0:01 despite the endlessly presented mint
0:03 footage government created money
0:05 typically accounts for less than 5% of
0:07 the money in circulation more than 95%
0:11 of all money in existence today was
0:14 created by someone signing a pledge of
0:16 indebtedness to a bank what's more this
0:19 bank credit money is being created and
0:22 destroyed in huge amounts every day as
0:25 new loans are made and old ones repaid
0:57 Banks can only practice this money
0:59 system with active cooperation of
1:01 government first governments pass legal
1:04 tender laws to make us use the national
1:06 fiat currency secondly governments allow
1:09 private bank credit to be paid out in
1:11 this government currency thirdly
1:14 government courts enforce debts and
1:17 lastly governments pass regulations to
1:20 protect the money system's functionality
1:23 and credibility with the public while
1:25 doing nothing to inform the public about
1:27 where money really comes from
1:32 the simple truth is that when we sign on
1:35 the dotted line for a so-called loan or
1:37 mortgage our signed pledge of payment
1:39 backed by the assets we pledge to
1:41 Forfeit should we fail to pay is the
1:44 only thing of real value involved in the
1:47 transaction to anyone who believes we
1:49 will honor our pledge that loan
1:51 agreement or mortgage is now a portable
1:54 exchangeable and sailable piece of paper
1:57 it's an IOU it represents value and is
2:00 therefore a form of money this money the
2:03 borrower exchanges for the bank's
2:05 so-called
2:06 loan now a loan in the real world means
2:09 that the lender must have something to
2:11 lend if you need a hammer my loaning you
2:14 a promise to provide a hammer I don't
2:16 have won't be of much help but in the
2:19 artificial world of money A bank's
2:21 promise to pay money it doesn't have is
2:24 allowed to be passed off as money and we
2:27 accept it as such
2:45 once the borrower signs the pledge of
2:47 debt the bank then balances the
2:49 transaction by creating with a few
2:51 keystrokes on a computer a matching debt
2:54 of the bank to the borrower from the
2:56 borrower's point of view this becomes
2:58 loan money in his or her account and
3:01 because the government allows this debt
3:03 of the bank to the borrower to be
3:05 converted to government FEI at currency
3:08 everyone has to accept it as
3:10 money again the basic truth is very
3:13 simple without the document the borrower
3:16 signed the banker would have nothing to
3:23 lend have you ever wondered how everyone
3:26 governments corporations small
3:28 businesses families can all be in debt
3:30 at the same time and for such
3:32 astronomical amounts have you ever
3:34 questioned how there can be that much
3:36 money out there to lend now you know
3:39 there isn't Banks do not lend money they
3:43 simply create it from debt and his debt
3:46 is potentially unlimited so is the
3:49 supply of money and as it turns out the
3:52 opposite situation is also
3:56 true isn't it astounding that despite
3:59 the incred wealth of resources
4:01 Innovation and productivity that
4:03 surrounds us almost all of us from
4:05 governments to companies to individuals
4:08 are heavily in debt to
4:10 Bankers if only people would stop and
4:12 think how can that be how can it be that
4:15 the people who actually produce all the
4:17 real wealth in the world are in debt to
4:20 those who merely lend out the money that
4:21 represents the wealth even more amazing
4:25 is that once we realize that money
4:27 really is debt we realize that if if
4:29 there was no debt there'd be no
4:45 [Music]
4:46 money if this is news to you you are not
4:50 alone most people imagine that if all
4:52 debts were paid off the state of the
4:55 economy would improve it's certainly
4:57 true on an individual level
5:00 just as we have more money to spend when
5:02 our loan payments are finished we think
5:04 that if everyone were out of debt there
5:06 would be more money to spend in general
5:09 but the truth is the exact opposite
5:11 there would be no money at
5:15 all there it is we are totally dependent
5:18 on continually renewed Bank credit for
5:21 there to be any money in existence no
5:24 loans no money which is what happened
5:26 during the Great Depression the money
5:29 supply crank drastically as the supply
5:31 of loans dried up
6:12 and that's not all banks create only the
6:15 amount of the principle they don't
6:17 create the money to pay the interest
6:19 where is that supposed to come
6:22 from the only place borrowers can go to
6:25 obtain the money to pay interest is the
6:27 general economy's overall money supply
6:29 but almost all that overall money supply
6:31 has been created exactly the same way as
6:34 Bank credit that has to be paid back
6:36 with more than was created so everywhere
6:39 there are other borrowers in the same
6:41 situation frantically trying to obtain
6:44 the money they need to pay back both
6:45 principal and interest from a total
6:47 money pool which contains only principal
6:51 it is clearly impossible for everyone to
6:53 pay back the principal plus interest
6:55 because the interest money doesn't exist
6:58 this can even be expressed by a simple
7:00 mathematical
7:05 formula the big problem here is that for
7:08 long-term loans such as mortgages and
7:10 government debt the total interest far
7:13 exceeds the principal so unless a lot of
7:15 extra money is created to pay the
7:17 interest it means a very high proportion
7:20 of foreclosures in a nonfunctioning
7:24 economy to maintain a functional Society
7:27 the rate of foreclosure needs to be low
7:30 and so to accomplish this more and more
7:32 new debt money has to be created to
7:35 satisfy today's demands for money to
7:37 service the previous debt but of course
7:40 this just makes the total debt bigger
7:42 and that means more interest must
7:44 ultimately be paid resulting in an Ever
7:46 escalating and inescapable spiral of
7:49 mounting
7:56 indebtedness it is only the time lag
7:59 between money's creation as new loans
8:01 and its repayment that keeps the overall
8:04 shortage of money from catching up and
8:06 bankrupting the entire
8:08 system however as the bank's insatiable
8:11 credit monster gets bigger and bigger
8:13 the need to create more and more debt
8:15 money to feed it becomes increasingly
8:18 urgent why are interest rates so low why
8:21 do we get unsolicited credit cards in
8:23 the mail why is the US government
8:25 spending faster than ever could it be to
8:28 Stave off collapse of the entire
8:30 monetary system a rational person has to
8:34 ask can this really go on forever isn't
8:37 a collapse
8:55 inevitable money facilitates production
8:58 and trade as the money supply increases
9:01 money just becomes increasingly
9:03 worthless unless the volume of
9:05 production and trade in the real world
9:07 Grows by the same amount add to this the
9:10 realization that when we hear that the
9:12 economy is growing at 3% per year it
9:15 sounds like a constant rate but it's not
9:18 this year's 3% represents more real
9:21 goods and services than last year's 3%
9:23 because it's 3% of the new Total instead
9:26 of a straight line is as naturally
9:28 visualized from the words it is really
9:31 an exponential curve getting steeper and
9:35 steeper the problem of course is that
9:38 Perpetual growth of the real economy
9:40 requires perpetually escalating use of
9:43 real world resources and energy more and
9:46 more stuff has to go from natural
9:48 resource to garbage every year forever
9:52 just to keep this system from collapsing
9:56 [Music]
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