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July 07, 2021

How to fix a crumbling monetary system

Long-time federal cabinet minister Paul Hellyer, now 86, believes not only that aliens have been visiting Earth for eons but that they can take credit for numerous human advances.

But, when it comes to the world’s crumbling monetary system, we have nobody to blame but ourselves, Hellyer maintains in a recent op-ed piece for the Ottawa Citizen.

The real source of the problem is a privately-owned monopoly that brazenly produces a constant stream of ‘money’, then quickly morphs it into debt, of which there is so much that the real economy is about to drown in it, he says.

Right now, the whole affair is like a balloon with a pin stuck in it, say critics of the existing economic system. The abuse of fiat money causes booms and then busts that lead inevitably to more centralization of money, power and resources in the hands of those that control the banks, they maintain -- screaming largely from the wilderness, despite having Texas congressman Ron Paul as their mainstream ally.

Hellyer’s solution to the problem: Re-instate the cash reserve system as an objective cap on the rate of money creation; reduce banks’ ability to lever their assets to a level that the banks themselves would consider prudent if they were lending you money; and sharply boost the proportion of government-not-bank-created money in the system, echoing the boom times that followed the Second World War.

"The infusion of substantial sums of debt-free money would end the tsunami of debt that has put the world financial system in peril and paralysed governments from taking the essential steps to solve the problems of the real world, as opposed to the demands of the money-changers,” he harshly asserts. 

 Is he on to something? Or would such a policy shift simply mean more inflation sooner?

By Gordon Powers, MSN Money



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Gordon PowersGordon Powers

A long-time fund company executive, Gordon Powers now heads up the Affinity Group, a financial services consulting firm. Gordon was a personal finance columnist for the Globe & Mail for many years, has taught retirement planning...

James HaversJames Havers

James is the senior editor of MSN Money living in Toronto. He has worked for the Nikkei Shimbun (Tokyo),,, Canadian Business and other publications. Havers turned to journalism after teaching overseas.

Jason BucklandJason Buckland

The modern-day MC Hammer of money, Jason can often be seen spending cash that isn’t his with the efficiency of a Wilt Chamberlain first date. After cutting his teeth as a reporter for the Toronto Sun, he joined the MSN Money team with...