97% Owned (2012) 1080p AV1 Opus 2.0 [XannyFamily]
An absolute must watch for anyone with interest in how the banking system and our entire fiat based economy works... or rather, doesn't work. Unlike the book I uploaded earlier today, this is not proposing just one specific solution, but rather pointing out objectively where the issues are and giving examples of how they could be addressed.
That go over your head a bit, but still curious?
Fiat money means money that holds no tangible value and is not backed by anything. Dollars, Euros, Yen, and so on are all fiat currencies. Not only does this mean we only perceive them as valuable because of confidence, but it also means there is no limit to the amount of new money that can be created out of thin air.
In today's fiat monetary system, unlike the gold standard we (sort of) still had until 1971 when it was killed by Nixon, almost all the money is created by commercial banks. The Fed and other central banks around the world in fact have very little control over the supply of money.
This is because central banks only create physical cash, while the digital money in our bank accounts and credit cards is all created by private banks - whether it is the retail bank you have an account with, or an investment bank serving large corporations, or even organisations such as the World Bank who lend money to governments.
How is this money created? Debt.
The only way new money can enter the economy is if private banks create enough debt. The entire global economy therefore relies on ever increasing levels of debt, and because this process creates money, it must also assume ever increasing levels of inflation.
This is why it is called credit creation. When a bank lends you money, whether it's $100 or $100,000, it is literally creating new money out of nothing and charging you interest on it.
If you want to know why inflation and interest rates are so high, this is your answer. Inflation is high because since 2008 the base rate has been almost zero, therefore borrowing was almost free, leading to a large growth in the amount of new money created. Now inflation has become a problem, raising interest rates in the hopes it will discourage borrowing is the only way central banks can attempt to fix it, because remember they have no direct control whatsoever over almost all money creation.
Inevitably even if any such solution works it must be temporary, because the fiat economy would simply collapse if banks stopped issuing new debt.
Bitcoin is put forward as a solution to this in the book
The Bitcoin Standard. because it is
sound money. Like gold, it has a predicable and scarce fixed supply, and each unit is backed by energy, itself a scarce, valuable commodity. No single entity, whether a state or private actor, can take control over it.
A documentary explaining this in further detail - without a focus on Bitcoin, just an exploration of how the fiat monetary system works - will be uploaded... as soon I press that big green button to share this torrent.
It's important shit to understand, yo.
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00:00:00.000 : en:Chapter 01
00:25:00.000 : en:Chapter 02
00:50:00.000 : en:Chapter 03
01:15:00.000 : en:Chapter 04
01:40:00.000 : en:Chapter 05
02:05:00.000 : en:Chapter 06