Late last night, in a post breaking news that John Twigg had left the BC Conservative Party (only to resurface as the Leader of BC First), I let it be known that I was, "... not sure at all about a parallel currency, I can't imagine how it could possibly work ... and the proposal to resurrect the Bank of BC seems like a complete non-starter."
He responded to me stating;
Reviving Bank of B.C. and issuing a parallel currency - IMO you shouldn't be so quick to diss something you don't understand. (Yet.)
Here, in John's own words, is his rationale for the idea, and in hindsight it does sound like something at least worth looking into.
I'm a former Financial Editor who is familiar with central banks policy, creation of money, roles of currency and other related topics and have been familiar with these issues for many decades. Interestingly another guy who was knowledgeable about them was Roger Rocan. The creation of money by fiat versus borrowing it from private banks who instead create currency out of thin air and then charge for it has long been a contentious issue. It probably was what got JFK assassinated because he was planning to get Congress to issue money.
|W.A.C. Bennett; Premier of|
BC from 1952 to 1972
Canada is one of the few nations in the world that owns its own central bank but more nations should, otherwise we pay private banks huge sums for the privilege of having a currency.
WAC Bennett unilaterally issued a silver dollar in 1958.
Yes there are huge, but largely false, worries about creating money out of thin air supposedly being inflationary, but when done within reason (i.e. reflecting the realities of GDP and need for enabling commerce) it is rarely a problem.
Why is it okay for private banks to create money out of thin air but not for public-owned central banks to do so? It's a shibboleth.
Also you may be assuming a revived Bank of B.C. would simply be another retail bank competing with other banks and credit unions and trust companies, but that's not necessarily the case. My vision is for an "investment bank" not a retail one, i.e. an agency that could help finance big projects as well as provide currency where appropriate (maybe rewarding people who do good works unpaid, such as for family caregivers keeping a relative out of a care home, or environmentalists ridding the countryside of invasive plants like Scotch Broom; among many other such potential uses).
Instead of saying it's a non-starter, you should say it's an idea that deserves more study, and it will be interesting to see how Twigg unveils it during the campaign.
The forms and uses of a new currency could be quite interesting, for example involving the world-leading bar-code technology of BC Lotteries Corp. based in Kamloops, which gives each ticket a unique identity - a great defense against counterfeiting! And making metal coins also could be a new industry for Kamloops, which has a mine nearby that is a rarity for its ability to produce copper, silver and gold from one deposit! (Or used to do.) [I'm unsure about the current status of HVC.]
Also note that many small towns around B.C. are losing population because they lack grocery stores (eg Gold River) and they lack banking services, but that latter problem could be eased if the B.C. government revived the Provincial Treasury Branches once operated by WAC Bennett and allied them with a revived Government Agents service (also from the WAC era).
And if you think such ideas are too radically socialist you should look next door to capitalist Alberta and examine the role of something called Alberta Treasury Branches.
The tendency of quickly rejecting ideas that are not quickly and easily understood is a problem all too common in today's dumbing-down world, but I've been thinking through these ideas ever since I was Barrett's press secretary from 1972 to 1975 during which time I had the privilege of traveling with him on several trips to visit bond-rating agencies in New York, London, Paris and other world centres. It's not rocket science, just business.