Money basically controls our lives. It determines what we are able to do, what we are able to buy and how we spend hours of each day, among other things.

But very few people ask the question: where does money actually come from?

A video published on ColdFusion TV answers that question with a deep dive into the history of the Federal Reserve, including how it was formed, who was involved in forming it and how it has evolved into what it is today. It also answers questions such as “What does a central bank actually do?” and  “Where does money come from?”

“Today, the Federal Reserve is the most powerful entity in the United States, and they’re not ashamed to admit it either,” says the video’s narrator. That power is largely due to the fact that they get their money from nowhere – they just invent it when it is needed.

The narrator continues: “The consequence to having money backed by nothing is that whenever the Federal Reserve creates money, it dilutes the currency supply of all other nations because their reserves are backed by the U.S. dollar.”

When a citizen writes a check, they must have sufficient funds in their account to cover the check. But when the Federal Reserve writes a check, there is no bank deposit on which that check is drawn. When the Federal Reserve writes a check, it creates new money.

Commercial banks also create money out of nothing via loans. Every time the bank creates a loan for the customer, it doesn’t use other people’s money for that loan — it creates new money.

Why should we care? Because there are consequences. The more money that is created, the more the existing money in circulation is worth less and less, which leads to inflation. As long as this system is in place, as long as people continue to take out loans, as long as people continue to incur debt, we will continue to experience inflation.

Much of what’s in this video I taught over the years in my public lectures and on the radio show.

Click here to watch the complete video.