Money, Banking, and The Federal Reserve System

2006, Economics  -   48 Comments
5.19
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Ratings: 5.19/10 from 85 users.

Money, Banking, and The Federal Reserve SystemThomas Jefferson and Andrew Jackson understood The Monster. But to most Americans today, Federal Reserve is just a name on the dollar bill. They have no idea of what the central bank does to the economy, or to their own economic lives; of how and why it was founded and operates; or of the sound money and banking that could end the statism, inflation, and business cycles that the Fed generates.

Dedicated to Murray N. Rothbard, steeped in American history and Austrian economics, and featuring Ron Paul, Joseph Salerno, Hans Hoppe, and Lew Rockwell, this extraordinary new film is the clearest, most compelling explanation ever offered of the Fed, and why curbing it must be our first priority.

Alan Greenspan is not, we're told, happy about this 42-minute blockbuster. Watch it, and you'll understand why. This is economics and history as they are meant to be: fascinating, informative, and motivating. This movie could change America.

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48 Comments / User Reviews

  1. slim pickens

    many of you miss the bigger picture here. the monetary system was by default designed to create one thing and one thing only, debt. out of all the money in this country that sits on the books only 10% is actual physical money. the rest is make believe , made up because the fed only requires 10% in holdings at any given time. if everyone at the same time went to there perspective bank and closed it our economy would fold up. on top the fact that 90% of all money is in essence air they charge interest on loans which by default are lending virtual money yet requiring a physical money repayment. that is a racket. i'm over simplifying things but those of you who truly know how the fed works knows this to be a fact. our economy is dieing fast why do you think we are off in other places fighting loosing battles for decades? because sustained wars generate large amounts of capital. now were off the coast of china stroking them into doing something stupid. why? for money our economic system is at its breaking point we have more going out than coming in and it is and will implode very soon. like others i believe gold and silver will be what we go back to after the sh^t hits the fan. to those that think these docs are propaganda i give you this. we mock what we don't know we shun what we fear and know to be true but are not willing yet to accept fact as being fact. unfortunately it will be to late before enough open minded people force the powers to be to rid this country of the fed and the wold banks just like our for fathers did so long ago.

  2. Tony44

    Good documentary. One caveat to the comments, not all "bankers" are reaping the rewards. Only the select top of the pyramid are. The rest get paid just like any other corporate troll.

  3. Don

    Gold's intrinsic value is far less than what it trades for today. What makes gold such a great standard? It's all psychological, just like paper currency is psychological.

  4. Leon Welch

    Money loaned printed out of thin air, loan paid back is equal to zero money. But the interest on the loan does not disappear and ends up in the big bankers pockets. Fed loves to print money, bankers love fractional reserve banking because it puts money in their pockets. Eventually they will own all of the money. Nixon took us off of the gold standard to pay for Vietnam, a useless conflict. Politicians love a monetary system backed by nothing. It give them the go to print money. Raise taxes or stop the hand outs and either one will send you job hunting if you are a politician. This system has not and will not work. All FIAT money goes up in smoke eventually. Show me one time in history where it has survived.

    1. manfruss

      The best business to open, a bank. Not that they'd let you into the game that easy, but what a joke. All I need is a first "depositor", and I can start lending out tens times what I was given, and at a good interest rate. Heck, I'll need is one year to pay back the initial deposit, and from there I'm laughing all the way to the .... bank. Free money anyone? What a stupid system, or crafty depending on which side of it you look. In the end, greed is what makes this fall apart.

  5. Wayne Tong

    I love how everyone says Central Bank is the problem and that we should get rid of it, well you know what? We can't, you really want the private sector to control money supply and interest rates? Did no one learn from the Great Depression and Great Recession, the private sector companies are driven by self interest and Wall Street care about shareholders. They dont give a f--k about the economy. So yes the Federal Reserve is flawed, but it is the best of what we have.

    As for you folks that say gold standard, well if we go back to the gold standard standard of living will increase so much as deflation kicks in. The poor get poorer, the Middle class gets poor, the rich, well theyll still be rich.

    1. Yoder

      'Wayne Tong", are you really that ignorant? The Great Depression was caused by Bankers!! The Federal Reserve had the power and obviously had the money to bail the banks out yet they stood by and watched it happen. Isn't it interesting that the Great Depression happened less then 20 years after the FR act was signed. Private Sectors DO control our money supply!!! Wake up man. There is a reason why Presidents and politicians throughout the years have spoke against privatized bankers controlling our money supply. It doesn't work. It's also no secret that presidents who have spoke out against the FR have been assassinated. I believe you have your facts ass backwards.

    2. L E

      Mr. Tong, The Federal Reserve is a private bank, it's about as Federal as Federal Express. And they do control interest rates and money supply. That's their job. There is no inflation or deflation with a currency backed by gold or any commodity for that matter. The "printed receipt " we use as "money" only becomes the means of exchange, because no one can afford to carry around gold or cattle to trade and do business.

      It doesn't really matter if that "money" is backed by gold, oil, or corn. See these things are " REAL MONEY" because of the inherent value they have and have represented in our lives since the dawn of trading to acquiring the other goods and services we want and need.

      That's the only reason "money" if you want to call it was created. It only represents what the government and the people (free market) decide it is worth in regards to how many "chickens" or "eggs" or "pieces of gold" that printed or fashioned coin represents. Example being, three chickens= five fish = eight loaves of bread= $1, make sense?

      Truth is, when the natural free market is allowed to operate, things naturally go from undervalued to overvalued, all within a range that has maintained its true value in the world since the dawn of trading. Not big bubbles that ultimately burst and lead to depressions.

      For example, in ancient Rome one ounce of gold could purchase you one hand crafted robe, one pair of high quality leather sandals, and a fine belt, hence today one ounce of gold will still purchase you a nice hand crafted suit, a nice pair of high quality leather shoes and a fine leather belt.

      I encourage you to investigate a little more about the FED, and how good it is, by the way, there never was and never has been a Great Depression in our country until the birth of the FED. The Great Depression occurred after the FED's birth on Dec 22, 1913 when it was passed into law.

      In 1907, that panic was created by JP Morgan and his banking buddy's (The NEW York Money Trust) as they were referred to then, to create the "NEED" for a private, centralized bank like the FED to prevent against so called "bank runs"- it worked! That's why it was called the the great "PANIC" of 1907 and not the GREAT DEPRESSION of 1907.

      Truth is, no one lost any money, but the small banks, because the people started loosing "faith" in the banks and went to start withdrawing their money because of the propaganda being asserted by the big banks who didn't like or want the competition of all the small banks popping up all over the country during the beginning of the biggest industrial revolution the modern world had ever seen. He, and and few of his rich banker friends had been trying to get the US to adopt a centralized bank- Unfair taxation (i.e. income tax today, unfair taxes on tea and goods yesterday, same "thang") was the very reason the US went to war for freedom from Britain's tyranny .

      Now, go do your research and find out how many banks have gone bust and forced to close prior to 1913, before the FED and how many have been forced to close or been "bailed out" since the FED's inception in 1913 and I think you will see very clearly why the FED doesn't work for its "stated purposes" but functions very well to fulfill its intended purposes, which was to keep loaning money to governments and small business in order to keep governments and people in debt, maintaining their position of power and guaranteeing profits- since you can create money out of thin air and charge interest to governments and small businesses. Thereby, maintaining consistent cash flow through the repayment of loaned money and or acquiring the assets of the governments, or small businesses, or person's who default on those loans.

      Just a quick crash course in real history, BTW, ask yourself why since 1913 the dollar has lost over 95% of it's purchasing power. Did the cost of things go up? NO! The value of the dollar continues to drop (debasing currency) because of its ability to be printed up at will. What happens when cocaine is everywhere? The price of cocaine drops! What happens when there is trillions of dollars floating around because of fractional reserve banking practices and it's ability to be printed out of thin air- by a small group of PRIVATE BUSINESSPERSONS who own the FED, who literally control the interest and money supply of a country? It leads to the collapse of the currency! And I wont argue about that one- just stick around for the next 5-10 years and you can experience that one for yourself!

      P.S. The REAL reason the rich get richer and the poor( and most middle class) get poorer is because rich people build businesses and acquire ASSETS. While the middle class manages and runs those businesses, while acquiring status, debt and liabilities. While the poor stay working at the bottom being supervised, if they are "lucky" enough to get a job , while spending everything they have on life's expenses and buying "stuff" , trying their best to feel like the middle class, instead of learning how to invest money and acquire assets as well. Sorry, its just the truth!

      Hope this has been helpful to you or just anyone- Life as we all know it is changing right up under our noses, and I am just so afraid that a lot of good, well-meaning people are going to be forced to endure an extended run and return to the old debt slavery and servitude of Feudal Europe, except this time around, instead of the King and His Court, you will have the Corporate Elite and the Government it selects to ensure its affairs! Oh, I'm sorry, its already underway and happening!

      Disclaimer- I didn't come up with ANY of this myself- I'm not that smart- I learned it all from my very rich mentor- who took the time to share with me some lessons he had learned- I am eternally grateful! I pass a little of that on to you! May God Bless us ALL Mr Tong, we are going to need it!

    3. xavier123

      Fractional reserve banking is one of the problems, you are correct, but your other arguments for a gold standard are not. The business cycle has occurred as long as complex trade has existed. Look a little farther back than the late 1800's and early 1900's. When you speak of gold as having an inherent value, that value stems from historical use and psychological misrepresentation. Food or land would be a much better commodity to back Money as it has real sustaining value to our existance than the implied value of gold. You speak of being able to buy a nice robe and such in Rome for an ounce of gold and claim to still be able to purchase the same things for the same ounce of gold. In Rome there was no dollar to base that assumption, gold was gold. People based their price in gold since most of their economy revolved on its value, much llike we do today with fiat dollars. You cannot compare the two since the price of gold is valued IN FIAT currency. Sure the price of gold, $1300/ounce can buy you the robe and such, but the main difference is that ounce is valued at $1300 in DOLLARS. Its not the gold that is doing the purchasing but the dollar. In the 80's if you redemed an ounce of gold for dollars, you would not be able to buy a robe. To explain this better, let's say the dollar collapsed,gold would no longer be priced in dollars or any other fiat currency. Gold and other goods would be the reference of value, which means gold may or may not buy you that robe. The price of gold will drop or rise depending on the value of other goods, much like a fiat currency does now. I will concede, Over the long term, gold is a hedge against inflation of fiat currency since the purpose of such a currency is flexibility, but it is not a hedge against other commodities like you claim. It is onky a hedge for what it is priced in since when one goes up the other goes down in value, and vise versa. Gold has had inflation, but it is largely deflationary and is subject to the same abuses as fiat currency. It can be controlled, just look to the Spanish after they brought gold back to Spain from south america. The flow of gold can be controlled by those who hold it, the same way George Soros crashed the Pound. The onky argument over a fixed or fiat currency, I am not advocating a fractional reserve currency, which I view as the problem, is the benefits over the risks. But advocating gold is misrepresenting the problem and clutching to a historic rock with no value other than the products it make in circuitry, vanity, among a few others. I'm not here to disagree that either side doesn't have an argument but I am here to argue gold is a falllacy. And you argument about poor, middle class and rich is half correct. Your interpretation is what every rich folk believes to make themselves feel superior. Rich do quire assets, with or without work can be debated, and most middle class spend and leverage in order to obtain the feeling of rich, but the poor have very little abilities to invest and obtain assets. There are a few that make it, but most spend money on necessities, and the money left over isn't worth investing as it takes money to make money, and the little money they have mathematically won't cut it, especially to obtain assets worth getting rich. I'm not saying its impossible, other have been a few success stories, but it is a lot harder than with no money.

    4. Leon Welch

      It is the best we have. Not so. It causes the boom and bust cycle. Fractional Reserve Banking creates money out of thin air. They loan it out. The loan is paid back and the money disappears. But there is one thing that does not disappear and that is the interest it generates. Care to guess who ends up with that interest and who will one day control all of the currency? If you do not know it is the big bankers. The Federal Reserve needs to go. Let interest rates control them selves in a free market and we can end the boom and bust cycles that kill this country.

    5. Peter Sugarbaker

      The federal reserve caused the Great Depression

  6. Winston Smith

    The FED is part of the problem..admittedly, a major part; but other factors (like globalization and the use of cheap foreign labor (Not to mention automation, which is often quite understated) are what destroyed the manufacturing base in the US. The Fractional Reserve method is criminal. Plain and simple. Banks create money by simply punching the numbers into their account balances based on the number of outstanding loans they have?
    This is an insane, anti-capitalistic practice. This is how it is that now over 90% (or so) of all US money that 'exists' is not actually physical money in circulation are but numbers on computer screens.

  7. Rocky Racoon

    I don' t think anyone yet has come close to outlining the macro-economic laws of capitalist development or uncovering the "genetic code" of capitalism; the capitalist law of value as did Karl Marx. For Von Mises capitalism was simply to complex to regulate...best leave it up to the bunny rabbit. Which is why he is adored by so many in the West.
    Those are my recollection from school daze. The political upshot of these theorists are obvious. Anyone seen Shock Doctrine? Kind of puts the political back into Political Economy doesn't it?

  8. T13

    Peter Schiff, Ron Paul, and Lew Rockwell who is speaking in part of this, subscribe to the theory of Austrian economics. From what I have seen they have been some of the only economist to accurately forecast economic events. I wish I'd heard of them long before 2008.

  9. NellaPamukov

    i didnt find it very useful, its all familiar to me.

  10. harry nutzack

    a gold standard would reek havoc with global trade... as a commodity, the value of gold is subject to fluctuation, often great swings happen very quickly, historically... this places a single nation on a gold standard subject to trading manipulation controlling the "real world" value of that nations currency... the gold standard can work if it is adopted globally, or by a relatively isolationist country, but a single nation switching over to valuing their currency based on a traded precious metal is setting themselves up for a hard fall at the hands of the moneyed who feel "ripped off" by rejection of centralized fractional reserve systems, or even just a consortium of greedy folks looking to make a buck... for global trade based countries, a system of valuation of currency based on REAL national productivity (actual added value to raw materials, no "ponzi-family" simulated black ink) would be the most stable, but probably stands very little chance of ever happening

    1. wpsmithjr

      Um... we had a gold standard up until 1971. We had no problems with global trade up until then. The only reason we had to go off the gold standard is because the government spent too much money, imagine that, and they could no longer pay foreign creditors in gold. Once we went off the gold standard, and onto fiat money printed by a central bank, the whole world followed suit. For hundreds, even thousands of years prior to 1971, gold and silver were the most widely used forms of money.

      Besides, you don't have to go directly onto a gold standard. Ron Paul recommends simply allowing gold and silver to be legal tender again, so people have a choice. Competing currencies if you will. The better currency will eventually win out. It will be gold and silver, of course, because who wants to SAVE fed reserve notes as they are devalued over time?

      And there is no kind of paper money, that can be printed out of thin air, with nothing backing it...not even something as arbitrary as "national productivity"... that will work as long as the Fed and Congress are allowed to print and spend at will. They'll just fudge the "national productivity" number like they fudge the CPI today.

  11. Joann

    damn smh... i know that this ties in with why the US is always in war...

  12. tonyathecutie

    blame the rothchilds!!!!!!!!!

  13. Matt Kukowski

    HR 1489 or DIE

    Money is NOT the problem. WE are the problem. Corrupt people that control the creation of money. However, there is not enough GOLD in the world to cater to all that is needed. GOLD is a metal.. SO WHAT.

    Rome fell, WW2 and 1 happened under gold. The Great Depression as well. GOLD is not the problem.

    Again.

    WE are the problem. The corrupt are the problem. GROW UP.

  14. Temy Beal

    Gold standard is hogwash. Matters not in the slightest what physical form money takes, or even whether it has ANY physical manifestation whatever...it might be ONLY electroni bits of information. The point is who controls it, the scarcity of it, and to what ends.

    1. wpsmithjr

      Duh. But that's what the gold standard does... it takes control out of the hands of the government and the banksters. There's only so much gold, silver, copper and nickel in the world... but there is enough. And they have intrinsic value.

      This is what prevents governments from overspending and "printing money out of thin air". If the money has intrinsic value, you can't just print it to make up for the shortfalls in the budget.

      Make gold and silver legal tender again... and put it in competition with the dollar, excuse me, federal reserve note, and it won't be long before the federal reserve note is GONE. Obsolete.

      A gallon of regular gasoline can be bought with a DIME... as long as it's a dime minted before 1964... when they stopped making them out of SILVER.

    2. Leon Welch

      Rumor has it that China may go to a gold standard. If they do say good by to the US dollar as the world reserve currency.

    3. Chad Aaron Leach

      yes but the only way to produce gold is in the heart of a rare star called a white dwarf however, fiat money on the other hand is only valuable because the government forces its citizens to use it, just look at the definition of the word "fiat". There is a reason why our founders wrote in our constitution that only gold and silver would be legal tender of the usa because they had already dealt with the problems of fiat money in the form of the contenential that nearly killed off the american revolution before it even got started.

    4. Jason Riggs

      Nowhere in the constitution does it say that only gold and silver would be legal tender of the usa... Where do you come up with this stuff?!?!?

    5. Leon Welch

      Our currency needs to be backed by gold period. When it is not backed by gold you end up in the mess we are in now. Lets see $43 trillion for medicare, medicaid, 22 trillion Social Security, and $24 trillion in government funded pensions. That is over $80 trillion and does not count the $16 trillion that they show on the books. Remove the gold standard and give the politicians the right to spend and spend they will and print they will until they destroy your currency.

  15. Ghulam Raza

    great one

  16. Mark Stouffer

    If people can't be trusted with freedom, how can they be trusted with power?

  17. Jakup Pauli Joensen

    It is true that most of us are not willing to sacrifice much for a change if needed. But there is no doubt at all that the monetary system we have today does not serve the benefits of the people. But rather the banking elite and corporations. A gold standard in it self will not solve everything. But would probably be better than the system we have today. But there are other ways than a gold standard that will serve the people and give the people the power back. The simple formula that shows that the whole system does not work is ( principle=principle+interest ) which does not match up, as principle + interest is different from the principle. Said in other words money in existents is debt created by the bank and the bank wants the debt + interest back. But the bank doesn't created the interest money to pay him back. So how are we going to be able to pay our debts? Money in existents is about 97% debt and 3% real paper notes, but none of them are backed up by anything, it is all build up on a belief system. Because we belief we can buy goods and services from our money. Bottom line is we need a whole new system and think about what serves us best. It has to be a system run by the government serving the people. With the system today the banks will end up owning all the world as no one is able to pay the interests and will end up bankrupt sooner of later.
    In other words we are all scr...d.

  18. d4a2r6r6yl

    I am is full agreement with FTTB she/he thinking is clear and percieves the issue accurately. they nothing for me to asy but... bully!!!!

  19. Pleiades

    Monetary & Banking reform will be introduced once the US Federal Reserve System and all Central Banks of the world are abolished and replaced by a new global system. In the meantime they will continued to be used as expropriation & transfer of wealth instruments they were designed to be. The gold standard was going to be abandoned eventually, so why even consider going back to it. The real problem is greed and parasitism.

  20. harmony

    It's nice for them to have the time to make this documentary. I'm sure things will work out for the best, if that's what we want to happen.

    P.S. I enjoyed reading the comments for this video.
    "My country is the world, and my religion is to be good." -TP

  21. Grant

    It looks like a commercial for Cash 4 Gold. Why didn't this video point out that there are more options than just switching back to a gold standard? Such as the complete abolishment of money as we know it, or the "Trust standard", however, humankind isn't quite ready for that.

  22. David N

    Tripe. I love how this thing addresses NONE of the issues of trying to get back on the Gold Standard. Don't get me wrong, I know our economic system is broken...but how much are we all willing to sacrifice to fix it? I can guarantee you that most of us won't sacrifice much.

    1. wpsmithjr

      How do you get back on the gold standard? Simple. You allow silver and gold to be accepted legal tender again.

      You could buy a gallon of regular gasoline with a silver dime.

      Are you gonna use paper... or silver and gold coins?

      I'm just sayin'.

  23. SWM

    Black Economy- You literally do not understand the difference between what is fact and what is not. (That IS a fact). A stream of observations and conclusions is not a "fact" even if you agree with them. (That is also a fact). Your inability to grasp a concept this fundamental suggests that you don't have the ability to understand even basic mechanisms of the economy. (That's not a fact, it's an observation).

  24. Bytor69

    I tried to contact this website through your comments page, but after I wrote everything out, I couldent find a submit button lol Wierd. I refreshed the page a couple times, yet no submit button. So, hopefully the guy that runs this great site will see my recomendation here for a doc that Im currently watching on Google. Heres what I tried to write in the comments page...peace.

    I have watched many of your wonderful documentaries on various subjects. Thank you so much.
    One documentary Im currently watching is called "Reality of America: A History of Money Changers & The Federal Reserve" from Google video. Although the audio and video arnt great, the information itself is very informative, and gives information that I havent seen in other docs, especially in the area of the Rothschilds. Although Im not particularly versed in the history of economics, I feel after watching this doc that Im much more aware of it its true origins, and why were in the mess we're in today.

    Thanks again for all the great docs, and I hope you'll consider adding this to your ever expanding library.

    - Scott in Cali

    1. dontdrinkthekoolaideither

      I am always glad when the Snowdog is victorious

  25. Alstar

    I think this great! all this does is allow people the choice to think about the unthinkable and make better decisions about their life choices. Let admit it... before the internet everthing we believed about life and what is going on in our world came from 4 central broadcasters CBS, NBC, ABC and Fox. etc... now we are forces think about other truths... embrace it and let go of the fear that has been instilled in the unknown truths that exist.
    Who would believe that the US Bomb the black wall street!

    1. clay dawson

      Fallacy: One cannot "think about the unthinkable." Technically nothing is unthinkable (except perhaps nothing itself) , but if there were an unthinkable, it would be such by virtue of the fact that one cannot think of it.

  26. HaTe_MaChInE

    @Chris - I'm pretty sure the point of bankruptcy is to NOT lose everything. At least the modern use.

    If you file for bankruptcy and still lose everything you should blame your lawyer not the banks.

  27. Chris

    if a person goes bankrupt they loose everything if a bank goes bankrupt they get saved by the fed im sure the fed benefits regular people by saving banks that will tell you to f off if you mess up

  28. Black Economy

    Propaganda?

    Everything stated in this video is a FACT. If you are so hopelessly ignorant of reality and wish to remain a slave to the financial system, it is your choice, but stay out of the way of those of us who seek the truth and realize that our current situation is only deteriorating.

  29. lanvy

    a bit one-sided for my taste...you come to that conclusion very quickly given the cheesy hollywood music queues.

  30. smoke some more camels

    lmfao your kidding right? in what way does this seem like the Mises institute would even benefit from manipulating those that watch this? What about ron paul? his MO is always about auditing/abolishing the fed not just in this video, but i guess hes looking to benefit from this too right?

  31. Red Camel

    This is nothing but propaganda by the Mises Institute its all unsubstantiated bullsh^t....