Sunday, April 13, 2008

The Money Masters

The Money Masters is a fascinating documentary about the worldwide history of central banking and the practice of what’s known as “fractional reserve lending.” Although it was made in 1998, the information is still relevant – perhaps even more so now than a decade ago. Despite being three and a half hours long and obviously low-budget, it’s an extremely gripping film. (There are shorter segments available on YouTube, or you can just dip into the film pretty much anywhere and pick up the thread… it’s full of all sorts of intriguing information.)

The film opens by asking the following questions: What’s going on in America today - why are we over our heads in debt?; Why can’t the politicians bring debt under control?; Why are so many people working at low-paying, dead-end jobs and still making do with less?; What’s the future of the American economy and way of life?; Why does the government tell us inflation is low when the buying power of our paychecks is declining at an alarming rate?; Are we headed into an economic crash of unprecedented proportions? If so, can we prevent it?; and, What can we do to protect our families?

A good part of the film is just a history lesson, but a very interesting and necessary one which takes the viewer from the Roman Empire to the history of the Bank of England and to the American Revolution. The filmmakers’ opinion is the Revolution was caused by England sending the Colonies into financial ruin by taking away their ability to use their own fiat currency to pay taxes. It then goes on to detail the various incarnations of a private or quasi-private central bank in the United States, right up to the present when the U.S. economy is controlled by the Fed. One particularly edifying section describes the rise of the shadowy Rothchild family that played a key role in banrolling European governments and American industry over the last two centuries. The film explains in chilling detail how the Great Depression was orchestrated for the benefit of a handful of rich bankers and how we can expect a worldwide depression in the near future if the banking system isn’t reformed.

It should be noted that the situation in Canada is considerably different than that of the U.S. Although our central bank was established by the Conservative government of R.B. Bennett in 1935 as a privately owned corporation, in 1938, under Liberal Prime Minister William Lyon Mackenzie King, it became a Crown corporation, fully owned by the government with the governor appointed by Cabinet. Even so, given that the Canadian and U.S. economies are so closely intertwined, the actions of the Fed in the U.S. quite obviously still have a significant influence over the monetary policies of the Bank of Canada.