Third World Debt & Foreign Aid

Third World Debt:  $2000 billion  (up from $100 billion 30 years ago)                         (UN's World Development Report)

¶ Debt Payments Flowing from the Poor to the Rich Countries:  approx 1400 billion (from 1960 to 1993)

¶ Foreign Aid Flowing from the Rich to the Poor Countries:  approx 140 billion (from 1960 to 1993)

Percentage of Foreign Aid that Reaches the Poor in the Poor Countries:  approx 5 %

Foreign Aid Given by Canada as a Percentage of GDP:  .29 %  (.09 % for U.S.)

Distribution of World Income         (UN Human Development Report)

¶ Richest 20 percent of the World's Population:  85 %       (up from 75 % over the past 30 years)

¶ Poorest 20 percent of the World's Population:  1.4 %      (down from 2.3 % over the past 30 years)

Annual Cost of Alleviating Poverty  (UN Human Development Program)

For Food, Clean water, Clothes, Education, Health Care & Sanitation for 4.4 billion people:  $60 billion

For Food and Basic Health Care for 4.4 billion people:  $19.5 billion

What Americans and Europeans spend annually on pet food:  $25 billion  (for comparison)

Fractional Reserve Banking or Usury

Do you know where the bank gets the $160,000 for your mortgage?  It's very simple.  Someone walks over to a computer and types 160,000 beside your name.  With only $27.93 of cash reserves for every $10,000 of assets (as of June 1999) the bank has just created the remaining $159,553 of that interest-earning money out of thin air.  In other words it was created as debt.  Most of it wasn't there before you walked into the bank.  When, after 25 years of hard work, you pay off your mortgage, the $159,553 vanishes back into thin air.  Not so the interest however.  It vanishes into the banker's pocket.  Leveraged on cash reserves in their vaults of $3.893 billion, the chartered (i.e. privately owned) banks, such as The Bank of Montreal, The Royal Bank, The CIBC, etc. have created about 95 percent of our total money supply ($589.1 billion as of Sept 1999) in exactly this way.  (About $32 billion of cash circulates in public hands.)  Thus the supply of money depends on people going into debt, and the level of debt within a modern economy is no more than the measure of the amount of money the banks have created.  This is called fractional reserve banking (click here for more information).  It is the modern form of usury because money (in the form of bank credit) is created as debt for no other reason than to enrich the banking class.  In essence we have a privatised money supply and thus a debt economy.  Historically, usury was defined as any interest whatever on an unproductive loan; it was condemned as an obvious social evil by Plato, Aristotle, Cicero, the Bible (Deuteronomy 23:19), the Koran (2:275-278), the Catholic Church, many codes of law and most writers on morals for more than two thousand years.

Mary's Cent

The example of `Mary's Cent' is often used to illustrate the injustice of usury in general and the mega-usury of compound interest in particular.  If the Virgin Mary had invested one cent for the baby Jesus at 6 percent compounded annually, the worth of that investment would grow as follows:

after 10 years         $.018  (or 1.8 cents)

after 100 years       $3.39

after 200 years       $1,151

after 300 years       $390,625

after 600 years    $15,258,757,071,928 (more than US GDP)

after 1000 years   $202,239,165,600,000,000,000,000

after 2000 years   (assuming the price of gold is $278 US an
                           ounce this figure is equal to a mass of gold
                           209 trillion times the mass of the sun)

If the interest was not compounded the value of Mary's investment after 2000 years would be $1.21.

World's Richest 6 Million People Get Richer

New research by Merrill Lynch, the investment bank, with Gemini Consulting found the wealth held by individuals with more than one million dollars of financial assets grew last year by 12 percent to $21.6 trillion.

George Graham, Financial Times (May 17, 1999)

Distribution of Wealth in Canada

Journalist Linda McQuaig uses a powerful analogy to describe the difference between the distribution of wealth.  Imagine a parade, she suggests, in which Canadians are lined up in order of their accumulated wealth, and the height of each participant reflects that accumulated wealth.  A household with average wealth is symbolized by a marcher of "average" height – say, something less than 6 feet tall.  The parade takes one hour to pass the viewing grandstand.
       The first marchers in the parade are actually under the  ground – that is, they do not have any wealth, and in fact carry net debts.  It isn't until 10 minutes later that the first "break-even" Canadian marches by: the first Canadian who carries no debt, but owns no net wealth either, and hence marches by exactly at ground-level.  After 15 minutes, we see the first dwarfs, standing just three feet tall...
       During the last minute of the wealth parade, marchers are as tall as Toronto's CN Tower, over one thousand feet tall.  And in the last second of the parade, the truly lopsided nature of wealth ownership in Canada is stunningly revealed: the very last marchers in this parade are supernatural giants, towering some 200 miles above the rest of the parade.
       If anything, McQuaig's description is conservative, in that it still relies on raw data from the last Statistics Canada survey of wealth in 1984, and things have probably become even more unequal since then.

(from Paper Boom by Jim Stanford)