Fiat Money: Explained in less than 4 minutes

Duration: 3 minutes and 48 seconds

Country: United States

Language: English

License: CC - Attribution Non-commercial No Derivatives

Genre: Animated

Producer: http://www.youtube.com/watch?v=Cm7Z3sOqE84

Director: mustwatch.eu

Views: 547 (5 embedded)

Posted by: reformy.cz on Dec 27, 2011

Despite every effort by governments, the gap between rich and poor continues to grow. It is now the biggest it has even been in history. All sorts of reasons for this have been proffered, but few, however, seem to realise that is a simple, inevitable consequence of our system of money and credit. This video, a shorter version of which appears in the film The Four Horsemen, explains ... Written and narrated by Dominic Frisby Animated by Pola Gruszka Produced by Renegade Economist www.fourhorsemenfilm.com www.dominicfrisby.net

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The four Horsemen Production, transcribed by : Reformy.cz
since nineteen seventy one when president nixon took the united states
off what was left of the gold standard the world has operated under a system of
money call FIAT
The dollar, the pound, the euro are all government fiat currencies
Fiat is a Latin word, meaning let it be so
It is the law that this government currency be money
indeed without that legal enforcement on the fact that we must pay taxes in this
money
that dollar bill dot computed digit represents a dollar we pretty much
meaningless
Only the government has the power to issue fiat money but banks can created
through lending
if somebody wants to borrow ten dollars
a bank
can created from nowhere and then lend it
and it then could charge interest
banks can create money by landing against asset, such as house they are given deeds to the house
and they create money out of nowhere and it
cut interest of course
over the last forty years since this fiat system of money became the global
norm the supply of money has grown exponentially in fact we've seen the
greatest growth in the supply money in history
but who benefits ?
Of course those that have the power to issue money governments and banks
they haven't had to do anything productive they just create money
then those companies and individuals that get this money early and
they can spend it before the prices of the things they want to buy have risen
to reflect the new money in circulation
in other words they get services products assets cheep
but prices soon rise so holders of assets such as shares or houses will
then see gains without their necessarily being any improvements to the company or
house in question.
This can often lead to speculative bubbles
Who gets this money early ?
however money is created by lending or fractional reserve banking
financial bailouts more or old-fashioned money printing. Banks are always at top or
near the top of the money issuing pyramid
next come corporations who borrowed large sums those on the lucrative
government contracts for new ventures particularly overseas
banks associate companies in partners those who borrow early at lower rates
and the bank senior employees
they all quickly get their share of the pie
in some cases this will come in the form of bonuses
but what about those at the bottom of the pyramid
Thous on fixed wages or low incomes those who live in remote areas all those with
savings
by the time this newly-created money has filtered down to them the prices of the
things they want to buy have increased
dash savings by the mets however and their wages remain largely unchanged
in some cases they have to take on the debt just to be able to afford the things
they were previously able to buy
which means they have to go back to the banks
in reality this process of creating money only redistributes wealth from the
bottom to the top of the pyramid
and those ever-increasing gulf between rich and poor gets bigger
and bigger and bigger