Bitcoin: The End of Money as We Know It Page #4

government bonds.

The loans came from rich

merchant families and goldsmiths,

who by now had become powerful

financiers and bankers.

Sovereign debt and deficit

spending had been born.

(upbeat instrumental music)

In 1694, the bank of

England was established

to fund a war against France.

England's central bank

was privately owned

and granted the monopoly

to issue banknotes,

paper that could be

redeemed for an equal amount

of gold from the

government's coffers.

The central bank soon also

managed the entire debt

of the crown.

- Money has been a tool of

sovereignty for centuries.

Being able to issue

currency gave you the power

but it also gave the value

to that monetary supply

by backing it with

the force of state

with essentially

the debt of state.

- [Voiceover] When the U.S.

won independence from Britain,

the first article of

the new constitution

gave congress the exclusive

right to "coin money".

This currency's value was tied

to gold in government vaults.

From 1781 until

the panic of 1907,

the financial system of the

U.S. was an economic Petri dish.

Brief central banks, state

banks, private banks,

private currency,

government currency,

depressions, strong

growth, recessions,

regular boom and bust cycles.

- The long term, as far

as capital is concerned,

people want predictability,

people want stability.

From the back of

that they can plan

and it is very hard to

plan in the long term

with it such a

evel of volatility.

- [Voiceover] In 1913, bankers

and politicians decided

that it was in the country's

best interest, and theirs,

to have a permanent

central bank.

They created the

Federal Reserve.

Among its jobs, expand

or contract the supply

of a single national currency,

the Federal Reserve note.

The dollar was tied to

gold and strategic control

of it would avoid booms

that lead to busts.

At least that was the plan.

Then came 1929.

(yelling)

The great depression would

have a profound effect

on monetary policy worldwide.

- [Roosevelt] I shall

ask the Congress

for the one remaining

instrument to me the president,

broad executive power.

- [Voiceover] Soon, the Fed had

printed nearly all the money

it legally could to pump

life back into the economy.

It needed gold to

fire up the mint.

So in 1933, President

Roosevelt issued

a controversial executive order,

forcing all U.S. citizens

to sell their gold

to the Federal Reserve

at a fixed price,

or go to prison.

The Fed offered far more cash

to foreign governments

for their gold.

Many jumped at the offer.

Gold flowed in,

and dollars spread

across the globe.

World War II devastated

nearly every major economy,

Rate this script:0.0 / 0 votes