feed barley & interest churning

[wedino]

From a taxpayer’s perspective , I can’t help but think that the interest churning the cwb does is a fraud. The cwb should be charging the Federal government at cost. Inflating this interest charge & passing it onto taxpayers is criminal!

My 2 cents worth!

[les]

There is no transfer of funds from the taxpayer in CWB financing. The govt. extends the fed govt. guarantee to the CWB's borrowings in international money markets. This allows the CWB to 'sell' money at a preferred rate of interest, because it is secure. The rates charged to customers who purchase with credit is at higher, commercial rates.

So the CWB collects the difference and pays it to farmers.

If you are familiar with T-bills, the notes issued by the CWB in Canada, the US and in the EU are similar investment vehicles. They are short term, usually 30 day notes, guaranteed liquid investments.

The over all dollar amounts are quite large. Consequently, to spread the risk, there is a multiple of different maturity dates for these notes, essentially every day.

The CWB is the second or third largest issuer of short term notes in Canada, behind GMAC and perhaps General Electric. There is US and EU note programs in place as well.

This interest churning issue is another one perpetrated by the master illusionists fighting the CWB. They think they have some smoking gun of CWB deception, when really it is their own ignorance and that of others they are preying upon. This issue has been explained to the critics ad nauseum, but their ears are deaf when they think they have something that might discredit the CWB.

Tom

[wedino]

Thalpenny, You said: >>There is no transfer of funds from the taxpayer in CWB financing.<<

You are saying that all of the customers that make up the bad debt(is it $6 billion?) at the cwb are meeting their interest obligations. It’s my understanding that our Federal government is paying most of these interest payments to the cwb under its loan guarantee program with the cwb.

[Vader]

sorry wedino, I would say that is more to you lack of understanding than to your understanding.

The feds guarantee the principal. The debtors are making payments as rescheduled through the Paris club.

This is a good topic because the more we talk about it the better the CWB looks.

[wedino]

No need for you to apologize Vader.

You seem to be in the know, are you sure all non current customers are making their respective payments? It seems to me that the principal is not being paid down.

[TOM4CWB]

Thalpenny;

What an interesting concept...

The CWB keeps just the spread on the difference between the commercial and the gov. rates of interest.

So all the customers with bad debt must do, is pay the CWB this spread, not needed to pay the total interest, and certainly not the principal.

But the tapayer of Canada is on the hook for the total interest and principal, no matter what the Paris Club does!

What a deal!

[parsley]

If you want to read about how the CWB really stands in this churning issue, go to

farmersforjustice.com

and click on

Taking Control.

Linda Swanson tells us a little more than you know, Vader

Parsley

[wedino]

Vader,here's Peincipal & interest payments made by the fed on account of Poland & Egypt.
1991 $108,693,789.58
1992 $179,807,434.74
1993 $137,890,570.15
1994 $ 61,910,971.09
1995 $347,470,682.14
1996 $236,155,481.58
1997 $172,710,284.02
1998 $170,613,253.03
1999 $174,947,343.52
2000 $176,471,310.63
These numbers show the amounts paid by the Government of Canada to the CWB in the calendar years from 1991-2000 in respect of Paris Club and/or Canadian Debt Initiative debt reduction. Please note that these payments are only a small part of the interest and principal due to the CWB for the credit sales. The numbers shown in the annual reports