Occupy #7 – A fun video on banks

This is a highly entertaining 30-minute video of the banks and the current crisis. It is also educational. The Occupy movement has reopened the issue of money, banks, and economics in a significant way.  Hopefully, informed discussion will follow…but do watch this video for the fun of it, because it is very well done.

Politically, this bank and money issue could, theoretically unite Occupy protesters with conservatives. Both have libertarian tendencies. Anyone heard of a guy named Ron Paul?

Quote from the video: “To preserve our independence, we must not let our rulers load us with perpetual debt. We must make our choice between economy and liberty or profusion and servitude. I place economy first among the first and most important among Republican virtues and public debt as the greatest of the dangers to be feared. It is incumbant on each generation to pay its own debts as it goes.

“If the American public ever allows private banks to control the issue of their money, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the people of their property until their children will wake up homeless upon the very continent their fathers conquered. ” – Thomas Jefferson

Published by

Jonathan Erdman

Writer. In the summers, I live and work in the incredible state of Alaska, in the bush community of McCarthy, as the Executive Director of the Wrangell Mountain Center. When not in McCarthy, you'll typically find me in the Santa Cruz Mountains of California, writing and working with local activists. My primary writing project right now is a novel set in remote bush Alaska, of the magical realism genre wherein an earnest and independent young woman finds a mysterious radio belonging to her grandmother, a device that has paranormal bandwidth and a disturbing ability to mess with one's mental stability.

9 thoughts on “Occupy #7 – A fun video on banks”

  1. In this video we learn that the Fed, which creates money, is a private bank. We further learn that, according to the Constitution, the US Treasury, a government agency, is supposed to control the US money supply. What’s Ron Paul’s position? Here’s a summary of the bill that he sponsored:

    H.R. 1098, the Free Competition in Currency Act of 2011, would allow competitive free market forces to provide sound money through choice in currency. The bill repeals federal legal tender laws, repeals restrictions on private mints, and repeals taxes on gold and silver which prevent them from circulating as forms of payment.

    Says Paul: “The American people deserve to have a choice of currencies to protect themselves and their families from the poor decisions of government.” Paul doesn’t object to private banks controlling the money supply, in violation of the Constitution. He objects to the monopolistic control of one segment of the private banking industry, namely the Fed. Paul wants to looser federal regulations so that any private bank can create and sell its own brand of money. And Paul wants to change the constitution so that the Treasury is no longer in charge of the US monetary supply.


  2. This is basically a compromising view of what Paul actually wants. The constitution states that only gold and silver can be legal tender. That is what Paul really supports and you can see how he is trying to work it into circulation there. Up until Korea or Vietnam all printed money was backed by a physical stash of gold that was equal in value. It just simplified it’s usage. In order to support the new trend of bogus wars, the gold standard was eliminated to allow printing up a bunch of quick cash for the government to spend. The ultimate goal is to return to the gold standard, which would essentially eliminate any “bank power”.


  3. I’m no expert on Paul’s positions so I’ll take your word for it, Matt. The floating US currency does eliminate any material obligation for banks to hold hard assets offsetting their loans, allowing them to overleverage to such extreme levels that a 5% drop in real estate values would have tanked the banks had the US taxpayers not bailed them out. Gold standard is one means of curtailing banks’ appetite; so are regulations requiring banks to maintain certain levels of reserve assets offsetting their loans. The big banks have relaxed and sidestepped reserve requirements through bundling and reselling of loans, derivatives, and all those other slick banking products that brought on the banking crisis. Tighter bank reserve requirements seem essential, either by reinstituting hard currency or by tighter federal regulation, but both GWBush and Obama have refused to move in this direction. Besides which, the main reserves held by the Fed are US government securities; i.e., debt owed by the taxpayers on money printed up by the private banks.

    But if the gold standard is Paul’s ultimate goal, why didn’t he sponsor a bill to that effect, rather than one calling for choice among competing currencies issued by private banks? Is it Paul’s idea that private banks’ cash offerings would be backed by their own privately-held gold reserves? And this: “allow printing up a bunch of quick cash for the government to spend” isn’t quite the problem highlighted in the video, is it? The banks print up quick cash in order to loan it to the government; then the banks collect interest on the debt, paid for by the citizenry. If the US government controlled the money supply, as per the Constitution, then the public would be lending money to the banks, not vice versa.


  4. Erdman, I don’t know if you read my reply to one of your comments on my blog about whether the “new right” would favor Greece’s default. My first reaction was that politicians on both left and right want the bankers to get their money, to stabilize the economy, and so on. But I wondered: what would new-right stalwart Ron Paul have to say about a government defaulting on its bank loans? So I googled “ron paul bankruptcy” and at the top of the list was this article. It quotes part of an interview with Paul from June of this year:

    Paul, in a conversation about the debt crisis in Greece, called on that country to declare bankruptcy, reasoning that the Greek debt was insurmountable and thus that the country could not avoid bankruptcy. “Are we going to experience — are you predicting, in essence, if bankruptcy is the cure for Greece, is it also the cure for the United States?” asked host Jan Mickelson. “Absolutely,” Paul responded.

    Good for Paul, in my opinion.


    1. Yes, I did see that comment on your blog. When I made that comment about the right, I was thinking of people like Ron Paul. I was also thinking about the new rise of the right in Europe, which I have read a bit about, but not too much. Those on the right in Scandinavian nations are suspicious of the EU and/or want to see if fail. So, if Greece fails and subsequently pulls out (or is ejected!) from the EU, then certain of those on the right in Europe will be happy to see it. This owes more to their scary nationalism than anything else, however.

      So, it all depends on which “right” we are talking about. The kind of right that is nationalistic, bordering on paranoid certainly isn’t something I relate with. Ron Paul’s version of libertarianism is something I can respect, because he is consistent in a particular ideology. Contrast this with “conservatives” (so-called) in the U.S. who demand less government, except when it comes to funding the military or subsidizing agriculture or whatever other government project funnels money directly to Big Business or lobbyists.


  5. I haven’t heard Paul speak on the bill directly. Perhaps he is being diplomatic, since “the establishment” just laughs at the notion of going back to the gold standard? Perhaps it is no longer considered a legitimate possibility even by Paul? I don’t have the knowledge to sort out the ramifications of the bill passing, but it seems that the bill would create an indirect gold standard due to the playing field being leveled.


  6. We’ve been discussing options to the current banking status quo. One important point to add to the mix is the Glass-Steagall Act of 1933. This act created the FDIC to insure deposits as well as banking reforms to create checks and balances and eliminate conflicts of interests.

    Since Reagan, the Glass-Steagall Act was gradually rendered more and more impotent. The Gramm-Leach-Bliley Act of 1999 repealed some of the provisions of Glass-Steagall that prohibited bank holding companies from owning other financial companies. I’m starting quote directly from wikipedia, so I’ll led them take it from here: “The repeal of provisions of the Glass–Steagall Act by the Gramm–Leach–Bliley Act in 1999 effectively removed the separation that previously existed between investment banking which issued securities and commercial banks which accepted deposits. The deregulation also removed conflict of interest prohibitions between investment bankers serving as officers of commercial banks.”

    I’ve heard it put this way. Glass-Steagall effectively separated legitimate commercial banking functions (pensions, mortgages, loans to small businesses, and infrastructure) from questionable, speculative investment functions (derivatives, exotic instruments, MBS’s, CDO’s, and Carbon Swaps).

    Well, reinstating Glass-Steagall or some similar government regulatory function would go to your point, Ktismatics.


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