Roosevelt's socialist agenda shifted power of interest rates to Washington DC. Fed raises interest rates to stop market bubbles in NY but harms the commodity regions

The Separatist Movements in Canada

Posted Dec 15, 2017 by Martin Armstrong

Many people are aware of the various attempts of Quebec to separate from Canada. What they are unaware of is the supporters of the Western Independence Party of Alberta. There has been an undertone of the separatist movement in Alberta which actually stems from the Great Depression usurpation of the Federal Reserve by Franklin D. Roosevelt.

Why is Western Canada separatist movement caused by Roosevelt’s usurpation of the Federal Reserve? Everyone looks to the United States and assumes whatever structure they adopt must be correct. The Euro was crafted because the USA has a single currency. They did not consolidate all the debts and that has created a nightmare.

So what is the link with the structural usurpation of the Federal Reserve? When the Fed was created, it was the solution to the Panic of 1907, which was set in motion by the disruption of the internal domestic capital flows caused by the San Francisco earthquake of 1906. The insurance companies were in New York. Consequently, the cash flowed to the West and a shortage developed in the East.

The original structural design of the Fed was to establish 12 branches to manage the capital flows domestically. Interest rates would decline where there was an excess of cash and rise where there was a shortage. This, they believed, would cause capital to move between the branches to balance the national capital flows and economy.

When Roosevelt comes to power, he wanted to control the economy for his socialist agenda. He usurped the power of interest rates to Washington DC. He, therefore, abandoned the structural design of the Fed and ever since the capital flows have been concerned internationally, not domestically.

As a result, the regional problems have resurfaced. The central bank raises interest rates to stop real estate or stock market bubbles in New York and that harms the commodity regions. When commodities have boomed, the financial regions are normally suppressed. We have called this the Texas-New York arbitrage.

What is resurfacing is the regional differences within Canada as well as the United States. One-size fits all of the interest rates pits East v West in both Canada and the United States. Farmers and miners are forced to pay higher interest rates when their economies are declining because of speculative booms in Toronto or New York.

This is the root cause of the regional separatist movements we are witnessing in Canada.