First, I would like you to watch the first 1:35 minutes of this 6:55 minute video of your Finance Minister, Chrystia Freeland, in her best school-marm costume, talking down to you about your ‘savings’: Click here.
She refers to better-off Canadians in this plandemic as having
quite a lot of money that they’ve saved. … it would be great if that money could go towards driving our recovery.
In short, you’ve got savings and she wants you to spend them, particularly, as we shall see, in a manner that she prefers.
To deconstruct this statement, lets define ‘money’ as cash on hand (or under your mattress). This is money that is not active in the economy and is potentially available to invest (spend) in the economy by purchasing something.
Generally, Canadians have little cash on hand. What they do have is used as a buffer for their economic transactions. As such, it is not significantly reducible. Depending on your life style, cash is more or less a component of it and is not excessive. As an analogy, when you are driving, you have a certain distance that you keep between yourself and the vehicle in front. This is a buffer. At a fixed speed, if your buffer is reduced by someone pulling in front of you, you have to drop back to reestablish your buffer.
For most Canadians, the income from any source that they receive is not in the form of cash but is either in the form of a direct deposit into their bank account or a paper cheque that they will deposit. Even if you want to cash a cheque, the bank first deposits it into your account and then withdraws the money from your account. The reason for this is not important here.
What are your savings if cash is a very minor part? Suppose the tooth fairy leaves $1000 under your pillow and you want to save it. You take the $1000, all the cash or money that you have, and deposit it into your bank account as your life savings. So how much money do you have in your savings for Ms Freeland? The answer is zero.
Once that $1000 is placed in your teller’s hand it is no longer yours. You have made a low interest loan of indefinite term to the bank, of $1000. In turn, you have become an unsecured creditor of the bank. Here’s the part that Freeland would seem not to understand. Although you had $1000 of savings, you spent it by lending it to the bank for some nominal rate of interest. You purchased an I.O.U from the bank. You spent the $1000. When you had cash, your savings were ‘liquid’ – easily available for spending. Now you have a $1000 loan to the bank which is not very liquid (forget credit and debit cards, they only add a layer of complexity to a simple argument without changing the underlying dynamics of it). If your bank then announces that it is bankrupt, you have to join the long list of creditors and you are at the bottom of the pile. That’s another story.
So now the bank has the money. You may think that it stores it in its vault until you want it. Nope, because that costs it money. It lends it out to someone as fast as it safely can.
Suppose the local plumber needs a new van but lacks the money to buy it. He goes to the bank and the bank loans him $1000. He has every right to take that loan in a cash payout, to his brother-in-law’s truck dealership. So now, the bank, like you is holding a loan agreement for $1000 and no money.
Consider this option. You take your new $1000 to the bank and buy a Canada savings bond. This used to be a standard form of saving when the government paid a reasonable interest rate. The money has now gone to the government to spend. Here’s the amusing situation. Freeland would like you to sell that bond for cash and spend it in the economy in some place that she would want. The government redeems the bond by paying you $1000 out of a finance department account. This is money that the government could have spent as Freeland wants but can’t now because you have it and not them.
I’ll summarize the above in a couple of points:
- There is no great quantity of savings available for spending. It has already been spent, mostly for investment instruments, in a manner that individuals at the time, judged to be best.
- If you try and convert these savings into a liquid form – cash – for spending, you have to sell existing assets. The buyer of these assets must then use his liquid resources to buy the assets and his liquidity is now locked up in the asset that you just sold.
- It’s a zero sum game. There is no magic pot of gold waiting for Freeland to ride up on a unicorn and grab.
Let’s look at a bit more of her interview.
“I want to make an offer now to all of your listeners, if people have ideas on how the government can act to help unlock that pre-loaded stimulus, I’m very, very interested. … If people have ideas on how we can really, you know, try to unleash that and particularly unleash it in parts of the Canadian economy that really need support … let me know.
The language is disturbing. She views your savings as a “pre-loaded stimulus”. It conveys a strong sense that your savings are an asset for her to use in managing the economy and not for you to use as you wish. There is no consideration of your savings as a personal private asset managed by you for the future when need may arise. Rather, it seems to be viewed as an asset the state should have some claim and control over.
Have we heard anything like this before? Well yes: the platform of the World Economic Forum (WEF).
Yes indeed, you’ll own nothing (but who will then own it?) and you’ll be happy (or else), parentheses added for clarity. Or, as Martin Armstrong calls it, Communism 3.0. Guess who is a member of the board of trustees of the WEF? Answer.
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For music, I don’t have time to research so a couple of quick selection by Rachmaninov and VOCES8. From his Vespers, Op.37, here is VI. Bogoroditse Devo:
And also from the Vespers, Nyne otpushchayeshi:
I would like to have been able to see the performers. They have a big rich sound. I have a passion for music from the Eastern Church. It is particularly generous to basses.
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