How the Federal Reserve’s central banking system works in under 5 mins.

How the Federal Reserve’s central banking system works in under 5 mins.


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  1. Stupidest thing I ever heard. What do you suppose the Fed is doing with the
    interest they earn? Piling it in the corner? Haha! They spend it, which
    puts it back into the economy (with no interest or obligation to repay
    attached), and re-balances the whole equation.

    Well, that's what they'd do if it actually worked the way the video says.
    Which it doesn't. Most the interest the Fed earns is turned over directly
    to the US Treasury (they give it back to us). Some is used for expenses (to
    pay accountants and buy calculators). And the rest is distributed to the
    shareholders. The shareholders are regional banks who are required to own
    the shares (not a private party), in other words, the very same people who
    borrowed the money in the first place (they give the interest back).

    In all those cases, the interest remains in the economy. There is no
    conspiracy, this whole video is bullshit.

    Reply
  2. The Fed used disinflation policies for sometime and have since introduced
    inflation to create a recovery. Thats how how the process works. Money has
    always been able to be printed arbitrarily, as banks create money, the
    Government just supplies them. When we had a gold standard, banks created
    money (as usual) but sometimes too much and it caused banking panics (look
    at how many there were in the 19th century). The current system enables the
    Fed to contract the money supply if necessary.

    Reply
  3. The more I research this, the more Ifind that substantiates the conspiracy
    theorists beliefs. Throughout history going back as far as the 1300's there
    have been MANY, MANY systems utilizing Fractional Reserve Banking adn the
    placemnet of a Central Bank. To this day there are absolutley NONE that
    have been successful. Even todays U.S. Federal Reserve is constantly
    changing their approach, not because of the changing economic picture but
    because many times it is their approach….cont…..

    Reply
  4. get your nose out of your textbook and take a good look at this world. look
    at europe! greece, italy, france, spain, england, ireland… all these
    countries are straining under massive debt. they are implementing austerity
    all over europe. people have no jobs, and the situations is not improving.
    the US is 16 trillion dollars in debt and skyrocketing. how are we ever
    going to pay this ever growing debt? every man, woman, and child in america
    has a $52,325.93 debt on their head.

    Reply
  5. The perpetual National Debt and $8.4 trillion the FRBNY received from the
    Treasury auctions and hid from Congress is exposed at 3w scribd dot com
    message 49040689 The Fed steals from people and gives to financiers.

    Reply
  6. @ptangboy Wow, The Fed prints the currency then loans it to the U.S.
    treasury with interest. The Federal Reserve inertest rate on the U.S.
    dollar: •Mar 18 08: A 3/4 point cut to 2.25%. •Apr 30 08: A 1/4 point cut
    to 2%. •Oct 8 08: A 1/2 point cut to 1.5%. •Oct 29 08: A 1/2 point cut to
    1%. Your right the fed should not charge interest for printing money since
    it is nothing but paper, its a scam. But to deny that they do it is
    ridiculous.

    Reply
  7. If we really do care about this, we should do something, but no I don't see
    anyone exposing this, because no one is going to take conspiracy theorists
    seriously, make yourself credible and research with books and what not….

    Reply
  8. It is not the job of the Fed or any other central bank to create jobs. The
    Fed has the power to lead the horse to the water but can't force the horse
    to drink it. ex During recessions, the Fed purchases bonds by lowering the
    interest rate and raising bond prices. This forces bond owners to sell
    their bonds for liquid assets which increases private bank loaning reserves
    with low interests. The more banks have in reserve, the more they can loan
    out to investors who have the can create jobs.

    Reply
  9. @alecboi84 Are you retarded? Who gives a shit about wallstreet all you
    fucks give into that area too easily you're weak lil scum, reject the
    system and don't advocate it! and for stereotyping me like lmao that's
    hilarious…. not really dude, I don't watch TV I have better things to do.
    and you're bashing me for making a statement about research, yeah that
    really makes me ignorant

    Reply
  10. I also took MA and MI in college. And in fact the Federal Reserve own your
    ass, they control the Global economy. for example if someone only printed
    100 US dollar and then stopped printing then gave it to you and said I want
    3% interest. How the hell you give him more 3 US dollars from where you can
    find 3 US dollar which is not exist? It is evil idea, interest is
    prohibited in Islam look for golden age in islam which economy was healthy
    100%

    Reply
  11. also, i don't know about you, but i don't trust the department of
    treasury's claims, or that of any politician that claim the US economy is
    improving. growth in china and india is slowing, which means US is buying
    less. on the ground it's very apparent that the US is declining. real
    unemployment numbers (not fabricated shit from .gov discounting those who
    have given up looking for a job) indicate rising unemployment. students are
    struggling to find jobs and are under severe debt, etc, etc.

    Reply
  12. So much more baloney ( at 50 seconds ), "it means the central bank must
    perpetually increase it's money supply. Baloney. Suppose I make 200 dollars
    a year in wages and you make 200 dollars a year in wages. Now suppose I
    want to borrow 100 dollars this year and you want to save 100 dollars. I
    borrow your 100 dollars (at 10% interest) and spend it. Next year I pay you
    your 100 dollars plus 10 dollars. I now have 90 dollars to spend, you have
    310.00 to spend. No extra money is needed.

    Reply
  13. @ERASER1091988 C'mon man we are all different shapes, sizes, and faces. We
    are all made in the image of God. Just b/c he looks different doesn't mean
    he is objectively worse than you or I. Why focus on someone's looks when if
    you watched this video without his face you wouldn't have made that rude
    remark?

    Reply
  14. Could this video get any more biased? I think not. It does not explain why
    the US, and all other countries, have a Central Bank. Before the US set up
    the Fed' in 1913, banks could essentially create as much currency as they
    wanted, leading to high inflation, even with the Gold Standard. Having a
    Central Bank gives the Government control over how much currency is in the
    market. The US also abandoned the Gold Standard completely in 1971 mostly
    because it hindered disinflationary policies.

    Reply
  15. If you really take into consideration how powerful all this is, it is
    pretty easy to understand how both Republicans and Democrats are of the
    same. The big picture portrayed by both adn the main focus of our economic
    troubles NEVER includes our monetary system or policies. They ahve us all
    focused on things that don't matter. It's a smokescreen.

    Reply
  16. i've listened to what you said and respectfully disagree. maybe you should
    stop taking adderall. i was prescribed it for many years. it can lead to
    dependency and changes in mood. take care of yourself. i'm done with this
    convo. we've argued our sides and their really isn't much left to say.
    thank you and good luck. peace.

    Reply
  17. The FED is the largest holder, AND creator of US debt… You don't see a
    problem with this? Someone is going to have to pay up eventually. And of
    course it will be the tax payer, a laTARP. Faith in the dollar, like the
    massive derivative markets underpinning the entire banking sector, is a
    ticking time bomb. Eventually it will implode.

    Reply
  18. @sensless1mc that is not the interest rate for when money is printed, its
    for when individuals take out a loan. The Fed cant charge interest for
    printing money as it is not creating anything but paper – it does not
    increase the value of anything, it just spreads the value of the country
    over more paper notes than before. There is no interest charged on that.

    Reply
  19. The dread of the coming collapse is hard to take. I'm trying to wake people
    up too. I worked my ass off on a music video about these Bankster
    Bastards. Would be great if you could take a min to check it out and pass
    it along. THEMONEYTUNE

    Reply
  20. but isn't this perpetual cycle of debt that which forces human beings to
    evolve and progress? disequilibrium is a prerequisite to evolution,
    therefore debt is the catalyst of innovation and creativity. without some
    kind of evolutionary driving force we are unlikely to move forward or
    progress.

    Reply
  21. excuse me, do you think the Fed is reducing inflation now? QE3 is money
    printing en mass without end. exactly what you said the banks could do
    before, but not now? hm ok. furthermore, your second statement is
    contradictory because if there is a gold standard, money cannot be printed
    arbitrarily – it must be linked to gold. the Fed is useless, why do we need
    a shadowy private bank to print money at interest when we could print it
    interest free and regulate it ourselves?

    Reply
  22. The example I posted is for money loaned within the banking system, it has
    nothing to do with the Fed. As to the Fed purchasing assets, when the Fed
    purchases assets ( whether they be Treasury bills/note or other assets ),
    the Fed creates the money for these purchases and puts this money into the
    general public circulation. Nobody "pays" for this money. It generally is
    spent into the economy ( causing an initial bout of inflation ) but
    eventually falls back into excess reserves.

    Reply
  23. @alecboi84 I think you're jumping to conclusions buddy, cos I have know
    reassurance of the matter. That's why I said we need to make ourselves
    credible and study the subject and well of course other matters, now why
    must you accuse me of being supid, if I say education is key?

    Reply
  24. I wonder just how many people watch this and dont question its validity –
    It is totally presumptuous that the Central Banks charge interest. There is
    no proof whatsoever of that – its just a conspiracy theory with no actual
    evidence.

    Reply
  25. @sensless1mc I never said it was false, but how can you easily believe
    this,I take it into consideration, but I'd like to study before I say. did
    you do your research? Do you yourself educate yourself on this matter? or
    did you just listen to this video? What do you know about this subject from
    books?

    Reply
  26. LMAO. i bet you copied that out of your macro econ text book, didn't you?
    you're so clever! — NOT!!! what you said is completely irrelevant. open
    market operations have nothing to do with the fact that all dollars created
    and exchanged are nothing but debt, a system which is entirely
    unsustainable as is clearly playing out all over the world. as the money
    supply increases the debt must correspondingly increase. debt = money. this
    basic fact is obviously too subtle for your mind to grasp.

    Reply

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