The Bank of Canada`s over-leveraged balance sheet!

[Anonymous]

http://youtu.be/fR5Z6oOzMF8



This is the May 2013 Bank of Canada Financial Statement released on the Bank of Canada website. There is no real cash or deposits, it is liable for all the bank notes currently in circulation, and the only "asset" is treasury bills and government bonds. In other words, the only asset is debt. But technically, debt can't really even be an asset, because in the paper markets, the realm of fiat, monopoly money--wealth becomes debt, or assets become someone else's simultaneous liability. If you look at it from a certain perspective, the Bank of Canada's assets is "our" liability as taxpayers to keep paying the interest on those bonds. Gold is the only real money, or asset, that is not someone else's liability. In a truly free society, our public central bank (if we even had one--and technically, a free society doesn't even need one!) would hold gold, or real money and wealth, that is not simultaneously someone else's liability. But currently the Bank of Canada is our "god" or "ruler" and we all work as slaves to pay interest on the ever increasing amounts of debt our government takes on from the Bank of Canada.

 

[Thomas Beyer]

What a bunch of BS.



Gold is not a practical currency.



Debt has to be seen in relations to assets, not in isolation !



Governments also hold assets, such as: roads, forests, mineral rights, schools, bridges, tunnels, water rights, land and: teh right to taxes .. and those assets are poorly calculated or not really counted. What is counted usually is the debt only. Debt size has to be seen in the context of these assets on the populations' ability to generate income or GDP / taxes. Debt to GDP ratio's of up to 50% or deficit to GDP ratios up to 3% are OK, by and large.



Without debt economies would collapse. Look at countries that have no mortgages, weak banks or corrupt governments. Is this the answer ?



The core issue in the western world is not debt, it is

a) excessive expectations of the populace without paying for it (through levies, taxes or fees)

b) excessive unionization of the public sector, thus excessive wages and benefits

c) unaccountable politicians that promise X and then deliver Y

d) excessive pensions, healthcare, education and bailout expenses (see a) given the revenues collected



The main answer to a) and d) is lose monetary policy, i.e. quantitative easing, i.e. erosion of purchase power, i.e. inflation.



b) and c) can be achieved with a more conservative government usually and democratic reform.



The gold standard is not the answer.