This film illustrates how the Fractional Reserve System and more importantly, how the money supply functions in America and indeed any society with a central bank. No where else has a movie been made that illustrates how the fractional reserve system functions better than this film. Unfortunately, the movie draws the false conclusion, that the founders wanted the government to print the money (for a detailed video explanation of our founders intent please watch "Money - A Brief History Of The American Dollar":

The original intent of the constitution is spelled out quite clearly, not only in the document but in the immediate history.

Article I, section 10 clause 1 states: "No state shall...coin money, emit bills of credit (i.e. paper money), make any thing but gold and silver a tender in payment of debts..."

The first part limits the powers of the states, “No state shall...coin money…”. States’ had coined money at the time.

The second part “No state shall…emit bills of credit…” Now, that’s one of those peculiar words, if you were living in that time, you knew what that meant. It meant what essentially we know of today as paper money. So, no state itself can create paper money, nor set up any kind of a bank that’s controlled by the state to do it for them.

The third part “No state shall…make any thing but gold and silver coin a tender in payment of debts…” Now, notice the language, no state shall make any thing BUT gold and silver coin. Meaning states CAN and SHOULD make gold and silver coin a tender in payment of debts.

And, most important, the historical background shows absolutely clearly that paper money was not going to be allowed at the national level or the state level. And, the very interesting point here is, that the same people who wrote the constitution, had been to a large extent in control of the states and of the congress under the Articles of Confederation during the War of Independence. These people had emitted LARGE amounts of paper money to finance the war, the states did it, and congress did it. The currency at the time was called the continental currency. They printed so much of the currency that it became essentially worthless, giving rise to the phrase, “Not worth a Continental”. Those same people looked back at what they’d done only a few years earlier and said, “We’re not going to do this anymore”.

To understand the importance of sound money and how sound currency functions in an economy, please watch "Money in a Free Society":

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