How Money Works in the U.S.A

The fractional reserve banking system is the way in which money circulates in the United States. Everything begins when the government asks to buy a certain amount of money from the Federal Reserve (which is a central bank).The U.S government prints out bonds which they then trade for money that only becomes official when it is deposited into a bank account. I believe that it is important to know that 97 % of these transactions happen virtually and that only 3 % of the total amount of money is physical, the rest exists only in computers.

After the money is placed in a bank account, the bank has now the opportunity to loan out 90% of said amount. Only leaving inside the bank a small 10 percent. This other 90 % can then be loaned again and placed in different banks, which also carry out this procedure. It is said than from the initial amount it can be replicate nine times after it enters its first bank. But there is something in these process that tends to be hidden and it is easily ignored. Interest

 These hidden fees accumulate with time. And when a loan is created, so its interest. This means that when the United States Government asks for a loan from the Federal Reserve, they receive an interest rate that gets bigger and bigger with time. This creates a debt that it is impossible to pay yet allows the influx and outflow of money. Meaning that money is, in fact, created by debt.

Director: Peter Joseph - Peter Joseph - YouTube - www.zeitgeistmovie.com - 2009 - http://www.youtube.com/watch?v=EewGMBOB4Gg