# Victoria Grant 12yr old speech on Canadian banks



## emperor (Jul 24, 2011)

Thought this might be interesting for some people that haven't heard it before.

http://www.youtube.com/watch?v=Bx5Sc3vWefE


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## Dopplegangerr (Sep 3, 2011)

Maybe this little girl is why my shares of RY have dropped so much in the last week or two


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## ddkay (Nov 20, 2010)

Adults using kids as a mouth piece for political gain = fail. She's cute I guess, but that speech was taken pretty much word for word from the "Oh Canada Movie" on YouTube.


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## KaeJS (Sep 28, 2010)

Created out of "thin air"?

All money is "debt"?

"Jesus"?

What?


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## andrewf (Mar 1, 2010)

Yikes.


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## CanadianCapitalist (Mar 31, 2009)

ddkay said:


> Adults using kids as a mouth piece for political gain = fail.


+1. Sounds like propaganda to me.


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## Just a Guy (Mar 27, 2012)

Every time I get a mortgage for a rental, the bank creates money for themselves. When I charge rent that covers the cost, I make money off the tenants in exchange for providing them with affordable housing. As I pay down the mortgage, I destroy the imaginary bank money, replacing it with real money.

I create jobs by hiring trades people to make repairs.

The difference is, I arrange to pay the money back. The government just keeps spending going to whichever trough is open (banks or tax payers).

If we want to change things, quit electing the people who promise to give everyone everything they want. If we stop spending and then pay down the debt, the problem will go away. Of course, why would we want to elect a government who isn't willing to bribe us with all the money it can get?


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## OhGreatGuru (May 24, 2009)

You will observe she was invited to speak at an American conference of an American Banking Association. Them Yanks sure have shown us Canucks how banks should be run, haven't they?


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## andrewf (Mar 1, 2010)

All money is imaginary. They're just bits of paper we all agree have value. It's a useful fiction.


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## Just a Guy (Mar 27, 2012)

Another reason to like real estate...it has real value, whatever the monetary system...and inflation means I pay less money long term.


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## caricole (Mar 12, 2012)

*The girl that silenced the world for 5 minutes*

Maybe listening would help

http://www.youtube.com/watch?v=-tvxM8i-esc

caricole :hopelessness:


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## doctrine (Sep 30, 2011)

I watched this. She was scripted. Can I ask her some questions? No? Why not? Because she doesn't know anything other than what her parents made her repeat?

I personally dislike government debt. What is $600B of debt doing for us lately? Debt for ongoing operations is ridiculous, the only valuable debt is debt for a purpose, like building the railway or war bonds. The war is over, the railway is built, pay off the debt already.

Money is fictional. It works because its easier than me giving you a bucket of rocks for a bucket of grain. Get over it. If you don't like debt, elect a party that is committed to reducing the debt. Oh wait, there isn't any in Canada. Although I appreciate the current government's efforts to reign in spending, they still aren't paying the debt. Paul Martin was the last finance minister to pay down the debt, he was a terrible Prime Minister but probably the greatest finance minister this country has ever seen.


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## andrewf (Mar 1, 2010)

Was PM actually a terrible PMÉ That was a meme, but I thought it was more fatigue with the Liberals in general.


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## HaroldCrump (Jun 10, 2009)

This is the first time I am hearing of this girl and this speech.
However, the basis of the entire speech is a set of misconceptions - and surely she didn't come up with these ideas, these have clearly been brainwashed into her by some folks with vested political interests.

Yes, bank loans create money out of "thin air".
But that is the foundation of the money multiplier based banking system.
The only way to avoid it is to go back to the barter system - when only finite quantities of specific goods can be exchanged for finite quantities of other goods.
The gold standard in existence before WWII was a variation of that system, but still had a substantial degree of money multiplier built into the system.

The debt she speaks is not there because govt. borrows money from private institutions - it is there because govt. borrows money, period.
Public debt can be eliminated if the govt. lives paycheque-to-paycheque year to year.

Her solution will not eliminate govt. debt and deficit.
What she is suggesting (i.e. eliminate private financial intermediaries) is indeed possible.
In fact, the communist economies like the USSR operated in exactly that model for decades.
Yet, that does not eliminate debt and deficit.

Wasn't there a guy here on CMF a year or so ago, spewing the same misconceptions and every time pasting a link to the website of a political party?


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## HaroldCrump (Jun 10, 2009)

Found it...in 2010 and 2011 this individual (or several maybe) were posting here under various user names - byron84 and Iamwhatiam were the two most used.
There were spewing the same misconceptions about the govt. of Canada creating fake money.
All of these were originating from a politicaly party/group called Canadian Action Party.
I won't post the link again, but that is the name of the website as well, plus .ca at the end.

If you read their website, it is almost identical to what this girl said in her speech.

P.S. I feel sorry for the girl more than anything else.
I have a daughter few years younger than her and I can't even imagine what kind of parents/guardians allow this sort of thing.


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## Facing42 (May 19, 2012)

*Victoria Grant*

Good afternoon everyone! 

This is Victoria's father. Victoria is a bright young girl with an exceptional memory. She chose this topic to research. She spent a few weeks writing, editing, having us proof read and challenge her, assisting her as any parent would and should. 
We had two outright requirements for her speech. She could not include information she could not explain outside of the scope of her speech and she could not use any vocabulary she was unable to define and use in another context.
She understands this topic at the level an intelligent, informed 12 year old is able to understand it. Why people focus on whether she wrote the speech vs what the speech says I am unsure. Is it an ego thing? I ask in a sincere manner. I mean no disrespect. I am simply curious as to why this becomes a main point of contention for people.
We supported our daughters desire to deal with this topic. Obviously, it is an interest of mine and she has endured many a dinner table conversation as well as social events where I discuss such topics. But she always participated, asked questions, and wanted to learn more just as my other children do. 
I will do my best to support my daughter in whatever ventures she chooses to pursue without apology.
Hope everyone has a great day and weekend. 

To Harold,

The type of parents that allow this sort of thing are parents who care about their children; who take an active role in their lives; who don't just simply drop them off at school expecting everyone else to teach their child;who prepare them for the future they will inherit. 
Harold, I wonder how many ideas you came up with on your own? I wonder if you have ever actually had an original thought that was devoid of a teachers influence; a parent's influence; an author's influence? I wonder if you were able to learn math, english, science without having the aid of others? I wonder if you were able to learn in the context of a vacuum? My daughter used this same repetition in her speech. Interesting how she learned to use repetition to get a point across. I wonder if this makes her speech less worthy of attention because someone taught her about repetition? Obviously for her comments to have any merit they must be completely devoid of any outside influence. 
Harold, at least you are discussing this. At least some people who have never understood what is happening with our economy are now discussing and researching this issue. Whether they agree with the thesis my daughter presents is irrelevant. What matters is that Canadians wake up and start participating in deciding our economic future and stop allowing the politicians and bankers to simply sign our lives away to interest based debt.
All the best Harold.


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## Sampson (Apr 3, 2009)

Just watched this video finally, and I think I'm confused.

If the Bank of Canada loaned money to me, is that created out of substance? Or would they be clicking a button on a computer, keeping track of how much I owe, charging me interest, and creating a death loan?

Or would the money the Canadian government creates out of thin air be 'good' debt?


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## ddkay (Nov 20, 2010)

Facing42 the problem I have is all the information given was cherry picked from fiat bashing videos on YouTube. Case in point: http://www.youtube.com/results?search_query=oh+canada+movie

Learning things _objectively_ is about more than copypasta. It's about looking at all possible perspectives, recognizing bias, throwing away anything that can be proved false.

Do you pay for precious metals research from the World Gold Council? If I told you they are solely funded by the mining industry, does that still sound like a credible source? http://www.gold.org/about_us/members/

I don't expect your daughter to know that, but you should...


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## Facing42 (May 19, 2012)

*Thanks for the input DDKay!*



ddkay said:


> Facing42 the problem I have is all the information given was cherry picked from fiat bashing videos on YouTube. Case in point: http://www.youtube.com/results?search_query=oh+canada+movie
> 
> Learning things _objectively_ is about more than copypasta. It's about looking at all possible perspectives, recognizing bias, throwing away anything that can be proved false.
> 
> ...


Hey ddkay!

Hope all is well. 

My daughter shared an opinion piece based off the research she did and I think she is right. Compounded interest is the problem. Collusion between politicians and bankers is also the problem. What are your thoughts on a solution? This is where most of us enter troubled waters and most can't agree. I like the idea of Public banking and utilizing the BOC but we as a family are still researching other ideas and would love to hear more ideas from people on these threads! I have a friend on facebook who holds a Libertarian perspective. Mises intrigues me with his thoughts but I am still making my way through his book Human Action. It is a long read and one needs a dictionary while reading it . 
I really am not sure what your point is with the World Gold Council. I would read between the lines but it would probably be more prudent for you to explain what your point is. Are you arguing for free market capitalism and a free market commodity backed currency? You won't get resistance from me. It may be the best solution. But I also believe the idea presented by Victoria may be the best solution for Canada. Be patient with us as our family learns and grows and PLEASE keep dialoguing with us. The more we all dialogue the more we can find a viable solution. Peace and hope for our children's future!


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## ddkay (Nov 20, 2010)

Here's this topic discussed here last summer Canada Debt problems and the Bank of Canada


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## Just a Guy (Mar 27, 2012)

Facing42,

While I admire your defense of your daughter's speech, as a parent, I'd be concerned over the plagiarism going on in such a "free thinking" child. As an informed parent, I could easily recognize this speech nearly word for word, having heard it repeated years ago...or if you prefer the american version, I could show you ones like that with a few details changed.

Despite what I may think of the topic, this speech was not written by your daughter it was copied. Maybe, as a parent, you and the teachers who encourage her should have checked her sources a little closer. 

Coming up with a sensational topic is great, parading around a 12 year old spouting off someone else's ideas and claiming them as her own...well that's something else.


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## Chris L (Nov 16, 2011)

"Why people focus on whether she wrote the speech vs what the speech says I am unsure. Is it an ego thing?"

No it's not. It's tossing a 12 year old into the ring with the rest of the people via media. Do you think she can handle adult discussion, is her ego strong and resilient enough to accept critical discussion of all angles. Can she take anger and abuse? Did she really know what she was getting into? Aside from that, her take on banking is weak at best and irrelevant at worst. Then she's put into the position of revolutionary - in at least a "12 year old get's it" kind or way. Well, to me, she doesn't seem to get it at all. Things are just not as simple as she tries to make them out to be. She's a child in an adult conversation through an adult medium. It's going to try her ego more than it will mine (and others).


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## Facing42 (May 19, 2012)

*Lol*



Just a Guy said:


> Facing42,
> 
> While I admire your defense of your daughter's speech, as a parent, I'd be concerned over the plagiarism going on in such a "free thinking" child. As an informed parent, I could easily recognize this speech nearly word for word, having heard it repeated years ago...or if you prefer the american version, I could show you ones like that with a few details changed.
> 
> ...


There is no plagiarism involved. Be careful....defamation of character lawsuits do actually exist. We have all her rought notes, computer time stamped notes etc. Please feel free to share these speech's you speak of. I take it you are a troll?


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## Facing42 (May 19, 2012)

*?*



Chris L said:


> "Why people focus on whether she wrote the speech vs what the speech says I am unsure. Is it an ego thing?"
> 
> No it's not. It's tossing a 12 year old into the ring with the rest of the people via media. Do you think she can handle adult discussion, is her ego strong and resilient enough to accept critical discussion of all angles. Can she take anger and abuse? Did she really know what she was getting into? Aside from that, her take on banking is weak at best and irrelevant at worst. Then she's put into the position of revolutionary - in at least a "12 year old get's it" kind or way. Well, to me, she doesn't seem to get it at all. Things are just not as simple as she tries to make them out to be. She's a child in an adult conversation through an adult medium. It's going to try her ego more than it will mine (and others).


So if they are not as simple as she is making them out to be then show us what is really happening. Talk about it. Dialogue about it. That was her suggesting, "Get out there and research it on your own". This is what she came to, as a 12 yr old, in her research, and she is encouraging others to research more as well. My daughter is resilient and has a community of people who surround her in a protective, supportive manner. The conversation is not an 'adult' one. This conversation is hers so it is a young adult one. If 'adults' want to talk with her they will have to speak at her level. If they want her to rise to their level of input she will need a few years. 

All the best Chris and thanks for the thoughts.


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## Dmoney (Apr 28, 2011)

Admire her for having the guts to get up and do this. Speaking in front of an audience is tough at any age.

Agree that she's out of her league here, and will be torn down by one side, and lauded by the other. Ten years from now, we'll see how it all turns out, hopefully for the best. 

Similar to the 12 year old who bought the house in Florida for a 75% annual ROI. Can't be bothered to find the thread, but it's on here somewhere. Not her idea, but I don't knock her parents for encouraging her to do it. 

Just hope the media attention doesn't get to her in any sort of negative way.


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## andrewf (Mar 1, 2010)

Facing, it is plagiarism to the extent that none of the thoughts are original. All of these arguments have been proposed before. Go ahead and sue me.


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## Four Pillars (Apr 5, 2009)

Facing42 said:


> There is no plagiarism involved. Be careful....defamation of character lawsuits do actually exist. We have all her rought notes, computer time stamped notes etc. Please feel free to share these speech's you speak of. I take it you are a troll?


Trust me - we all know who the troll is here.


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## andrewf (Mar 1, 2010)

^Agreed. I doubt this person is even related to Victoria.


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## Facing42 (May 19, 2012)

Perhaps you should research what plagiarism is before commenting.


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## Just a Guy (Mar 27, 2012)

Threats of lawsuits, conspiracy theories, believing things are true because a 12 year old says so, blaming the banks for lending money when the actual problem came from overspending and borrowing in the first place...

Are you sure your not American? Those were the people you presented in front of...How's their printing money solution going?


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## Facing42 (May 19, 2012)

LOL....hmmm interesting. No plans of giving you my actual info to find out  All the best people.


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## Facing42 (May 19, 2012)

Just a Guy, 

Again, maybe you should watch the conference videos at PBI. They are trying to stop what the American government is doing and they are looking to us Canadians for a viable option based on how we use to utilize the BOC prior to 1974. What is your reason for being in such an attack mode? Bad day? I came on here to dialogue and get some ideas from other Canadians; to engage people and be engaged. So far, this site is proving to lack any sense of kindness or desire for dialogue.


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## Facing42 (May 19, 2012)

Just a Guy said:


> Facing42,
> 
> While I admire your defense of your daughter's speech, as a parent, I'd be concerned over the plagiarism going on in such a "free thinking" child. As an informed parent, I could easily recognize this speech nearly word for word, having heard it repeated years ago...or if you prefer the american version, I could show you ones like that with a few details changed.
> 
> ...


Andrewf,

What Just a Guy stated can be considered defamation of character. He is accusing, unfactually, my daughter of plagerism. He argues he has a source that proves it. I gaurantee he does not. I gaurantee he is trying to defame my daughter. There is a difference between taking someones speech word for word and claiming it as your own (plagerism) and sourcing an idea or concept from other people. All her sources were given to her teacher for her speech meet etc etc.


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## Just a Guy (Mar 27, 2012)

Umm, I wouldn't say your comments are particularly engaging, I'd say more into the attacking...however I do agree with your last comment. 

Perhaps I'm being corrupted by it, been attacked around here a lot since joining. Maybe you've also been infected?


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## sharbit (Apr 26, 2012)

not how it works and very scripted but pretty cute.


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## financialnoob (Feb 26, 2011)

Really? Defamation lawsuit threats over a message board thread on some 12 year-old girl's thoughts on the way things should be run???


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## Just a Guy (Mar 27, 2012)

See if any of this sounds familiar...

http://www.youtube.com/watch?v=PlxKtDOkEj4&feature=youtube_gdata_player

Of course it's American. But there is a quote from Canada.

There are more such things out there if you look. I think one of Kiyosaki's last books is along a similar vein.


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## ddkay (Nov 20, 2010)

I sense a lot of tension among people these last few days, I wonder if its bullish for the market


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## upstream (Mar 22, 2012)

What is funny is the idea that what she is saying is a revalation. Sounds like what I've been hearing my whole life. What she says is full of logic flaws and inacuraccy, but she is adolescent know it all. I'm sure she is just regurgitating soundbites from multiple sources angry with thier existence. In time she will learn it is better, and far more productive to think before you blurt out someone elses idiotic diatribe.

Here is a clue sweetie. Money, be it gold, paper or electronic data is required for a functioning economy. Elected political bodies aught to be responsible for the creation of credit since they are also responsible for dictating national revenue. Banks should be responsible for disemminating the credit based on strict lending guidelines. When banks have more bad loans out than cash reserves in thier bank, then they are bankrupt, should be closed down and liquidated. Simple. The current fiasco in financial markets comes from two main culprits.

a) The impossible contract. More debt exists in the world than money. Stemming from the fact Central Banks use government bonds bearing interest to back the money penned into existence. I.E. $1 exists and is backed by a $1 bond generating $.005 to $.4 more debt in interest each year. The rate depending on the bond and the country that is referenced. That existing dollar can be used to pay the debt of the origional bond, but the money does not exist to pay the interest, so it accumulates as national debt. To be kept on the books somewhere in the world as debt, and kept at managable levels only through regular devaluation or outright default. Both of which senarios eventually destroy the underlying currency left holding the debt bag.

b) The fact that governments whether they be democracies or dictatorships, socialist or not, always resort to bribing the general population into voting for then or not revolting against them as the case may be. And history shows the most sucessfull governments in the short term are the ones with the biggest lines of credit, for they can spend furthest beyond thier means and pass the problem off to future governments and generations. Basically politicians are greedy for power and we are greedy for everything. So the mean spending habits of governments and societies is always into the red.

So now that you've got your mouth wagging hon, put your brain in high gear and try to look less foolish.


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## andrewf (Mar 1, 2010)

Taking arguments without properly crediting them is plagiarism, whether it is word-for-word or rephrased. Also, it is spelled plagiarism, as there is no such thing as plagerism.

These arguments are all garbage from Canadian Action Party. Victoria (or more likely her parents) writing this speech based on that or similar sites is hardly an intellectual triumph.

Seeing as you are her parent (or a troll claiming to be such), I'm sure you will gladly share her carefully referenced notes and background material.


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## andrewf (Mar 1, 2010)

upstream:

Your argument in (a) doesn't seem right. Currency is not backed by debt. Currency is a liability of the central bank only conceptually. The central bank has no obligation to redeem currency for anything of value (unlike in the gold standard days), as they are perpetual liabilities with zero interest. It is possible for the money supply to shrink, which seems to contradict your argument.

If people are interested in how this actually works, I could recommend 'This time is different' by Reinhart and Rogoff.


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## HaroldCrump (Jun 10, 2009)

Facing42, I don't want to make this a parenting thread, however, I do not believe an 11 year old came up with those ideas originally.
I see a clear political agenda here.
Questioning status quo and working for change and political activism are great and noble goals, no question.

However, the entire premise of the arguments you (and Victoria) have put forward are based on misconceptions about the functioning of the monetary system.

Also, we have heard the same rhetoric here on CMF before (I quoted dates and user names above).
I highly suspect that you are simply a reincarnation of those same personas - most likely the same person posting with a new user name.
I also believe you are connected with the Action Party and are simply using the issues like the monetary policy to further your political agenda.


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## Facing42 (May 19, 2012)

Upstream: Right....thanks for the interaction that for some reason you have to try and communicate in a derogatory manner. There are many economists who disagree with you and agree with the ideas that Victoria is presenting.


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## Facing42 (May 19, 2012)

Funny, we sat in a room filled with Bankers, politicans and economists who stated she is right in what she has spoken on. (go to Public Banking Institute's website and you can see all the conference speakers. Harold vs the economist, bankers and politicians ;0...could be fun! I believe they have a discussion forum there you can debate them on. Would love to see you participate! I read the thread you spoke of. It is simply you disagreeing. It is not the end of the discussion.

As stated, a child does not learn in a vacuum. If there are misconceptions, then argue against those points. This had no political agenda. Does it now? I think it crosses political barriers. It is something that affects all people equally.


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## Facing42 (May 19, 2012)

andrewf; Thanks for the spelling correction. The sources are quoted in the paper she handed in to her teacher. The main sources are referenced on the main grainy video on Youtube. So again, sorry, no plagiarism.


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## olivaw (Nov 21, 2010)

Why are posters here attacking the girl and her parents instead of the argument?


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## mrPPincer (Nov 21, 2011)

olivaw said:


> Why are posters here attacking the girl and her parents instead of the argument?


^^^ 

My thoughts exactly.

olivaw I don't have an answer to your question.
I have some speculations but I don't think they would add to the discussion... if we can call it that at this point.

If we can weed through all the inflammatory comments so far there could actually be the basis for an intelligent discussion here.

I must say that probably like most Canadians I have little knowledge on this and I plan to do a little research before I comment any further.
In the meantime I'd suggest people have a look at this site I've discovered, which offers 3 free movies which touch on the subject at hand.

http://www.zeitgeistmovie.com/

That's all I have to add at this point, cheers


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## MoneyGal (Apr 24, 2009)

I can't speak for anyone else but I'm not discussing the ideas put forth in that video because they aren't worth discussing. 

There are two key banking and monetary concepts which are key to understanding how monetary policy works: fractional reserve banking, and fiat currency. 

Bottom line response to this video based on my quick viewing: the fractional reserve system allows a whole lot of people to owe a whole lot of other people money. As a result, there is more money in deposits than there is in circulation. However, banking institutions can borrow money from other banks or the central bank to meet their immediate obligations and pay it back later on. 

The video argues that bank notes are somehow a different type of money than deposits, which is not the case.


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## MoneyGal (Apr 24, 2009)

Also, I think that Victoria should probably try and arrange a visit with Wesley Snipes; some of his monetary theories might also be of interest to her. Not sure she'd be allowed into the jail where he's being held for tax evasion, though.


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## crazyjackcsa (Aug 8, 2010)

olivaw said:


> Why are posters here attacking the girl and her parents instead of the argument?


Because the medium is the message.


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## HaroldCrump (Jun 10, 2009)

olivaw said:


> Why are posters here attacking the girl and her parents instead of the argument?


The arguments *have* been discussed/attacked here on CMF before.
Search the archives and the threads I referred to above.

I am not a social media geek, but I suspect the same discussions have been hashed out elsewhere all over the Internet.
Facing42 (ostensibly VG's dad) referred to some banking indstry discussion forum - no doubt this topic has been flogged to death over there.

I have no idea what kind of "economists, bankers and politicians" Facing42 met with, but these concepts are basic fundamentals and form the basis of the money multiplier based monetary system.
_Some_ aspects of VG's ideas (such as eliminating the intermediate private institutions that play the role of primary dealers in the banking system) were implemented by the communist economies such as the USSR, and we all know how well that turned out.

Speaking for myself, I have no incentive to launch into a detailed debate on the fundamentals of modern economy and finance with Facing42 (or any of his previous aliases).
Primarily because I smell a political motive/agenda here.
That belief is further reinforced by the use of an 11 year old child to deliver the propaganda.


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## mrPPincer (Nov 21, 2011)

crazyjackcsa said:


> Because the medium is the message.


soo.. because it was on youtube, that was the message??


Just watched the Oh Canada movie posted farther up this thread by ddkay, http://www.youtube.com/watch?v=Vi_UKzJ9Y8k

I found it interesting, but I really would have liked to all of hear what Paul Martin really had to say without all the edits designed to make him look like an idiot
Otherwise, interesting production.


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## olivaw (Nov 21, 2010)

HaroldCrump said:


> Speaking for myself, I have no incentive to launch into a detailed debate on the fundamentals of modern economy and finance with Facing42 (or any of his previous aliases). Primarily because I smell a political motive/agenda here. That belief is further reinforced by the use of an 11 year old child to deliver the propaganda.


Found this CBC piece by googling "Victoria Grant". Looks like the speech has gone viral. She and her parents have answered the charge that she's a mouthpiece. The CBC also spoke with Walid Hejazi, a professor of international business. He disagreed without the personal attacks. 



> "Walid Hejazi, a professor of international business and a banking expert at the Rotman School of Management, has seen Grant’s speech on-line. And while he was impressed with her delivery, he said what she’s arguing for has been tried by countries in the past and leads to hyperinflation."


http://www.cbc.ca/news/canada/toronto/story/2012/05/19/girl-finance-youtube-speech.html


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## HaroldCrump (Jun 10, 2009)

Hyperinflation is one possible outcome.
The other outcome is complete isolation from the international monetary system and international trade, leading to a crushing recession and economic capitulation.
Depending on _how_ exactly the recommendations of VG are implemented, it can lead to various outcomes, none of them pretty or tenable or sustainable.

I quickly read through some of the comments on that CBC article - not sure which one are posted by her supporters/sponsors such as her dad here, but there are some pretty whacky ideas out there.

The original speech was indeed delivered smoothly and with convinction.
But alas, the ideas in it are all a hodgepodge of misconceptions, myths, and misunderstandings.


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## emperor (Jul 24, 2011)

Dear lord I created a monster... I found the link on facebook thought it might be useful, I don't know if it's true or not.. Outta my league :rolleyes2:


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## crazyjackcsa (Aug 8, 2010)

mrPPincer said:


> soo.. because it was on youtube, that was the message??
> 
> 
> Just watched the Oh Canada movie posted farther up this thread by ddkay, http://www.youtube.com/watch?v=Vi_UKzJ9Y8k
> ...


Alright, so you aren't familiar with Marshall Mcluhan. In a nutshell, how the message is delivered is as important as the message itself. In this case, a young girl is speaking out mainly on the internet and social media, against the big bad banks. 

Why a young girl? Why social media? Because it's part of the message: The "new" generation thinks there is a problem, and wants it fixed.


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## andrewf (Mar 1, 2010)

Fractional reserve banking allows the central bank to exercise greater control over the money supply by inducing banks to raise their reserve ratios. If the government spent all money into circulation, in order to reduce the money supply, the government would have to buy back dollars (or tax them out of circulation). This is like trying to stuff toothpaste back into the tube. Technically possible, but difficult and messy.


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## HaroldCrump (Jun 10, 2009)

If I had to guess, I'd say Facing42 (and VG) are confusing government debt/deficit and fractional reserve banking.
The argument against structural government deficits is not an argument to abolish the fractional reserve banking system.
Their argument that eliminating private financial institutional intermediateries will solve the problem is not true either.
Governments are perfectly capable of running uncontrolled deficits even in the absence of private lenders.


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## olivaw (Nov 21, 2010)

HaroldCrump said:


> Governments are perfectly capable of running uncontrolled deficits even in the absence of private lenders.


Now there's the real problem.


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## mrPPincer (Nov 21, 2011)

crazyjackcsa said:


> Alright, so you aren't familiar with Marshall Mcluhan. In a nutshell, how the message is delivered is as important as the message itself.


Ah, cool. I'd heard of the name but sadly I've not yet read any of his stuff.
I'll have to correct that on my next trip to the library 
(A quick look at his wikipedia page and I see he's also coined some other popular phrases/concepts, such as 'the global village' and 'world wide web')





HaroldCrump said:


> Governments are perfectly capable of running uncontrolled deficits even in the absence of private lenders.


That's one of the first thoughts I had on reading this thread.

I was reminded of a friend who has more credit card debt than he can ever pay off.
Another friend intervened for him and got him some more reasonable interest rates by speaking tho the CC company on his behalf.

Do you think he used the leeway to start paying down the principal?
Of course not. He immediately started building even more debt because he could now afford it.

I doubt an irresponsible government would act any differently.
On that note, do you think it's too late to try and get Paul Martin back as finance minister? :hopelessness:


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## Facing42 (May 19, 2012)

Harold and Andrew, 

Now we are dialoguing  My daughter and I went over the concept of hyperfinflation the other night. She expressed one question, "If we owe 800 billion dollars now and we pay 60 billion dollars in interest, and that is going to be more each year, how are we not going to face hyperinflation, whether we pay it off in full now or never pay it off but only make interest payments?" To which I said, welcome to the world of compounded interest and the reality that our system is about to collapse. Her next question, "So if we pay off the private banks, and stop using them, and use the BOC to give us our countries money at 0 percent interest wouldn't that make more sense?" To which I said, I believe it would. Let the collapse happen and start over with the BOC. Or we could just tell the banks that the debt will not be paid as their system was fraudulent. How? 1) Compounded interest...usury. 2) private loans were given without expressing to the people that the bankers were not actually giving them money they had in their banks; instead people pledge themselves as surety, give the bank a promissary note in the form of an application, and the bank then lends them back another note/electronic note that only exists because of the promisary note they received from the borrower. We are not confusing fractional reserve banking with government debt. I have no issue with fractional reserve lending at 0% interest, to an extent. There can only be in circulation that which is proportianate to the assetts that exist in the economy and there can be no interest or interest based debt will destroy the economy. Within an economy, when dealing with a MOE, interest can never be paid back. It is impossible.


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## andrewf (Mar 1, 2010)

Handwaving. It does not follow that hyperinflation results from debt. Hyperinflation is a result of excess growth of the money supply, which would seem to be what you are advocating. When you print money, as you advocate, you increase the money supply. If the government needs to print more money than is consistent with stable inflation, it will either need to borrow that money or cause runaway inflation. 

We have had fractional reserve banking for decades. We have had interest bearing debt for centuries. Why have we not seen hyperinflation? Your argument is a logical fallacy lacking empirical evidence to support its conclusion.


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## Facing42 (May 19, 2012)

I never said hyperinflation results from debt. I was dealing with the Harold quote from the economist who said the solution my daughter put forth would cause hyperinflation. My point is that 95% of the money in circulation is debt money owed to the private banks. If we pay them back now or later hyperinflation is going to occur. Pay them back now...cut the umbilical cord and get it over with or don't pay them and send them to jail for fraud...either way works for me. You keep talking about the printing of money...are you using this as a blanket statement of generating money (including electronic forms)? Simply because we have had fractional reserve lending doesn't mean it is good but again I am not arguing against FRL per se. I am arguing against compounded interest which forces a country to borrow until it is unable to repay it's debt. You are familiar with the collapse of 1929 right? Germany? Zimbabwe? Do you think they printed more money for the sake of printing it? They printed it because of interest bearing debt.


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## Facing42 (May 19, 2012)

http://www.wintersonnenwende.com/scriptorium/english/archives/articles/hyperinflation-e.html


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## sharbit (Apr 26, 2012)

Facing42 said:


> "If we owe 800 billion dollars now and we pay 60 billion dollars in interest, and that is going to be more each year, how are we not going to face hyperinflation, whether we pay it off in full now or never pay it off but only make interest payments?" To which I said, welcome to the world of compounded interest and the reality that our system is about to collapse.




This is a common incorrect conclusion. All money is conceptually debt in its form. 1$ entitles you to x hours of labour or widgets or whatever - this was always the case only it was historically a liability to the crown. The thing with a fiat currency is that if there is inflation in the system and it is at reasonable levels prices are always relative. Relative pricing is a central concept of modern economics. So if you introduce excess money into the system prices will go up, debt value will go down however relative prices remain intact.

Remember, we control our currency unlike in the euro so the situation they are facing isn't going to happen without poor political leadership (example: the debt ceiling nonsense in the US). What they have is essentially a gold standard where they can't rebalance their currency and always require more dollars coming in. It's really an impossible situation. There are issues with their labour pool as well because wages aren’t being allowed to re-price. The trade-off is that we have higher inflation; this is debatable as to who it benefits in the long run however it allows us to avoid deflation because assets can re-price themselves and with monetization we can force this.

This may sound like I love the banks however I think there needs to be a few changes in the regulatory framework such that people can't exploit this. Most of my concerns relate to real estate lending and the expansion of credit relating to that. From my perspective all this has done is inflate real estate and left some people with unsustainable liabilities. I also think CMHC has become corrupt. I think it serves an important part to the economy and would keep it with a few new constraints. However, I would “clean house,” as they say.

Now, one problem with economics is that a lot of its theoretical and everyone seems to have an opinion so it leads to awesome flame wars on forums. There's usually a lot of common misunderstandings of the banking framework as well. People always seem to think it's the worst case - Gov of Can owes the Canadian banks which relend. This isn't true and kind of contradicts that whole "Bank of Canada" thing.

I think you and your daughter are correct that there are issues however I don’t think throwing out the whole system is the right way to go. If I could attack one thing in particular; specifically your argument of not charging interest. This serves a purpose beyond profit in the current framework and is embedded in a lot of modern finance. It’s important you understand that before burning down the house.


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## sharbit (Apr 26, 2012)

Also more importantly, being an investment nerd I sometimes wonder about the next generation and the future of Canada but every once and a while you hear about a smarty-pants from wherever. I know when I was 12 I couldn’t have done that. Since you’re the dad I want to say congratulations on all her success and well done.


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## andrewf (Mar 1, 2010)

Compound interest does not cause hyperinflation, either. We have had compound interest for centuries, and you can only point to Zimbabwe and Wiemar republic Germany. They had hyperinflation because they wanted to buy more goods and services than their economy could produce, so the governments printed money to buy them. As prices rose, they had to print ever more money. If you read the wikipedia entry on the Zimbabwe hyperinflation, what do you disagree with.


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## Toronto.gal (Jan 8, 2010)

I just listened to the video, but have not read the comments.

All I will say, is that at the age of 12, I would not have wanted my son to wonder/worry about any of those issues. 

No matter how bright a child might be, there is a time for everything.


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## Sampson (Apr 3, 2009)

We have quite a more significant problem than simply debt. As someone upthread pointed out - we trade goods and services for debt.

Problem is, there are too many goods and services that really aren't needed, but people that need to be paid. Gone are the days where we fairly trade or time and resources for something with implied value, the fiat currency. Without direct trade for these, there will be waste in the system.

If the money is lent by private institutions, the excess goes to shareholders as profits, if lent by the government, they would have to print money, or simply lose excess due to inefficiencies - both resulting in hyperinflation. I agree with all the responses, the proposed 'change' would simply lead to hyperinflation and there are plenty of examples, with the US possibly becoming one of those soon.


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## the-royal-mail (Dec 11, 2009)

I think some people spend too much time on the Internet and doing google searches. Seems the Internet gives even the most common person a voice, regardless if the message is valid/accurate or not.

I prefer to deal with people with a balanced approach, rather than those who have an agenda to pursue.

Too bad a child had to be brainwashed in the process.


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## mrPPincer (Nov 21, 2011)

@TRM, I posted a link to the Zeitgeit movies because they touched on the subject of the fractional reserve banking system, I don't have any agenda at all.

The movies interview some interesting and intelligent characters, but their final conclusion of doing away with money altogether is, as they admit, not a perfect solution, and even if if was, I think the probability that we as a human society could pull it off is vanishingly small, when for example, in my area a vocal minority bring out the pitchforks and torches for major resistance against something as benign as wind power.

I've been following the economics part of this conversation with interest but - Facing42 your walls of text would be easier reading if you broke them up a bit.



... oh yeah ...


sharbit said:


> Also more importantly, being an investment nerd I sometimes wonder about the next generation and the future of Canada but every once and a while you hear about a smarty-pants from wherever. I know when I was 12 I couldn’t have done that. Since you’re the dad I want to say congratulations on all her success and well done.


^^^ agreed, +1


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## HaroldCrump (Jun 10, 2009)

Facing42 said:


> To which I said, welcome to the world of compounded interest and the reality that our system is about to collapse.


What?
Compound interest for govt. debt is not what causes hyperinflation.
Are you advocating abolition of interest as a form of return for capital?
If so, just say so.
Why all this rigmarole about private banks, govt. debt etc.

And in case you are, I am sure you are aware that you are not the first one to say this.
Various economic system theories have advocated the abolition of various forms of returns over the centuries.

Let's go back to high school economics for a minute - there are three main factors of production - labor, capital, and entrepreneurship.
The returns for labor are wages, the returns for entrepreneurship are profits, and the returns for capital are interest/dividends.

Marxian economics considers returns on entrepreneurship & capital to be labor surplus and recommends abolition of all three.
Or, rather, to be more technically correct, _socialization_ of these returns.

Therefore, you cannot abolish interest payments on govt. debt without at the same time abolishing the interest form of returns completely.

And that has nothing to do with hyperinflation.



> Her next question, "So if we pay off the private banks, and stop using them, and use the BOC to give us our countries money at 0 percent interest wouldn't that make more sense?" To which I said, I believe it would. Let the collapse happen and start over with the BOC. Or we could just tell the banks that the debt will not be paid as their system was fraudulent.


Wrong.
What you are calling fradulent private banks comprise of millions of common shareholders.
The returns in the form of interest goes back to those shareholders.
And it is a return for putting their capital at risk by lending it out.
You are essentially saying - nationalize the private banks.
If so, just say so.

There are countries that have nationalized banks.

I see no evidence to suggest that nationalizing banks eliminates govt. borrowing or interest payments or inflation.



> How? 1) Compounded interest...usury.


Wrong. Interest payment is a form of return for capital.
As long as capital is private, it demands returns.
Only way to deny it returns, is to socialize capital.



> 2) private loans were given without expressing to the people that the bankers were not actually giving them money they had in their banks; instead people pledge themselves as surety, give the bank a promissary note in the form of an application, and the bank then lends them back another note/electronic note that only exists because of the promisary note they received from the borrower.


Um...that is how banking works.
Has always worked since let's say the advent of modern history, and possibly even back during the Roman times.



> I have no issue with fractional reserve lending at 0% interest, to an extent.


Sorry, *I* have an issue with that.
Are you recommending a permanent, fixed, lending rate of 0%?
Do you have any idea what the impact of that will be?
You are worried about hyperinflation - that is hyperinflation right there.

Why should the govt. be allowed to borrow money @ 0% interest from private lenders?
As a tax payer, I have serious issues with that.
This is a sure shot receipe for govt. malpractice, out of control, irresponsible spending, and fiscal insanity.



> there can be no interest or interest based debt will destroy the economy.


Interest is a form of return for capital.
An incentive to put capital at risk.
Just like wages are a return for labor.
To abolish interest, we must socialize capital.
But then we must abolish wages as well.

At this point, the theories you are putting forward are starting to get highly academic at best, and delusional in practice.


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## andrewf (Mar 1, 2010)

If interest-bearing debt will destroy the economy, why has the economy been ticking over nicely for centuries despite the evils of usury? Even for all of our current woes, the economy is working very well, just not quite as well as we would like.


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## HaroldCrump (Jun 10, 2009)

^ I find the idea that govt. should be allowed to borrow money from private investors (citizens) and private institutions (including banks) at 0% rate completely delusional.
The impact of such a policy will be the exact opposite of what the OP intends.

We have seen what happens when governments are allowed to borrow money at artificially low rates - Greece, and other PIIGS were allowed to borrow at artificially low rates because of the strength of the EU and Euro.

Also, Japan is a classic example of what the OP proposes - the majority of Japanese public debt is held internally within the country, and their borrowing rates have been 0% or pretty close for over 2 decades now.
Their debt to GDP ratio is 236% last I heard and they have recently been downgraded.

This is a receipe for disaster.


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## andrewf (Mar 1, 2010)

Why would anyone lend the government money at 0%? 

Only the central bank would do this....


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## KaeJS (Sep 28, 2010)

Wow.

Who knew this thread would blow up as big as it did. Incredible.

I had forgotten all about this girl and her speech. Now, her father is here, too?

No doubt, some 12 year olds know more than others. But, a 12 year old can only be taught what was depicted in this video.
_
"What I have discovered is that the banks and the government have colluded to financially enslave the people of Canada."_ - VG.

^ Really? That's a bold statement for a 12 year old. Go ask ten 12 year olds what the word "Colluded" means and check your statistics on how many of them know the definition for that word.

I don't believe VG was able to "think" of this all on her own. My brother is about the same age and would have no idea what any of this means if I were to show him this video.

I don't want to be rude, but IIRC, Jesus was also mentioned in her speech along with some part of the Bible. As soon as someone mentions religion, especially in a matter where they are trying to make a serious speech, it instantly loses all credibility, _in my opinion._

With all that being said, it was a great little stunt. So, for that, I applaud both the father and the daughter. However, a stunt is about as far as this goes and I am surprised at all of the attention this video has received.


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## Aolis (Nov 26, 2009)

The issue with the speech is that it starts with a conclusion that no twelve year old would reach. So she obviously heard it somewhere and then looked for arguments that supported the conclusion. The arguments have faulty logic which is easily checked on the internet if someone really wanted to understand.

Even in the example conversation that the parent (Facing42) has with their daughter, he doesn't explain to her how the system could work, just "the reality that our system is about to collapse".

So while it is cute to see a monkey play the piano, it is obviously just a trick.


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## v_tofu (Apr 16, 2009)

so... Buy silver and Gold? and some Facebook stock for diversity?


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