Deferred Doesn’t Mean Free – Understanding Mortgage Deferrals, Banks and Your Money

I was reading an article a few days back about how Canadians have taken to social media to express frustration with the proposed 6-month mortgage deferral program. This deferral program was announced by the Big-6 banks and the nation’s mortgage default insurance companies. The deferral policy states that interest will continue to be applied during the deferral period which will, in the end, increase your total mortgage loan amount.

Among many intelligent and less than intelligent commentaries, one angry scribbler contributed this nugget of naivety to the social media onslaught.

“This isn’t right. Banks are supposed to help the public, not push them deeper into more debt. Profiting from this situation is inhuman!”

This poor soul has clearly not been paying attention to history.

This article will address the banking business model, how money is created and what it actually is, the level of concentration of the world’s wealth and by how much the Canadian and US public debt has exploded since 1980s bank deregulation. Spoiler…Banks are not here to help the public.

Let’s start by looking at what happened the last time we had a massive crisis.

How the financial sector responds to crisis? – Money Creation

During the financial crisis in 08-09, captured governments handed trillions of dollars over to the international network of financial corporations.

Bailouts were common place worldwide.

Canadians during that crisis heard repeatedly how Canada had the “most sound financial system in the world” and that Canadian banks didn’t need any bailouts.

Wrong.

Canadian banks, according to the Canadian Centre for Policy Alternatives, received $114 billion in bailouts.

The Government of Canada denied these accusations of course, instead calling the bailouts “liquidity support”.

During my time as a communications specialist in the office of a Canadian provincial health minister, I learned that governments will tell you about 10% of the story at any one time. Obviously they emphasize the 10% that serves their ideological narrative best and makes them look somewhat competent. Government communications specializes in downplay and euphemism and aims to make the “issue” go away.

So…the Canadian government’s “liquidity support” was a euphemism for a bailout.

At the same time, the Obama administration oversaw the biggest wealth transfer in history. Between TARP and Quantitative Easing, the administrations have showered more than $4 Trillion over Wall Street, driving the real estate market and stock market back to epic levels. Cue debt fueled asset price speculation.

Education…or lack therof

Society is not well informed enough on the subjects of money, debt, finance and banking. As a result, we are emotional about these subjects rather than rational while being kept in the dark about money inflation and the true costs of banking actions.

Our schools lack instruction on these essential subjects and our higher level economics and politics courses lean towards the “trickle down” teachings that benefit the privileged class. This is part of the reason why Canada’s consumer, public and mortgage debt levels are so dire.

Finance, money and banking interests control our governments and stop progress from taking place on issues as wide ranging as the environment, poverty, homelessness and government corruption.

What’s the connection?

When finance rules government and finance profits from the status quo, the issues of the day remain unaddressed at the highest levels despite negative effects on humanity. But why is finance so powerful?

Concentration of the World’s Wealth

A 2011 Swiss Institute Study by Vitali, Glattfelder and Battison discovered the following:

There are approximately 37 million corporations worldwide. 43,000 of these are Transnational Corporations (TNC), A core of 1318 of these TNCs with interlocking ownership influence the actions of the other 43,000 transnationals.

Within the 1318 lies a “super-entity” of 147 tightly knit companies.

This 0.00039% of the world’s corporations exert control over 40% of the entire international business network. See related article, click HERE

So most of world wealth is hoarded by a thin film of inherited, aristocratic privilege at the apex of society.

Most of these super entity corporations are financial institutions.

Wake Up Facts – Banks are NOT Public Servants

For-profit banks are not here to serve the public.
Banks are not designed to teach sound financial education or encourage the population to get out of debt.
Banks have business models that aim to maximum profit by encouraging the extension of debt to the limits of an individual’s (corporation’s or nation’s) economic surplus. Meaning, they extend credit up to the maximum that you can pay back monthly out of your total gross earnings.
Money is debt. It springs into existence the moment it is borrowed and vanishes the moment it is paid back.

If all the debt was paid back, “there would be no money left in existence”. (G.E. Griffin)

Money today has no gold or silver backing it. There is no fractional “reserve” amount. The reserve amount is 0%. It is fiat money (CLICK HERE for FIAT DEFINITION).
You can’t go to the central bank and redeem your currency for gold or any other precious metal. Our money is “legal tender” meaning the government decrees by law that we must accept paper fiat money as currency.

With that being said…The Federal Reserve Bank has stated that:

“neither paper currency nor deposits have value as commodities. Intrinsically, a dollar bill is just a piece of paper.” (Modern Money Mechanics, Federal Reserve Bank Chicago)

Banks create money by monetizing private business and personal debts. Monetizing means taking those loans and using them as backing to create more loans. Creating more loans creates more money.

“If the commercial banks create ample synthetic money we are prosperous; if not, we starve.” (Robert Hemphill, Credit Manager, Federal Reserve Bank, Atlanta)

How do central banks create money?

A central bank writes a cheque to buy government bonds (the cheque is backed by nothing)
The money received for the government bonds is spent by the government.
Bonds now in central bank possession act as reserves to create further loans. Approx. $9 in fiat money is created for every $1 fiat dollar in reserve.
The fiat money created on those bond reserves is the source of all bank loans; personal and business.
Every time this fraudulent slight of hand takes place the nation’s purchasing power declines. Prices rise because the currency is worth less. This is called inflation.
Inflation is a hidden tax. It hits hardest those who are thrifty, on a fixed income and middle or low income.
Because money=debt, when people are borrowing, the money supply is high. When lenders curtail credit or citizens stop borrowing due to a period of contraction, the money supply falls.
These are your booms, busts and depression. The average citizen doesn’t benefit but lives under the yoke of a modern, high-tech feudalism.

“Debt, public and private, is here to stay. What is required is not the abolition of debt, but it’s prudent use and intelligent management.” (Federal Reserve Bank, Chicago)

So if debt is here to stay and we’re not going to return to a commodity based currency, have North American governments used debt prudently and with intelligent management? Let’s look…

CANADA and the US indebted – Debt Growth Since 1980s (when banking was massively deregulated)

Canada

1981 – $91,900,000,000
1991 – $377,700,000,000
2002 – $511,900,000,000
2012 – $583,600,000,000
2019 – $787,800,000,000

Current projection post COVID-19 – $967,800,000,000. That’s almost a trillion Canada.

10.53 times increase in total public debt since 1981 = 1,053% increase

United States

1980 – $907,700,000,000
1990 – $3,233,000,000,000
2000 – $5,659,000,000,000
2012 – $16,059,000,000,000
2019 – $22,700,000,000,000
Today – $23,300,000,000,000

Post COVID projection- let’s just round that up to a cool $25 Trillion

27.54 times increase in total public debt since 1980 = 2,754% increase

What’s wrong with debt?

Nothing if based on an honest transaction and if it is managed prudently, which based on the above statistics it has not been.

The big problem with our debt is that it is based on fraud.

If I borrowed money from you that you had earned by your labor and talent, you would be fully entitled to receive my interest payment.

However, loans are created, as explained above, by the mere stroke of a pen or a few keystrokes on a computer keyboard.

Is it not fraud to charge someone interest on something created out of thin air? What is the time value of nothing? Unfortunately, in our societies, someone pays interest on every cent that exists in circulation.

“Every dollar that exists in circulation today is earning daily and compounded interest for the banks which created it.” (G.E. Griffin)

Every business venture, investment, profit, transaction including losses and taxes provide payment to a bank.

What did they do to earn this perpetual flow of wealth?

They waved the magic wand of fiat money. This is usury of the highest magnitude.

Our education curriculum needs an update. Knowing how basic banking and finance operate is essential for survival in today’s environment and to remedy the current incest of the government-bank money creation cartel.

This isn’t a rich vs. poor argument. Neither is it left vs. right.

The money monopolists don’t care who you are. Rich, poor, liberal, conservative, free, enslaved. All that matters is that you are using their fiat money and continuing the financial merry go round.

In North America we’ve elected either the Reds or the Blues (Liberal, Conservative, Democrat, Republican) at the Federal level for the entire existence of our countries. Major political organizations are beholden to finance and people are slowly starting to realize the obvious.

“That chartered banks represent a partnership between the parties in control of the government and the founders and shareholders of the banks,” Calomiris and Haber write.

Something’s gotta give. The same master is controlling the political marionettes.

Our banking and political systems are corrupt.

Meanwhile, here’s some recent Canadian fiat money creation news to chew on.

In Canada, due to Covid-19, we have experienced a massive shut down and a correspondingly massive societal bailout through the government, instructing the Canadian central bank cartel to “create” a massive amount of new stimulus funds.

Regarding all these emergency orders, former Conservative MP Garth Turner points out that “no provincial legislatures approved them. The House of Commons is not sitting. Opposition leaders are self-gelded. The most significant individual economic acts in Canada’s history, and the greatest level of expenditures ever seen, just kinda happened. Because of a virus that has so far taken 462 lives. This compares with 8,511 deaths last year from the flu. And we shut nothing then.”

This isn’t meant to negate the sadness felt over the deaths of our fellow citizens or the fact that we are facing a serious pandemic. What it does ask the citizens of this country is that we keep our eyes on our leaders. Activate critical thinking skills. Critical thinking has purposefully never been a focus of our vanilla education curriculums. But it is essential now.

When fear sets in and the population is distracted by TikTOk and empty bank accounts, a lot of undemocratic shit is going to get implemented when you’re not looking. Pushed through by powerful interests who have captured governments and whose business model is perpetual and ever increasing debt.

These banking interests are not your friends and are most certainly not a public service.

Be well. Stay healthy. Thank you very much for reading. Please share 🙂

One of my hobbies is blogging about mortgages, debt and government policy. During the day I’m a MORTGAGE BROKER in Kelowna, BC!

Michael Huber
Huber Mortgage

PS – I’m always available if you have any mortgage related questions. Contact me HERE.

If you’d like some handy tips on how to save money when you buy your next house, Check out the free Huber Mortgage Home Buyers Guide HERE

Deferred Doesn’t Mean Free – Understanding Mortgage Deferrals, Banks and Your Money

Among many intelligent and less than intelligent commentaries, one angry scribbler contributed this nugget of naivety to the social media onslaught.

“This isn’t right. Banks are supposed to help the public, not push them deeper into more debt. Profiting from this situation is inhuman!”

This poor soul has clearly not been paying attention to history.

This article will address the banking business model, how money is created and what it actually is, the level of concentration of the world’s wealth and by how much the Canadian and US public debt has exploded since 1980s bank deregulation. Spoiler…Banks are not here to help the public.

Let’s start by looking at what happened the last time we had a massive crisis.

How the financial sector responds to crisis? – Money Creation

During the financial crisis in 08-09, captured governments handed trillions of dollars over to the international network of financial corporations.

Bailouts were common place worldwide.

Canadians during that crisis heard repeatedly how Canada had the “most sound financial system in the world” and that Canadian banks didn’t need any bailouts.

Wrong.

Canadian banks, according to the Canadian Centre for Policy Alternatives, received $114 billion in bailouts.

The Government of Canada denied these accusations of course, instead calling the bailouts “liquidity support”.

So…the Canadian government’s “liquidity support” was a euphemism for a bailout.

Education…or lack therof

Society is not well informed enough on the subjects of money, debt, finance and banking. As a result, we are emotional about these subjects rather than rational while being kept in the dark about money inflation and the true costs of banking actions.

Our schools lack instruction on these essential subjects and our higher level economics and politics courses lean towards the “trickle down” teachings that benefit the privileged class. This is part of the reason why Canada’s consumer, public and mortgage debt levels are so dire.

Finance, money and banking interests control our governments and stop progress from taking place on issues as wide ranging as the environment, poverty, homelessness and government corruption.

What’s the connection?

When finance rules government and finance profits from the status quo, the issues of the day remain unaddressed at the highest levels despite negative effects on humanity. But why is finance so powerful?

Concentration of the World’s Wealth

A 2011 Swiss Institute Study by Vitali, Glattfelder and Battison discovered the following:

There are approximately 37 million corporations worldwide. 43,000 of these are Transnational Corporations (TNC), A core of 1318 of these TNCs with interlocking ownership influence the actions of the other 43,000 transnationals.

Within the 1318 lies a “super-entity” of 147 tightly knit companies.

This 0.00039% of the world’s corporations exert control over 40% of the entire international business network. See related article, click HERE

So most of world wealth is hoarded by a thin film of inherited, aristocratic privilege at the apex of society.

Most of these super entity corporations are financial institutions.

Wake Up Facts – Banks are NOT Public Servants

For-profit banks are not here to serve the public.

Banks are not designed to teach sound financial education or encourage the population to get out of debt.

Banks have business models that aim to maximum profit by encouraging the extension of debt to the limits of an individual’s (corporation’s or nation’s) economic surplus. Meaning, they extend credit up to the maximum that you can pay back monthly out of your total gross earnings.

Money is debt. It springs into existence the moment it is borrowed and vanishes the moment it is paid back.

If all the debt was paid back, “there would be no money left in existence”. (G.E. Griffin)

Money today has no gold or silver backing it. There is no fractional “reserve” amount. The reserve amount is 0%. It is fiat money (CLICK HERE for FIAT DEFINITION).

You can’t go to the central bank and redeem your currency for gold or any other precious metal. Our money is “legal tender” meaning the government decrees by law that we must accept paper fiat money as currency.

With that being said…The Federal Reserve Bank has stated that:

“neither paper currency nor deposits have value as commodities. Intrinsically, a dollar bill is just a piece of paper.” (Modern Money Mechanics, Federal Reserve Bank Chicago)

Banks create money by monetizing private business and personal debts. Monetizing means taking those loans and using them as backing to create more loans. Creating more loans creates more money.

“If the commercial banks create ample synthetic money we are prosperous; if not, we starve.” (Robert Hemphill, Credit Manager, Federal Reserve Bank, Atlanta)

How do central banks create money?

A central bank writes a cheque to buy government bonds (the cheque is backed by nothing)

The money received for the government bonds is spent by the government.

Bonds now in central bank possession act as reserves to create further loans. Approx. $9 in fiat money is created for every $1 fiat dollar in reserve.

The fiat money created on those bond reserves is the source of all bank loans; personal and business.

Every time this fraudulent slight of hand takes place the nation’s purchasing power declines. Prices rise because the currency is worth less. This is called inflation.

Inflation is a hidden tax. It hits hardest those who are thrifty, on a fixed income and middle or low income.

Because money=debt, when people are borrowing, the money supply is high. When lenders curtail credit or citizens stop borrowing due to a period of contraction, the money supply falls.

These are your booms, busts and depression. The average citizen doesn’t benefit but lives under the yoke of a modern, high-tech feudalism.

“Debt, public and private, is here to stay. What is required is not the abolition of debt, but it’s prudent use and intelligent management.” (Federal Reserve Bank, Chicago)

So if debt is here to stay and we’re not going to return to a commodity based currency, have North American governments used debt prudently and with intelligent management? Let’s look…

CANADA and the US indebted – Debt Growth Since 1980s (when banking was massively deregulated)

Canada

1981 – $91,900,000,000 1991 – $377,700,000,000 2002 – $511,900,000,000 2012 – $583,600,000,000 2019 – $787,800,000,000

Current projection post COVID-19 – $967,800,000,000. That’s almost a trillion Canada.

10.53 times increase in total public debt since 1981 = 1,053% increase

United States

1980 – $907,700,000,000 1990 – $3,233,000,000,000 2000 – $5,659,000,000,000 2012 – $16,059,000,000,000 2019 – $22,700,000,000,000 Today – $23,300,000,000,000

Post COVID projection- let’s just round that up to a cool $25 Trillion

27.54 times increase in total public debt since 1980 = 2,754% increase

What’s wrong with debt?

Nothing if based on an honest transaction and if it is managed prudently, which based on the above statistics it has not been.

The big problem with our debt is that it is based on fraud.

If I borrowed money from you that you had earned by your labor and talent, you would be fully entitled to receive my interest payment.

However, loans are created, as explained above, by the mere stroke of a pen or a few keystrokes on a computer keyboard.

Is it not fraud to charge someone interest on something created out of thin air? What is the time value of nothing? Unfortunately, in our societies, someone pays interest on every cent that exists in circulation.

“Every dollar that exists in circulation today is earning daily and compounded interest for the banks which created it.” (G.E. Griffin)

Every business venture, investment, profit, transaction including losses and taxes provide payment to a bank.

What did they do to earn this perpetual flow of wealth?

They waved the magic wand of fiat money. This is usury of the highest magnitude.

Our education curriculum needs an update. Knowing how basic banking and finance operate is essential for survival in today’s environment and to remedy the current incest of the government-bank money creation cartel.

This isn’t a rich vs. poor argument. Neither is it left vs. right.

The money monopolists don’t care who you are. Rich, poor, liberal, conservative, free, enslaved. All that matters is that you are using their fiat money and continuing the financial merry go round.

In North America we’ve elected either the Reds or the Blues (Liberal, Conservative, Democrat, Republican) at the Federal level for the entire existence of our countries. Major political organizations are beholden to finance and people are slowly starting to realize the obvious.

“That chartered banks represent a partnership between the parties in control of the government and the founders and shareholders of the banks,” Calomiris and Haber write.

Something’s gotta give. The same master is controlling the political marionettes.

Our banking and political systems are corrupt.

Meanwhile, here’s some recent Canadian fiat money creation news to chew on.

In Canada, due to Covid-19, we have experienced a massive shut down and a correspondingly massive societal bailout through the government, instructing the Canadian central bank cartel to “create” a massive amount of new stimulus funds.

When fear sets in and the population is distracted by TikTOk and empty bank accounts, a lot of undemocratic shit is going to get implemented when you’re not looking. Pushed through by powerful interests who have captured governments and whose business model is perpetual and ever increasing debt.

These banking interests are not your friends and are most certainly not a public service.

1981 – $91,900,000,000
1991 – $377,700,000,000
2002 – $511,900,000,000
2012 – $583,600,000,000
2019 – $787,800,000,000

1980 – $907,700,000,000
1990 – $3,233,000,000,000
2000 – $5,659,000,000,000
2012 – $16,059,000,000,000
2019 – $22,700,000,000,000
Today – $23,300,000,000,000

Michael Huber
Huber Mortgage