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Is there a Hidden Agenda in the War in Ukraine?

5/22/2022

What if if there are more bad guys in the Ukraine conflict than we think. And what if the really big ones pulling the strings are hidden?

It’s become increasingly clear that both the US and many EU countries, as well as Britain, want the war in Ukraine to continue. There’s been very little meaningful push for a negotiated solution, in spite of the carnage that is taking place.

Instead, the emphasis has been on getting more and more weapons into Ukraine.
That may please American armament manufacturers but it's hard to see how Europe benefits from the conflict.

Almost 40% of European gas imports are imported from Russia via pipelines through Ukraine and the Baltic Sea. 25% of their oil imports also come from Russia, mostly via tankers. If these arrangements are disrupted or canceled many European countries will have to pay a lot more for energy imports. That could severely damage their industries.

Moreover, if the current war intensifies it could explode into their own territory. Why would they want to risk that?

Is it possible that the big reason for the war has very little to do with Ukraine itself? Could the real motive be an attempt by NATO countries to "fix" the increasing vulnerability of the present global financial empire, which is almost entirely dominated by the US, Britain and the Europe?

That vulnerability exists for two reasons.

The first is growing de-dollarization seen in organizations like the BRIC (Brazil, Russia, India, China) New Development Bank (NDB) and the Eurasian Economic Union (EAEU). These initiatives could, if they catch on,   challenge the dominance of both the American dollar and the Euro as the go-to reserve currencies for international exchanges. The very real fear in Western financial towers is that the Global South will move in favour of these new systems.

Hence Russia, as one of the major investors in the NDB and EEU, must be destabilized. What better way to do that than to tie the county up in a costly and exhausting war? And where better to provoke that war than Ukraine with its tensions between the Ukrainian speaking west of the country and the Russian speaking east?

Perhaps that explains why 40% of members in the Ukrainian militia groups that have fomented so much violence in Eastern Ukraine over the last few years have apparently been foreign mercenaries. One has to wonder who has been footing the bill for that, since it's  hard to imagine the Ukrainian government being able to afford that expenditure. Ukraine is the poorest country in Europe with a gross national income per capita of $3,540 US (2020 statistics, Atlas method).

Secondly, the destabilization of Russia needs to happen soon, since the massively overinflated stock markets of the Western World are due for a “correction”, one that might be even more dramatic than the 2008 financial crisis. Financial elites understand that If the stock markets start to plunge and interest rates continue to rise that could be a trigger for Third World countries to actually default on their debts and simply abandon the current system, but only if they have an alternative to go to.

These Asian alternatives, which entail replacing the dollar with a basket of currencies from different countries, would be a seismic shift if they were to be embraced. Some say it would be the end of the American and European global dominance. There’s no way that that’s not going to be heavily resisted.

Could it be possible then, that the real puppet masters pushing the Ukraine war are Western financial elites, well hidden from view?   It is not a hypothesis you will hear or see in our media. There we are given a simplistic story of a small nation, courageously led by a heroic leader standing up to an evil villain. It’s a narrative designed to tug at our heart and our sense of compassion.

But, do you really believe NATO governments, who have never shown any remorse at the death and destruction their incursions have caused in Libya, Syria and Iraq, would suddenly feel moved to risk nuclear war to protect Ukrainians?

Or is Ukraine just a pawn in a geopolitical financial power struggle, one that could massively backfire on the West? And have the Ukrainian people been conned or coerced into accepting a war that could drag on for a long time and ultimately end very badly for them?

Perhaps we should be asking more questions - and expecting more from our media.

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Why the Bank of Canada needs to be reformed and how we could do it.

5/14/2022

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The recent verbal skirmish between Conservative leadership contestant, Pierre Poilievre, and PM Justin Trudeau, over the role of the Bank of Canada was more interesting for what it didn’t allude to than what it did.

“The Bank of Canada Governor has allowed himself to become the ATM machine of this government…. Money printing government deficits have caused more dollars chasing fewer goods, driving higher prices.”   Pierre Poilievre

‘The independence of the Bank of Canada from the government of the day is a really important principle that ensures the stability and the good reputation of Canada in international economic circles.” PM Justin Trudeau

Let’s start with Poilievre’s accusation that the inflation we are seeing in our stores is caused by the Bank of Canada's enthusiastic creation of money to fund government spending. That's not really true.

Most government funding that is not raised through taxes comes from the government's issuance of interest bearing treasury bills and bonds. Currently only 10% of these are purchased by the Bank of Canada. The remaining 90% are sold to financial institutions. The money raised in this way is in the form of government debt owed to these institutions. During the pandemic Canada took on a large debt load to finance CERB payments, a decision that made sense to most Canadians.

So if the Bank of Canada isn't printing huge amounts of money and dishing it out to government through the purchase of new treasury bills, does that mean our Central Bank isn't a source of inflation. Yes and No. I don't think Poilievre is correct in blaming the Bank of Canada for the price hike of goods. But the explosion in property values and share prices can definitely be linked to Bank of Canada policies.

It has to do with Quantitative Easing.

Quantitative Easing: Who benefits? Who is neglected?

When COVID hit, our Central Bank began using the money it can create out of thin air to buy treasury bills and bonds, but not directly from government. Instead, the great majority of the purchases were in the secondary market - from commercial banks and other financial institutions that had purchased these assets at an earlier date. The strategy is called Quantitative Easing (QE).

The rationale for QE has been that these financial institutions will then use the money they have received through selling their bonds to the Bank of Canada to create additional loans directed at the business sector That will stimulate the economy and create jobs. Sounds good!

Except, that is not what commercial banks have been doing. Instead, they have preferred to loan money to to investors who buy real estate, stocks, bonds and other financial instruments. Those who benefit are rarely citizens, workers or local businesses, but rather the 1 to 10 percent of the population who can afford to speculate in this kind of way.

In other words, while the Bank of Canada's QE initiatives may be guilty of causing inflation in property and shares, they have, arguably, had very little to do with price rises in the ordinary things we consume. Certainly, at present, these hikes have much more to do with shortages caused by supply chain problems.

For a clearer description of how Quantitative Easing works check out Jim Stanford's article in The Monitor.

Whose interests does the Bank of Canada serve?

Let’s turn now to our Prime Minister’s assertion that the Bank of Canada needs to be independent from government. One has to ask the question: Where has that independence led Central Banks?

Those in control of Central Banks in Europe and North America have known for years that the money they were injecting into the banking sector through QE's buyback of treasury bills and bonds was not trickling down to the main street economy. Yet they have continued with what is, in reality, a very harmful practice.   Why is that? Could it be that the independence of Central Banks from government that Trudeau so values, has led to them being joined at the hip with self-serving private sector bankers on Wall Street, Bay Street, the City of London, etc.? Why would the phenomenon be any different in Canada?

Last October the Bank of Canada announced that it would end its experiment with Quantitative Easing. Perhaps, leadership there finally had some qualms about the staggering rise in real estate prices, precipitated by all that money competing for Toronto properties.

But does that mean that Quantitative Easing is necessarily a bad thing?  Not at all. It very much depends on how it is used.

A Quantitative Easing approach that serves the people

What if the money created by the Bank of Canada was not used principally to buy bonds from the private sector? What if, instead of only 10%, a sizeable part of it was directly loaned to the government of Canada to be used to stimulate infrastructure development and the jobs that go with that? That’s not a farfetched idea. In fact, Canada did exactly that for 35 years.

In 1938 the Bank of Canada, until then a private sector bank, was nationalized by the liberal government under Prime Minister McKenzie King. The next year, the Bank began buying treasury bills and bonds directly from the Canadian government. What that meant, in essence, was that the Canadian government was borrowing money from itself and paying itself interest, instead of doing so through private sector financial institutions.

That money was used initially to fund the war effort. Post war, it was infrastructure projects including the TransCanada Highway, the St Lawrence Seaway, multiple universities across the country, and, of course, the many infrastructure projects that were initiated here in our province once we joined confederation. It was an amazing period with multiple employment opportunities for those of us lucky enough to come of age during that period.

Then, in 1974 the Canadian government abruptly ceased to borrow money through our Central Bank and began, instead, to issue bonds and treasury bills to be bought by private financial institutions. Look what happened to our debt load once that started.

Most Canadians are unaware of just how golden the postwar period was for ordinary people. But our prime minister shouldn’t be. It was under the government of his father, Pierre Trudeau, that the Bank of Canada, no doubt under pressure from the international bankers who absolutely hated Canada’s unique experiment, suddenly  ceased loaning money to government,

Will the King government’s QE model ever be resurrected? Apparently not with our current pool of political parties. It’s as if that golden era has been expunged from the history of parliamentarians. There’s never any discussion or reference to it.

But there should be. And my generation, Baby Boomers who benefited so easily from past QE policies, should be pushing for it.

Pierre Poilievre is right to demand reform of the Bank of Canada. He's right to want to ban the Bank's introduction of a digital currency. But like economists in the Modern Monetary Theory movement, I would disagree with his enthusiasm for constricting the money creation powers of the bank in the name of controlling inflation.

The problem is not the excessive creation of money.  It's where the money has been going. It's how that money has been used to enrich the already rich and powerful, while, meanwhile, the job and housing opportunities for so many of our young people continue to shrink, in spite of their multiple degrees or levels of training.

We need to fix that inequity, but an independent Bank of Canada is never going to do that on its own. It needs a push.

What we really need are political leaders with the vision and insights of the McKenzie King era - leaders that would be committed to the development of local infrastructure and the jobs that would go with that.

And if we can find these leaders we need to support them.

Marilyn Reid

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