Canada & Modern Money

I came accross this interesting, historical chart indicating how Canada’s debt and interest has boomed since it stopped getting its Central Bank to issue money. I believe the change was much influenced by US political pressure but it does prove, as I am sure that our Canadian Bank of England Governor, Mark Carney is well aware, that an advanced economy can issue its own currency whenever it wishes without the roof falling in.

In our discussions of Modern Monetary Theory (MMT), which I prefer to call Modern Monetary Practice, it rather suggests that those arguing against it have forgotten – or never knew – recent monetary history:

This is also a chart that would help to drive amendment of the EU Lisbon treaty, where direct Central Bank money issuance is forbidden.


  1. Sean Danaher -

    Interesting how little debt there was until 1974.

    The Canadian economy is rather surprising. When looking for signs of a growth rate change around 1974 I saw none. The growth rate seemed fairly flat but surprisingly low: GDP Growth Rate in Canada averaged 0.79 percent from 1961 until 2017

    Given the population of Canada was c 18M in 1961 and c 37M now this seems very lack-lustre. The UK hopes for c 3% growth but post Brexit 1.5% seems to be what the BoE forcasts.

    1. Peter May -

      They was no debt precisely because the Bank of Canada issued all the money but the low GDP increase is as you say – most surprising.

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