Pay and productivity

Pay and productivity

Since 1973 there has been a divergence of pay and productivity, contributing to the massive income inequality.

What happened in 1973?

Canada is a text book example. Before 1973, under the McKenzie-King legislature (and the constitution in fact), the publicly-owned (unlike the US Reserve bank) Banque du Canada managed the currency supply.

Control of national currencies

In 1973, under Trudeau premier, the right to create currency was handed over to private banks.

What this means is that all levels of government now have to be indebted to private banks for financing in the country's own currency, which is nothing more than a legal idea, created out of nothing but bookkeeping.

Worse, interest has now to be paid on that artificial (fiat) currency or the assets covering the debt (pension funds, infrastructure, buildings, land) will be seized. It is important to realise that the currency for the interest payments has not been "created", thus it has to be extorted from taxpayers.

An ever increasing percentage of government budgets (the largest single item) is paid to banks as interest for no reciprocal performance. Remember this budget is real effort and assets of taxpayer being handed over.

Money that should have been available for infrastructure.

Quantitative easing

Secondly, this free hand at creating currency has lead to an "exuberant" inflation of currency by the banks in the name of easing, bailouts, etc. (While the US's initial 2008 bank bailout was $760 billion, Canada's was $200 billion). This is simply the taxpayer being placed on-the-hook, under threat of foreclosure, for rampant currency creation, ie., debt.

Each new dollar created of course has purchasing power. This value does not come from the "printing press", but robbed from savings and wages through inflation (more units makes each existing unit less valuable).

Rate of impoverishment

We can only guess at the rates, but less say the inflation of the currency supply (it is parabolic) is about 12% per annum, and the inflation of consumer prices is about 2% (with food and fuel, perhaps 4%).

The difference of 8-10% per year is the rate at which productivity is being stolen from the producers.


Permit me a word on bankruptcies please. Bankruptcy does not mean "cleaning the slate"; bankruptcy means handing over your assets, ie., dispossession.

Bankruptcy is important because the bookkeeping trick requires that interest be paid out of the existing currency supply (loans/debt), thus reducing the currency supply forcing governments to perpetually borrow more just to maintain the currency supply and prevent deflation, and economic shrinking.

Every debt covenant has an asset attached, pension fund, infrastructure, land, etc.

This continual interest payments on our own currencies, requiring more debt to maintain the currency supply will inevitably lead to bankruptcy.

Dispossession of national assets

This simple bookkeeping scam, legislated in 1973, has lead to a volcano of new currency,

• debasing our saving and wages, and
• since currency is now debt, leading to bankruptcy and dispossession of national assets

This is why banks continue to lend to governments who have no hope of repayment, since they are after the real assets such as pensions, land, and infrastructure, not repayment of currency created out of nothing