject to a condition that the borrower maintain a minimum credit balance with the bank.

The members of this group, especially, need to think long and hard about this provision. A neighborhood bank can advance me $100 trillion as long as I agree to keep $99.99 trillion of it on deposit at the same bank.  That bank then has $100 trillion of assets and liabilities and would appear as such to all other banks in the same system.

Up until the 1985 revision, every Bank Act everywhere in the English/Commonwealth system recognized that required off-setting deposit balances are *mala in se* or  evil/wrongful of themselves and prohibited them outright as a protection of the banking  system generally. There are perhaps half a dozen similar provisions in the Bank Act that are critical to the functioning of an honest system, but which have been subjected to the
same intellectual trick of beginning the provision with "Except by express agreement between the bank and the borrower...".

By analogy it is as if there were six or seven key provisions of the Bank Act that can be reduced to the form: "No one shall give a loaded firearm to a child"; but which have now been altered to read: "Except with the express permission of the child, no one shall give a loaded firearm to a child".  The manifest incompetence of the legislature is in its failure to grasp that the reason for denying banks the ability to require off-setting deposits is
to protect the banking system and has nothing to do with the alleged consent of the nominal borrower.

Likewise, until very recently the most significant of all rules/ policies involving banks, has always been to forbid banks from owing real estate in their own right. As long as the banking system was prohibited from owning real estate (except for its immediate places of business) the banks had a collective stake in the macro-economy. Since they could nly hold wealth as financial assets they had a vested interest in the financial economy such that if it collapsed then the banks would suffer the most harm. Again as of 1985 the Canadian solution to that problem is to decree under the current Bank Act that

*no such law has ever existed.*

retroactive to the beginning of time (section 434) (emphasis added):

434. (1) *A bank may acquire and hold an absolute title in or to real property*

affected by a mortgage or hypothec securing a loan or an advance made by the bank or a debt or liability to the bank, either by the obtaining of a release of

the equity of redemption in the mortgaged property, or by procuring a

foreclosure, or by other means whereby, as between individuals, an
equity of redemption can, by law, be barred, or a transfer of title to real property
can, by law, be effected, and may purchase and acquire any prior mortgage or charge on such property.

No act or law to prevent:
(2) *Nothing in any charter, Act or law shall be construed as ever having been***
*intended to prevent or as preventing a bank from acquiring and holding an*

*absolute title to and in any mortgaged or hypothecated real property*,
whatever the value thereof,

*or from exercising or acting on any power of sale contained***

*in any mortgage*

given to or held by the bank, authorizing or enabling it to sell or convey any property so mortgaged.

That whirring sound in the background is George Orwell spinning in his grave.

 

*No such law has ever existed * and

*no power in the universe*

can stop a bank from foreclosing or acting upon a power of sale in any mortgage given to or held by a bank. I spoke with an MP about this particular provision and his response was that MPs generally are told by their Party what laws/bills they are going to vote for or not, and that as a rule most MP's do not even bother to read the laws they are asked to pass because it is effectively pointless.

In practice it means that all mortgage foreclosures are at least constructive frauds against law and equity. The reason it is a fraud is that all courts are expressly prohibited from granting relief to the nominal borrower. If a court has no power to grant relief, then it is a false pretense to pretend to hear the matter without disclosure to both parties that the court is powerless to stop the bank. The effect of the words "Nothing in any charter, Act or law..." is that the Crown purports to create an entity that is more inherently powerful than the Crown itself. This law (s. 434) is what is referred to as a "declaratory statute" that merely declares/clarifies what the existing law is. The section does not purport to
change the law but rather to (falsely) assert/clarify that it has never been otherwise. In other words s. 434 of the Bank Act expressly clarifies that the "Crown" derives its power from the chartered banks and not vice versa.

Under s. 91 of the Constitution Act the federal government has the exclusive right and responsibility to make laws respecting "banking" "for the Peace, Order and Good Government of Canada", while the Bank Act states, to the extent that the Constitution Act is a "law" or "Act", that "Nothing in the Constitution Act shall be construed as preventing a bank from acting on any power of sale contained in any mortgage given to or held by a bank...".  Logically that is an absolute declaration by the Crown that the Crown is legally subservient to the chartered banks.

The Bank Act is not a statute so much as *prima facie* evidence of a criminal conspiracy against the People. What we need is a new set of "Nuremburg Trials" to clarify that "I did not read the bill that I voted for" is tantamount to "I was only following orders".  

 

This material was produced by Tim.Madden for the Public Banking Group June, 2010

 

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Alan Page,
May 13, 2011, 7:56 AM
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Alan Page,
Jul 30, 2010, 9:27 AM
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Alan Page,
Jul 5, 2010, 10:39 AM
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